AIPPI Congress Report 2: Out of term - provisional and post term patent enforcement

Before lunch yesterday, attendees were treated to a session on the protection and potential remedies that may be available for patents before issue and after expiry.  With Steve Garland (Smart & Biggar) at the helm, the AmeriKat summarizes the four key points coming from the session as follows: 

Views from the pre-grant and post-expiry remedies session

1.  Use Italian preliminary measures to weaponize an early injunction threat with a pre-grant injunction.  Judge Marina Tavassi (President of the Milan Court of Appeal) explained that in Italy there is a tradition of patentees seeking and obtaining pre-grant injunctions on the basis of their published, but not granted, patent applications.  It was explained that this tool was available in recognition and to counterbalance the length of the ultimate substantive patent proceedings. Judge Tavassi noted that the patent trials in Italy are speeding up, particularly because, she said, Italy enjoys specialist IP courts. 

2.  US and UK law allows for pre-issuance damages (but not pre-grant injunctions) (35 USC 154(d)).  Philip Swain (Foley Hoag) noted that this was a relatively recent development in the US stemming from the change in the law when patent applications started to be published.  If the owner of the patent proves the use of the invention as claimed in the published patent application by the accused infringer and the accused infringer had actual notice of the published patent application (i.e via a notification letter or came across it themselves), then damages can be obtained.  You cannot obtain damages based on a constructive notice (see Rosebud v Adobe Systems (Fed Cir 2016)).  Proving actual notice is challenging, thus why it is difficult in practice to obtain pre-issuance damages.  This is different to the position in the UK which operates more on a constructive notice basis - you are deemed to be aware of the application when it is published, but an English translation needs to be on file.  Thus why patentees need to be diligent in filing their translations. Dominic Adair explained that upon grant, you can apply for pre-grant damages unless the defendant can rely on an innocent infringement defence and say that they operate in a different field and didn't know about it (but that is really rare). 

3.  Post-term enforcement in the US is not available. Philip explained that the basic premise is that that infringement is limited to acts that take place during the term of the patent (35 USC 271(a)).  This was reinforced in Kimble v Marvel Entertainment (Supreme Court, 2015).  However the case law recognizes that the parties can engage in behavior during the term of the patent which can result in compensation for activities that happen after expiry.  In particular, the Kimble decision recognized that parties could enter into royalty agreements that allowed parties to agree to pay royalties on sales made after the patent has expired.  For example, parties can agree to pay a lump sum royalty before patent expiration that covered post-expiration sales.  However post-expiration running royalties are not recoverable under Kimble.  Kimble also does not address claims for lost profits based on accelerated market entry.  Damages can be awarded for accelerated market re-entry damages (i.e. the infringer has a "head start").  These cases, include BIC Leisure v Windsurfing International (1988), Amsted Industry v National Castings (1990), TP Orthodontics v Professional Positioners (1990) and Magna Electronic v TRW Auto Holdings (2015). 

4.  Springboard injunctions and bridgehead damages are equitable remedies in the UK  - the touchstone is fairness. Dominic Adair (Bristows) explained that the UK Courts looks backwards at the defendants' behavior and will look as to whether the  acts of the defendant amounted to an unwarranted head start/commercial advantage.  There has to be an infringing act during the patent term.  The case law in the UK derives in part from confidential information cases and, in particular, the term "springboard" was coined in such a case (Terrapin v Builders Supply).  Where damages are not adequate, springboard injunctions may be a fairer remedy.  But, springboard injunctions are not common. The most famous example of the Court granting a springboard injunction was Dyson v Hoover [2001] RPC 27, but there is limited jurisprudence in the UK.  This limitation was recognized by Jacob LJ in Mayne Pharma.  The CJEU case of Generics BV v Smith Kline & French [1997] RPC 801 is also often cited.  That case took place before SPCs when post-term injunctions could compensate an innovator patentee for regulatory delay (see paras 27 and 28).  This case would not happen today in light of Bolar and the SPC Regulation.  Sometimes interim injunctions are granted in order to prevent the defendant building a bridgehead (see Monsanto v Stauffer [1984] FSR 574).  The parallel New Zealand case before Eichelbaum J seems to suggest that the patentee should also enjoy an "after glow" of the patent post expiry to ensure that the patentee is also in a strong position after expiry.  However, care is taken by the UK not to over compensate the patentee.  Dom asked whether this should be extended to not over punishing the infringer.  Springboard injuncted generics may not simply lose their hoped for first mover advantage, they may also end up at the bottom of the pile if there is rapid competition (an issue which could be dealt with by duration of the injunction).  Dom also flagged some difficult questions, including the limits of the remedy within and outside of the jurisdiction. For example, what if the bridgehead advantage is built up in another jurisdiction?  There are no post-expiry springboard injunctions in the US for patents, but they are present for trade secret cases and are known as a "head start injunction". 

There were numerous questions from the audience as to whether other EPC Contracting Member States would ever follow the Italian example of pre-issuance injunctive proceedings, but no definitive view was reached.  The AmeriKat admits to not quite understanding the legal basis for such a remedy in Italy and how often they are granted, so perhaps our Italian readers can shed some light on the legal basis.