The so-called Potpourri I reform of civil procedure has made the suspensive effect of an appeal the exception rather than the rule. This could change the stakes of first-instance patent revocation cases. A literal reading of the relevant provisions suggests that, as a rule, a first-instance judgment revoking a patent is now enforceable pending an appeal. An analogy drawn with a 2012 Brussels Court of Appeal judgment could offer a way out of this situation for the patent owner. Regardless, it makes sense to request the first-instance court explicitly to exclude the provisional enforcement of patent invalidity decisions.
The Potpourri I Act was passed on October 19 2015. It is the first of several reforms to procedural law by the Federal Public Service for Justice under the direction of Koen Geens. Potpourri I brings a variety of changes to civil procedure in Belgium, including to:
- the rules on debt collection;
- the scope of res iudicata (ie, matters already decided); and
- the constitution of appellate courts.
All the measures aim to improve the efficacy of civil proceedings and reduce costs and court backlogs. Most entered into force on November 1 2015 and apply to proceedings filed after that date.
Before Potpourri I entered into force, Article 1397 of the Judicial Code provided that unless there was a statutory exception, opposition and appeals (but not a subsequent point-of-law appeal to the Court of Cassation) had suspensive effect. One such statutory exception applied to injunctions granted in cease-and-desist IP infringement proceedings (Article XVII.18 of the Code of Economic Law). Apart from statutory exceptions, Article 1398 of the Judicial Code further granted the first-instance court power to allow the provisional enforcement of its judgment. However, the rule was that an appeal prevents the prevailing party from enforcing a first-instance judgment pending the outcome of the appeal.
The rule has been reversed. Article 1397 now reads that unless there are statutory exceptions or the first-instance court decides otherwise in a reasoned decision, first-instance judgments can be provisionally enforced. Article 1398 as amended clarifies that provisional enforcement of a judgment is done at the risk of the party pursuing enforcement and without prejudice to the rules on consignment.
Without further amendments to the Code of Economic Law, this change could have unwanted repercussions in patent cases. Article XI.59 Section 2 of the Code of Economic Law provides that a point-of-law appeal to the Court of Cassation has suspensive effect on the decision to revoke a patent. The effect of the provision has been that an invalidity decision on patents produced its erga omnes effect (ie, towards all parties) only after the decision had become final and a point-of-law referral was no longer possible. Article XI.59 Section 2 (like its predecessor, Article 51 Section 2 of the 1984 Patent Act) was drafted under the previous regime, where an appeal to the first-instance decision had suspensive effect as a rule. As a result, it was not necessary to specify in Article XI.59 that an appeal filed against a first-instance decision revoking a patent also had that effect.
Strictly speaking, the result is that there is now no literal statutory exception for patent revocation to the new general rule that a first-instance judgment can be provisionally enforced. According to the letter of the law, an appeal against such a judgment would not have suspensive effect on the revocation of a patent under the new regime.
Surely this is not a situation that the legislature had in mind with the Potpourri I reform. First, Book XI of the Code of Economic Law included no provisions for the practical steps to be followed if a patent is revoked (with erga omnes effect) in a first-instance judgment that is overturned by the Court of Appeal. Would the patentee have to pay the annual fees that became (retroactively) due for the period spent obtaining a reversal on appeal? What would be the effect of central limitation? There is no guidance in the Code of Economic Law. Second, what would be the position of third parties that put the invention into effect during the period between first-instance revocation and reversal on appeal? Would an infringement action filed by the patentee against such parties be admissible pending the appeal against the non-final judgment to revoke the patent? These questions show that patent revocation was not considered by the drafters of Potpourri I or must be reconsidered.
An effective way out of this conundrum could be by analogy with the Brussels Court of Appeal's February 14 judgment in Lundbeck v Tiefenbacher. In that case, the Brussels Commercial Court allowed the provisional enforcement of its first-instance judgment to revoke Lundbeck's supplementary protection certificate for escitalopram. In a preliminary decision, the Court of Appeal reversed that aspect of the decision, citing Article 51 Section 2 of the Patent Act to hold that the provisional enforcement of a first-instance judgment to revoke a patent could not be reconciled with the suspensive effect of a point-of-law appeal to the Court of Cassation. Similarly, it is arguable that Article XI.59 Section 2 is an (albeit implicit) statutory exception to the new general rule that an appeal does not have suspensive effect.
Although the reasoning based on the escitalopram judgment is sensible, the lack of a statutory provisions leads to uncertainty. The legislature should amend Article XI.59 Section 2 of the Code of Economic Law to clarify that, when a patent is revoked, an appeal also has suspensive effect. Meanwhile, counsel representing patentees in revocation actions filed after November 1 2015 (or cases where invalidity is raised as a defence) should request the Brussels Commercial Court to exclude explicitly the provisional enforcement of its judgment in a reasoned decision should it find that the patent in suit is (partially) invalid. Those reasons could include the difficulties in re-establishing the patentee's rights in the event of a reversal on appeal, as mentioned above.
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