Recent developments in Swiss patent and trademark practice
In Switzerland, the Federal Patent Court is exclusively competent for patent infringement and validity cases. The number of cases handled by the court has remained relatively constant over the past three years. In its annual report, the court provided a detailed survey of the year 2016, during which two-thirds of the cases it handled concerned ordinary proceedings and one-third concerned summary proceedings. Of the ordinary proceedings, 47% were settled, 41% were terminated by judgment and 12% were declared groundless. Of the terminated summary proceedings in 2016, 29% were settled by compromise and 71% were terminated by judgment.
It is striking that in 2016 fewer cases were settled in ordinary proceedings than in 2015. In previous years more than 65% settled (as high as 85% in 2013), whereas only 47% settled in 2016 – leading to an overall settlement rate of 75% over the first five years of the Federal Patent Court’s existence. The court noted that the parties to the disputes in question in 2016 sought termination by means of a ruling, thereby precluding settlement.
Of the cases appealed to the Supreme Court in 2016, 80% of the rulings of the Federal Patent Court were upheld and 20% were overturned. This is a strong indication of the high quality of the Federal Patent Court’s decisions.
The backlog of cases has remained relatively constant over the last few years, averaging around one year’s caseload.
Concerning the language of proceedings – which is always a thorny issue in Switzerland – most were handled in German; only 4% were in French in 2016 and none were in Italian. Although the court must use one of the official languages of Switzerland, the parties may mutually agree to use English. This happened in one-third of the incoming main proceedings of the reporting year. The Federal Patent Court attempted to promote legislative amendments to use English in such cases, but this attempt failed – at least for the time being. The Federal Patent Court remains legally obliged to carry out its activities in an official language of Switzerland, but the issue remains pressing.
The Federal Patent Court is set to see significant changes in 2017. The terms of the current judges will finish at the end of the year – including that of the court’s president, Dr Dieter Braendle. Dr Mark Schweizer has been elected as the new president, winning 184 of the 187 votes cast. His term will begin on January 1 2018. The election for the other judges is scheduled for later in 2017.
In ownership disputes, the Federal Patent Court expects four basic questions to be answered by the plaintiff:
- Who actually has invented the disputed technology?
- How has the plaintiff obtained the right to be granted a patent for this technology?
- How has the defendant/patent applicant been informed of this technology?
- How is the technology reflected in the patent application at stake?
In a recent decision (S2017_003) prima facie evidence was used to answer these questions, which led to an ex parte register ban. In a subsequent decision (S2017_002) these questions were held not to have been answered and consequently the register ban was not granted. In addition, for an ex parte register ban to be justified, the plaintiff must show a risk that any of the prohibited acts might materialise.
Enforcement to a limited extent
Generally speaking, according to Swiss practice a defendant can choose between a nullity counterclaim and a nullity plea in defence. In a counterclaim the patentee can file auxiliary requests and the patent will be limited by a decision of the court. But what if the plaintiff needs to restrict the claims when faced with a nullity plea in defence? Before the court clarified this issue, it was believed that it would be necessary to file limited claims at either the Intellectual Property Institute (IPI), as was done in one case (O2012_016), or the European Patent Office (EPO). Even though this is and was possible, the patentee has only one chance at limitation before either office. Since the offices need time to conduct the limitation proceedings, there is simply no time for several limitations during the course of the proceedings before the Federal Patent Court. The patentee does not know in advance if the limitation filed would be sufficient in view of the proceedings before the Federal Patent Court. This has been a significant disadvantage for patentees. Tobias Bremi (the court’s second permanent judge) explained that the court’s approach is pragmatic: if the patent is enforced only to a limited extent (eg, as in Decision S2016_002), the patent’s validity will be assessed only to that extent in case of a nullity plea in defence. Hence, in case of a nullity plea in defence, there is no need to limit the whole patent through limitation procedures. The patentee can confine its infringement request to a limited claim compared to the granted claims. This can be done either when filing a suit or during proceedings. Nevertheless, a restriction to a more limited request during proceedings will have consequences regarding the apportionment of costs.
Limitation of the request for injunctive relief constitutes a limitation of the action, which is explicitly permitted at any time. However, the right of the plaintiff to present new facts in support of such a limited request is not unrestricted (see Decision O2012_016).
The Supreme Court has confirmed (in Decision 4A_131/2016, following Federal Patent Court Decision O2014_002) that infringement under the doctrine of equivalents must be assessed using the three-step questionnaire developed by the Federal Patent Court (in Decision S2013_001):
- Do the replacing features objectively fulfil the same function?
- Are the replaced features and their objectively identical function rendered obvious by the teaching of the patent to a person skilled in the art?
- With consideration to the claim wording in view of the description, would a person skilled in the art have taken the replacing features into account as being an equivalent solution?
The second question resembles that used in Germany (the so-called ‘second Schneidmesser question’). However, German and Swiss courts apply the questions differently.
German courts apply the question by enquiring as to the ability of a person skilled in the art to actually find the replacing means (in their capacity to have the same effect). When applying the second Schneidmesser question, one does not compare two already given scenarios and – only based thereon – assess whether the same effect is evident.
Swiss courts apply the second question by first comparing two given solutions (one with the replaced/claimed feature and one with the replacing feature) and then asking whether the same effect is evident. This approach seems to be more along the lines of the second Actavis v Eli Lilly ( UKSC 48) question used in the United Kingdom – which, contrary to the second Schneidmesser question, also involves comparing two given solutions (despite the comparable wording of the second Schneidmesser and Actavis v Eli Lilly ( UKSC 48) questions).
In another recent decision (O2015_004) – part of the worldwide litigation concerning pemetrexed – the Federal Patent Court decided again on infringement under the doctrine of equivalents and an appeal is pending at the Supreme Court. The critical feature was narrowed during prosecution to a specific pharmaceutically active molecule in the form of a salt. The court answered the third question in the negative: a skilled person would have understood that it was an intentional limitation. Although the application as filed mentioned no alternatives to the specific molecule, it had to be assumed that alternatives were commonly known. The application as filed referred to an earlier application disclosing multiple variants of the molecule.
Hence, the question arises as to whether the wording of the claim is more binding the more obvious the alternatives are (ie, for the applicant when drafting the application). This question has not yet been definitively answered, but it seems that the court tends towards answering it in the affirmative.
Abandonment of subject matter
As noted above, in Decision O2015_004 the critical feature was narrowed during prosecution in order to overcome the examiner’s objections and proceed to grant.
The Federal Patent Court noted that the patentee is bound by limitations that it accepted during prosecution in order to obtain the patent, and that it is therefore prevented under the principle of good faith (Article 2 of the Civil Code) from circumventing this limitation by asserting equivalence. The three-step questionnaire does not apply, because it is a question not of interpretation of the claim wording, but rather of good faith. The reason for the limitation of the feature during prosecution is irrelevant, according to the Federal Patent Court. The decision has been appealed to the Supreme Court.
Nullity suit served directly on foreign patentees
The Supreme Court recently confirmed the Federal Patent Court’s practice of serving nullity suits on foreign patentees directly, rather than through their local Swiss representative (Decision 4A_222/2016). If the patentee does not appoint a local representative and defends the suit, a decision will be issued in absentia. Notably, the Federal Patent Court will not notify the local representative of the patent in Switzerland. If the patent is revoked, this may well have substantial cost implications, as reasonable attorneys’ fees and court fees are to be reimbursed to the successful plaintiff. Two well-known foreign patentees recently saw their patents revoked in Switzerland without even having taken up the fight (ie, Illinois Tool Works, Inc and ICOS; see Decisions O2015_017 and O2015_007).
If a patent owner has placed patented goods on the market outside the European Economic Area (or consented to it) and if the patent protection for the functional characteristics of the goods is only of subordinate importance, the goods may be imported commercially into Switzerland. Subordinate importance is presumed, unless the patent owner provides prima facie evidence to the contrary. This has been the law since 2009. However, the provision is notably rather elastic. The Federal Patent Court recently issued the first decision (S2016_006) providing guidance in this respect. The subject matter at stake was a turbocharged vehicle with a noise-reducing turbocharger. The vehicle manufacturer intended to prohibit grey-market importation of its cars into Switzerland. The Federal Patent Court held that the noise-reducing turbocharger was a ‘nice to have’ feature that was of only subordinate importance. Evidently, the hurdles are high for a patentee to overcome the legal presumption of subordinate importance.
The problem-solution approach is used by the EPO when assessing inventive step. First, the closest prior art is determined. Second, the differences between the claim and the prior art are defined; the technical effects of the differentiating features are identified and the technical problem is defined. The technical problem is the aim and task (for the skilled person) of modifying the closest prior art to provide the technical effects. Third, it is assessed whether the solution to the technical problem is obvious for the skilled person.
In a recent decision in summary proceedings (S2017_001), the Federal Patent Court assessed how the problem-solution approach in assessment of inventive step should be applied in detail. The court held that it is not permissible to simply exclude a document from consideration as a potential springboard towards the invention. The term ‘closest prior art’ is misleading in that it suggests that:
- there is always a single piece of prior art that comes closest to the invention; and
- this single piece of prior art is also the most promising starting point towards the invention.
Both assumptions will be valid only rarely.
In corresponding proceedings, the EPO ruled out a certain document as a proper starting point. The Federal Patent Court explicitly disagreed with the EPO on this point and used the same document as a starting point for the assessment of inventive step.
Fixation of parties
The facts of one recent decision (O2016_016) were straightforward: A had sued B for nullity of a patent. B lodged a counterclaim for infringement against A with his reply. In the same proceedings, B also sued X and Y for infringement. B argued that this voluntary joinder was admissible, as the duties of all of these parties resulted from similar circumstances (ie, cooperation with respect to the alleged infringement of the patent in suit).
However, the president of the court held that the parties were fixed upon litispendence. Exceptions would be only the admissible substitution of a party or other reasons provided by law – which were not applicable here. A voluntary joinder would have been possible, but only in separate proceedings. The president thus dismissed the cases against X and Y for non-compliance with procedural requirements.
Supplementary protection certificates
The question of whether or not a product is protected by a basic patent is important for the granting of supplementary protection certificates (SPCs) in both Switzerland and the European Union. Although this appears to be a simple question, in reality it is not. The so-called ‘infringement test’ has been used in Switzerland since the Supreme Court’s Fosinopril decision in 1998 (BGE 124 III 375). However, the European Court of Justice (ECJ) officially disapproved of the use of the infringement test in Medeva in 2011 (ECJ C-322/10). As a result, recent case law from the ECJ and the Swiss Supreme Court do not correspond. The key issue in Decision O2017_001, which is currently pending at the Federal Patent Court, is whether the Swiss process for the granting of SPCs should be brought in line with that of the ECJ.
On April 13 2016 the IPI issued a definitive total refusal of the geographical extension to Switzerland of an international trademark of Apple directed to an app icon for all goods claimed in Class 9 (Figure 1).
In 2012 the IPI had granted protection to Apple’s earlier iTunes app icon for almost identical goods and for a visually similar sign (Figure 2).
Apple appealed to the Federal Administrative Court, arguing that the IPI’s rejection constituted a change of practice. The IPI disagreed, contending that the refusal reflected only a change of public awareness of app icons (ie, the facts of the case had changed).
The Federal Administrative Court confirmed the IPI’s rejection and stated that the trademark was trivial and therefore lacked distinctiveness. The court also agreed with the IPI that the rejection was based not on a change of practice, but rather a change of public awareness. Because of the increased distribution of smartphones over the past few years, the public would consider such a symbol to be an app icon. However, the tile form for app icons is a standard form.
The new ‘Swissness’ regulation is now in force, which governs the use of the Swiss cross (Figure 3) and the term ‘Swiss’ as a trademark for products and services. Essentially, products and services from Switzerland can be designated ‘Swiss’ and are allowed to carry the Swiss cross, provided that certain guidelines are followed.
Cancellation proceedings for unused trademarks
Unused registered trademarks cause legal uncertainty for third parties. Previously, cancellation had to be enforced by way of a court action, which could be time consuming and costly. There is now a simplified procedure at the IPI whereby third parties can apply for cancellation of an unused trademark. This is possible where the trademark owner has not used the mark for some or all of the registered goods or services for an uninterrupted period of five years and cannot provide any substantial reasons for this. In obvious cases of non-use, this cancellation procedure will help third parties to gain legal certainty quickly and in a cost-effective manner.
Hepp Wenger Ryffel AG acted in Decisions S2016_002, O2015_004, 4A_222/2016 and O2015_007.
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Hepp Wenger Ryffel announces with deep sadness and heavy hearts the untimely and sudden passing of Peter Frei on August 26 2017. Peter was a much loved colleague and friend. He will be greatly missed.