Patent invalidity action and invalidity defense

Difference Between an Invalidity Action and an Invalidity Defense

Before delving into the subject, let’s examine a point of civil procedure that will be useful later.

An action (in this case, for invalidity) is a procedure initiated before a court to obtain the respect or recognition of a right or a legitimate interest (here, the recognition that the patent is invalid). 

An invalidity defense is, in law, an argument raised before even addressing the merits of the case, which seeks to have a procedural document—or potentially the entire procedure—annulled due to a violation by one of the parties of an essential legal provision (in this case, the existence of the patent). If the invalidity defense is admitted, the document (here, the patent) is removed from the proceedings and can no longer serve as a basis for the judgment.

Still unclear on the difference?

Here’s the “non-legal” explanation I sometimes give:

• An invalidity defense is a kind of wildcard:
  • “Stop, Your Honor, because the malicious patentee does not actually have a patent since it is invalid”;
  • It is not a request but a finding that will render the infringement action moot;
  • No decision regarding the invalidity of the patent will be issued, but a decision will note the lack of grounds for the infringement action;
• A counterclaim for invalidity is a real request:
  • “Your Honor, before declaring me liable for infringement, I ask that you find that their patent is invalid”;
  • This request for invalidity will also render the infringement action moot,
  • A decision regarding the invalidity of the patent will be issued.

This may seem like a detail… but regarding the statute of limitations, you will see that it changes everything (well, probably not anymore since the PACTE law, but let’s move on).

The Invalidity Action

As a Principal Claim

Principle

The invalidity action filed as a principal claim (Article 53 of the French Code of Civil Procedure) seeks to obtain the invalidity of a patent when no other civil action is pending (Article L613-25 of the French Intellectual Property Code for French patents and Article L614-12 of the French Intellectual Property Code for European patents).

Competent Courts

Principle

Only the Paris Judicial Court (Tribunal Judiciaire de Paris) has jurisdiction over invalidity actions (Article L615-17 of the French Intellectual Property Code together with Article D211-6 of the French Intellectual Property Code). This exclusive jurisdiction was confirmed by the French Supreme Court (French Supreme Court, Commercial Chamber, March 3, 2015, No. 14-10568).

The Paris Court of Appeal has jurisdiction on appeal (Paris Court of Appeal, Division 5, Chamber 1, June 20, 2012).

Clarification regarding the jurisdiction of courts of appeal since November 1, 2009

The application of the 2009 decree granting exclusive jurisdiction to the Paris District Court (TGI) in patent matters raised questions regarding the competent court of appeal in the event of an appeal against a judgment rendered by a provincial TGI prior to November 1, 2009.

According to the Court of Cassation (C. Cass. com., March 3, 2015, No. 14-10568), nothing in Decree No. 2009-1205 of October 9, 2009 indicates exclusive jurisdiction of the Paris Court of Appeal: only the jurisdiction of the Paris District Court is recognized for patents.

Therefore, the general principles of Article R311-3 of the Judicial Organization Code must be applied, according to which the Court of Appeal has jurisdiction over decisions of the District Courts located within its jurisdiction.

Interest and standing to sue

The invalidity of a patent may be sought by any person with a direct and personal interest in bringing an action (Article 31 of the French Code of Civil Procedure (CPC)).

It is often stated that the interest in bringing an action must be personal and direct, legitimate, existing, and current.

Common actions

Principle

In most invalidity actions, it is said that the action is common, meaning there are no conditions regarding standing to sue: any person with a direct and personal interest may bring the action (Article 31 CPC).

Here are some examples of interest in bringing an action.

A cease-and-desist letter / threat from the patent proprietor

The interest in bringing an action may arise from a cease-and-desist letter or a threat of infringement action from the proprietor (Civil Tribunal of Seine, August 11, 1864, or in trademark matters, Paris District Court, 3rd Chamber, 1st Section, September 19, 2013).

The threatened party / recipient of the cease-and-desist letter may then seek the invalidity of the asserted patent.

The patent hinders a competitor

The patent may genuinely hinder a competitor, as commercialization in France could be impeded by the patent (Paris Court of Appeal, Pole 5, 1st Chamber, January 11, 2012).

Historically, the interest in bringing an action could be justified by (Paris Court of Appeal, 4th Chamber, Section B, May 13, 2005) the fact of having a company whose corporate purpose:

• is similar to the corporate purpose of the patent proprietor;
• is similar to the patented device.

Today, judges appear to require more: it is necessary to demonstrate the existence of preparatory acts or serious projects to implement a technique similar to the contested patents (Paris Court of Appeal, Pole 5, 1st Chamber, March 6, 2013).

The fact that the plaintiff seeks to enable imminent exploitation of the patented technique or a similar technique (Paris Court of Appeal, Pole 5, 1st Chamber, April 9, 2019, Case No. 17/08631).

However, a third party manufacturing a product B that interacts with product A has no standing to sue for the invalidity of product A, which it does not manufacture: the commercial whole theory cannot justify this interest (Paris District Court, June 5, 2014).

Does the patent hinder the former patent proprietor?

It may happen that the patent has been the subject of an assignment, but the assignor wishes to continue exploiting the invention.

If they find themselves in the position of a competitor hindered by the patent, one may wonder whether the conclusions of the previous section apply.

The answer is no!

Indeed, the assignor owes the assignee a warranty against eviction by their own act, a warranty of public policy (1628 Civil Code).

Therefore, they may not seek the nullity of the patent as a principal claim (in trademark matters, Paris Court of Appeal, Division 5, Chamber 1, 9 April 2014).

The licensee no longer wishes to pay official fees

A licensee always has an interest in seeking the nullity of the patent in order to subsequently claim the nullity of their license agreement for lack of subject matter (French Supreme Court, Commercial Chamber, 17 March 1980, No. 78-14361).

The licensee wishes to eliminate the clauses on ownership of improvements

A license agreement may provide that improvements to a patent, conceived by the licensee, must be disclosed to the patent proprietor, the latter reserving the right to file these improvements in their own name.

The licensee, wishing to retain ownership of these improvements, thus has an interest in invoking the nullity of the initial patent to invalidate these ownership clauses in cascade (French Supreme Court, Commercial Chamber, 8 July 1997, No. 95-17589).

The impact of the patent on the price of a product

It would be entirely conceivable for a consumer to seek the nullity of a patent if they consider that the patent has a negative impact on the price of the patented product.

It will still be necessary to prove:

• that the patent has a negative impact on prices (which can be complex) and
• that the product is indeed likely to be purchased by the claimant.

Nevertheless, no court has yet ruled on this situation… This scenario has only been considered by legal scholars.

Refusal to pay compensation to a non-exploiting co-proprietor

The refusal to pay compensation to a non-exploiting co-proprietor (under Article L613-29 IPC) appears to constitute sufficient standing to bring an action.

It should be noted that there are conflicting decisions (Paris Court of Appeal, 4th Chamber, Section B, 19 December 2003), but the conclusion seems questionable. In this case, the Court of Appeal considered that having regarded a patent as valid for so long amounted to a waiver of any action for nullity: if the judges’ reasoning were followed, this would also apply to the licensee. Moreover, this implies that the claimant cannot change their mind…

Standing to bring an action for the patent proprietor themselves

If the patent proprietor purchased the patent from a third party (i.e., they are the assignee), they may wish to annul the sale to recover their money: they thus have a clear standing to bring an action (French Supreme Court, Commercial Chamber, 8 July 1981, No. 79-15844 or Paris Court of Appeal, 4th Chamber, Section A, 19 October 2005).

The action for nullity could be viewed as an « action to verify the subject matter of the assignment agreement« .

Nevertheless, prior knowledge of the defect by the assignee at the time of the assignment renders the nullity claim inadmissible (French Supreme Court, Request Chamber, 9 November 1864, Ann. prop. ind. 1864, p377).

Filing of an application by an unauthorized person

The fact that a European patent application was filed by an unauthorized person may allow for the invalidation of the associated patent (A138(1) e) EPC).

However, only the person claiming to be the true person authorized to file the patent application may bring the invalidation action (this is a relative invalidity, C. Cass. com, 14 February 2012 n°11-14288).

Focus on « pharmaceutical » patents

For « pharmaceutical » patents, it is not necessary to have obtained a marketing authorization (MA) or any other administrative authorization to justify a legitimate interest in bringing an action (Tribunal de grande instance de Paris, 3e ch., 4e sect. 30 September 2010).

Exclusive actions

Public Prosecutor

The Intellectual Property Code provides only one case where the action is exclusive, i.e., expressly open to a specific person: the Public Prosecutor (L613-26 IPC).

It is not necessary to demonstrate any legitimate interest in bringing an action: the Public Prosecutor therefore acts at its own discretion.

A trade union

A trade union may request the invalidation of a patent, as the law allows them to act to defend the collective interests of the profession they represent (L2132-3 French Labor Code).

An association

An association may bring an invalidation action against a patent, as it may act in court on behalf of collective interests, provided these fall within its corporate purpose (L421-1-1 Consumer Code or C. Cass 1re civ., 18 September 2008, n°06-22038).

Abuse

It may happen that the initiation of an invalidation action is perceived as an abuse on the part of the claimant (e.g., the claimant seeks to harm the proprietor’s reputation, to circumvent the authority of res judicata in another proceeding, etc. Tribunal de Grande Instance de Paris, 3e ch., 1re sect., 5 June 2014).

In such a case, the claimant may be liable for substantial damages (Tribunal de Grande Instance de Paris, 3e ch., 1re sect., 5 June 2014).

By way of counterclaim

Principle

The counterclaim for invalidation (64 CCP) is the action aimed, when sued for infringement, at requesting the invalidation of the patents serving as the basis for the infringement action.

Standing and legitimate interest

When the main action is an infringement action

When the main action is an infringement action, the interest in bringing a counterclaim for invalidity is evident: the defendant seeks to cut short any discussion regarding the infringement.

The requirement of a « sufficient connection » under Article 70 of the French Code of Civil Procedure (CPC) is then satisfied.

However, the counterclaim must only target:

• the patents for which an infringement action has been brought (Regional Court of Paris, 3rd Chamber, 2nd Section, 31 May 2013);
• the claims asserted in the infringement action;
  • unless these claims hinder the defendant’s economic activity (French Supreme Court, Commercial Chamber, 14 September 2010, No. 09-13488);
    
    
  • and, where applicable, the claims on which the asserted claims depend (Paris Court of Appeal, 4th Chamber, Section A, 25 April 2001).

When the main action is an action for the performance of a license agreement

When the main action is an action for the performance of a license agreement, the interest in bringing a counterclaim is justified, as the latter seeks to dismiss the opponent’s claim by eliminating the subject matter of the agreement.

The requirement of a « sufficient connection » under Article 70 CPC is then satisfied.

When the main action concerns the proprietorship of the patent

When the main action concerns the proprietorship of the patent, it will not be possible to bring a counterclaim for invalidity (French Supreme Court, Commercial Chamber, 19 November 1963).

Indeed, issues of title validity and « legitimate ownership » of the title are entirely distinct matters.

Compulsory joinder of the proprietor?

Where an exclusive licensee brings an infringement action, the patent proprietor is not a party to the proceedings.

Accordingly, the counterclaim for invalidity must be directed against the patent proprietor by way of compulsory joinder (Article 331 CPC) so that the proprietor may defend their rights. In the absence of joinder (compulsory or voluntary), the counterclaim will be inadmissible.

Competent courts

In civil matters

This question may seem superfluous, as one might assume that the competent court is that of the main action.

However, what happens if a dispute concerning a license agreement arises between two professionals (within the jurisdiction of the commercial court) and, incidentally, the validity of the patent is raised?

According to the French Supreme Court, as soon as a question concerning a patent is raised, only the Regional Court of Paris has jurisdiction (French Supreme Court, Commercial Chamber, 21 January 2004, No. 02-16958, see Article L615-17 of the French Intellectual Property Code (CPI) together with Article D211-6 CPI), and this jurisdiction cannot be derogated from.

The Paris Court of Appeal has jurisdiction on appeal (Paris Court of Appeal, Division 5, Chamber 1, 20 June 2012).

In criminal matters

While Article 52 of the Law of January 3, 1968 on patents initially provided that questions of invalidity were to be decided by the civil court, this is no longer the case.

Today, the criminal court hearing an infringement action is not required to refer the dispute to the special jurisdiction under Article L615-17 CPI if it is also hearing a counterclaim for invalidity (this article dealing only with civil aspects, by analogy in trademark law C. Cass. crim., June 19, 2013, No. 12-84533): the criminal court may well hear the invalidity action against the patent.

Defendant in the action

The defendant in the action is the proprietor of the patent.

If an assignment has taken place, the action must be brought against the assignee: an action brought against the assignor must be declared inadmissible (Paris Court of Appeal, 4th ch., sect. B, May 13, 2005).

If the assignment has not yet been published, the action may be declared inadmissible (but this inadmissibility will guide you to the new proprietor). In the context of a counterclaim for invalidity, there should be fewer difficulties since the claimant in the infringement action normally discloses the chain of title.

Invalidity of the patent and/or a patent application

Pending patent

This point does not pose a real problem since Article L613-25 CPI (for French patents and Article L614-12 CPI for European patents) explicitly states that an invalidity action may be brought against a patent.

Expired or lapsed patent

It appears entirely possible to bring an invalidity action against an already expired title.

Indeed, due to the retroactive effect of invalidity (unlike lapse or expiration), the claimant may have an interest in obtaining the invalidity of the patent:

• to avoid a potential infringement action for acts prior to lapse or expiration, or
• to invalidate an SPC that is in force (Paris Court of First Instance, 3rd ch., 1st sect., February 12, 2008).

Patent application

At first glance, it seems to me that an invalidity action can only be brought against a patent (in light of the wording of Article L613-25 CPI for French patents and Article L614-12 CPI for European patents), yet it would seem unfair for a person to bring an infringement action based on an application (L615-4 CPI) without the defendant being able to raise the invalidity of the application.

The courts have sometimes allowed the invalidity action against a patent application (Paris Court of First Instance, ch. 03 sect. 02, October 5, 2001 or Paris Court of First Instance, 3rd ch., 3rd sect., November 16, 2005) or have sometimes rejected it (Paris Court of First Instance, 3rd ch., 2nd sect., October 20, 2005).

In short, the situation is uncertain…

Limitation of the patent during proceedings

Please refer to the article on limitation in France.

Statute of limitations for the invalidity action

Before May 23, 2019

Principle and Limitation Period

As with any legal action, the question of the limitation period for the action must be considered.

Indeed, Article 122 CPC provides:

A plea in bar is any means that seeks to have the opposing party declared inadmissible in their claim, without examination on the merits, for lack of right to act, such as lack of standing, lack of interest, limitation, a non-extendable deadline, or res judicata.

Prior to June 19, 2008, the general limitation period of 30 years applied (2262 of the Civil Code, which in practice amounted to no limitation given the 20-year validity period of a patent).

The limitation period was, however, amended by Law No. 2008-561 of June 17, 2008. Since then, the general limitation period has been 5 years (2224 of the Civil Code).

Starting Point

Due to the wording of Article 2224 of the Civil Code, the starting point does not appear to be the filing date of the patent application, as the application is confidential at that stage.

Some argue that the starting point of the limitation period would be the publication date of the application (Tribunal de Grande Instance de Paris, 3rd Chamber, 1st Section, April 25, 2013 or Court of Appeal of Paris, Pole 5, 1st Chamber, November 8, 2016, Case No. 2014/15008).

It would be far more logical to consider that the limitation period for the action begins on the publication date of the patent grant (Tribunal de Grande Instance de Paris, March 13, 2015, 3rd Chamber, 3rd Section, Case No. 2013/09605 or Court of Appeal of Paris, Pole 5, Chamber 2, September 22, 2017): this is the date on which third parties are notified of the existence of a definitive industrial property title.

Some have even considered that the limitation period for the action only begins from the moment the party seeking nullity effectively becomes aware of the title being asserted against them (Tribunal de Grande Instance de Paris, November 6, 2014, 3rd Chamber, 1st Section, Case No. 2013/14239 or Tribunal de Grande Instance de Paris, 3rd Chamber, 3rd Section, December 18, 2015, Case No. 2014/04698).

You are left to figure it out for yourselves…

Limitation Period Not Running?

It is worth considering whether, in certain cases, the limitation period does not begin to run.

In my view, if the claimant in the nullity action is a minor (or an adult under guardianship), Article 2235 of the Civil Code requires that the limitation period not run (or be suspended).

This provision immediately brings to mind another, more interesting case: what about a company that has not yet been formed? Personally, I would find it logical for the limitation period not to run until the company is formed (since it cannot act before then), but it must be acknowledged that nothing is provided for by law (or at least to my knowledge).

New Starting Point in Case of Limitation?

In the event of a limitation of the patent, it seems reasonable to assume that a new limitation period begins to run.

Contractual Modifications of the Limitation Period

It is a priori possible for a license agreement to modify, within a window of between 1 and 10 years, the limitation period (2254 of the Civil Code).

This new limitation period will only apply between the parties to the license agreement.

Special case of the counterclaim

The counterclaim is subject to the statute of limitations, just like the main action (see supra).

The statute of limitations for the counterclaim is not suspended by the filing of the main action: the statute of limitations is only suspended as of the date of the filing of the counterclaim with the registry (C. Cass. 2e civ. 26 November 1998, No. 96-12262).

Statute of limitations raised at the appeal stage

The statute of limitations may be raised in the first instance, but also at the appeal stage (Article 2248 of the French Civil Code).

As of 23 May 2019

Principle

Since the PACTE law, we can say that it is simpler (or not…).

Indeed, Article 124 of Law No. 2019-486 of 22 May 2019 on the growth and transformation of businesses (or the PACTE law for insiders) provides that the action for nullity is now imprescriptible.

This provision is transcribed in Article L615-8-1 of the French Intellectual Property Code.

Transitional provisions

The transitional provision (Article 124, III of Law No. 2019-486 of 22 May 2019 on the growth and transformation of businesses) provides that this imprescriptibility applies to all patents in force except for decisions that have the force of res judicata.

First, it is regrettable that titles that are no longer in force have been excluded, since an infringement action may be initiated on the basis of an expired title, provided that the statute of limitations for this action has not expired.

Debate on retroactivity

Once the transitional provisions have been set out, we may wonder whether this wording indicates that a statute of limitations already acquired is retroactively canceled?

Formally, the transitional provision does not state: « for patents in force even if the statute of limitations has expired. »

Therefore, does this provision call into question statutes of limitations already acquired?

Indeed, some might rely on Article 2222 of the French Civil Code, which provides that « A law that extends the duration of a statute of limitations or a forfeiture period has no effect on a statute of limitations or forfeiture that has already been acquired. »

Nevertheless, it should not be forgotten that the Court of Cassation accepts that a law may provide for retroactivity of its provisions: it then requires that this law be explicit concerning this retroactivity.

Most often, this retroactivity is justified by imperatives of general interest (Court of Cassation, 1st Civil Chamber, 18 June 2014, appeal No. 13-13471), since even explicit retroactivity may be set aside by the Court of Cassation if the justification does not seem sufficient (Court of Cassation, Social Chamber, 21 March 2012, appeal No. 04-47532).

In my view, retroactivity should apply here since there is no other way to interpret the transitional provision.

Indeed, assuming that this provision does not provide for retroactivity, what does it mean? That it applies only for the future (since it only concerns titles in force at the date of publication of the law)? Then why have a transitional provision if, in reality, the general principles of law over time were to prevail?

Why include « They have no effect on decisions that have become final« ? If there is no retroactivity, such a clarification would be meaningless since those decisions belong to the past. The only explanation for this sentence is (in my view) to clarify that a judicial decision having recognized the statute of limitations for a nullity action cannot be challenged due to the retroactivity provided for in the transitional provisions.

In conclusion, if the transitional provisions do not contain the word « retroactive, » there are no other reasonable interpretations, and such retroactivity must be acknowledged.

… Furthermore, this greatly simplifies matters for us, as the previous situation was far too complex…

Scope of the invalidation

Principle

The patent may be invalidated in whole or in part (L613-27 CPI, paragraph 3).

Total invalidation of the patent

In the event of invalidation of all the claims of a patent, the patent is invalidated and is deemed never to have existed (see below for the effects).

While the total invalidation of claims does not pose a major issue, partial invalidation requires further elaboration.

Partial invalidation of the patent

In reality, the terminology may cover two distinct concepts:

• certain claims are invalidated while others are maintained as is;
• certain claims are amended (their scope is limited) by the court via a remittal to the INPI (L613-27 CPI, paragraph 3).

Invalidation of certain claims

Fate of an independent claim upon the invalidation of another independent claim

Each independent claim is… independent: thus, the invalidity of one independent claim has no automatic impact on the other independent claims (Tribunal de Grande Instance de Paris, 3e ch. sect. 02, 11 May 2001).

Fate of a claim dependent on an invalidated claim

If a claim is deemed invalid, this does not automatically mean that the dependent claims must be invalidated.

For example, the invalidation of a claim for lack of inventive step does not automatically result in the invalidation of the claims that depend on it (C. Cass. com. 20 May 2014, No. 13-10061 or C. Cass. com. ch., 7 January 2014, No. 12-25955).

This may seem obvious in cases of invalidity for lack of novelty or inventive step (the dependent claims constituting limitations of the claims on which they depend), but the Cour de cassation regularly finds it necessary to reiterate this (C. Cass. com. 9 July 2013, No. 12-18135).

Similarly, a claim may be insufficiently described while a claim that depends on it may no longer be (the precise embodiment then claimed is specifically described in the description).

The same applies to extension of the patent beyond the application as filed: this defect does not necessarily « contaminate » the dependent claims (C. Cass. com., 12 July 2005, No. 04-10105).

If a claim is invalidated, the claims that depend on it must be considered as independent, and their validity must be analyzed (Court of Appeal of Paris, 4th ch. sect. B, 7 May 2009) while taking into account the context of the invalidated claim (Court of Appeal of Paris, 4th ch., 8 November 2000).

Fate of a dependent claim of a maintained claim

Conversely, if a claim is considered valid, this does not automatically mean that the dependent claims must be maintained.

Of course, if a claim is considered novel and inventive, the claims dependent thereon:

• will be necessarily novel and inventive:
  • if their features constitute genuine limitations, C. Cass. com., 14 January 1994, n°92-11296 or C. Cass. com., 12 December 1995, n°93-21640 94-12488);
  • and if their effective date is identical;
• are not necessarily patentable in the sense that other grounds for invalidity may exist (cf. L613-25 CPI: insufficiency of disclosure, extension beyond the content of the application as filed, exclusion from patentability, etc.).

Limitation modifying the wording of the claims

Principle

Most often, the limitation of claims is requested by the patent proprietor to avoid a complete revocation of the claim challenged by the opposing party.

In the event of limitation, the judge refers the proprietor to the INPI to proceed with it (L613-27 CPI, 3rd paragraph).

However, this limitation is not a right: if the judge prefers a complete revocation, they may well order it (Cour d’appel de Paris, 4e ch., sect. B, 20 May 2005).

Examples of limitations

The judges have already accepted to limit claims in the context of an extension of the subject-matter of the patent beyond the content of the application as filed (e.g., if a claim had been extended to “cooking apparatus” instead of “deep fryer”, the judge may revert to the narrower initial scope to restore its “true scope”, C. Cass. com., 15 November 1994, n°93-12917).

However, if the defect in the patent consists in the addition of a limitation to a claim contrary to Article L613-25 CPI c) (e.g., a limitation not initially disclosed in the application), the judge cannot simply remove this feature: indeed, such a removal would constitute a defect under Article L613-25 CPI d), as the scope of the claim would thereby be broadened.

It appears possible to obtain a limitation if the scope of protection conferred by the patent has been extended after grant (L613-25 CPI d)): in this case, the judge may limit the claim to its initial scope as granted (provided that this limitation does not contravene Article L613-25 CPI c)).

Furthermore, if the claim presents alternatives (e.g., “aluminum or iron”) and only one of the alternatives is novel and inventive, it appears possible for the judge to order a limitation to the sole valid alternative.

Finally, if a dependent claim has been found unpatentable while the claim on which it depends is patentable, the judge may order a limitation by removing this dependent claim.

Unlikely limitations

If, to overcome the defect affecting a claim, it is necessary to re-conduct a complete patentability analysis based on the introduced limitation, it is unlikely that the judge will grant it: the role of the judge is not to re-examine the different proposed amendments by the proprietor!

A straightforward revocation of the claim is more likely…

But is this legally possible?

In reality, I really wonder whether this limitation (i.e., a limitation modifying the wording of the claims) is possible.

Indeed, Article L613-25 CPI provides that « If the grounds for nullity affect the patent only in part, the nullity shall be pronounced in the form of a corresponding limitation of the claims« … Thus, there must be a partial ground for nullity (I recall that the ground is the reason for the judge’s decision on the parties’ claims).

Therefore, if a party alleges the nullity of all claims, the judge must determine whether this is true or false. The judge cannot really (or at least in my view) say « this is true but still it would be false if the claim were worded as follows…« . This is, moreover, the position of the judges in the decision of the Tribunal de Grande Instance de Paris, ch 03 sect 04, 20 October 2011, RG No. 09/17807.

In my view, the only case where the judge may render a decision with partial grounds for nullity is where certain claims survive the patentability examination: the judge will indicate that claims 1-3 are null while claims 4-12 are valid, and the patent will thus be limited to what survives (well, it is also true that this is the case in the decision of the Tribunal de Grande Instance de Paris, ch 03 sect 04, 20 October 2011, RG No. 09/17807, yet they did not pronounce the limitation…).

Effects

Of a revocation

On the patent

The revocation of a patent has an absolute or erga omnes effect (L613-27 CPI).

Furthermore, revocation has a retroactive effect (general principle of nullity of legal acts) on the patent: the rights then attached to the patent are deemed never to have existed (« principle according to which what is null is deemed never to have existed« , C. Cass. 3e civ., 22 June 2005, No. 03-18.624, « the revocation of a patent results in its annihilation as of the filing date of the patent application« , C. Cass. com., 12 June 2007, No. 05-14548).

In the case of a European patent, it is not excluded that a French decision may revoke a patent while a parallel opposition subsequently maintains the patent in an amended form: the absolute effect of the revocation prevails over the subsequent decision of the EPO (even though, most often, French judges stay proceedings in consideration of the sound administration of justice, Tribunal de Grande Instance de Paris, ch. 03, 24 March 1999).

On the supplementary protection certificate

The revocation of the patent results in the lapse of the supplementary protection certificate (or SPC) attached thereto (L613-28 CPI).

On the alleged acts of infringement

Since the patent is revoked retroactively (see above), the acts of exploitation of the invention can no longer be considered as acts of infringement (C. Cass. com., 12 June 2007, No. 05-14548).

On the abusive nature of the infringement action

The fact that the patent is revoked does not de facto render the infringement action abusive (see 32-1 CPC, Court of Appeal of Paris, 4th ch., sect. A, 5 February 2003 and Court of Appeal of Paris, ch. 04, sect. B, 29 March 2002).

On patent assignments

If the patent is totally invalidated, any assignments (to which the patent may have been subject prior to its invalidation) may be invalidated for lack of subject matter and/or consideration (C. Cass. com., 8 July 1981, n°79-15844 or Court of Appeal of Paris, 4th ch. sect. A, 19 October 2005).

If the patent is partially invalidated, the judge must seek the « common intention of the parties » by interpreting the contract and determining whether a contract would have been signed for a patent thus limited.

The legal basis for this invalidation appears to be, according to doctrine, the warranty against hidden defects (Article 1641 of the Civil Code) owed by the assignor to the assignee (a minority has argued that the warranty owed was linked to the warranty against eviction by third parties, Court of Appeal of Paris, 4th ch. sect. A, 19 October 2005).

In accordance with the general law of nullities, it is appropriate to attempt to restore the parties to the situation they were in prior to the conclusion of the contract. If the patent cannot be returned, it is possible (Article 1644 of the Civil Code):

• to refund the assignment price of the patent via a redhibitory action (total invalidation of the patent) (Article 1648 of the Civil Code);
• to refund a portion of the assignment price of the patent via a quantum meruit action (partial invalidation of the patent);

Profits made by the assignee during the period of the patent’s validity may be deducted from the assignment price to « offset » the destruction of the patent and its non-restitution (Article 1647 of the Civil Code), but this remains at the discretion of the judge.

Furthermore, it is entirely possible to include a clause in the assignment agreement exempting the assignor from the warranty (Article 1643 of the Civil Code) or to stipulate that the agreement would be an aleatory contract. However, this clause must be disregarded in the event of fraud by the seller (C. Cass. pl., 30 June 1998, n°96-11866).

On existing licenses

If the patent is totally invalidated, the license agreement may be invalidated for lack of subject matter and/or consideration (e.g., for trademarks, C. Cass. com., 1 June 1999, n°97-12853).

The legal basis for this invalidation appears to be, as for the assignment, the warranty against hidden defects (for the lease of property, Article 1721 of the Civil Code) owed by the licensor to the licensee.

In the event of partial invalidation of the patent, the licensee may (similar to what occurs for assignments) request the annulment of the agreement for lack of subject matter and/or consideration or a reduction in future official fees.

Nevertheless, it would appear that royalties already paid do not have to be reimbursed even if the patent is deemed never to have existed (C. Cass. com, 28 January 2003, n°00-12149, the licensee having « benefited » from the appearance of the license): this approach is consistent with the traditional position that the termination of a contract operates without retroactivity for contracts of successive performance (C. Cass. civ. 1, 1 October 1996, n°94-18657).

In addition, the licensor may be held liable (on the basis of Article 1721 of the Civil Code, paragraph 2):

• to refund a portion of the official fees collected from the date when the disturbance in the licensee’s enjoyment began, and
• to pay damages for future loss of earnings.

It is entirely possible to include a clause in the license agreement exempting the licensor from the warranty (C. Cass. soc., 11 March 1986, n°84-11231).

On settlements between an alleged infringer and the proprietor

It is possible that an alleged infringer may have settled with the patent proprietor to avoid litigation.

In this case, the settlement will not be annulled, and the amounts paid have no particular reason to be reimbursed (C. Cass. com, 28 January 2003, n°00-12149).

On decisions condemning third parties for infringement

It may happen that a person is initially condemned on the basis of a patent and that, subsequently, this patent is invalidated.

The question then arises of the conflict between the authority of res judicata (i.e., the condemnation of the infringer) and the retroactive invalidation of the patent, which would deprive the condemnation of its legal basis.

After some jurisprudential hesitation (e.g., C. Cass. com., 3 March 2009, n°06-10243), the Cour de cassation, sitting in plenary session, ultimately held that the invalidation of a patent does not provide grounds for the reimbursement of amounts already paid in execution of its condemnation (C. Cass. pl. n°10-24282, 17 February 2012): the authority of res judicata is a principle superior to the retroactivity of nullity.

Nevertheless, it is reasonable to assume that the enforcement judge (L213-6 COJ) will refuse:

• any measure aimed at enforcing a prohibition on performing the « infringing » acts (liberatory effect – the same would apply if the patent were to lapse or expire);
• any measure aimed at enforcing a condemnation not yet liquidated (C. Cass. com, 12 June 2007, n°05-14548);
• any measure aimed at liquidating an astreinte (in trademark, C. Cass. 2e civ, 6 January 2005, n°02-15954).

For Advocate General Le Mesle, these latter points would be justified by the very wording of Article L613-27 CPI: invalidation has an absolute effect, thus justifying the cessation of the effects of the condemnation judgment for the future.

On Non-Annulment

The decision rejecting the invalidity of a patent does not have absolute effect (C. Cass. com., 5 May 1987, n°85-16892).

Nevertheless, if there is a triple identity of request, parties, and cause, the authority of the res judicata will prevent the claimant from re-requesting invalidity (1351 CPC).

Nevertheless, it will remain possible:

• for third parties to request the invalidity of a patent on the same grounds, or
• for the same party to re-request the annulment of the patent based on a new ground for invalidity or cause (C. Cass. com., 10 March 1980, n°78-11697):
  • noting that by « grounds for invalidity » or « cause » it is understood to mean insufficiency of description, invalidity, inventive step… (Court of Appeal of Paris, 4th ch. sect. A, 7 May 1996) regardless of the evidence for this ground (i.e., prior art documents, different attacked features for insufficiency of description Court of Appeal of Paris 4th ch., 27 May 1998, etc.);
  • if the patent has been amended, it is likely that the same ground may be reasserted, except (in order not to conflict with the authority of the res judicata):
    • the one having caused the amendment of the patent;
    • the one arguing that the amendment of the patent constitutes an extension of the protection of the application after grant (L613-25 CPI d)).
  • Nevertheless, it should be noted that the Court of Appeal of Paris appears to be reversing this case law (Court of Appeal of Paris, Pole 5, 2nd ch., 9 May 2014) on the grounds that the claimant must present, from the outset in the proceedings relating to the first request, all the means it deems likely to support it (application of the principle of « concentration of means » from C. Cass. plen., 7 July 2006, n° 04-10672).

In the case of a European patent, it is not excluded that a French decision may uphold a patent while a parallel opposition subsequently revokes/amends the patent. In this case, the decision of the European Patent Office prevails over national courts (A68 EPC).

The Invalidity Exception

Principle

To defend oneself, it seems entirely possible to raise an invalidity exception of the patent (e.g., C. Cass com., 17 December 1964, n° 60-12295 in which an invalidity exception is raised by a party).

Legal Nature of the Exception

The term « exception » appears, in reality, to be a misnomer, as « invalidity exceptions » of a patent are not procedural exceptions within the meaning of the Code of Civil Procedure (see the exception of nullity under Article 112 CPC).

While the Law of 5 July 1844 (Article 46) provided for the possibility of resorting to an exception allowing the criminal judge to rule on the validity of the patent, this provision has now disappeared: the « invalidity exceptions » raised today appear, in reality, to be substantive defenses (provided for under Article 71 CPC):

A substantive defense is any means that seeks to have the adversary’s claim dismissed as unjustified after examination of the merits of the right.

Defense and counterclaim

If the defense of invalidity seeks more than mere dismissal, the defense of invalidity should have been raised in the form of a counterclaim (64 CPC): therefore, any additional claim (e.g., restitution of sums paid under a license agreement) expressed outside the statute of limitations must be declared inadmissible (C. Cass. 1re civ. 1 December 1998, No. 96-17761).

Competent courts

In civil matters

One may wonder whether, pursuant to Article L615-17 CPI in conjunction with D211-6 CPI, only the Paris Judicial Court has jurisdiction when a defense of invalidity is raised.

The answer is yes!

Indeed, the judge hearing the main action is also competent to rule on all defenses « except those raising a question falling within the exclusive jurisdiction of another court » (49 CPC): this is the case in patent matters, and a referral must be made.

In criminal matters

As with the counterclaim for invalidity, the criminal court may hear the defense of invalidity of the patent (384 CPP): the criminal judge is competent to rule on any defense raised.

The defendant to the defense

Is it possible to raise a defense of invalidity of the patent when the exclusive licensee has brought the infringement action as the main claim (see above regarding the counterclaim)?

In my view, the « admissibility » of the defense should not be analyzed in the same way as for an action: the defense need only be relevant to mount a defense.

Therefore, while a counterclaim for invalidity may not be directed against a licensee, the defense itself appears to be opposable to any person (since it allows for defense, see C. Cass. 1re civ., 21 February 1995, No. 92-17814 in matters of sale, the invalidity of a contract is opposable to a third party).

Effects

If the defense of invalidity is upheld

The effect of a judgment upholding a defense of invalidity is widely discussed in legal doctrine.

While some argue that, unlike main and counterclaim actions, the defense of invalidity does not result in the invalidation of the patent erga omnes (i.e., opposable to all) (since the defense only seeks the dismissal of the opposing party’s claims and not the invalidation of the patent), the Cour de cassation has already ruled in favor of an absolute effect of such invalidation (C. Cass. com., 20 January 1987, Conforglace v. Miroiterie Voironnaise H. Héritier: PIBD 1987, No. 410, III, p. 149).

The operative part of the decision (480 CPC) should be referred to in order to determine whether the question of invalidity raised by way of defense will have the authority of res judicata (1351 CPC).

If the defense of invalidity is dismissed

It is quite likely that the effect of dismissing a defense of invalidity is comparable to the dismissal of an action for invalidity (see above).

Statute of limitations

Principle

In civil proceedings, there is a Latin maxim « quae temporalia sunt ad agendum, perpetua sunt ad excipiendum » (i.e., « what is temporary by way of action is perpetual by way of defense« ) (e.g., C. Cass. 3e civ., 10 May 2001, No. 99-11762).

Thus, it appears entirely possible to raise a defense of invalidity of the patent as a means of defense, without regard to the potential statute of limitations on the action.

Expired statute of limitations

Nevertheless, the Cour de cassation specifies that the nullity exception is admissible only if the statute of limitations has expired (C. Cass. com. 26 May 2010, n°09-14431 or C. Cass. 1re civ, 4 May 2012 n°10-25558 or C. Cass. com. 3 Dec. 2013, n° 12-23976): if it has not expired, the counterclaim for nullity should be preferred.

Commencement of performance of the contract

Principle

In the context of a contractual relationship, performance of the contract precludes the perpetual nature of the exception (C. Cass. 1re civ, 4 May 2012 n°10-25558), whether the nullity invoked is relative or absolute (C. Cass. civ. 1re, 24 Apr. 2013, n° 11-27082).

Case of a license agreement

While, in general, this principle does not apply (since there is often no contract between the proprietor and the infringer), one may question the applicability of this principle where a licensee is sued for infringement for exceeding the limits set by their license agreement.

If the licensee has already paid license fees (i.e., performed part of the license agreement), would they be entitled to invoke a nullity exception against the patent that is the subject of the license?

In my view, the licensee would be fully entitled to raise this exception, as the nullity exception is not directly aimed at the license agreement itself but at the patent that is the subject of the agreement.

Limitations on challenging the patent

Principle

The proprietor of a patent (or the assignee, respectively) may wish to include in license agreements (or assignment agreements, respectively) a clause prohibiting the direct or indirect challenge to the validity of the licensed (or assigned, respectively) patents (a clause deemed a priori valid in principle C. Cass. com, 7 December 1964).

Consequence in case of non-compliance with the clause

The Cour de cassation has stated that the breach of this obligation should be sanctioned by a procedural bar (C. Cass. mix., 14 February 2003, n°00-19423 and 00-19424).

Limitation and scope of the contract

In principle, such a clause may limit the filing of a nullity action (whether as a principal or counterclaim) within the framework of the performance of the contract.

However, if the licensee is sued for infringement (because they have exceeded the contractual scope of their license), it appears possible to defend themselves by raising the nullity of the patent by way of a counterclaim or exception (C. Cass. com., 17 December 1964).

Limitation and EU law

Background

A clause prohibiting the challenge of a patent in a license agreement was historically prohibited by Regulation 2349/84 of 23 July 1984 (prohibition related to free competition, see also Commission Decision of 2 December 1975, 76/29/CEE).

Principle: a likely prohibition of the limitation

While Regulation 772/2004 of April 7, 2004 (now replacing Regulation 240/96 and Regulation 2349/84) does not explicitly list prohibited clauses, it is reasonable to assume that such a clause would still be prohibited (at least, it should be analyzed on a case-by-case basis under Article 101(1) in conjunction with Article 101(3) of the Treaty on the Functioning of the European Union).

A clause providing for termination of the agreement in the event of a challenge remains possible, however (Article 5.1.c of Regulation 772/2004 of April 7, 2004).

Exception to this prohibition

The ECJ had previously clarified (in its judgment of September 27, 1988, Case 65/86) that such a clause should be prohibited except:

• if such a clause was specifically intended to terminate pending litigation before a national court;
• if the license is granted free of charge;
• if the license relates to a technically outdated process.

Limitation and former patent proprietor

The assignor owes the assignee a warranty against eviction due to the assignor’s personal acts, a warranty of public policy (Article 1628 of the French Civil Code) that cannot be waived.

Accordingly, the assignor may not seek the nullity of the patent as a principal claim.