Procedure in patent enforcement and invalidity actions
As a rule, patent rights shall be enforced and invalidated before the Court. Furthermore, according to Article 34 of the IPC, the declaration of nullity or annulment may only result from a judicial decision – that is, one rendered by the Court.
A special legal system of enforcement of industrial property rights was created by Law 62/2011 applicable to all disputes, including preliminary injunctions, related to reference medicines and generic medicines, regardless of whether they involved process, product or utilisation patents, or SPCs.
Until January 2019, mandatory arbitration proceedings should be initiated within 30 days of the Portuguese Authority of Medicines and Health Products' (INFARMED) publication, on its official website, of the marketing authorisation application, or from the date of the registration application, in case of centralised marketing authorisation.
Decree-Law 110/2018, which amended Law 62/2011, maintained the same enforcement system for pharmaceutical patents and generic medicines but revoked the mandatory arbitration route. Since 9 January 2019, the interested party who seeks to enforce an industrial property right, in light of the publication of a marketing authorisation application for generics medicines, still needs to do so within a 30-day deadline, but the nature of the arbitration for generic medicines is now voluntary rather than mandatory. If the parties do not agree to submit the dispute to arbitration (which has been the rule so far), the enforcement action shall be brought before the Court.
Given the relatively recent establishment of the Court and also the competence of arbitral tribunals to handle pharmaceutical patent cases until recently, the expertise in this field is not yet sufficiently developed. However, this first instance Court is now being faced with a growing number of patent cases, in light of the recent changes in Law 62/2011 and developments in patent litigation landscape are expected in the upcoming years.
Finally, because patent infringement is considered a criminal offence, punishable with imprisonment for up to three years or a penalty up to a maximum of 360 days, the injured parties may also resort to criminal courts. However, the resort to criminal proceedings in Portugal is mainly reserved for the most blatant cases of trademark infringement – counterfeiting – and is not usual for patent enforcement cases.
Where the cases demand specific technical skills and expertise that the judges and arbitrators do not possess, the court or tribunal may be assisted by an expert (a technical adviser).
Industrial property has guarantees established by law for property in general and enjoys special protection under the IPC and other legislation and conventions in force. Therefore, a patent holder or a licensee or sub-licensee (if this is contemplated in the respective licence or sub-licence contract) has standing to sue.
The enforcement of patent rights can be made through actions aiming at preventing or putting an end to the infringement of those patent rights. In relation to invalidity claims, the Public Prosecutor's Office or any interested party are entitled to bring a suit to annul or declare the nullity of a patent against any holder of registered patent rights. Nullity can be invoked at any time by any interested party. Annulment actions, following the enactment of the new IPC, must now be filed within five years as from the decision of the respective grant.
Patent infringement and invalidation proceedings before the Court follow the procedural rules set out in the Portuguese Civil Procedural Code. Patent infringement proceedings under Law 62/2011 shall follow the mandatory provisions of said Law. Voluntary arbitration proceedings shall also follow the Portuguese Law on Voluntary Arbitration, as well as the procedural rules of the arbitration adopted in each case. Patent infringement proceedings before the criminal courts will follow the procedural rules set out in the Portuguese Criminal Procedural Code.
In any case, as a rule, the parties will submit their pleadings with evidence, thus being given the opportunity to present their case in writing and to file their requests in relation to further evidence to be presented. The evidence generally includes documentary evidence and testimonial evidence, but may also include written depositions, legal opinions and expert opinions.
The IPC contemplates measures and procedures to ensure the enforcement of the industrial property rights, including specific rules for obtaining relevant evidence of infringement and discovery and also for interim measures or preliminary injunctions. In this context, whenever evidence is in the possession of, held by or under the control of the opposing or a third party, the interested party may request of the Court that it be presented, provided that, to justify its intentions, it presents sufficient indication of a violation of industrial property rights.
Concerning acts carried out on a commercial scale, the applicant may also ask the Court for the presentation of banking, financial, accounting or commercial documents that are in the possession of, accessible to or under the control of the opposing or third party.
Whenever industrial property rights are violated, or there are grounds to believe a third party may cause serious, difficult-to-repair harm to these rights, the interested party may request urgent and effective provisional measures aimed at preserving evidence of the alleged violation. This legal provision gives rise to a great amount of discussion in doctrine and case law in relation to the interpretation of 'damage to an industrial property right that is serious and difficult to repair', in other words, irreparable harm.
Finally, the interested party may also request the submission of detailed information (from the alleged violator or from third parties) on the origin and distribution networks of the goods or services it suspects infringe industrial property rights.
In invalidation proceedings before the Court, a patentee may limit the scope of protection of an invention by altering the claims both via the administrative route (before the Patent Office) and the judicial route (before the Court).
Separately or within the scope of a counterclaim in infringement proceedings, it is usual for the defendant to request the declaration of nullity of the patent, usually claiming that the patent did not meet, at the time of its grant, the patentability requirements.
This was a hot topic in the context of mandatory arbitrations under Law 62/2011 as the case law of the arbitral tribunals has been very torn concerning the arbitral tribunals' own competence to assess the validity of patents (or SPCs) even if raised as a defence with mere inter partes effects. The courts of appeal have been strongly divided about this topic, despite the fact that none of the decisions rendered had a generally binding force.
Decree-Law 110/2018 inserted a new provision in Law 62/2011, allowing the invalidity objection to be assessed and declared with mere effects inter partes in the context of voluntary arbitration proceedings.
However, this new provision does not settle at all the previous discussions on this topic and discussions are being held in relation to the legal nature of this new provision (in particular, if it has an interpretative nature or not). Therefore, and until the case law is settled, this controversy is still pertinent, now in the context of voluntary arbitration and also in the context of judicial proceedings.
A typical patent infringement or invalidation case in the Court may take a couple of years or more, depending on the complexity of the matters involved therein. A preliminary injunction may take between three and eight months.
As regards the voluntary arbitration proceedings under Law 62/2011 as amended by Decree-Law 110/2018, said law establishes that the final hearing must take place 60 days following the filing of the defence, although this deadline was already provided for in the context of mandatory arbitration and it was rarely complied with. In the context of potential voluntary arbitrations, the applicable Law on Voluntary Arbitration establishes a 12-month period for the arbitration award, which may nevertheless be extended by agreement of the parties. This deadline to give a final award was often extended in the context of mandatory arbitrations, in particular in more complex cases.
As to the costs of the proceedings, court fees are calculated based on the value of the dispute, as fixed by the court on the basis of the worth of the interest of the parties in dispute. Arbitration costs include the arbitrators' fees (in the context of mandatory arbitrations, usually around €60,000 for the arbitral panel, in cases where the arbitration reached its end with a final merit award) and the administrative costs (secretary and other administrative expenses).
Added to this, the parties must consider the attorney's fees and possibly the experts' fees.
It is possible to apply for an interim injunction seeking a provisional decision that prevents or puts an end to the infringement of an industrial property right, including the seizure of the infringing products.
With regard to preliminary injunctions, the IPC provides that whenever there is violation of, or justified fear that, another party may cause serious and difficult-to-repair harm to an industrial property right, the court may, if the interested party so requests: (1) order the appropriate measures to rule out any imminent violation; or (2) prohibit continuation of the violation.
The injunction can be effective against the infringer's suppliers or customers if these are also parties in the injunction proceedings and therefore specifically covered by the court's injunction decision.
As mentioned before, preliminary injunctions related to pharmaceutical patents may also be filed before the arbitral tribunals, currently in the context of voluntary arbitration.
Ex parte decisions are not common in patent matters in Portugal. Likewise, there is neither regulation nor tradition in Portugal on protective letters used as means of reducing risk in ex parte preliminary relief. In this sense, a protective letter would not reduce the risk of ex parte preliminary relief, notably because of the mentioned lack of regulation on those protective letters.
Article 343 of the IPC foresees the applicant's liability in provisional and precautionary measures, and it was recently amended to now include, as a ground for possible damages, the measure being 'abusively applied for or in bad faith'. It also provides that the damages can be claimed by the defendant as well as by 'any injured third party'.