|"Thank goodness that's all|
over", said the Kat -- but
sadly it isn't ...
Those with long memories will recall that the Commission put forward a proposal for a Directive on the protection of technical inventions (utility models) in 1997; this was followed in 1999 by an amended proposal for an Directive on the protection of inventions by utility model. This led to consultations in 2001 and a summary of responses to the consultation exercise in 2002. Since then, all has been quiet on the Commission front, though some countries both within the European Union (notably Germany) and outside it (notably China, Japan and Korea) appear to have been doing very well with their own national systems, which provide protection which is overwhelmingly enjoyed by local businesses and waved against foreign interlopers: it's therefore a good way of gaining local protection and unbalancing the still-fragile Single Market all in one go. This is a subject to which this Kat will shortly be returning, but it's now time to get back to today's CJEU ruling.
Sadly, the questions on which the CJEU has been asked to rule are not the sexiest, but the fact that they have been asked by a Hungarian tribunal, the Fővárosi Bíróság, adds a touch of paprika to their otherwise bland taste.
So what is this case all about? In May 1991, Plastinnova applied to register an industrial design with the Hungarian Patent Office (HPO). This was followed, in September 1992, by an application for protection by means of a utility model. Plastinnova, relying on a transformation of the protection sought, claimed the priority date of its design application for its utility model application, The HPO allowed the transformation and granted the utility model application.
Later, in May 1998, Bericap sought to invalidate the utility model for lack of (i) novelty and (ii) inventive step by instituting administrative proceedings before the HPO. In June 2004 the HPO confirmed the utility model's validity, but restricted its scope. Plastinnova, unhappy at this, applied to a first instance court, the Fővárosi Bíróság (that's the Budapest Municipal Court) for amendment of the HPO's decision. This turned out badly for Plastinnova since the Fővárosi Bíróság not only refused its application but declared the utility model invalid. Plastinnova appealed to the Fővárosi ítélőtábla (Court of Appeal, Budapest) which restored the utility model's registration to its previous state of validity.
Now it was Bericap's turn to appeal, which it did to the Legfelsőbb Bíróság (Supreme Court). That court confirmed the order of the Fővárosi ítélőtábla with the result that the utility model registration remained tantalisingly valid. Having gone all the way to the Supreme Court and lost, there was only one thing for Bericap to do: it went all the way back down to the HPO and started again. In January 2007 Bericap filed a further application for invalidation, again on the grounds of (i) novelty and (ii) inventive step. In support of its application Bericap submitted a number of patent specifications, these being annexed to this application as documents K4 to K10, K19 to K25, K29 and K30. Plastinnova, which obviously had less relish for a reply of nearly a decade's worth of litigation, asked for the fresh application to be rejected without any examination as to its merits, since it had after all been thoroughly litigated.
Coming dangerously close to spoiling all the fun, the HPO rejected the second application for invalidation too. Citing Paragraph 42(3) of the Law on Patents, the HPO said there was no point in looking at patent specifications K4 to K8, K10, K19, K21 and K22, since they constituted the basis of the decision in the previous invalidation procedure. Added the HPO:
- 'each of those documents [had] been subject to examination, regardless of which of them contained information relevant to the model concerned’;
- ‘since the decision in the previous procedure [was] based on all of the documents examined, they [had to] be disregarded in the present procedure’.
- ‘each of the features covered by the main claims concerning the protection by utility model [was] identifiable from the photographs and [that], therefore, the protection of that model [could] claim priority’ and finally
- ‘a decision [had] also [been] made concerning priority in the previous procedure, and that decision was also based on the conclusion that the protection by utility model should be accorded the priority which had been conferred on it on the basis of the transformation of the protection of the industrial design’.
By now the reader will not be surprised to learn that Bericap refused to be daunted by this rebuff. The company went straight off to the Fővárosi Bíróság, seeking amendment of the HPO's decision and its long-desired invalidation of the utility model's registration. Do not worry that, after so long a battle, Bericap might be running out of ammunition: the company argued as follows:
- Since protection by utility model secured for its proprietor exclusive rights comparable to those conferred by a patent, it was in the public interest that exclusive be are based only on a protection which satisfies the legal requirements.
- Statute law (Law on Patents), paras 42 and 80) ensured the protection of the public interest by introducing as a matter of law the action for invalidation, which may be invoked by any person
- The public interest is also reflected in Paragraph 81(3) of the same law, according to which the procedure may be continued ex officio in the event that an application for invalidation is withdrawn.
At this point the members of the Fővárosi Bíróság either remembered, or were reminded, that Hungary is part of the European Union and therefore subscribes to the good and noble principles -- by which it and 26 other Member States are bound hand and foot -- of the Intellectual Property Enforcement (Directive 2004/48) and in particular to Articles 2(1) and 3(2). By Article 2(1)
"Without prejudice to the means which are or may be provided for in Community or national legislation, in so far as those means may be more favourable for rightholders, the measures, procedures and remedies provided for by this Directive shall apply, in accordance with Article 3, to any infringement of intellectual property rights as provided for by Community law and/or by the national law of the Member State concerned".Article 3(2) adds:
"Those measures, procedures and remedies shall also be effective, proportionate and dissuasive and shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse".Reference to these provisions certainly took this Kat aback. Readers of the IP Enforcement Directive will recall that words like "invalid" and "cancel" do not appear in it; readers of the narrative of this dispute so far will recall that words like "enforce" and "infringe" do not appear in it.
But the Fővárosi Bíróság went further, wondering whether the making of a reference to the CJEU on this set of facts might raise issues under the Paris Convention and the TRIPS Agreement as to the manner in which the relevant rules of national law are applied. The Fővárosi Bíróság accordingly stayed the proceedings and asked the CJEU the following questions:
"1. Is it consistent with European Union law if, during proceedings to amend a decision relating to an application for invalidation of a utility model, the measures, procedures and legal remedies are applied in such a way that: the national court is not bound by the claims or statements with legal effect made by the parties, and the court is entitled to order of its own motion any evidence that it may deem necessary?The Advocate General was not apparently invited to give an Opinion, presumably because none was needed.
2. Is it consistent with European Union law if, during proceedings to amend a decision relating to an application for invalidation of a utility model, the measures, procedures and legal remedies are applied in such a way that: the national court, when making its decision, is not bound by the administrative decision made in relation to the application for invalidation, or by the findings established therein, nor, specifically, by the grounds for invalidation indicated during the administrative procedure, or by the declarations, assertions or evidence submitted during the administrative procedure?
3. Is it consistent with European Union law if, during proceedings to amend a decision relating to a further application aimed at invalidating a utility model, the measures, procedures and legal remedies are applied in such a way that: the national court excludes any evidence submitted with the further application, including evidence relating to the state of the art, to which reference was already made in connection with the previous application for invalidation of a utility model?"
This morning the CJEU ruled as follows:
"Inasmuch as the provisions of Articles 2(1) and 3(2) of Directive 2004/48 ..., interpreted in the light of Article 2(1) of the [Paris] Convention ... and of Article 41(1) and (2) of the Agreement on Trade-Related Aspects of Intellectual Property Rights, ... are not applicable to an invalidation procedure such as that at issue in the main proceedings, those provisions do not preclude that, in such judicial proceedings, the court:Thank goodness for that, says the IPKat. Now it only remains for the case to return to the Fővárosi Bíróság, followed by appeals to the Fővárosi ítélőtábla and again to the Legfelsőbb Bíróság.
– is not bound by the claims and other statements made by the parties and is entitled to order of its own motion the production of any evidence that it may deem necessary;
– is not bound by an administrative decision made in relation to an application for invalidation or by the findings of fact in that decision, and
– is not entitled to re-examine evidence which was already submitted in connection with a previous application for invalidation".
Merpel has never read so much stuff and nonsense in her life. She has many friends who are Hungarians; each of them is delightful company. They are witty, hospitable, thoughtful folk -- and she's worried that any form of prolonged exposure to the administrative procedures and court litigation of the kind described above would be sure to drive them quite insane.