Warning letters and groundless - PowerPoint Presentation

Slide1

Warning letters and groundless threats

YOUNG EPLAW

18 April 2016Slide2

FRANCE - An overview

Article

L. 615-1 of the French intellectual property

codeSecondary infringers which do not directly manufacture the product (such as those who offer for sale, put on the market, use or hold in view of putting on the market) must be aware that they are infringing a patent. They can be made aware by a letter.This can maximise the period of infringing acts to be taken into account.

There is no obligation to send a notice letter to a party before initiating proceedings

Article 56 of the French civil procedure code

A claimant is required to prove an attempt to resolve the dispute amicably.

This requirement is therefore met by the sending of a warning letter to the alleged infringerSlide3

FRANCE - Does the legal position vary depending on the identity of the recipient of the threat ?

Manufacturers

, as

primary infringers, must be contacted to justify an attempt at an amicable resolution.However, there is no sanction for a failure to do soDistributors and importers etc (secondary infringers) would

also potentially commit infringing acts if the infringement is established. They cannot

be

held

liable for

infringing

acts

if

they

are not

aware

of

them

.

Therefore

all

acts

that

occured

before

they

are

notified

will

not

necessarily

be

taken

into

account

.

HOWEVER,

there

is

a fine line

between

information and

denigrationSlide4

FRANCE - Unlawful content of a warning letter – secondary

infringers

The

reference to foreign proceedings has no bearing on the facts and it can amount to denigration (CA Versailles, 6 November 2003, confirmed by the Supreme Court on 27 May 2015)The reference to their claims and not to the fact that the defendant has raised a defense can also amount to denigration (CA Versailles, 6 November 2003, confirmed by the Supreme Court on 27 May 2015)The reference to a decision that is pending and that has not yet been rendered can amount to denigration (CA Versailles, 6 November 2003, confirmed by the Supreme Court on 27 May 2015,  TGI 30 January 2002, TGI 24 January 2013)The lack of specific identification of the claims of the patent which are held to be infringed can amount to denigration (CA Paris, 12 December 1990)The act of writing widely to several distributors can also amount to denigration (TGI 16 May 2000, TGI Strasbourg 16 June 2011)Slide5

FRANCE – Dos and Don’ts (secondary infringers)

DO

DON’T

Refer to a definitive decisionRefer to foreign proceedingsRefer to the specific claims of the patent and explain how these are infringed

Refer to pending proceedingsMention any defense or

counterclaim

if

any

has been

raised

Write

widely

to all

distributors

in a short

amount

of timeSlide6

UK – unjustified threats of patent infringement proceedings Alex May18 April 2016Slide7

1. What communications could attract liability?

Statutory cause of action:

Where a person (whether or not the proprietor)

threatens another person with UK court proceedings for infringement of a patentany person aggrieved by the threats (whether or not the person to whom the threats were made) may bring UK court proceedings against the person making the threats.Must relate to a UK or EP(UK) patent (or patent application).Objective test; context.Law reform in 2016:Threats to bring court proceedings in UK or elsewhere;Provided threats relate to acts done, or to be done, in UK.Slide8

2. How can liability be avoided?

Justified threats:

Acts in respect of which threats were made would constitute patent infringement; and

At the time of making the threats, the person who made them did not know, and had no reason to suspect, that the patent was invalid. Mere notification of a patent right.Enquiries to identify ‘primary actor’.Sue first, negotiate later v. comply with CPR.Threats made ‘without prejudice’.Non-specific threats.Law reform – communications not actionable threats if: not express; for a legitimate purpose; necessary for that purpose; and person communicating reasonably believes information is true.Slide9

3. Does the legal position vary depending on the identity of the recipient of the threat?

Threats made to primary actors:

Product claims:

Manufacturers.Importers.Process claims – users of the process.Can threaten regarding any other alleged infringements.Threats made to secondary infringers: ‘best endeavours’ to identify the primary actor have failed; andthose endeavours are specified in threat. Slide10

4. What are the potential sanctions/remedies for threatening infringement proceedings?

Remedies:

Declaration that the threats lacked justification.

Injunction to prevent further threats.Damages for losses caused by threats.Common law torts:Malicious falsehood.Unlawful interference with contractual relations.Slide11

5. Dos and don’ts

Only threaten primary actors.

Analyse infringement and validity positions before threatening secondary infringers.

Exhaust efforts to identify primary actor before threatening secondary infringers. Limit correspondence with secondary infringers to mere notifications. Sue secondary infringers before entering into correspondence.Obtain indemnity from client beforehand.Law reform – legal and patent attorney advisers exempt if:Adviser acting on instructions of client; andCommunication identifies client.Slide12

Warning letters and groundless threats – a Dutch perspective

Marijn van der Wal

Young EPLAW

BrusselsSlide13

No specific statutory

basis

Case

law based on general unlawful act under Art. 6:162 Dutch Civil CodeDoctrine known as 'fluttering' or 'waving' case lawContext drivenRelates to warning infringing parties or its customers for patent

infringement In principle, initiating court infringement proceedings without prior warning

allowed

Personal

liability

for

legal

advisors

unlikely

1. The Netherlands - OverviewSlide14

Warning (turns out to be) groundless

Invalid right

No

infringementAdditional blame can be allocated to patent holder Dutch Supreme Court (DSC) 6.4.1962 (Drefvelin/Wientjes)2. Threshold for liabilitySlide15

Catchphrase:

"patent proprietor knew or should have known of the serious, non-negligable chance that the patent was invalid (or not infringed)"

Derived from DSC 29.9.2006 (CFS Bakel/Stork)

2. Threshold for liability (II)Slide16

Examples of unlawful

warnings

:Earlier decision on the merits holding invalidity/non-infringementEarlier preliminary decision of invalidity/non-infringementWarnings to downstream clients onlyNo substantiation of asserted

infringementInsufficient infringement researchIncorrect suggestion of existence IP rights

2. Threshold for liability (III)Slide17

High threshold

for

warning primary source (additional blame)Principle: patent holder must be able able to enforce rightsWarning secondary infringing parties more likely to be

unlawful Tension with infringement awareness for damages

? (art. 45 TRIPS)

3. Varying addresseesSlide18

'Fluttering'-injunction (also cross-border)supported by penaltiesalso if previous warnings were allowable

Rectification

also if previous warnings were allowable

Account of all addressees Damagesonly for unlawful ‘fluttering’proof of suffered damages 4. Remedies against groundless threatsSlide19

Do

Validity and

infringement

research (do you homework)Stick to the factsMention unfavourable decisions5. Dos and don'tsDon'tWarn secondary infringers only, not the sourceKeep asserted (patent) rights unspecified

Involve other jurisdictions if assertions are uncertainSlide20

Belgium – Warning letters & threats

Kristof Neefs

18 April 2016Slide21

no requirement to send letter-before-action

Code of Economic Law:

Article VI.104 (unfair competition, incl. denigration)

Article VI.105 (discrediting/denigrating advertising)Article XV.107 (invoking capacity of registered IP holder)abuse of rights (Article 1382 Civil Code)

BE – overviewSlide22

Antwerp Comm. Court 3/04/2012, second screen application

“

In view of the breadth and depth of our portfolio, we hold the view that it is not necessary to specify infringement of every relevant patent we own.”

notice letter + refusal to specify relevant patents and infringing activities = act of unfair competitionwarning letter to determine the “playing field”Antwerp Comm. Court 20/10/2009, montelukast notice letter re patent A + reservation of all other rightsno waiver of the right to enforce patent B

BE – letter to ‘primary’ infringerSlide23

Antwerp Court of Appeal, 29/06/2015,

Multiwear

warning letter (copyright)

absence of reply by commercial undertaking creates presumption of acceptance (reversal of burden of proof) - ?Brussels Comm. Court 4/10/2011, clopidogelnotice letter to generic manufacturerGx files revocation proceedingspatentee does not defend patentnot an abuse of rights

BE – letter to ‘primary’ infringerSlide24

Notification of court proceedings must be objective:

Antwerp Court of Appeal, 15/10/2009,

Go fast

Brussels Court of Appeal, 24/06/2014, A-Fax Brussels Comm. Court, 23/04/2013, CofaceAccusations of infringement by a supplier amount to an act of unfair competition:Brussels Court of Appeal, 24/10/2000, AlnacoBrussels Comm. Court, 3/01/2007, Turtle Wax

BE – letter

to ‘secondary’ infringer or customersSlide25

injunctive relief (+ penalties for non-compliance)

d

amages (quantum?)

rectification to addresseespublication of judgment

BE – sanctions & remediesSlide26

BE – do & do not

DO

DO

NOT

inquire

with

/

accuse

the

addressee

(

directly

)

accuse

the

supplier

of

the

addressee

be

specific

and

complete

(or reserve

other

rights

)

promote

your

products

or services as

an

alternative

to

those

of

the

addressee’s

supplier

be

ready

to

state

your

case

systematically

send

warning

letters

to

a party’s

customers

reply

to

notice

letters (

if

only

to

formally

contest

its

contents)

objectively

notify

to

court

decisionsSlide27

[Client name]

27

Kasper Frahm

18 April 2016Denmark - Warning letters and groundless threatsSlide28

1. Denmark - OverviewNo specific statutory basis

Case law based on violations of the Danish Marketing Practices Act § 1

Culpable acts in violation of good marketing practices

No obligation to send a warning letter prior to initiating proceedings25 April 201628Young EPLAWSlide29

2. Denmark – What actions can attract liability

?

Warning letters with unreasonable claims or demands

Warning letters with a denigrating or contemptuous toneWarning turns out to be groundlessInvalid rightNo infringement… and this ought to have been reasonably obvious for the patent holderHowever, the mere fact that a patent is invalidated does not mean that the patent holder should have foreseen this if e.g. the EPO has already assessed the prior art document (which later forms the basis of invalidation of the patent), cf. DuPont Nutrition Biosciences v. Novozymes, the Maritime and Commercial High Court, case T-5-11. If the EPO has granted the patent there is a "clear assumption that the patent was valid"25 April 2016

Young EPLAW29Slide30

3. Denmark – Does the legal position vary depending on the

identity

of the recipient?

High threshold for warning primary infringerPatent holder is allowed to attempt to enforce rights, even if the patent is later invalidated or if the court finds that there was no infringement of the patent. A high level of impropriety is required in order for the warning letter/threat to be considered groundless.Lower threshold for warning secondary infringersParticularly if the secondary infringers are relatively small/weak compared to the patent holder25 April 2016Young EPLAW30Slide31

3. Denmark – Does the legal position vary depending on the

identity

of the recipient? (

cont.)Furnipart v Frost, the Supreme Court's decision of 12 Sept 2012 in case 293/2010Frost's director contacted two of Furnipart's custo- mers over the phone  Not a violation of good marketing practices because he did not denigrate Furnipart's productStokke v Leanderform, the Maritime and Commercial High Court's decision of 10 August 2010 in case V-30-09Stokke sent a letter to all of their dealers saying that Leanderform's chair constituted an infringe- ment of Stokke's Tripp Trapp chair and that they had 48 hours to stop selling Leanderform's chair or they would no longer be Stokke dealers.

Stokke did not inform that they had lost the identical case in Holland. A violation of good marketing practices. "Stokke should have known that such an incomplete and thus misleading approach was designed to significantly influence the market"

25 April 2016

Young EPLAW

31Slide32

3. Denmark – Does the legal position vary depending on the identity

of the recipient? (

cont

.)Tromborg v. Ferrosan, The Maritime and Commercial High Court's decision of 8 Feb 2013 in cases V-55-11 and V-108-11Tromborg contacted the owner of Ferrosan and contacted Pfizer's lawyer (Pfizer was in the process of purchasing Ferrosan) and was quoted in newspapers as accusing Ferrosan of "stealing our concept", "free-riding of Tromborg", "infringing our IP-rights", committing "low-down, dirty tricks" and "thievery" Not a violation of good marketing practices. "Just stating their own view" and "Ferrosan was provided a chance to reply"Sparta v ALT for damerne, the Supreme

Court's decision of 9 Jan 2013 in case 41/2001In a press statement Sparta accused ALT for damerne of "stealing", being "distasteful", being "very unfair and aggressive" and of "obviously acting in violation of good marketing practices"

 A violation of the Danish Marketing Practices Act

25 April 2016

32

Young EPLAWSlide33

4. Denmark - Remedies against groundless threats

Damages (the normal remedy)

Injunction against further threats

Rectification25 April 201633Young EPLAWSlide34

5. Denmark – Do's and don'ts

Do:

A thorough assessment before sending out a warning letter

Make it clear that you are stating your own (subjective) opinionMention unfavorable decisionsDon't:Send to secondary infringers without also sending to primary infringerDenigrate or otherwise devalue defendant and defendant's productPresent the matter as if it is clear unless it indeed is crystal clear25 April 201634Young EPLAWSlide35

Scenario

Our client, "

Skimania

" manufactures skis and fasteners in Germany and distributes them through distributors in Germany and in five countries (France, UK, Netherlands, Belgium, Denmark). A competitor, "Skipassion", has a European patent on some fasteners (designated in each country). Skipassion initiated preliminary injunction proceedings against Skimania in Germany.

The proceedings are pending. There are no proceedings in any other country. 

Skipassion

then sent a letter to

Skimania's

distributors in each of our countries to say that:

They hold a European patent.

They believe that the fasteners sold to them by

Skimania

infringe this patent.

Proceedings have been initiated in Germany.

Question:

what is the legal position in each country?