The CJEU sheds light on the way to calculate the term of SPCs

Article 13 (1) of Regulation EC No. 469/2009 (concerning the supplementary protection certificate for medicinal products, “SPC”) provides that SPCs are calculated on the basis of “the date of first authorisation to place the product one the market in the Community”. Existing SPC regulation is however ambiguous on this point and EU member states have adopted divergent practices.

By decision of 2 October 2014 the Oberlandesgericht Wien has referred questions to CJEU on a preliminary ruling regarding the calculation of SPCs term under Article 13 (1) of Regulation EC No. 469/2009.

The referral concerned two queries: a) whether the date of an MA (Market Authorization) has to be determined according to Community law or that of the member state where the SPC application is filed; b) whether (under Community law) “the date of the first authorisation” – as per Article 13(1) of the Regulation – is the date the MA actually issued or the date the applicant is notified.

The CJEU issued its Decision on 6 October 2015 in the case C-471/14, Seattle Genetics Inc. v Österreichisches Patentamt (full text here).

Confirming both the conclusions and the arguments submitted by the Advocate General Niilo Jääskinen in his Opinion as of September 10, 2015, the Court clarified: a) that, since Article 13(1) of aforesaid Regulation contains no express reference to the laws of the member states, it is necessary to adopt an independent and uniform interpretation that will be valid throughout the EU; b) that the date of the first authorisation is a matter of Community law, not of the legislation of the member state where the marketing authorisation has effect. The Court declared that the EU legislator chose to use the Regulation as the legal instrument to create a standard SPCs system.

In evaluating the second question, the CJEU further pointed out that SPCs were created to ensure sufficient protection to encourage pharmaceutical research, in light of the fact the period of exclusivity granted by patents concerning pharmaceutical products is insufficient to cover the R&D investment necessary.

In this context, the right to market a new drug arises on the date the patent holder becomes aware that the MA has been issued.

The Court therefore answered the second question by confirming that it is the date of notification of the MA that is to be considered the “date of the first authorisation”, this is the date to be taken into account in calculating the term of SPC.

As a result of this ruling, SPCs holders will benefit from a longer term of protection – by up to some weeks. Furthermore, a number of SPCs will likely need to have their duration recalculated.

 Matteo Aiosa

Court of Justice, Eighth Chamber, 6 October 2015, C-471/14, Seattle Genetics Inc. v Österreichisches Patentamt.

Huawei v. ZTE: Enforcing standard-essential patents as abuse of dominance

Following the request for a preliminary ruling issued by the Landgericht of Düsseldorf (Germany), on July 16th 2015, the European Court of Justice addressed the question whether or not, and at what conditions, the firm holding a standard-essential patent (SEP: namely, a patent essential to produce manufactures in compliance with a particular standard), which has committed to grant a license to third parties on FRAND terms, abuses its dominant position by seeking injunctions against alleged infringers (decision available here).

The long-awaited judgment of the Court confirms the general approach adopted by the Commission in both Motorola and Samsung cases (available here and here). However, while the Commission had merely stated that enforcing a SEP in court can constitute an abuse of dominance under certain circumstances, the ECJ decision goes further, clarifying what those circumstances are. In particular, the Court held that seeking an injunction against an alleged infringer does not violate competition law when the following conditions are met:

  1. prior to bringing the action, the SEP holder has informed the alleged infringer of the violation of its intellectual property right, specifying the mode of infringement;
  2. the SEP holder has presented a written offer for a license on FRAND terms to the “infringer” (which has previously expressed its intention to conclude a license agreement). The offer must include all the relevant conditions of the agreement, in particular the royalty rate applied and the way it is calculated;
  3. the potential licensee has not “diligently responded to [patent owner’s] offer in accordance with recognized commercial practices in the field and in good faith”, and has continued to use the protected technology.

The decision of the Court of Justice seems to subordinate the finding of abuse to the “bad faith” of both SEP owners and producers of standard-based products. On the one hand, the formers have to concretely fulfill the obligation to the standardization bodies consisting in giving a license on FRAND conditions to third parties. Indeed, a patent cannot obtain the SEP status unless the legitimate holder undertakes to grant a FRAND license to anyone who may require it, in order to prevent the SEP holder from “reserv[ing] to itself the manufacture of the products in question”. Thus, it is not surprising that, according to the ECJ, the patent owner may incur in an abuse of dominance if it seeks an infringement injunction without even submitting a licensing agreement to the alleged infringer.

On the other hand, the ECJ imposes the obligation of good faith also to the potential licensee, which – having decided not to accept the offer submitted by the patent owner – “may rely on the abusive nature of an action for a prohibitory injunction or for the recall of products only if it has submitted to the proprietor of the SEP in question, promptly and in writing, a specific counter-offer that corresponds to FRAND terms”.

The ECJ judgment has definitely the merit of striking a reasonable balance between the interests at stake: those of the potential (and willing) licensees, which supposedly made specific investments relying on the FRAND license promised by the SEP holder; and those of the SEP holder itself, which should be granted the right to effectively protect its intellectual property rights from free-riders.

Nonetheless, the intervention of European judges leaves some issues unsolved. Firstly, the decision does not explain when a license can be considered FRAND. Secondly, it does not answer the question whether holding a SEP implies, per se, a dominant position on the market (actually, the referring court had not asked about the finding of dominance). At first glance, there seems to be the glimmer of an opening for such a conclusion. A passage of the sentence, in fact, reads as follows: “[…] the patent at issue is essential to a standard established by a standardization body, rendering its use indispensable to all competitors which envisage manufacturing products that comply with the standard to which it is linked. That features distinguishes SEPs from patents that are non essential to a standard and which normally allow third parties to manufacture competing products without recourse to the patent concerned and without compromising the essential functions of the product in question” (emphasis added). This appears quite close to an irrebuttable presumption of dominance. A debatable position: in my view, the presumption should be rebuttable (as suggested by the Advocate General Whatalet in his opinion, available here), hence the judges should continue assessing, case-by-case, a situation of actual, effective dominance.

Piera Francesca Piserà

CJEU, 16 July 2015, case C-170/2013, Huawei Technologies Co. Ltd. v. ZTE Deutschland GmbH.

Topographic maps as databases: CJEU

The CJEU ruled that topographic maps may fall within database protection under Directive 96/9 (full text here). The dispute concerned the use by Verlag Esterbauer, an Austrian travel books publisher, of certain topographic maps published by the Land of Bavaria. In particular, Verlag Esterbauer scanned the maps and extracted the underlying geographic data with a graphics programme to produce and market its own maps dedicated to walkers and cyclists.

According to the Court, the concept of “database” must be interpreted widely, as collections of works and/or other data, in any form, without technical or material restrictions, therefore applying also to analog databases. Indeed, the Court stressed the “functional” nature of database protection and its aim at fostering investment in data processing systems.

The main requirement of a database under Art. 1(2) of Directive 96/9 is the existence of “independent materials”, i.e. separable without affecting their value. Independent materials can also consist of combination of pieces of information, if they have autonomous informative value after being extracted. This may be the case of geographical information (e.g., “geographical coordinates point” plus “the numbered code used by the map producer to designate a unique feature, such as a church”), as long as the extraction of such data from the map does not affect their autonomous value. Under the broad definition of database, this autonomous value shall be assessed vis-à-vis the degree of interest of third parties to the extracted material, irrespective of the fact that such value might diminish after the extraction.

The Court found that in the captioned case: (i) Verlag Esterbauer made an autonomous commercial use of the information extracted from the Land of Bavaria’s maps, and (ii) it provided its customers relevant geographical information. Thus, such geographical information constitutes “independent material” from a database.

It seems all too evident that the Court, in line with its settled case-law (see our comments on the Ryanair case here), keeps broadening the notion of database under Directive 96/9 with the aim of further protecting investments in the information market.

Francesco Banterle

CJEU, 29 October 2015, Case C-490/14, Freistaat Bayern v Verlag Esterbauer GmbH

The CJEU on the assessment of the likelihood of confusion between Arabic words which are visually similar, but different in pronunciation and concept

On March 28, 2014, the Brussels Court of Appeal lodged a request for a preliminary ruling by the Court of Justice of the European Union (Case C-147/14, full text here). The reference was made in the course of a proceedings concerning the infringement of the two Community trademarks “EL-BENNA” and “E-BNINA”, registered by the Management Loutfi Propriété intellectuelle SARL (“Loutfi”) for goods in Class 29, 30, 32, from the Benelux trademark “EL-BAINA”, filed by the AMJ Meatproducts NV (“Meatproducts”) for goods in Class 29 and 30. The Court of Appeal held that both Loutfi’s and Meatproducts’ trademarks were registered for goods (halal products) that were identical or at least similar, and that the relevant public for assessing the likelihood confusion was the normal Muslim consumer of halal food in the EU, who had at least a basic knowledge of Arabic. Furthermore, comparing the marks orally and conceptually, the Court determined that the words EL BENNA, EL BNINA and EL BAINA did not have a meaning in one of the official languages of the European Union, and all of them had different meanings and pronunciations in the Arabic language.

On the basis of that, the Court asked CJEU if the Article 9 (1)(b) of CTMR must be interpreted as meaning that, in the assessment of the likelihood of confusion between a Community trade mark in which an Arabic word is dominant and a sign in which a different, but visually similar, Arabic word is dominant, the difference in pronunciation and meaning between those words may, or even must, be examined and taken into account by the competent courts of the Member States, even though Arabic is not an official language of the European Union or of the Member States. The CJEU (Tenth Chamber), with the decision of 25 June 2015, ruled that: “Article 9(1)(b) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark must be interpreted as meaning that, in order to assess the likelihood of confusion that may exist between a Community trade mark and a sign which cover identical or similar goods and which both contain a dominant Arabic word in Latin and Arabic script, those words being visually similar, in circumstances where the relevant public for the Community trade mark and for the sign at issue has a basic knowledge of written Arabic, the meaning and pronunciation of those words must be taken into account”.

It might seem absurd that for the Community trade mark the relevant public does not necessarily coincide with the ethnic belonging to a Member State of the European Union. However, the decision of the CJEU is consistent with its previous guidance, both in the identification of the relevant public, i.e. the Muslim as “the average consumer of the category of products concerned (which) is deemed to be reasonably well-informed and reasonably observant and circumspect” (CJEU 22 June 1999, case C-342/97, Lloyd/Klijsen; Lloyd/Loint’s), and in the global appreciation of the likelihood, having taken “into account all factors relevant to the circumstances of the case” (CJEU 11 November 1997, case C-251/95, Puma/Sabel). 

– Update –

The parameter of the average consumer is further strengthened by the decision of 21 January 2016, case C-75/14, “Verlados” / “Calvados” the CJEU stated that, in order to assess whether there is an ‘evocation’ in the field of geographical indications (within the Article 16(b) of Regulation (EC) No 110/2008) it must be taken into consideration “the phonetic and visual relationship between those names and any evidence that may show that such a relationship is not fortuitous, so as to ascertain whether, when the average European consumer, reasonably well informed and reasonably observant and circumspect, is confronted with the name of a product, the image triggered in his mind is that of the product whose geographical indication is protected”.

A consideration is compulsory: are we really sure that at the present time, where consumers make millions online purchases every day with a simple click spending a matters of seconds to choose and buy a product – just relying only few images and a brief description of the same and without the possibility to try it – the parameter of the average consumer which is reasonable observant and circumspect is still true? Maybe a change of course should be considered with reference to the attention paid by the “e-consumer”, and the right of withdrawal within at least 14 days provided by the consumer laws is a clear indication of the need of a major protection for those who make online purchases.

 Matteo Aiosa

Court of Justice, Tenth Chamber, 25 June 2015,  C-147/14, Loutfi Management Propriété intellectuelle SARL.v AMJ Meatproducts NV- Halalsupply NV.

The ECJ delimit the scope of the human embryos’ uses unpatentability

Corte-di-Giustizia-Unione-Europea-CGUE-2In International Stem Cell Corp., 18 December 2014, C-364/13 (full text here), the ECJ returns on the meaning of “human embryo” for the purpose of their uses’ unpatentability laid down in art. 6(2)(c) of Dir. 98/44/EC on the legal protection of biotechnological inventions. The Court was asked to clarify the scope of its previous ruling in Brüstle, 18 October 2011, C-34/10, where that concept was interpreted in a wide sense as including not only embryos created by ovum’s fertilization, but also non-fertilized one, if such ova are capable of commencing the process of a human being’s development.

The Court established that it is correct to infer from the absence of such a capacity that human cells generated through parthenogenesis (a form of asexual reproduction in which growth of embryos  occurs without fertilization) do not constitute ‘human embryo’. Organisms which are not capable of developing into a human being can not be considered “human embryos” and therefore are not eligible for patent protection. It is for the referring Court to determine whether or not. The decision apparently centers two objectives: to be coherent with the Directive’s aim to exclude patentability where respect for human dignity could be affected and to delimit this exclusion, allowing the Member States no discretionality.

Jacopo Ciani

ECJ (Grand Chamber), 18 December 2014, C-364/13, International Stem Cell Corporation v. Comptroller General of Patents, Designs and Trade Marks

ECJ: the Owner of an Online Database not Protected by Copyright or Sui Generis Right May Limit its Use by Contract

On January 15, 2015 the Court of Justice of the European Union (ECJ), in Ryanair Ltd v PR Aviation BV, C-30/14, handed down a decision concerning the interpretation of Directive 96/9/EC on the legal protection of databases (full text here). The case concerned the unauthorized extraction of flight data (so called ‘screen scraping’) from Ryanair’s website by the PR Aviation, which operates a price comparison website where users can also book a flight on payment of commissions. Access to Ryanair’s website requires acceptance of the air company’s T&Cs, by ticking a box, which prohibit unauthorized ‘screen scraping’ practices.

Ryanair brought proceedings against PR Aviation before Dutch courts for infringement of copyright and sui generis right on its database as well as breach of contract. Upon preliminary ruling requested by the Dutch Supreme Court, the ECJ ruled that the Directive 96/9/EC is not applicable to databases which are not protected either by copyright or by the so-called sui generis database right granted to the maker of the database (whether Ryanair’s website may be entitled to such protection shall be determined by the competent national court).

Therefore, according to the ECJ, mandatory exceptions to restricted acts laid down by Articles 6 and 8 of the Directive (allowing the ‘lawful user’ of the same to use the protected database without the author’s or maker’s consent, in certain cases and if certain conditions are met) do not prevent the database owner from laying down contractual limitations on its use by third parties, while the same contractual limitations are null and void vis-à-vis lawful users of those databases which benefit from copyright and/or sui generis right protections.

While the interpretative principle outlined by the ECJ is actually not very striking (insofar as it is rather clear from the literal text of the Database Directive that the legal regime implemented by it – including the mandatory rights of ‘lawful users’ – only apply to those databases which can be protected with copyright or the sui generis right), it is important to highlight that, according to general principles of contract law, any contractual provisions governing the use of unprotected databases may only be binding on third parties who accepted those provisions (and that, accordingly, should be deemed to be already aware of their content) and, conversely, cannot bind any third parties extraneous to the contractual relationship with the website owner. In the Ryanair case discussed above, the ECJ makes clear that the company that had ‘scraped’ Ryanair’s flight data without authorization had previously accepted Ryanair’s general T&Cs by ticking a box to that effect. What about if ones were to take the disputed flight data not from Ryanair’s website but from the price comparison’s website? In this scenario, Ryanair’s T&Cs, notably the ‘screen scraping’ prohibition, should not be deemed to apply.

Federica De Santis

Court of Justice, 15 January 2015, C-30/, Ryanair Ltd v PR Aviation BV, C-30/14