T 0689/19 - (II) Intervention and Portuguese arbitration and nullity

Key points

• The question is whether the interventions are admissible.
• The patentee had initiated "arbitration proceedings under Portuguese Law No. 62/2011 of 12 December 2011" against the interveners.
• These are the mandatory "arbitration" proceedings for pharma patent cases under Portuguese law.
• It seems that this kind of mandatory arbitration procedure is of historical interest only. "The 2018 amendment to Law 62/2011 removed the mandatory arbitration requirement for disputes in connection with pharmaceutical patent infringements, subjecting them to the jurisdiction of the Intellectual Property Court." (link); idem Global Patent Litigation, Portugal, para. 200.
• "It has not been contested that Articles 2 and 3 No. 1 of Law No. 62/2011 confer on arbitration tribunals exclusive jurisdiction in disputes, including requests for preliminary injunctions, arising from industrial property rights related to so-called reference medicines and generic medicines "
• "The dispute is about whether these proceedings, in view of their subject and nature, qualify as "infringement proceedings" within the meaning of Article 105 EPC.
•  "Consequently, an autonomous interpretation of what constitutes "infringement proceedings" should avoid interfering with national legislation by adopting a definition that is tailored to some, but not all, national systems. Moreover, the legislative intent has to be taken into account."
• " The purpose of Article 105 EPC is to avoid parallel proceedings (infringement proceedings, nullity proceedings or declaratory proceedings for non-infringement) before national courts of the contracting states while centralised opposition and opposition appeal proceedings are still pending. This ensures efficient use of the judicial system and avoids contradictory decisions (see G 4/91, points 3 and 4 of the Reasons; G 1/94, OJ EPO 1994, 787, point 7 of the Reasons)."
• Note (added 29.12.2022: it is interesting that nullity proceedings before national courts are listed because Art. 105 refers only to infringement and non-infringement proceedings).
• " In the board's opinion, it does not matter whether these proceedings are set off in the present case by a request for a marketing authorisation either. What matters is that the exclusive rights conferred by a European patent are invoked in these proceedings and their enforcement is sought. Indeed, "infringement" means contravention of the rights conferred by a patent on its owner, which are rights to exclude (prevent) third parties from making use of the subject-matter of a patent without the authorisation of the patent proprietor. The board therefore concurs with the definition given in decision T 1713/11 that "proceedings for infringement" within the meaning of Article 105(1)(a) EPC are (national) proceedings "meant to establish whether a third party is commercially active in an area that falls within the patentee's right to exclude" (T 1713/11, point 2.6 of the Reasons)."
• The interventions are admitted.
  
  
• See also T0223/11 concerning the predecessor administrative Portuguese proceedings. 
• EPO 

The link to the decision is provided after the jump, as well as (an extract of) the text of the decision.

https://www.epo.org/law-practice/case-law-appeals/recent/t190689eu1.html

1. Interventions - admissibility

1.1 Exhibit 3 to document (12), and documents (23) and (27) prove that arbitration proceedings under Portuguese Law No. 62/2011 of 12 December 2011 (hereinafter Law No. 62/2011, see exhibit 1 to document (12), document (22), and exhibit 1 to document (33)) were initiated on 10 May 2017 against intervener 1 (opponent 2), on 10 October 2018 against intervener 3 (opponent 4) and on 22 November 2018 against intervener 4 (opponent 5). The notices of intervention were filed on 8 August 2017 (intervener 1/opponent 2), 12 October 2018 (intervener 3/opponent 4) and 29 November 2018 (intervener 4/opponent 5). Therefore all the notices of intervention were filed within the three-month period referred to in Rule 89(1) EPC. At the time of the interventions, opposition proceedings were pending after remittal of the case by decision T 950/13. Together with the notices of intervention, written reasoned statements setting out the extent of the intervention and the grounds in support were filed, and the required fees were paid (Rule 89(2) EPC). Therefore the formal requirements of Rules 89 and 76 EPC are met, which is not contested. However, it is a matter of dispute between the parties whether arbitration proceedings instituted under Law No. 62/2011 are "proceedings for infringement" within the meaning of Article 105(1)(a) EPC that could give rise to an admissible intervention.

1.2 It should be noted that Law No. 62/2011 has meanwhile been amended by Law No. 110/2018 of 10 December 2018 (entry into force on 9 January 2019). However, the later amendments to Law No. 62/2011 are not relevant for assessing the admissibility of the interventions.

1.3 It has not been contested that Articles 2 and 3 No. 1 of Law No. 62/2011 confer on arbitration tribunals exclusive jurisdiction in disputes, including requests for preliminary injunctions, arising from industrial property rights related to so-called reference medicines and generic medicines (documents (12), (21), and (33), Judgment no. 460/15.5YHLSB.L1-8 of 5 May 2016 of the Court of Appeal of Lisbon, referred to in document (16), page 2). Thus Law No. 62/2011 has instituted a special regime for the settlement of disputes arising from industrial property rights related to marketing authorisations for medicines which rules out the jurisdiction of national courts, in particular the jurisdiction of the Portuguese Intellectual Property Court. The mandatory versus voluntary nature of the arbitration proceedings is thus not at issue. The dispute is about whether these proceedings, in view of their subject and nature, qualify as "infringement proceedings" within the meaning of Article 105 EPC.

1.4 Article 105 has to be read in conjunction with Article 64 EPC (G 4/91, OJ EPO 1993, 339, corrected translation, 707, point 1 of the Reasons). The (exclusive) rights conferred by a European patent and, correspondingly, the acts that constitute an infringement of these rights are defined in the national law of the contracting states. The national law also specifies the procedures and remedies for the enforcement of patent rights. Consequently, an autonomous interpretation of what constitutes "infringement proceedings" should avoid interfering with national legislation by adopting a definition that is tailored to some, but not all, national systems. Moreover, the legislative intent has to be taken into account. The purpose of Article 105 EPC is to avoid parallel proceedings (infringement proceedings, nullity proceedings or declaratory proceedings for non-infringement) before national courts of the contracting states while centralised opposition and opposition appeal proceedings are still pending. This ensures efficient use of the judicial system and avoids contradictory decisions (see G 4/91, points 3 and 4 of the Reasons; G 1/94, OJ EPO 1994, 787, point 7 of the Reasons). Of course, the possibility of intervening in opposition proceedings after the opposition period has expired or during subsequent appeal proceedings, and of thereby acquiring the status of a party to the proceedings, is exceptional (see G 2/19, OJ EPO 2020, 87, point B.II.4 of the Reasons). However, the conditions set forth in Article 105(1) EPC strike the proper balance of interest (see G 4/91, point 8 of the Reasons: "The problem which could arise out of late intervention in respect of delay of the proceedings was considered during the preparatory work but it was not accepted as a reason for rejecting such intervention even at the appeal stage of the proceedings."). The board therefore agrees with decision T 1713/11 that it should take into account the legislative intent when examining the admissibility of an intervention without creating further preconditions for an intervention (T 1713/11, point 2.2 of the Reasons). When considering both the context and the purpose of Article 105 EPC, the definition of "proceedings for infringement" cannot depend on the nature of the proceedings (civil, administrative or penal), nor on the remedies available in these proceedings (T 1713/11, point 2.5 of the Reasons). In the board's opinion, it does not matter whether these proceedings are set off in the present case by a request for a marketing authorisation either. What matters is that the exclusive rights conferred by a European patent are invoked in these proceedings and their enforcement is sought. Indeed, "infringement" means contravention of the rights conferred by a patent on its owner, which are rights to exclude (prevent) third parties from making use of the subject-matter of a patent without the authorisation of the patent proprietor. The board therefore concurs with the definition given in decision T 1713/11 that "proceedings for infringement" within the meaning of Article 105(1)(a) EPC are (national) proceedings "meant to establish whether a third party is commercially active in an area that falls within the patentee's right to exclude" (T 1713/11, point 2.6 of the Reasons).

1.5 In the board's judgement, it follows from the wording of the letters dated 10 May 2017, 10 October 2018 and 22 November 2018 which were sent on behalf of the respondent (exhibit 3 to document (12), documents (23) and (27)) that the arbitration proceedings instituted under Law No. 62/2011 against interveners 1, 3 and 4 aimed inter alia at establishing whether the interveners had committed acts falling within the patent proprietor's right to exclude of the patent in suit. The relevant passages read as follows:

"The object of these proceedings is the exercise of the rights to which BMS is entitled, arising from the Portuguese parts of European Patent no. 1 711 481, European Patent no. 1 610 780 and European Patent no. 1 885 339, notably those under Article 101 of the Industrial Property Code, in relation to generic medicines with the active substance dasatinib, ...

You are furthermore informed that, under the present arbitration, a decision will be sought to inter alia prevent the Defendant from practising any activities that infringe such rights or to avoid that said infringement continues, should it have already been committed, and, in the latter case, it will be further requested that the Defendant be convicted to the payment of a compensation for any damage caused due to such infringement."

1.6 Two affidavits provided by the parties also deal in greater detail with the nature and aim of the arbitration proceedings instituted under Law No. 62/2011. The parties' experts opine that arbitration proceedings are the only remedy for enforcing industrial property rights, in particular patent rights, against applicants for marketing authorisations for generic medicines, and that these proceedings aim at obtaining a decision on the merits as to the existence or not of infringement of industrial property rights (see documents (16) and (38), referring also to Article 101 of the Portuguese Industrial Property Code relied on in the letters instituting the arbitration proceedings). There is no evidence on file to disprove the conclusions by the intervener's experts, and the board fails to see a reason why it should disregard this evidence.

1.7 In the board's judgement, the arbitration proceedings instituted under Law No. 62/2011 against interveners 1, 3 and 4 thus constituted "proceedings for infringement" within the meaning of Article 105(1)(a) EPC.

1.8 The respondent's arguments did not persuade the board for the following reasons:

1.8.1 As regards the disruptive nature of interventions and the required substantive legitimate interest for a party to intervene, the legislator took these aspects into consideration when adopting Article 105 EPC. In line with T 1713/11 (point 2.2 of the Reasons), the board holds that the conditions for interventions pursuant to Article 105(1) EPC establish a substantive legitimate interest and that no further preconditions for an intervention should be created by way of interpretation of Article 105 EPC. As long as opposition proceedings are pending, there is a legitimate interest in having the validity of a European patent determined within centralised opposition proceedings before the European Patent Office, rather than in one or more national proceedings (G 4/91, OJ EPO 1993, 339, corrected translation, 707, points 3 and 4 of the Reasons; G 1/94, OJ EPO 1994, 787, point 7 of the Reasons). The outcome of opposition proceedings must have a bearing on the national proceedings. This is the case if exclusive rights conferred by the European patent which is under consideration in opposition or opposition appeal proceedings are invoked in the national proceedings.

1.8.2 As regards the argument that the initial stage of arbitration proceedings according to Law No. 62/2011 was preventive, the board holds that the arbitration proceedings nevertheless fall under the notion of "infringement proceedings". As discussed above, the respondent's letters instituting such proceedings (exhibit 3 to document (12), and documents (23) and (27)) as well as the available expert declarations (documents (16) and (38)) show that these proceedings aim at prevention, cessation and/or compensation. The board cannot conclude from the evidence on file that these remedies are subject to distinct proceedings initiated at different points in time. But even if the arbitration proceedings according to Law No. 62/2011 are preventive (i.e. directed against impending infringement), this would not, in the board's judgement, be decisive. Neither the wording nor the purpose of Article 105(1)(a) EPC limits "infringement proceedings" to lawsuits against occurring acts of infringement of patent rights. In the board's judgement, all proceedings that are, in substance, directed to the enforcement of exclusive rights conferred by a patent, including proceedings which aim at preventing infringement of a patent, are encompassed by the term "infringement proceedings" (see T 1459/06, point 1 of the Reasons). The definition in point 2.6 of the Reasons of decision T 1713/11 appears to be more limited in that it refers to the issue of whether a third party "is commercially active". However, T 1713/11 is concerned with the question of whether a distinction should be made between criminal and civil proceedings, and not between a situation where a patent is being infringed and a situation where such infringement is imminent. The rationale of decision T 1713/11 is that, in point 2.6 of the Reasons, it gives an autonomous interpretation and definition of "infringement" by making the link to the proprietor's right to exclude. To the extent that, in the present case, rights conferred by the opposed patent had been asserted in order to prevent imminent infringement, the arbitration proceedings according to Law No. 62/2011 amount in substance to infringement proceedings within the meaning of Article 105(1)(a) EPC and give rise to an admissible intervention. This finding is also in line with decision T 439/17. The purpose of the national proceedings in this case was to obtain and/or preserve evidence of facts relevant for possible infringement proceedings. Such proceedings for obtaining and/or preserving evidence do not aim at preventing third parties from making use of the subject-matter of a patent (T 439/17, point 7 of the Reasons). Therefore such proceedings do not constitute infringement proceedings.

1.8.3 As regards decision T 223/11, the board notes that this decision is not relevant since it deals with national proceedings before the Portuguese Administrative Court which had been instituted before the promulgation of Law No. 62/2011. The board furthermore holds that it has no power, when assessing the admissibility of an intervention, to consider the facts and circumstances of the national proceedings as if it were in the place of the national authority and to anticipate the outcome of the national proceedings. The board has only to determine whether or not the national proceedings are "infringement proceedings" within the meaning of Article 105(1)(a) EPC, that is, whether they are founded on the patent proprietor's rights to prevent third parties from making use of the subject-matter of the opposed patent. It is therefore irrelevant whether the national law provides for an exemption to the rights conferred by a patent and whether this exemption applies in the circumstances at hand in the national proceedings.

1.8.4 Nor is the board persuaded by the respondent's argument that arbitration proceedings instituted under Law No. 62/2011 could not be infringement proceedings because applicants for a marketing authorisation for a generic medicine are not able to put the generic product on the market until such authorisation is given. However, the rights conferred by a patent are not limited to offering for sale or selling a generic medicine. Rather, the patentee's right to exclude as defined according to the national law will encompass acts preparatory to the marketing such as making or importing and storing the medicine (see e.g. Article 28 of the Agreement on Trade-Related Aspects of Intellectual Property Rights, which is binding on all contracting states).

1.9 In view of the above, the board holds that the arbitration proceedings according to Law No. 62/2011 constitute infringement proceedings within the meaning of Article 105(1)(a) EPC to the extent that they are directed to the enforcement of patent rights (and not merely rights stemming from supplementary protection certificates or from the protection of undisclosed test or other data submitted as a condition for the approval of marketing a pharmaceutical product). The opposition division was therefore correct to hold the interventions admissible. The interveners thus acquired status as opponents 2, 4 and 5 respectively and were entitled to appeal under Article 107 EPC (G 3/04, OJ EPO 2006, 118, point 4 of the Reasons).