IP Report - 2017-1

The Inteo IP Report is a newsletter reporting on noteworthy developments in Belgian and EU intellectual property law. To receive these updates by e-mail, you can subscribe here.

Trade marks & parallel imports – On 7 November 2016, the Belgian Cour de Cassation ruled on the BMS-criterion of “objective necessity” for the repackaging of parallel imported pharmaceutical products in MSD/PI Pharma (C.15.0206.N). MSD markets a pharmaceutical product in Belgium in 28, 56 and 98 tablet packs. The 98-tablet pack amounted for 89% of the market, prompting a parallel importer to repackage 28-tablet packs imported from Poland into 98-tablet packs. MSD objected that repackaging was not objectively required to access the market. Its action was denied by the Brussels court of appeal. The Cour de Cassation confirmed that decision and held that it follows from CJEU case law that it must be examined whether the packaging size marketed in the export country allows access to the entire market of the product in the member state where it is imported. Perhaps regrettably, the Cour de Cassation refused to issue a reference for a preliminary ruling to the Court of Justice on the matter.

Unfair competition – The Antwerp court of appeal issued a judgment in an unfair competition case between British American Tobacco (‘BAT’) and Belgian cigarette manufacturer Torrekens (2016/AR/357) on 23 January 2017. BAT has phased out the well-known cigarette brand ‘Belga’. Shortly thereafter, Torrekens launched the trade mark ‘B’ with a get-up that was similar to Belga and marketing that was focused on the Belgian origins of the brand. BAT successfully obtained an injunction against the B-mark on 1 February 2016. That was not the end of the matter, because Torrekens then used a modified get-up, in which the ‘B’ on the pack was replaced by a question mark. The Antwerp court of appeal decided that this get-up amounts to misleading advertising and to an act of unfair competition by diverting customers, illegally obtained to begin with, to the new product packaging.

Right of information - On 18 January 2017, the EU Court of Justice of the EU explained in case C-427/15 that the right of information of an intellectual property right owner can also be exercised in the context of proceedings separate to those in which the infringement was determined. A sensible outcome. Several European jurisdictions, including Belgium, provide for expedited proceedings to obtain injunctive relief. Such proceedings usually do not allow for damages, which must then be sought in a separate action. It is in that action that information such as the quantities produced or sold by the infringer and the suppliers and customers of the infringer becomes most relevant.

Innovation Income Deduction (IID) - The Belgian Patent Income Deduction or ‘PID’ regime is replaced with new tax incentives for research & development : the Innovation Income Deduction (“IID”). Under the IID regime, the scope of income deduction for patents and SPC’s is broadened to include orphan drug protection, plant breeders’ rights, innovative software and data or market exclusivity rights for medicinal and plant protection products. ‘Innovative software’ is defined as copyrighted software, improvements to or derivative works of such software, that are the result of research and development projects and programs as defined in Article 275 /3 of the Income Tax Code. Such projects and projects must be notified to the Belgian Science Policy Office (“BELSPO”). ‘Innovation income’ qualifying for the IID not only includes royalties, but it extends to damages awarded by a court or agreed to in a settlement agreement.
 
Double & treble damages - In case C-367/15, the EU Court of Justice decided that Article 13 of the Enforcement Directive (Directive EC 2004/48) allows EU member states to provide for punitive damages in intellectual property matters. Polish legislation gave copyright holders the choice to claim compensation for either the actual harm incurred or a sum corresponding to twice (and in cases of wilful infringement, thrice) the hypothetical royalty that would have been due if the infringer had obtained permission to use the work (a rule referred to as treble resp. double damages). The infringer argued that this legislation could not be reconciled with Article 13 of the Enforcement Directive. The CJEU disagreed, noting that the Enforcement Directive lays down a minimum standard of protection for IP holders and it does not prevent that Member States provide for measures that are more favourable for rightsholders. This decision will surely grab attention, not in the least that of software publishers. The treble damages rule will not benefit the rights holder in the main proceedings, however, because the Polish Constitutional Court meanwhile found that that part of the provision is unconstitutional.   

Supplementary Protection Certificates for medicinal products - The UK High Court has issued a reference for a preliminary ruling to the EU Court of Justice in relation to Article 3(a) of the SPC Regulation. In Teva/Gilead ([2017] EWHC 13 (Pat)), the English court was asked essentially whether a patent claim for "a pharmaceutical composition comprising active ingredient X (...) and optionally other therapeutic ingredients" is sufficient to obtain an SPC for a product comprising a combination of X and Y. Teva argued that it was not, because the EU Court of Justice's judgment in Medeva explains that, to meet the requirement in Article 3(a) that the product covered by the SPC is "protected by a basic patent in force", the product must be specified in the wording of the claims. Noting that EU national courts have continued to interpret Article 3(a) of the SPC Regulation in different ways in spite of several judgments of the CJEU on the subject, the UK High Court decided to repeat the first question in Sanofi/Actavis (C-443/12) in a new referral: “What are the criteria for deciding whether 'the product is protected by a basic patent in force' in Article 3(a) of the SPC Regulation?”. Arnold J suggests that the criterion should be that the product embodies the technical contribution of the patent.

Unified Patent Court & Brexit – The entry into force of the Unified Patent Court Agreement requires ratification by 13 states, including at least France, Germany and the United Kingdom. The outcome of the Brexit referendum seemed to have derailed the process but in November 2016, the UK announced its intention to ratify the agreement in 2017. On 16 January 2017, the Preparatory Committee of the Unified Patent Court (“UPC”) published an update indicating that the UPC would become operational in December 2017. No more than 2 days after that announcement, British PM Theresa May said that the United Kingdom will take back control of its laws and “bring an end to the jurisdiction of the European Court of Justice in Britain”. The speech of 17 January 2017 appears to shed new doubt over the UK’s intention to ratify, because the Unified Patent Court will be bound by the decisions of the Court of Justice of the European Union. If the UK does ratify, the secretary who would have to formally sign the ratification instrument is, ironically, Mr. Boris Johnson.