Wednesday, June 21, 2017

New Papers on on FRAND, SEPs, Holdup & Holdout, Part 3

1.  Igor Nikolic has posted a paper on ssrn titled Alternative Remedies for Standard Essential Patents DisputesHere is a link to the paper, and here is the abstract:
The possibility to seek and obtain injunctions for the infringement of Standard Essential Patents (SEPs) is limited in both the US and the EU. The reasons for restricting the use of injunctions is due to concern of patent holdup, i.e. the possibility of SEP holder to force standard-implementers to accept onerous licensing terms, exceeding patent’s true economic value, as well as seeing injunctions as incompatible with the commitment given by the patent holder that it will license its SEPs on fair, reasonable and non-discriminatory (FRAND) terms.
Limiting the use of injunctions by SEP holders may enable implementers to engage in a holdout, i.e. delaying taking a license for as long as possible, forcing the patentee to engage in expensive and protracted litigation in order to settle for below FRAND terms.
Instead of focusing on injunctions, courts may use some procedural remedies in SEP disputes to restore the balance between the interests of patent holders and implementers. Courts could, at the beginning of the trial, order the defendant to make interim payments into escrow, or provide another type of security, reflecting the value of SEP holder’s whole portfolio, and not just for the patents in the litigation. Once interim payments are in place, courts may separate patent and FRAND issue and try patent issues first, as such could provide parties a sense of the overall strength of the SEP portfolio. Courts may adjust the level of interim payments, after patent issues have been resolved, by setting the higher amount if most of the patents have been confirmed valid and infringed or, conversely, lower the amount if most of the patents have been found to be invalid and non-infringed.
Interim payments could therefore secure the interests of SEP holders and make holdout strategy more costly, while at the same time dispense the need for injunctions and mitigate the concern about holdup.
2.  Georg Nolte and Lev Rosenblum have posted a paper on ssrn titled Injunctions in SEP Cases in EuropeHere is a link to the paper, and here is the abstract:
This paper discusses several public cases from Germany that deal with SEPs and FRAND and have been decided after the CJEU’s decision in Huawei v. ZTE. It starts with the patent law system and appeal possibilities in Germany, explains briefly the Orange Book decision, sets out some details of the Huawei decision and explains the questions sent by the Regional Court of Düsseldorf that form the basis of the CJEU decision. The paper also discusses the decisions or orders from the Regional Courts of Düsseldorf and Mannheim as well as the Higher Regional Courts of Düsseldorf and Karlsruhe that followed the Huawei decision. Although many open questions still remain, the Huawei decision has brought quite some clarity to the courts in Germany, setting out when a SEP owner can obtain an injunction while offering a safe harbor for licensees that seek protection from such an injunction. But still it is rather difficult for both parties to predict the outcome of a specific case.
3.  Peter Picht recently has posted two papers on ssrn that may be of interest to readers of this blog.  The first is titled  Unwired Planet/Huawei:  A Seminal SEP/FRAND Decision from the UKHere is a link to the paper, and here is the abstract: 
With its decision in Unwired Planet (UWP) v. Huawei, Birrs J has not only handed down the first major ruling on SEP/FRAND issues in England but also decided a case that poses a number of questions which are key for this area of the law. Well aware of this, he has drafted a thorough and extensive opinion that is likely to have considerable impact – not only – on the development of EC law. Inter alia, the decision discusses the legal nature of an ETSI FRAND declaration; the question whether “FRAND” is a range or a single set of licensing conditions; the procedural component of FRAND; the existence of a qualified “unFRANDliness”-threshold below which competition law is not triggered; the sequencing of negotiation and litigation over FRAND licences; hard-edged vs. soft-edged discrimination; the role of “Comparables” for calculating FRAND; and the anti-competitiveness of offering a mixed portfolio of SEPs and non-SEPs. 
The other is „FRAND wars 2.0“ – Rechtsprechung im Anschluss an die Huawei/ZTE-Entscheidung des EuGH („FRAND wars 2.0“ – Survey of court decisions in the aftermath of Huawei/ZTE), which is forthcoming in Wettbewerb in Recht und Praxis.  Here is a link to the paper (in German), and here is the abstract (in both German and English):
German Abstract: In seiner viel beachteten Huawei/ZTE-Entscheidung hat der EuGH einen Rechtsrahmen für die FRAND-Lizenzierung von standardessentiellen Patenten (SEPs) skizziert. Viele Einzelfragen sind damit indes noch nicht geklärt, sie tragen zu einer weiterhin sehr regen Prozessaktivität in diesem Bereich bei. Der vorliegende Beitrag gibt einen Überblick über die gesamte im Anschluss an Huawei/ZTE ergangene Rechtsprechung, wobei die Entscheidungen deutscher Gericht eingehender besprochen werden, Entscheidungen aus anderen Ländern immerhin kursorisch. Zu den von den Gerichten (und dem Beitrag) näher erörterten Fragen gehören die Möglichkeit einer Erfüllung der Huawei-Anforderungen nach Einleitung des Rechtsstreits; die Verpflichtung einer Partei, ihre Huawei-Verhaltensanforderungen zu erfüllen, obgleich die andere Partei dies nicht tut; Zeitpunkt, Adressat und Inhalt der Verletzungsanzeige sowie der beiderseitigen Lizenzangebote; die Geltung der Huawei/ZTE-Vorgaben für Schadensersatzklagen wegen Patentverletzung; sowie der Umgang mit Patentverwertern, die SEPs durchzusetzen versuchen.
English Abstract: In its landmark decision Huawei/ZTE the ECJ has sketched a conduct-based framework for negotiating FRAND licenses regarding standard-essential patents (SEPs). Many details remain un-clear, though, and they keep fueling intense SEP litigation. This paper undertakes to summarize the decisions rendered by German courts in the wake of Huawei. Decisions by non-German courts are briefly listed as well. Among the issues that have kept courts busy are the questions of whether Huawei requirements can be fulfilled even though a lawsuit has already been filed; whether a party has to comply with Huawei in spite of the other party not doing so; how and when exactly the notice of infringement and the respective licensing offers have to be communicated; whether the Huawei-rules of conduct extend to claims for damages; and how patent assertion entities are to be treated in SEP litigation.  
4. Haris Tsilikas has published a paper titled Huawei v. ZTE in Context--EU Competition Policy and Collaborative Standardization in Wireless Telecommunications, 48 IIC 151 (2017).  Here is a link to the article, and here is the abstract:
Collaborative standardization, an efficient and inclusive form of organized innovation under the auspices of standard-setting organisations (SSOs), has demonstrated significant technological achievements in the field of wireless telecommunications. At the core of collaborative standardization is a working balance of interests and incentives of all stakeholders involved, i.e. contributors of technology and users of standards, epitomized by licensing on FRAND terms. Standardization contributes to significant gains in consumer welfare, in the form of lower prices, more innovation and more consumer choice and convenience. At the same time, standardization fosters competitive markets, upstream and downstream. Public policy has not always been successful in accommodating collaborative standardization. The enforcement of Art. 102 TFEU by the EU Commission, for instance, reveals an underlying mistrust of the operation of markets in the context of collaborative standardization and a strong preference for court-determined FRAND terms. However, the recent CJEU ruling in Huawei v. ZTE provides strong incentives for private stakeholders to determine FRAND through bilateral commercial negotiations and as such it is a welcome shift in EU competition policy in collaborative standardization.

Monday, June 19, 2017

New Papers on on FRAND, SEPs, Holdup & Holdout, Part 2

1.  Bowman Heiden and Nicolas Petit have posted an article on ssrn titled Patent Trespass and the Royalty Gap:  Exploring the Nature and Impact of Patent HoldoutHere is a link to the paper, and here is the abstract:
This paper studies the problem of patent holdout. Part I reviews the economic theory of holdout, with a specific emphasis on patents. It shows that the ordinary concept of holdout refers to the non-transacting conduct of a property owner, and that “patent trespass” is a better characterization for technology implementers’ attempt to evade the conclusion of licensing agreements. Part II proposes a definition and provide illustrations of patent trespass. To that end, the paper relies on the qualitative data gathered during interviews with industry stakeholders as well as on an analysis of holdout in case-law. Part III exposes the factors that determinatively make patent trespass transactional, systematic and/or systemic. Part IV records the results of of a quantitative study of patent trespass, based on the intuitions that arose from received theory and qualitative interviews as exposed in previous parts. The preliminary empirical results show a correlational link between the nature of patent trespass and the heterogeneity of market actors and markets. In particular, MNCs operating in developed markets seem to primarily deploy extensive delaying tactics with the main goal of reducing their royalty payments, while large firms in emerging markets (LFE) and small to medium-sized enterprises (SMEs), especially the “long tail” of microvendors, seek to avoid payment altogether. 
2.  Richard Li and Richard Li-dar Wang have published a paper titled Reforming and Specifying Intellectual Property Rights Policies of Standard-Setting Organizations: Towards Fair and Efficient Patent Licensing and Dispute Resolution, 2017 U. Ill. J. L. Tech. Pol'y 1.  Here is  a link to the paper, and here is the abstract:
Standard-setting organizations (SSOs) rely on commitments to license on fair, reasonable, and non-discriminatory (FRAND) terms from standard-essential patent (SEP) holders to ensure access to standards and prevent potential anticompetitive conduct that unreasonably enforces SEPs against standard implementers. A substantial number of SEP disputes, however, have been raised unceasingly in recent years. In this Article’s research, a statistical analysis of the SEP litigation cases in the United States from 2000 to 2014 shows that the SEP disputes are closely related to the FRAND licensing terms that are required in the intellectual property rights (IPR) policies of the SSOs in the information and communications technology (ICT) sector. In accordance with opinions to date from the U.S. Court of Appeals for the Federal Circuit, the U.S. International Trade Commission, the U.S. competition authorities, the European Commission, and the Court of Justice of the European Union, there is no per se rule that prohibits seeking injunctive relief against SEP infringement. Nonetheless, the criteria to decide whether to grant injunctive relief are different among various forums. In principle, injunctive relief should not be granted against a standard implementer who is willing to take license and is still negotiating in good faith with the SEP holder, so as to be aligned with the SEP holder’s commitment to license on FRAND terms. With regard to FRAND royalties of SEPs, a fundamental principle emerging from several court decisions on SEP royalties in the United States is that a royalty award for an SEP should only be based on the value of the patented invention, not to include the value added from the standards.
Furthermore, through semi-structured interviews with standard-setting delegates and licensing negotiators from the ICT industry, this research finds that many existing IPR policies are too ambiguous to constrain potential anticompetitive conduct that enforces SEPs in an unreasonable way. In fact, in light of the results of the statistical survey, the case analysis, and the stakeholder interviews, it has become urgent and imperative to improve existing vague and ambiguous IPR policies. Concrete proposals for reforming IPR policies include: defining the standard essentiality clearly and using the accurate phrase “essential patent claim”; adding specific deadlines for SEP disclosure and declaration, legal effects of failing to disclose, and update obligations for material changes concerning SEPs; incorporating prerequisite conditions for seeking injunctive relief against SEP infringement; clarifying the FRAND obligation applicable to all offers of SEP royalties during licensing negotiations; identifying a series of steps or key factors for SEP royalty calculation under the FRAND obligation; and allowing reciprocal license to be a precondition for the commitment to license on FRAND terms. These proposals could substantially strengthen existing IPR policies, fix their ambiguities, and avoid potential disputes.
Finally, this research investigates fifteen representative SSOs, examining whether their IPR policies conform to the reforming proposals, by way of which the authors further elaborate on these proposals and provide substantial suggestions on how to amend the existing policies of the representative SSOs to avoid potential disputes. Based on the statistical and qualitative analysis and the specific reforming proposals, this Article concludes that it is imperative to reform existing IPR policies to facilitate fair and efficient SEP licensing and dispute resolution, and therefore to promote competition and to ultimately benefit consumers around the world.
3. Yang Li published a paper titled FRAND Holdup and Its Solution, 25 IIP Bulletin (2016).  Here is a link to the article, and here is the abstract:
Although many approaches have been raised to determine and calculate the royalty of SEP with FRAND commitment, because of grossly exaggeration of the risks of patent holdup and overemphasizing limiting or eliminating the availability of injunction, in the absence of scientific and uniform standard of determining FRAND royalty, not only FRAND royalty of substantive justice is still far away, but also FRAND holdup has become a serious issue perplexing SEP holder. In order to mitigate, prevent and even eliminate FRAND holdup and to determine FRAND royalty at the meantime, FRAND-oriented towards procedural justice is perhaps a good choice. The core of FRAND-oriented towards procedural justice is to design a set of rule of Notice and Counter-Notice to stimulate SEP holder and SEP implementer to negotiate royalty in good faith and settle FRAND royalty through negotiation. In case of negotiation failure, the third independent party (court, arbitration organization) can also depend on rule of Notice and Counter-Notice to determine whether injunction is necessary and decide what’s FRAND royalty.
I previously mentioned a version of this paper published in China Patents & Trademarks, here.  This issue of the IIP Bulletin also has an article titled Various Issues Concerning IP Litigation from the Perspective of the Legal System, which is "an English summary by the Institute of Intellectual Property based on the FY2015 JPO-commissioned research study report on the issues related to the industrial property rights system."  There is some discussion of damages and attorneys' fees at pp. 3-4.

4.  Marco LoBue has posted a short write-up on the Trust in IP Blog titled High Court rules in favour of the SEP holder and narrows the scope of competition law defence in Unwired Planet vs. Huawei.  He concludes that "[w]hile some judges (i.e. the Court of Appeal of Dusseldorf in Sisvel v. Haier) apply Huawei strictly, others keep into account specific features such as the defendant’s sophistication and its countervailing buyer power. Therefore, in spite of Huawei, lack of legal certainty across different jurisdictions continues to be a concern for companies active in SEP licensing."

Friday, June 16, 2017

New Papers on FRAND, SEPs, Holdup & Holdout, Part 1

1.  Vincent Angwenyi published an article titled Hold-up, Hold-out and F/RAND:  The Quest for Balance in the February 2017 issue of GRUR Int. (pp. 105-14).  Here is the abstract:
Hold-up and hold-out by analogy can be regarded as two sides of the same coin.  The coin in this case can be said to represent the patent or the technology in question, the ultimate beneficiary of which should be society.  A healthy patent ecosystem can be maintained in part by ensuring that innovators are motivated to continue creating new technology and implementers to convey the benefits of the innovation to society.  An ideal situation is one that balances the interests of innovators and implementers as much as possible.
2.  Jorge Contreras and Michael Eixenberger have posted a paper on ssrn titled The Anti-Suit Injunction - A Transnational Remedy for Multi-Jurisdictional SEP Litigation, to be published in the forthcoming Cambridge Handbook of Technical Standardization Law - Patent, Antitrust and Competition Law (Jorge L. Contreras, ed.).  Here is a link, and here is the abstract:
Litigation concerning standards-essential patents (SEPs) has become increasingly global, with parallel litigation occurring over the same issues in multiple jurisdictions throughout North America, Europe and Asia. As a result, litigants have sought mechanisms to coordinate these actions both to manage costs and to avoid inconsistent and incompatible results. One little-known procedural mechanism that has long been available to manage multi-jurisdictional litigation, and which is growing in popularity in SEP disputes, is the anti-suit injunction.
An anti-suit injunction is an interlocutory remedy issued by a court in one jurisdiction which prohibits a litigant from initiating or continuing parallel litigation in another jurisdiction or jurisdictions. Anti-suit injunctions thus contain litigation costs and reduce the likelihood of inconsistent results by ensuring that issues are resolved in one jurisdiction before they are litigated elsewhere. In the standards context, anti-suit injunctions can be particularly powerful tools for prospective licensees alleging that SEP holders have failed to comply with their FRAND licensing obligations. Specifically, a court reviewing a SEP holder’s compliance with a FRAND licensing commitment may issue an anti-suit injunction to prevent the SEP holder from bringing foreign patent infringement claims (including injunctions against the sale of infringing products) until the FRAND licensing dispute has been resolved in the issuing jurisdiction.
This chapter discusses the historical development and procedural requirements for anti-suit injunctions in both the United States and Europe. It also reviews recent SEP cases in which anti-suit injunctions have been granted, including Microsoft v. Motorola, Vringo v. ZTE and TCL v. Ericsson.

3.  Alexander Galetovic and Stephen Haber have published a paper titled The Fallacies of Patent-Holdup Theory, 13 J. Comp. L. & Econ. 1 (2017).  Here is a link to the article, and here is the abstract: 
Patent-holdup theory avers that the patent system threatens the rate of innovation in the U.S. economy, particularly in information technology industries that are heavily reliant on standard-essential patents. We show that arrays of empirical tests falsify the core predictions of the theory. We therefore examine the logic of patent-holdup theory. We show that patent-holdup theory conflates two mutually inconsistent economic mechanisms: holdup (the appropriation of a quasi rent) and the exercise of monopoly power (to set the market price to extract a monopoly rent). Moreover, three fallacies underpin patent-holdup theory: (1) that patent holdup is a straightforward variant of holdup as it is understood in transaction-cost economics; (2) that royalty stacking is holdup repeated multiple times on the same product; and (3) that standard-essential patents contribute little or no value to the markets they help create. These fallacies give rise to a theory that is logically inconsistent and incomplete, and that ignores economic fundamentals. The flaws in logic of patent-holdup theory, and its lack of fit with the evidence, suggest that a new theory about the mechanics and dynamics of SEP-intensive IT industries is called for, both as a matter of science and as a guide to antitrust and patent policies.
4.  Jens Leth Hougaard, Chiu Yu Ko, and Xuyao Zhang have posted a paper on ssrn titled A Welfare Economic Interpretation of FRANDHere is a link to the article, and here is the abstract: 
Setting an industry-wide standard is crucial for information and communication technologies for interoperability, compatibility and efficiency. To minimize holdup problems, patent holders are often required to ex-ante commit to licensing their technologies under Fair, Reasonable and Non-Discriminatory (FRAND) terms. Yet, there is little consensus, in both courtrooms and industries, on the exact meaning of FRAND. We propose a welfare economic framework that enables a precise distinction: fairness in the distribution of royalty payments among patent users, and reasonableness in setting the size of the compensation to the patent holder, where both the size and the distribution of payments are determined in a non-discriminatory way making sure that similar firms are treated similarly. We illustrate our approach in various classic models from industrial organization, and discuss further potential applications.
5.  Anne Layne-Farrar and Koren W. Wong-Ervin have posted a paper on ssrn titled Methodologies for Calculating Frand Damages: An Economic and Comparative Analysis of the Case Law from China, the European Union, India, and the United States, forthcoming in the Jindal Global Law School Law Review (2017).  Here is a link to the paper, and here is the abstract:
In the last several years, courts around the world, including in China, the European Union, India, and the United States, have ruled on appropriate methodologies for calculating either a reasonable royalty rate or reasonable royalty damages on standard-essential patents (SEPs) upon which a patent holder has made an assurance to license on fair, reasonable and non-discriminatory (FRAND) terms. Included in these decisions are determinations about patent holdup, licensee holdout, the seeking of injunctive relief, royalty stacking, the incremental value rule, reliance on comparable licenses, the appropriate revenue base for royalty calculations, and the use of worldwide portfolio licensing. This article provides an economic and comparative analysis of the case law to date, including the landmark 2013 FRAND-royalty determination issued by the Shenzhen Intermediate People’s Court (and affirmed by the Guangdong Province High People’s Court) in Huawei v. InterDigital; numerous U.S. district court decisions; recent seminal decisions from the United States Court of Appeals for the Federal Circuit in Ericsson v. D-Link and CISCO v. CSIRO; the six recent decisions involving Ericsson issued by the Delhi High Court; the European Court of Justice decision in Huawei v. ZTE; and numerous post-Huawei v. ZTE decisions by European Union member states. While this article focuses on court decisions, discussions of the various agency decisions from around the world are also included throughout.

Wednesday, June 14, 2017

Wenzel on Preliminary Injunctions in Germany

Stephan Wenzel has published an article in the November 2016 issue of Mitteilungen der deutschen Patentanwälten (pp. 481-85) titled Olanzapin macht aus dem Patent ein Gebrauchsmuster:  Ein Kommentar zue aktuellen Rechtslage bei einstweiligen Verfügungen aus einem erteilten Patent ("Olanzapin turns patents into utility models:  A commentary on the current state of the law concerning preliminary injunctions for issued patents").  Here is the abstract (my translation):
Since the Olanzapin and Harnkatheterset decisions of the Düsseldorf Court of Appeals, there has been an increase in denials of motions for preliminary injunctions on the ground that the validity of the patent in suit is uncertain.  Not all infringement courts follow this opinion, however.  An analysis.
To put the title in perspective, "utility model" (or sometimes "petty patent") is the term most commonly used in English for an intellectual property right in an invention that may not qualify for a patent (perhaps because it wouldn't satisfy patent law's nonobviousness criterion).  What I just said can be a bit misleading, though, because the law of utility models (in countries, unlike the U.S., that recognize them at all) can vary quite a bit from one place to another.  Indeed, since 2006 under German law utility models (Gebrauchsmuster) must satisfy the same "inventive step" criterion that applies to patents. They are generally easier to obtain, however, because there is only a cursory examination up front, and once obtained a German utility model can be converted into a patent (and thus provides a measure of temporary protection).  Another difference between patents and utility models is that in Germany patent validity and infringement decisions are bifurcated.  The German Patent Office's Bundespatentgericht, not the courts hearing infringement matters, resolve patent validity challenges, although in the end the Patent Office's determination can be appealed to the Federal Supreme Court.  With regard to utility models, on the other hand, validity is resolved in the context of infringement litigation, not in a proceeding before the Bundespatengericht.  For fuller discussion, see my book pp. 237-38. 

Anyway, this brief introduction to utility models illuminates the author's meaning above, where he suggests that, in deciding whether or not to grant a preliminary injunction in a patent infringement case, the Düsseldorf courts are too willing to substitute their own opinions on patent validity, and do not give sufficient weight to fact that the German or European Patent Office has granted a patent in the first place.  To be sure, this lack of deference can work in both directions.  In the Olanzapin case the author refers to, the court reversed a denial of a preliminary injunction, despite the fact that the patent had been found invalid by the Patent Office, on the ground that that decision was clearly erroneous (evident unrichtig).  (For discussion of Olanzapin, see my book pp. 243-44.)  But both Olanzapin and the subsequent decision in Harnkatheterset contain language suggesting that validity can be adequately ascertained only if the patent has already withstood a validity challenge, and it's this part that Dr. Wenzel finds most troubling.  (For a previous blog post on Harnkatheterset, see here.)  Dr. Wenzel cites work by other scholars and decisions from other courts in Germany that do not appear to make it quite so difficult for patent owners to obtain preliminary injunctions, though they differ somewhat in their verbal formulations.  (They may require a high probability of validity, for example, but not necessarily a Bundespatentgericht decision upholding validity.) He concludes by suggesting that courts are more willing to grant preliminary injunctions in favor of drug companies against generic drug makers, and that this favoritism violates the principle of equality.

Monday, June 12, 2017

U.S. Supreme Court Holds That Federal Law Does Not Authorize Injunctions to Compel Compliance with 42 U.S.C. § 262(l)(2)(A)

The Supreme Court this morning also issued a unanimous opinion in Sandoz Inv. v. Amgen Inc., which involved two questions arising under the Biologics Price Competition and Innovation Act (BPCIA).  The proper interpretation of this extraordinarily complex statute might seem even further afield from the subject of patent remedies than is the case I mentioned earlier this morning on inter partes review, but there actually is a remedies question at issue in Amgen.  The Court holds that, when an applicant seeking FDA approval to market a biosimilar pursuant to the BPCIA's abbreviated process does not provide the sponsor (that is, the firm which was originally granted approval to market the relevant biologic) with its application materials and manufacturing information within 20 days of receipt of notification that the FDA has accepted its application for review, pursuant to 42 U.S.C. § 262(l)(2)(A), 42 U.S.C. § 262(l)(9)(C) permits the sponsor to sue the applicant for a declaratory judgment "of infringement, validity, or enforceability of any patent that claims the biological product or a use of the biological product."  In addition, the act of submitting the application constitutes an act of artificial infringement under 35 U.S.C. § 271(e)(2)(C)(ii), regardless of whether the applicant has provided the sponsor with the application and manufacturing information,  and 35 U.S.C. § 271(e)(4) authorizes the court to issue an injunction against the infringing manufacture and sale of the biologic.  Neither 35 U.S.C. § 271(e)(4) nor 42 U.S.C. § 262(l)(9)(C), however, authorize the sponsor to sue for  an injunction compelling the disclosure of the application and manufacturing informationThe Court nevertheless remands for the Federal Circuit to determine whether or not an injunction compelling disclosure of the application and manufacturing information may be available under state law, Amgen having also asserted claims for relief against Sandoz under California unfair competition law.  (The Court leaves open the possibility that the Federal Circuit may conclude that application of state law here might be preempted, though.)  The other issue in the case was whether Sandoz could provide its notice of commercial marketing to Amgen in advance of receiving a license from the FDA to market its biosimilar, or whether it had to wait until receipt of that license, the practical consequence being that Sandoz can't market its biosimilar until at least 180 days from providing the notice to Amgen.  The Court holds that the requisite notice may precede the issuance of the license, which should work to speed up the introduction of biosimilars to the market.

Breaking News: U.S. Supreme Court to Hear Case on Constitutionality of Inter Partes Review

This is not directly related to patent remedies, but it is an important piece of news.   The U.S. Supreme Court this morning grant certiorari in Oil States Energy Services, LLC v. Greene's Energy Group, LLC, Case No. 16-712, to review the following question:  "Whether inter partes review—an adversarial process used by the Patent and Trademark Office (PTO) to analyze the validity of existing patents—violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury."  Inter partes reviews, for those of you outside the U.S. who are not familiar with them, are an administrative procedure (enacted as part of the 2011 America Invents Act) for challenging the validity of issued patents.

Hat tip to Professor Dmitry Karshtedt for bringing this to my attention.

Update:  Here is a link to Scotus Blog's page for this case, from which you can download the cert petition, the briefs filed to date, etc.   Here is a link to the order list, which shows that the Court granted cert. as to the petitioner's first question (the one quoted above) only.

Saturday, June 10, 2017

Interesting Posts on Injunctions in India on SpicyIP

In recent weeks the SpicyIP Blog has published some interesting posts on injunctions in India, most recently one from May 11 by Maitreyee Dixit titled Lighting Up Injunction Jurisprudence:  US v. India and another from May 9 by Professor Shamnad Basheer titled And the US Issues Yet Another Compulsory License!  The latter notes, among other things, the discrepancy between the U.S.'s position regarding other countries' threats to impose compulsory licenses for patented inventions and the U.S. courts' actual practice under eBay--including the Federal Circuit's recent (and in my view, problematic) decision in Nichia v. Everlight (see my post here).  The author adds in a postscript, however, that "while US courts do a fairly decent job of explicating the standards for an injunction and largely adhering to them, Indian courts have made a hotchpotch of these criteria and we’re left with little to no clarity on this," and refers to the (then-forthcoming) Dixit post. Dixit discusses, among other matters, the lack of consistency among the Indian courts on the the meaning of the "public interest" factor--which the judge in the Bayer v. Ajanta decision from earlier this year interpreted as including "‘loss of employment’ and ‘revenue to the state,’" though two other more recent decisions including Bayer v. BDR have not followed this approach--and on the meaning of "prima facie case"   On the Ajanta and BDR matters, Dixit also links to this post and this post by Balaji Subramanian.  On the prima facie case issue, she also cites this post by Rupali Samuel and this paper by Shamnad Basheer, Jay Sanklecha and Prakruthi Gowda, titled Pharmaceutical Patent Enforcement:  A Development Perspective, the abstract to which reads as follows:
Although standards for the grant of intellectual property rights often take center stage in the literature on intellectual property and development, intellectual property enforcement is largely ignored. This paper seeks to fill this gap, albeit to a limited extent, by focusing on the standards for the grant of injunctions in patent infringement suits.
This is particularly relevant, as a number of developing countries, such as India, are faced with burgeoning patent disputes disputes that have enormous implications for the future of innovation and the issue of access to patented goods, notably pharmaceuticals. Given that interim injunctions are largely dispositive of intellectual property disputes in many cases, this chapter focuses largely on such injunctions.
The standards for the grant of injunctions ought to be calibrated in a manner that appropriately balances the interests of the patentee in securing timely and effective enforcement of her rights with the public interest in guarding against erroneous injunctions (i.e. where the patent turns out to be invalid or not infringed after trial). Such wrongly granted injunctions harm not only competitors against whom they are granted, but also consumers who are forced to pay a monopoly price during the subsistence of the injunction/restraining order.
We recommend that, when faced with a complex patent dispute where it is difficult to legitimately assess the strength of each party’s case at the interim stage and effectively predict who is more likely to win at trial, courts move directly to the trial stage - a suggestion that is coming to be increasingly adopted by the Indian Supreme Court. We argue that this is a TRIPS flexibility that developing countries, such as India, can legitimately exploit. We also highlight issues of institutional capacity and ask: Should developing countries such as India institute specialist intellectual property courts to decide patent infringement suits? Would this make for more optimal intellectual property adjudication? Though specific to India, most of the suggestions in this chapter could prove useful for a number of other developing countries, particularly those that follow common law and are yet to experience a significant number of patent infringement cases.
Finally, the post also links to a 2015 SpicyIP series on interim injunctions, here.

Readers also might be interested in this June 5 post by Prashant Reddy titled 143 patent infringement lawsuits between 2005 and 2015: Only 5 judgments.  From my less-than-perfect vantage point, it does seem to me that many of the most important Indian decisions on patent remedies in recent years have been from interim proceedings.  In addition, the blog has published some interesting posts recently on punitive damages for copyright and trademark infringement, here, here, here, and here.  See also my blog post of September 11, 2015.