In a recent judgment, the Supreme Court clarifies the procedural practice for defendants to raise a patent limitation during invalidity proceedings. In this particular case, the invalidity related to addition of subject matter and lack of inventive step on the patent of the Tiotropium drug.
The case was brought in 2012 by Laboratorios Liconsa S.A. (“Liconsa”) against Boehringer Ingelheim Pharma GmbH &Co (“Boehringer”) before the Barcelona Patent court.
Liconsa filed invalidity proceedings for revocation of Boehringer's patent EP 1.379.220 , validated in Spain under number ES 2.236.590 (“ES 590”), for lack of novelty and inventive step. Boehringer replied with a counterclaim, seeking judicial limitation of the contested patent under Article 138(3) of the European Patent Convention.
On 20 February 2017, Commercial Court no. 1 of Barcelona handed down judgment no. 30/2017[1] , by which it (i) substantially upheld Liconsa's claim declaring that the patent “lacks effect,
with respect to the claims originally granted” and (ii) dismissed the counterclaim brought by Boehringer, on the grounds that the limited claims were “null and void and not admissible due to added matter”.
Boehringer appealed the judgment before the Appeal Court of Barcelona (second instance). Liconsa challenged the appeal and partially contested the judgment.
A few days after the first instance judgment, on 1 April of the same year, Law nº 24/2015 of 24 July 2015 on Patents (“LP 2015”) entered into force in Spain[2] . Article 105 of the new law allowed the patentee to apply before the Spanish Patent and Trademark Office (“SPTO”) for the revocation or limitation of its patent (by amending its claims) at any time during the patent term, including where judicial proceedings on the validity of the patent were pending. Article 120 also provided the possibility to limit a patent subject to invalidity proceedings, either within the invalidity proceedings (Article 120(3)) or outside them (Article 120(4)).
Based on the new Article 105 and during appeal, Boehringer sought limitation of the patent ES 590 before the SPTO. The SPTO granted the limitation and, in March 2018, published the brochure of the limited patent. This new fact was then brought to the attention of the Appeal Court of Barcelona by Boehringer, who requested the termination of the proceedings for lack of cause.
The Appeal Court dismissed Boehringer’s motion for termination and declared (i) that it could not recognise the effectiveness of the administrative limitation of the patent and (ii) that the new wording of the limited patent could not be considered for the purposes of the proceedings. This is because article 105(4) of LP 2015 states that, when a request for patent limitation is addressed to the SPTO and the validity of said patent is the subject of judicial invalidity proceedings, the request for limitation must be authorised by the court hearing the validity proceedings[3]. However, Boehringer had not sought the necessary authorisation from the court. Therefore, the Appeal Court considered that the administrative limitation had been improperly requested and accepted.
On 29 March 2019, the Barcelona Appeal Court issued judgment no. 593/2019[4], by which it (i) dismissed Boehringer's appeal (and Liconsa's partial challenge), confirming the first instance judgment and (ii) ordered: (a) the register cancellation of patent ES 590 and (b) the cancellation of the amendment made before the SPTO during the appeal proceedings.
Boehringer appealed the second instance judgment to the Supreme Court on the following grounds:
The appeal was allowed by the Spanish Supreme Court, which ruled on the merits on 9 February 2023 (judgment no. 205/2023[5] ), dismissing Boehringer's appeal in the following terms.
On the breach of the procedure law for reviewing a final administrative act
Boehringer argued that the publication of the grant of the limitation by the SPTO (on March 2018) was an administrative act carried out by a public institution in the exercise of its functions and competences, which had also become final because it had not been appealed in time and before the contentious-administrative courts. According to Boehringer, the Appeal Court, by ordering the cancellation of the SPTO's limitation, was reviewing a final decision of the SPTO; thereby infringing the rules of jurisdiction and competence applicable to the case. In other words, Boehringer denounced that the second instance court did not have jurisdiction to annul the administrative act.
The Supreme Court ruled that the Appeal Court acted in accordance with its jurisdiction and with the subject of the proceedings. It was Boehringer who requested the termination of the proceedings before the Appeal Court alleging lack of cause and introduced SPTO’s publication of the limitation of ES 590 -as a new fact of the case-. At that time and to assess Boehringer’s motion for termination, the court had to review the fact, which resulted in the refusal of the administrative limitation of the patent (on the grounds that this had been obtained without the court’s authorisation, as required by the LP 2015).
The Supreme Court considered it reasonable that when the Appeal Court confirmed the invalidity of the patent and, consequently, ordered its cancellation before the SPTO; it also considered the administrative limitation, ordering its cancellation so that the invalidity would be fully effective. The Supreme Court quotes the words of the court a quo “the decision handed down in these proceedings must have its corresponding reflection in the SPTO, its effects reaching both the registered patent and its subsequent amendment”.
For the Supreme Court, the fact that the SPTO's decision had not been subject of an administrative appeal did not prevent the civil court (which was the one legitimate to authorise the limitation application) from assessing the lack of validity of the administrative act (neither at the time of deciding the request for the proceedings termination brought by Boehringer, nor subsequently when deciding on the validity of the patent).
On the breach of the procedure law against the defendant’s right to an effective remedy
Boehringer claims that the decision on the cancellation of the administrative limitation has not been subject of a reasoned decision, in breach of its constitutional right to an effective judicial remedy.
The Supreme Court considered that a substantive response was given at the second instance, since the Appeal Court denied the effects of the administrative limitation (the validity of which depended on its own authorisation) on two occasions. First, when it ruled on Boehringer's motion for termination (and rejected it). Second, when it upheld the patent invalidity action and denied the effects of the administrative limitation. To this effect, the Supreme Court recognised that “the upholding of the invalidity action entails, for its effectiveness, the cancellation of its registration and of the subsequent amendment accepted by the SPTO”, and therefore the order to cancel the administrative limitation is merely an effect resulting from the invalidity of the patent.
Incorrect application of rules by demanding authorisation under Article 105(4) to make the limitation of the patent effective before the SPTO.
Boehringer claimed that Article 105(4) (which required judicial authorisation for the patentee to request the limitation of its patent before the SPTO) was not applicable to the present case. This is because the invalidity proceedings had begun before the entry into force of the LP 2015, whose sixth transitional provision provided that judicial proceedings initiated at that time were to be followed in accordance with the procedure under which they had been initiated.
The Supreme Court emphasised that Boehringer was able to request the limitation of the patent before the SPTO under the new Article 105(4), as this possibility did not previously exist. The second transitional provision of LP 2015 also establishes that Title X LP 2015 (which includes article 105) is applicable to patents granted under the previous legislation.
Who must apply for authorisation
Boehringer also questioned who should ask for the authorisation required by article 105(4). They argued that it should be the SPTO - and not the patentee - who should have sought the judicial authorisation. And that, as Liconsa had not requested the preventive inscription of the claim before the SPTO, the omission of the authorisation was in any case attributable to Liconsa and not to Boehringer.
The Supreme Court considered that the one who must seek authorisation prior to the application for limitation is the one entitled to apply for the limitation, i.e. the patentee.
The court concluded that the absence of judicial authorisation renders any administrative decision on the limitation ineffective. And that, the court hearing an invalidity claim who becomes aware of the existence of an administrative decision on the limitation of the contested patent rendered without the required judicial authorisation, may (i) disregard the administrative limitation and, (ii) if the invalidity of the patent is upheld, order the cancellation of the patent declared invalid extending such cancellation to the limitation, which is ineffective.
Practical implications of the ruling
The judgment gives a summary of the new patent limitation regime introduced by LP 2015, which raises three possible scenarios to request limitation once the invalidity proceedings have been initiated:
In all these cases, the limitation depends on the court deciding on the invalidity.
However, the Supreme Court recalls that article 105 must be applied in accordance with its full terms. The prerequisite for judicial authorisation is linked to and inseparable from the application for limitation of the patent that is subject of the invalidity proceedings. The purpose of this rule seeks to avoid contradictions between the court's decision on the invalidity of a patent and the eventual limitation of the patent applied for before the SPTO and accepted by the latter.
The court confirms that the application of this rule is not incompatible with the fact that the invalidity proceedings had continued under the procedure initiated in accordance with the sixth transitional provision.
In short, the Supreme Court clarifies any doubts on the limitation of a patent subject of a judicial action for invalidity, as well as on the application of the transitional rules in this respect.
For other updates on the invalidity of technological patents: see Barcelona Patent Court publishes landmark ruling in TV platform dispute - Bird & Bird (twobirds.com).
[2] Law 24/2015 of 24 July 2015 on Patents repealed, except for the provisions of its transitional provisions, the previous patent law, namely Law 11/1986 of 20 March 1986 on Patents.
[3] "When judicial proceedings on the validity of the patent (...) are pending, the request for limitation, addressed to the Spanish Patent and Trademark Office, must be authorised by the Judge or Court hearing the proceedings".
