ABPI Associação Brasileira da Propriedade Intelectual (Brazil) Liability for contributory infringement of IPRs certain aspects of patent infringement
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1 Question Q204P National Group: ABPI Associação Brasileira da Propriedade Intelectual (Brazil) Title: Liability for contributory infringement of IPRs certain aspects of patent infringement Contributors: Joaquim Eugenio Goulart, Ivan Bacellar Ahlert, Natália Barzilai, David Merrylees, Márcio Merkl Viviane Yumy Mitsuuchi Kunisawa Representative within Working Committee: Joaquim Eugenio Goulart Date: Questions The Groups are invited to answer the following questions under their national laws I) Analysis of current legislation and case law 1. a) Is it a separate condition for the supply or offering of means to qualify as contributory patent infringement that the means supplied or offered were suitable to be put to a use that would infringe the patent? Article 42 of the Brazilian Industrial Property Law provides for the rights conferred by a patent. 1 of Art. 42 establish that the patentee is further guaranteed the right to prevent third parties from contributing to the practice by other parties of the acts referred to in this article. The complete text of article 42 is as follows: Article 42 - A patent confers on its proprietor the right to prevent third parties from manufacturing, using, offering for sale, selling or importing for such purposes without his consent: I - a product that is the subject of a patent; II - a process, or product directly obtained by a patented process; 1 - The patentee is further guaranteed the right to prevent third parties from contributing to the practice by other parties of the acts referred to in this article. ( ) In addition, Article 185 of the same Law states that the following is considered as a criminal offense: supplying a component of a patented product, or material or equipment for carrying out a patented process, provided that the final application of the component, material or equipment necessarily leads to the exploitation of the subject matter of the patent. 1
2 Under Art. 42 a party will be liable as contributory infringer either if components or material offered by him/her are particularly suitable to be used in connection with the patented invention and/or if he/she to some extent induces a third party to practice acts that are considered as direct infringement. According to Art. 42 even the supply of commercially available raw material or regular components capable of non-infringing uses can constitute contributory infringement depending on the specific circumstances. Art. 185, which specifies a criminal offence as opposed to only a civil tort, more directly deals with the situation in which the component, material or equipment necessarily leads to the exploitation of the subject matter of the patent, in other words, with the supply of means that are particularly suitable to be used in connection with the patented invention. In view of the statutory rules, it is possible to conclude that the Brazilian legislator s intention was to qualify as essential that the supplier leads the supplied party to infringe the patent. However, it is not necessarily a separate condition, particularly under Art. 42, that the supplied means is particularly suitable to be put to a use that would infringe the patent. Hence, for criminal liability it is a separate condition that means supplied or offered be suitable to be put to a use that would infringe the patent; however, there are opinions that a further act of direct infringing is not necessary for raising criminal liability over the contributory infringement. b) If yes to a), is it relevant that the means are also suitable to be put to other uses not related to the invention? Not if the patentee is able to prove that the supplier has induced the infringing use. As a matter of fact, criminal liability would very likely be removed if the means are also suitable to be put to non-infringing uses. As regards civil liability, if the means are also suitable to be put to non-infringing uses, contributory infringement would depend on the circumstances and the level of knowledge by the supplier about the potential infringing use of the means and/or the intentions of the person supplied. 2. a) Is it a condition for the supply or offering of means to qualify as contributory patent infringement that the person supplied intended, at the time of supply or offering, to put the means to an infringing use? No. In the case of a civil tort under article 42 (but not a criminal offense), the question is simply whether the supplier contributed to the infringement. It does not require that the supplied person intended or not, at the time of supply or offering, to put the means to an infringing use. In the case of a criminal offense under Art. 185, the difference is that the product supplied necessarily leads to the exploitation of the subject matter of the patent, but once more the patentee is not required to provide evidence to the effect that the person supplied intended, at the time of supply or offering, to put the means to an infringing use. b) If yes to a), is the element of intention a separate condition to any condition of suitability for an infringing use?. Except for a situation in which Art. 185 applies (criminal offense), it is not a separate condition, but an element that evidences the contributory infringement. 2
3 c) If yes to a) is it a condition for the supply or offering of means to qualify as contributory patent infringement that the supplier was aware, at the time of supply or offering, that the person supplied intended to put the means to an actually infringing use? In the case of article 42 (civil tort), the patentee has the right to prevent the supplier from contributing to the infringing use independently of his intention. Thus in the case of a supplier who has no knowledge of the fact that his action induces another party to infringe, he can still be prevented from supplying the product in question to that final infringer. However, it would certainly be more prudent for the patentee to provide evidence to the effect that the supplier was somehow aware of the infringing use before initiating any litigation based on contributory infringement, for example, by means of a formal warning to the supplier. In the specific situation provided for in Art. 185 (criminal offense), there is also no requirement to prove intent. 3. If it is a condition for the supply or offering of means to qualify as contributory patent infringement that the means relate to an essential, valuable or central element in the invention or that the means relate to an essential, valuable or central element in the product or service that constitutes direct infringement, what is the test for determining whether an element is essential, valuable or central? The Brazilian law does not establish as a condition to characterize an act of contributory infringement the supply or offering of means relate to an essential, valuable or central element in the invention. However, if the supplied element is not directly related to the claimed features, this supply would almost certainly not be considered as contributory infringement. 4. To the extent the means supplied or offered are staple commercial products, is it an additional condition for the supply or offering of means to qualify as contributory patent infringement that the supplier provides any instruction, recommendation or other inducement to the person supplied to put the goods supplied or offered to an infringing use? As mentioned above, even if the supplier was unaware of the use by the supplied person, the patentee under article 42 has the right to prevent further supply. Since it is not possible to prevent past supply, any future supply would be made after the supplier becomes aware of the contributory infringing activity and would be done with intent. 5. a) Is injunctive relief available against acts of contributory infringement? Yes. Moreover, when the patent owner has all necessary evidence to lodge its civil action, there are some preliminary measures that may be taken in order to stop the infringement immediately, including contributory infringement. According to Article 209 of the Industrial Property Law, in patent infringement cases, the judge is allowed to grant an ex parte restraining order to prevent future violations. In this situation, the defendant will not be permitted to sell the infringing goods during the civil action under the threat of a daily fine to be determined by the court. This injunction may be granted ex-parte and the judge may request the plaintiff to post a bond to guarantee the execution of the injunction. This bond is usually requested by the courts in infringement cases and is relatively nominal. 3
4 Before granting preliminary orders either for collecting evidence or restraining the defendant, the court must follow certain criteria: (1) The fumus boni juris: the plaintiff must demonstrate that there is a likelihood of success, that it has the right to protection and that the defendant is infringing the patent (the Letters Patent and an expert report confirming patent infringement can be very powerful pieces of evidence); and (2) The periculum in mora: the judge must be convinced that the plaintiff s right is threatened by an activity of the defendant and could be severely damaged if no action is taken before a final decision on the merits is rendered. In civil law, a preliminary injunction can be requested at any time and even before the defendant knows of the action. The judge may even grant a preliminary injunction without an express request by the plaintiff if he/she considers that serving the defendant with the summons would risk the integrity of the evidence. A preliminary injunction, if not reversed in an interlocutory appeal procedure, may remain inforce until the final decision which, in turn, may provide permanent injunctive relief b) If yes to a), may injunctive relief be directed against the manufacture of the means per se or the supply of the means per se? It is possible to be directed against either the supplier or the manufacturer or even both, as far as the main goal of the injunctive relief is to stop the potential direct patent infringement. If in order to stop the patent infringement the judge has to grant a restraining order that is against the manufacture of the means per se and/or the supply of the means per se, then such injunctive relief is totally feasible. In Brazil, judges have discretionary power to grant preliminary injunctions or injunctive relief orders in order to stop the violation. There are no limitations, besides the ones mentioned in item 5a above. Therefore, in theory, if the contributory infringement is proven, it is possible to stop the entire manufacturing/supplying chain. c) If no to b), must the injunction be limited to manufacture or supply of the means in circumstances which would amount to contributory infringement? Although it is not a statutory requirement that the injunction be limited to manufacture or supply of the means in circumstances which would amount to contributory infringement, a court would usually require convincing evidence of irreparable harm and/or a likelihood that the manufacture or supply of the means in circumstances would amount to contributory infringement. d) If yes to c), how in practice should this limitation be included in injunction orders, for example: Not applicable. i) may claims for injunctive relief be directed for example against the abstract or hypothetical situation that the means are supplied in 4
5 circumstances where the supplier is aware that the person supplied intends to put the means to an infringing use, and/or Notwithstanding that it should not be a requirement that injunctive orders be limited to concrete and real situations, only in very particular cases a court would direct an injunction order against an abstract or hypothetical situation, without further identifying at least the person supplied or the detailed circumstances of knowledge of the intent of the person supplied. ii) must claims for injunctive relief be directed against particular shipments of means for which the supplied person s intent and the supplier's knowledge has been proven? It should not be a general requirement that the injunction relief be directed against particular shipments of means for which the supplied person s intent and the supplier's knowledge has been proven, although a court would usually require that the injunctive relief be limited to particular shipments, or for shipments during a particular period of time. 6. Is it a condition for the supply or offering of means to qualify as contributory patent infringement that the intended use of means for actual infringement is intended to take place in the country where the means are supplied or offered? Generally, if the actual infringement will take place in another country (not in Brazil), it is more dificult to qualify the local supplier as a contributory infringer. However it should be noted that where 2 of Art. 42 refers to the possibility to prevent third parties from contributing to the practice by other parties of the acts outlined in Art. 42, presumably the patentee is also allowed to prevent a party from performing economic activities in Brazil for providing means for a third party to assemble and use the invention in another country. The justification of the amendment bill introducing civil liability for contributory infringement in the Industrial Property Law specifically addressed the situation in which a means is supplied in Brazil for manufacturing the patented invention abroad. The final wording of the article does not contemplate any territorial limitation, but there is some controversy because of the territoriality limitations included in the acts that qualify as direct infringement; but as a general rule, it might be considered that an act of offering or supplying the means on one country may qualify as contributory infringement even if the intended use of means for actual (direct) infringement is intended to take place in another country. Moreover, according to Art. 185 the act of supplying a component of a patented product, or material or equipment for carrying out a patented process which final application necessarily leads to the exploitation of the subject matter of the patent will constitute infringement irrespective of the place where the final use occurs. In this regard, the Criminal Code specifically states that the crime may be considered as committed in the place where the acts produced or could produce results. 7. How is it to be determined where means are supplied or offered? For example: 5
6 Supplier X conducts business in country A, X agrees to supply person Y with means for an infringing use in country B. Are the means supplied in country A or B or in both? Based on the answer to item 6, depending on the circumstances the means can be considered to be supplied in A, specially if Art. 185 applies. Supplier X undertakes to deliver means free on board in a harbour in country A in the same circumstances Are the means supplied in country A or B or in both? Irrelevant, same as above. Supplier X undertakes to deliver means free on board in a harbour in country B in the same circumstances Are the means supplied in country A or B or in both? Irrelevant, same as above. If the offer was made in country A but accepted in country B, are the means supplied in country A or B or in both? Irrelevant, same as above. 8. If means suitable for being incorporated into a patented product P are supplied by supplier X in country A to person Y, in circumstances where it was known to X (or it was obvious in the circumstances): i) that Y intended to export the means to country B and complete product P in country B; and ii) that Y intended to export the completed product P into country A, would Y then be regarded as having intended to put the means to an infringing use in country A by importing and selling product P in country A, with the consequence that X could be held liable for contributory infringement in country A by supplying the means to Y? Yes. 9. a) Is the question of contributory infringement determined in accordance with the law of the country in which the means are: i) offered; or ii) supplied? As already commented, both, depending on the circumstances. b) What is the applicable law if the means are offered in country A but supplied in country B? If a party in Brazil offers means for another party to carry out a patented invention in another country, Art. 42 will possibly apply if the offer per se can be deemed to constitue a contribution for another party to use the invention (even if abroad). Probably it will be relevant to determine if the act of offering alone constitutes an economic activity. c) Are there any other relevant principles to determine the applicable law? The applicable law is determined by the place where the direct or contributory infringement takes place. II) Proposals for substantive harmonisation 6
7 The Groups are invited to put forward their proposals for adoption of uniform rules, and in particular consider the following questions: Considering (i) the current substantial diversity in the national legal systems and (ii) the present difficulties in advancing in the discussions about harmonization of patenteability requirements both in WIPO and in the group B+, the Brazilian group considers premature to consider harmonization of issues related to enforcement of patent rights. However, especially taking into account the current cross-border nature of manufacture and of doing business, the Brazilian Group does consider that it would be beneficial if all countries were to provide some form of contributory infringement provisions in their legislations. 1. In a harmonised system of patent law, what should be the conditions for an act of supply or offering of means to qualify as a contributory patent infringement? In a harmonised system of patent law, the conditions for an act of supply or offering of means to qualify as a contributory patent infringement should include that: the means supplied or offered by the contributory infringer relate to a substantial element of the subject matter of the patent; the means supplied or offered by the contributory infringer are for a use in accordance with the patent, where the contributory infringement is taking place; at the time of offering or supply, the suitability and intended use were known to the supplier or obvious under the circumstances; 2. In a harmonised system of patent law, to what extent should injunctive relief be available to prevent contributory patent infringement? Injuctive relief for preventing contributory infringement should be available to the same extent as for direct infringement. 3. In a harmonised system of patent law, how should it be determined where means are supplied or offered? 4. Should special rules apply to offers transmitted via electronic devices or placed on the internet? 5. In a harmonised system of patent law, how should it be determined which country's law should apply to acts of offering or supplying means where persons or actions in more than one country are involved? 6. Does your Group have any other views or proposals for harmonisation in this area? In addition to and independent of substantive harmonisation, in order to provide for effective enforcement of patent rights (either in direct or contributory infringement cases), the Brazilian group understands that efforts should be made towards judicial co-operation mechanisms in bilateral/multilateral treaties, already existing or to be negotiated. Note: It will be helpful and appreciated if the Groups follow the order of the questions in their Reports and use the questions and numbers for each answer. 7
8 December 2009 SUMMARY The Brazilian Industrial Property Law presents different rules with regard to contributory infringement, which can be characterized as both a civil tort and a criminal offence. Under Art. 42 a party will be liable as contributory infringer either if components or material offered by him/her are particularly suitable to be used in connection with the patented invention and/or if he/she to some extent induces a third party to practice acts that are considered as direct infringement. Art. 185, which specifies a criminal offence as opposed to only a civil tort, more directly deals with the situation in which the supply of means that are particularly suitable to be used in connection with the patented invention. Moreover, presumably the patentee is also allowed to prevent a party from performing economic activities in Brazil for providing means for a third party to assemble and use the invention in another country. Considering (i) the current substantial diversity in the national legal systems and (ii) the present difficulties in advancing in the discussions about harmonization of patentability requirements both in WIPO and in the group B+, the Brazilian group considers premature to consider harmonization of issues related to enforcement of patent rights. However, especially taking into account the current cross-border nature of manufacture and of doing business, the Brazilian Group does consider that it would be beneficial if all countries were to provide some form of contributory infringement provisions in their legislations. RÉSUMÉ La loi brésilienne de propriété industrielle presente différents régléments concernant la fourniture de moyen de droit de propriété intellectuelle, laquelle peut être caracterisée comme responsabilité pour faute et aussi un délit. Selon l article 42, une personne serait considérée un contrefacteur par fourniture des moyens si les éléments ou matériels offerts pour lui sont particulièrement approprié pour être utilisés en rapport à l invention bréveté et/ou si lui induit un tiers a exercer des actes des infractions directes. L article 185 fait mention à la sanction criminelle en opposition à la responsabilité civile, de manière plus spécifique mentionne la situation où l approvisionnement est particulièrement aproprié pour être utilisé en conexion avec l invention brévété. En plus, se suppose que le titulaire du brévet est aussi autorisé a empecher de tiers a assembler ou utiliser l invention dans un autre pays. Considerant (i) l actuelle diversité substantielle dans les législations nationalles et (ii) l actuelle difficulté dans l évolution des discussions sur l harmonisation des conditions de brévetabilité, soit dans l OMPI, soit dans le groupe B+, le groupe brésilien considère 8
9 prémature penser à l harmonisation des questions concernant l application des droits des brévets. Néamoins, considerant spécialement l actuel nature internationale de la manufacture et du commerce, le groupe brésilien considère qu il serait une évolution si tous les pays auraint quelques reglémentations sur la contrefaçon par fourniture des moyens dans ses législations. ZUSAMMENFASSUNG Das brasilianische Gesetz für Gewerbliches Eigentum beinhaltet verschiedene Vor-schriften im Hinblick auf die mittelbare Verletzung, die sowohl als ein Delikt als auch eine Straftat charakterisiert werden kann. Gemäss Art. 42 wird eine Partei als mittelbare Verletzer betrachtet, entweder wenn von dieser Partei Komponenten oder Material angeboten werden, die besonders geeignet sind in Verbindung mit der patentierten Erfindung verwendet zu werden und/oder wenn diese Partei zu einem gewissen Grad Dritte zur Durchführung von Aktivitäten beinflusst, die als direkte Verletzung betrachtet werden. Art. 185, der eine Straftat definiert im Gegensatz zu lediglich einem Delikt befasst sich direkter mit der Situation der Bereitstellung von Mitteln, die besonders geeignet sind, im Zusammenhang mit der patentierten Erfindung verwendet zu werden. Darüber hinaus ist es dem Patentinhaber vermutlich auch erlaubt, eine Partei an der Durchführung wirtschaftlicher Aktivitäten in Brasilien zu hindern mit dem Zweck der Bereitstellung von Mitteln, damit Dritte die Erfindung in einem anderen Land zusammen bauen und verwenden. In Anbetracht der Tatsache, dass (i) die aktuelle erhebliche Vielfalt in den nationalen Rechtsordnungen und (ii) die derzeitigen Schwierigkeiten bei den Fortschritten in den Diskussionen über die Harmonisierung der Anforderungen hinsichtlich Patentierbarkeit sowohl in WIPO als auch in der Gruppe B+, ist die brasilianische Gruppe der Auffassung, dass eine Harmonisierung von Bestimmungen hinsichtlich die Durchsetzung von Patentrechten verfrüht ist. Jedoch vor allem unter Berücksichtigung des aktuellen grenzüberschreitenden Charakters der Herstellung und Geschäftstätigkeit, ist die brasilianische Gruppe der Ansicht, dass es vorteilhaft wäre, wenn alle Länder eine gewisse Art von Bestimmungen hinsichtlich mittelbaren Verletzungen in ihren Rechtsvorschriften vorsehen würden. 9
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