French case law on the consequences of the revocation of a patent on the payment of royalties by the licensee and of damages by the infringer Venice European patent judges forum 24 October 2015 Sabine Agé Paris Lyon French case law on the consequences of the revocation of a patent on the payment of: 1. Royalties by the licensee 2. Damages by the infringer 2 Sabine Agé, Véron & Associés 1
1. French case law on the consequences of the revocation of a patent on the payment of royalties Contemplated scenario: Patent licence agreement The licensee pays royalties pursuant to this agreement The patent is later revoked What are the consequences of the revocation on the payment of royalties for the past? 3 French case law Royalties paid before the revocation of the patent are not reimbursed to the licensee The reason behind is that the licensee implemented the patent until its revocation and thus had an advantage over its competitors No royalties are due for the future as of the revocation of the patent 4 Sabine Agé, Véron & Associés 2
Cour d appel de Paris, 23 September 2014, Genentech v. Hoechst and Sanofi The Cour d appel de Paris referred the following question to the CJEU: Should the provisions of Article 81 of the Treaty, now Article 101 of the Treaty on the Functioning of the European Union, be interpreted as an obstacle to giving effect, in case of invalidation of the patents, to a licence agreement which imposes on the licensee royalties for the sole use of the rights attached to the patents under licence? 5 Cour d appel de Paris, 23 September 2014, Genentech v. Hoechst and Sanofi The cour d appel questions the compatibility with EU competition law of an arbitral award which ordered Genentech, the licensee, to pay 100,000,000 royalties to Hoechst, the licensor, for use of a patent revoked in Europe The question referred to the CJEU does not reflect the specific circumstances of the case 6 Sabine Agé, Véron & Associés 3
Genentech v. Hoechst and Sanofi: timeline of the case 7 Genentech s arguments based on antitrust law The arbitral award violates EU competition law by ordering Genentech to pay royalties while: no patent infringement was found: requiring it to bear, for a technology which is not patented and is accessible without restriction, costs which are unjustified the patent had been invalidated: by forcing the licensee to payment of royalties without cause by the effect of the invalidation of the patents attached to the granted rights, it inflicts a disadvantage in competition on the licensee; 8 Sabine Agé, Véron & Associés 4
Genentech v. Hoechst and Sanofi: what consequences? Payment of royalties was dependant on a finding of infringement: could they be considered as being accrued? Licence fees should be due for the past in case of revocation of the patent but challenges by licensees on the grounds of competition law can be expected Wait and see the decision of the CJEU ( C-567/14) 9 2. French case law on the consequences of the revocation of a patent on the infringer Contemplated scenario: A decision finding infringement and ordering the payment of damages to the patentee The patent is later revoked What are the consequences of the patent revocation on the payment of the damages? 10 Sabine Agé, Véron & Associés 5
French case law Cour de cassation, en banc, 17 February 2012, Reginald Wehrkamp-Richter v. Louis Paul Guitay, LPG Systems: damages paid pursuant to an irrevocable decision are not reimbursed 11 Cour de cassation, 17 February 2012, Reginald Wehrkamp-Richter v. Louis Paul Guitay, LPG Systems (en banc) 12 Sabine Agé, Véron & Associés 6
And before the UPC? No specific provisionon the effect of the nullity or revocation of a patent on a prior decision on infringement or on a contract in UPCA Provision existed in Luxembourg convention, Art. 33(2): 2. Subject to the national provisions ( ), the retroactive effect of the revocation of the patent as a result of opposition or revocation proceedings shall not affect: (a) any decision on infringement which has acquired the authority of a final decision and been enforced prior to the revocation decision; (b) any contract concluded prior to the revocation decision, in so far as it has been performed before that decision; however, repayment, to an extent justified by the circumstances, of sums paid under the relevant contract, may be claimed on grounds of equity. Provision exists in Reg. (EC) No 6/2002 of 12 Dec. 2001 on Community designs (Art. 26) and Reg. (EC) No 207/2009 of 26 Feb. 2009 on Community trademark (Art. 55): same wording 13 And before the UPC? How to delay payment of damages pending final decision on revocation claim (to avoid irrevocable decision on damages before final decision on revocation)? Rule 118: the damages or the compensation may be stated in the order or determined in separate proceedings Rule 136: if separate proceedings, possible stay of the application for a determination of damages pending appeal on the merits Rule 223: if no separate proceedings, an application for suspensive effect of the appeal may be filed 14 Sabine Agé, Véron & Associés 7
And before the UPC? How to obtain a stay of the enforcement of the order on damages after final decision on revocation? Rule 354(2): Where an enforceable decision or order has been made pursuant to a finding of infringement of a patent and, following the conclusion of the action, the patent is amended or revoked, the Court may order, upon request of the party against whom the decision or order would be enforceable, that the decision or order cease to be enforceable. 15 Contact information 1, rue Volney 75002 Paris Tel. +33 (0)1 47 03 62 62 Fax +33 (0)1 47 03 62 69 3, cours Charlemagne 69002 Lyon Tel. +33 (0)4 72 69 39 39 Fax +33 (0)4 72 69 39 49 www.veron.com sabine.age@veron.com Sabine Agé, Véron & Associés 8