At a glance: patent enforcement proceedings in Switzerland & More News Here – Upjobsnews

Patent enforcement proceedings

Lawsuits and courts

What legal or administrative proceedings are available for enforcing patent rights against an infringer? Are there specialised courts in which a patent infringement lawsuit can or must be brought?

From the outset, patentees have to instigate civil proceedings to enforce patent rights. The Swiss Federal Patent Court (FPC) has exclusive jurisdiction over patent infringement and invalidity actions of patentees (article 26(1)(a) of the Patent Court Act (PatCA)). The panel of judges at the FPC is composed of at least one judge with a legal background and one judge with a technical background. The judges of the FPC must have proven knowledge of patent law to be eligible. Appeals against decisions of the FPC are heard by the Swiss Federal Supreme Court (SFSC).

According to article 81 of the Federal Act on Patents for Inventions (PatA), wilful patent infringement is a criminal offence; therefore, patentees can also instigate criminal proceedings against an infringer. Criminal proceedings may be instigated by the state (ex officio) if the infringer acts in a commercial manner.

In addition, patentees may request border control measures from the customs authorities, such as seizure and destruction of infringing goods, subject to statutory requirements (article 86a et seq, PatA).

Trial format and timing

What is the format of a patent infringement trial?

The proceedings before the FPC are governed by the Code of Civil Procedure (CPC). The court decides as a panel of three, although in special cases it will be a panel of five (article 21, PatCA). For preliminary injunctions, a decision can be taken by a single judge unless the technical background of the case requires a panel of three, which is usually the case (articles 23(1)(b) and (3), PatCA). Swiss law does not on the other hand provide for the carrying out of jury trials at the FPC.

Different evidence is permissible in proceedings before the FPC. This includes live testimony, documents and expert opinion.

The FPC panel must comprise at least one judge with a technical background. While, in theory, the court has the power to appoint external experts, it usually relies on the formal opinion of one of its own technical judges. This opinion is made available to the parties for comments (article 183(3), CPC and article 37(3), PatCA).

Opinions by party-appointed experts do not generally qualify as evidence under the CPC. They are considered only to be a party’s allegations. Nonetheless, party-appointed expert opinions are often filed by a party to support its pleading.

An FPC decision on the merits is usually rendered within 12 to 24 months. The majority of cases before the FPC (more than 50 per cent) are terminated by settlement (often at the preparatory hearing). The preparatory hearing usually takes place approximately six months after the statement of claim has been filed. An expedition of this process is not possible.

Proof requirements

What are the burdens of proof for establishing infringement, invalidity and unenforceability of a patent?

The general principle for the burden of proof states that the burden of proof rests with the person who derives rights from an alleged fact. This principle also applies in patent law (rec 5, BGer 4A_142/2014 from 2 October 2014).

Standing to sue

Who may sue for patent infringement? Under what conditions can an accused infringer bring a lawsuit to obtain a judicial ruling or declaration on the accusation?

The proprietor is entitled to bring an action for an injunction or remedy, damages and a declaratory judgment. Additionally, any person who holds an exclusive licence, irrespective of the registration of the licence in the Register, is entitled to bring an action for injunction or remedy as well as an action for damages, provided this is not expressly excluded by the licence agreement.

Article 74, paragraph 3 of the PatA provides the legal basis for an action for negative declaratory relief by an accused infringer to have a decision on whether an infringement has been committed by him or her. The accused infringer must show that he or she has an interest in a declaratory judgment, that there is uncertainty in the legal situation and that this uncertainty will continue unreasonably.

An interest in a declaratory judgment is regularly present when the patent proprietor accuses the plaintiff of patent infringement (rec 2.4, BGE 129 III 295). The SFSC and the prevailing doctrine, however, deny an interest in a declaratory judgment if a performance claim is to be expected within a ‘short period of time’ because in that case an unreasonable continuation of the legal uncertainty is not given (rec 3.5, BGE 131 III 319).

Inducement, and contributory and multiple party infringement

To what extent can someone be liable for inducing or contributing to patent infringement? Can multiple parties be jointly liable for infringement if each practises only some of the elements of a patent claim, but together they practise all the elements?

Article 66(d) of the PatA expressly states that any person who abets any of the offences mentioned in article 66(a) to (c) of the PatA, participates in them, or aids or facilitates the performance of any of these acts may be held liable under civil and criminal law.

Furthermore, Swiss civil law recognises the principle of joint liability. According to this principle, two or more persons who have together caused damage, whether as instigator, perpetrator or accomplice, are jointly and severally liable to the person suffering damage (article 50, paragraph 1, CC). Joint liability according to this article requires that several persons cause the damage in an adequate causal and joint manner. It is required that the persons cooperate, whereby each injuring party knows or could at least have known about the conduct of the other party; therefore, it is possible for multiple parties to be jointly liable for infringement if each practises some of the elements of a patent claim, but together they practise all the elements.

Joinder of multiple defendants

Can multiple parties be joined as defendants in the same lawsuit? If so, what are the requirements? Must all the defendants be accused of infringing all the same patents?

Under Swiss law, multiple parties can be joined as defendants in the same lawsuit. The purpose of such a joinder of parties is generally to simplify procedures and avoid contradictory judgments.

There are three requirements.

• The rights and obligations to be assessed must be based on similar facts or legal grounds. The necessary similarity exists if the formation of a simple joinder of parties appears to be appropriate with regard to the subject matter of the proceedings, whether for reasons of procedural economy or to avoid contradictory judgments (rec 2, BGer 4A_625/2015).
• All individual cases must be subject to the same types of procedure under Swiss law (article 71, CPC).
• There must be the same substantive jurisdiction for all actions; however, the same local jurisdiction is not a prerequisite for a simple joinder of parties.

Infringement by foreign activities

To what extent can activities that take place outside the jurisdiction support a charge of patent infringement?

Generally, activities taking place outside the Swiss jurisdiction are subject to the foreign jurisdiction where they take place. A Swiss court cannot order or enforce an injunctive remedy against activities outside of its jurisdiction. This would be considered an infringement of the territoriality principle.

Damages claims alone can theoretically be addressed against the infringer in Switzerland if he or she is located in Switzerland. Nevertheless, this rarely happens as the foreign jurisdiction will usually assume both aspects of the dispute together (the injunctive remedy and the damages claims) and thereby create a lis pendens (meaning the Swiss court could no longer take over jurisdiction over the same damage dispute).

In terms of cross-border importations, the principle of unilateral regional exhaustion (ie, without agreement of a reciprocal right) in the European Economic Area (EEA) has applied in Switzerland since 2009. This means that the right of exclusion lapses as soon as the patent owner introduces the patented product on the market in an EEA country. In such a case, it may also be imported in parallel into Switzerland from the EEA without the owner’s permission.

Contrarily, if it is first put on the market in a country outside the EEA, parallel importation is not allowed unless there is corresponding consent; however, for patent-protected goods whose price is fixed by the government – this primarily applies to pharmaceutical products – national exhaustion in Switzerland applies (article 9a, paragraph 5, PatA).

Infringement by equivalents

To what extent can ‘equivalents’ of the claimed subject matter be shown to infringe?

According to article 66(a) of the PatA, the doctrine of equivalents applies to infringement actions in Switzerland. To extend the scope of protection beyond the strict literal meaning of the words of the claim, any element that is equivalent to an element specified in that claim is taken into account; therefore, the scope of protection conferred by a patent claim is not limited to the identical use of the features of the construed claim by the defendant’s product or process, but it also extends to equivalent elements if the following conditions are met:

• the equivalent element has the same effect;
• it is obvious to the skilled person that it has the same effect; and
• the skilled person would have considered the equivalent element as having the same value.

Discovery of evidence

What mechanisms are available for obtaining evidence from an opponent, from third parties or from outside the country for proving infringement, damages or invalidity?

As the burden of proof lies with the party that alleges a fact, in this case the infringement, it is for the party itself to obtain the evidence.

Preliminary measures may be requested to preserve evidence or obtain a precise description of an allegedly infringing process (article 77, paragraph 1, PatA). Furthermore, a petitioner may request the taking of evidence at a pretrial stage if this is required to assess a potential claim’s likelihood of success (article 158, CPC).

Litigation timetable

What is the typical timetable for a patent infringement lawsuit in the trial and appellate courts?

An FPC decision on the merits is usually rendered within 12 to 24 months. The majority of cases before the FPC (more than 50 per cent) are terminated by settlement (often at the preparatory hearing). The preparatory hearing usually takes place approximately six months after the statement of claim has been filed. Expedition of this process is not possible.

Litigation costs

What is the typical range of costs of a patent infringement lawsuit before trial, during trial and for an appeal? Are contingency fees permitted?

Patent litigation costs include:

• the court fees and expenses;
• attorneys’ fees; and
• patent attorneys’ fees.

 

If a litigant loses the lawsuit, it must bear the court fees and expenses and will be ordered to pay the prevailing party compensation for attorneys’ and patent attorneys’ fees. The FPC determines the court fees and the adverse party’s attorneys’ fees on the basis of a statutory tariff.

Parties may also demand compensation for the reasonable actual legal costs incurred to pay their attorneys and patent attorneys by furnishing proof of actual and reasonable costs.

Court appeals

What avenues of appeal are available following an adverse decision in a patent infringement lawsuit? Is new evidence allowed at the appellate stage?

Patent office decisions are subject to appeal to the Swiss Federal Administrative Court (SFAC). The decisions of the SFAC are subsequently subject to appeal to the SFSC, Switzerland’s highest court.

Judgments of the FPC are subject to appeal to the SFSC. The right to appeal is granted by law and is not subject to leave to appeal.

In an appeal to the SFSC, the losing party may raise only substantive legal questions. The Federal Tribunal will not review the FPC’s or the SFAC’s factual findings unless they were due to obvious mistakes. New evidence is generally not allowed before the SFSC. Where the court of lower instance did not exhaustively establish the facts of the case, the Federal Tribunal will usually refer the case back to the lower instance so that it may complete the factual findings.

The deadline to file an appeal is 30 days from receipt of the FPC’s decision. Appeal proceedings usually take three to 12 months.

Competition considerations

To what extent can enforcement of a patent expose the patent owner to liability for a competition violation, unfair competition or a business-related tort?

Since patents grant exclusive rights, they may generally result in a restriction of economic competition which is, however, imposed by the law and not infringing per se. Nevertheless, the particular use of patents (eg, by imposing import restrictions, inadmissible patent licensing or distribution agreements, inadmissible conduct by market-dominant companies) may collide with competition law principles (article 3, paragraph 2 of the Cartel Act (CartA): ‘The law does not cover restrictions of competition which result exclusively from legislation on intellectual property. On the other hand, import restrictions based on intellectual property rights are subject to assessment under this law.’).

Generally speaking, the mere assertion of injunctive relief based on a patent is considered legitimate. Additionally, articles 40a and 40c of the PatA each stipulate that under certain circumstances, compulsory licences may be ordered, but only after an anticompetitive practice within the meaning of the CartA has been established.

The enforcement of a patent against an infringer does not by itself constitute an act of unfair competition, unless a separate cause of action would arise in parallel to the patent (eg, public defamation of the alleged infringer). The same applies for business-related torts: patent enforcement per se does not cause tort-based damages claims unless a separate cause of action would arise in parallel (eg, the patent infringement claims were obviously unfounded and caused market reputation damages to the defendant).

Alternative dispute resolution

To what extent are alternative dispute resolution techniques available to resolve patent disputes?

Patents can only be challenged in substance before the FPC. However, patent validity issues are considered arbitrable in Switzerland; thus, if a patent dispute falls within the ambit of a validly established arbitration agreement, a party could challenge the patent in arbitration.

Parties are free to agree on mediation, arbitration or any other alternative dispute resolution (ADR) mechanism if they can agree on the competence of an ADR body. Patent infringement and validity cases are considered arbitrable in Switzerland, although arbitration proceedings are rarely used to resolve pure patent infringement and invalidity disputes alone: it is more frequent for parties to conclude arbitration agreements in patent licensing agreements.

This also empowers an arbitral tribunal to decide on underlying patent infringement and validity issues. An arbitral award declaring a patent invalid will be recognised and enforced by the Swiss Federal Institute on Intellectual Property.

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22 March 2021.

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