Questions of interpretation referred to Dutch Supreme Court regarding applicable seizure rules in Astellas V Synthon

Thursday, 15 October 2015

Infringement of intellectual property rights and seizure of evidence in the Netherlands: questions of interpretation referred to Dutch Supreme Court regarding applicable seizure rules in Astellas V Synthon.

Introduction

Evidencing (imminent) infringement of intellectual property rights can be tough. The applicable seizure rules in the Netherlands give rise to questions of interpretation. On 6 October 2015, the Court of Appeal Arnhem-Leeuwarden decided to send questions of interpretation to the Hoge Raad (the Dutch Supreme Court) in ongoing patent proceedings between Astellas Pharma Inc. (Japan) and Synthon B.V. (the Netherlands).  

Astellas is the owner of European Patent 0 661 045 B1 (EP 045) for a ‘sustained-release hydrogel preparation’. EP 045 is in force in Austria, Belgium, Switzerland, Germany, Denmark, Spain, France, United Kingdom, Greece, Ireland, Liechtenstein, Luxembourg, Portugal and the Netherlands.  

Synthon B.V. was indicated in instructions of use - together with the Spanish company Synthon Hispania, S.L. - as the party responsible for the production of several tamsulosine tablets with sustained release, which Astellas discovered in and outside Spain.  

On 17 May 2012, Astellas - amongst others - obtained an intermediary injunction before the Commercial Court Number 10 of Barcelona for infringement of the Spanish part of EP 045 against (amongst others) Synthon Hispania, S.L.  

Following a request submitted on 4 September 2012, Astellas obtained permission from the Presiding Judge of the (at the time) District Court Arnhem on 5 September 2012, to seize evidence at Synthon regarding the production by Synthon of the tamsulosine tablets, as well as the instructions of use in which Synthon was indicated as a party responsible for the production of the tablets. Synthon is located in the court distict of the District Court Arnhem.  

The seizure of evidence took place on 13 and 14 September 2015. The bailiff seized a total of 4 DVD+R discs containing ‘possibly relevant digital files which are located in or which may be accessed through the computer system present on the business premises’, as well as copies of ‘possibly relevant documents from the company’s accounts.’  

Summary proceedings for inspection of the evidence seized  

Because Synthon did not respond to a subsequent request from the attorney-at-law of Astellas to inspect the evidence seized, Astellas started summary proceedings (‘kort geding’) against Synthon before the Presiding Judge of the District Court Arnhem.  

Astellas first of all claimed to be granted an inspection of and be given possession through surrender of the copies of the relevant documentation (including electronic data) seized and sequestrated by the bailiff , which (may) contain data regarding (any) acts from Synthon with which Synthon infringes or has infringed EP 045 in the Netherlands and/or in any other designated country in which EP 045 is in force and/or by which Synthon according to Astellas acts or acted unlawful against Astellas.  

Secondly, Astellas claimed Synthon be ordered to tolerate the inspection and surrender.  

With regard to the process of inspection and surrender, Astellas, thirdly, claimed:

  1. the attorneys-at-law of Astellas would make a first selection of the seized documents which they wish to provide to Astellas;  
  2. Synthon subsequently has a right to object against the inspection and the surrender of the selected documents within 15 calendar days following the day on which the attorneys-at-law of Synthon have received the selection;  
  3. that Synthon will be deemed to have waived its objections if it has not, within   15 days after raising its objections in writing, summoned Astellas to appear before the Presiding Judge of the District Court to request a decision regarding the objections.  

Fourthly, Astellas claimed that Synthon would be ordered to forfeit a penalty of EUR 50,000,- for each day or each time, at Astellas’ choice, that Synthon would not comply with the aforementioned orders.  

Last but not least Astellas claimed that Synthon be ordered to pay all Astellas’ procedural costs in accordance with article 1019h of the Dutch Code of Civil Procedure (DCCP).  

Astellas argued that it has a legitimate interest to be granted an inspection within the meaning of article 843a DCCP in conjunction with article 1019a DCCP, because Astellas had genuine indications that Synthon manufactured or ordered a third party to manufacture the involved tamsulosine tablets, which conduct constitutes an infringement of claims, 1, 2, 4, 5, 6, 10 and 14 of EP 045, or an unlawful act against Astellas by coordinationg, advancing and/or facilitating such EP 045 infringements in the designated countries. Astellas expected an inspection to lead to the finding of documents to prove its statement that Synthon has performed acts reserved to the patentee with regard to EP 045 in the designated countries, or has acted unlawfully.  

The decision of the Presiding Judge in the summary proceedings for inspection of the seized evidence  

The Presiding Judge of the District Court granted almost all of Astellas’ claims on the following grounds:  

‘4.2 The urgent interest of Astellas in the claimed inspection into the seized materials follows from the fact that she wishes to use the evidence to be obtained in possible proceedings against Synthon namely in case the evidence obtained requires for such proceedings to be started, the urgent interest moreover not having been challenged by Synthon.  

Claim for inspection / criterion  

4.3 In order for a claim based on article 843a DCCP in conjunction with article 1019a DCCP to be granted, it is amongst others required that there exists a legitimate interest and a legal relationship to which the claimant is a party. A legitimate interest and the existence of a legal relationship can only be held to exist if it can at least be concluded that the claimant has made it sufficiently plausible that an intellectual property right of the claimant has been infringed or that such an infringement is imminent. As an aside, it should be taken into consideration that in view of the meaning of the Enforcement Directive, from which article 1019a (et seq.)DCCP are derived, an infringement or an imminent infringement is not sufficiently plausible if they can be proved by other evidence. If that would be the case, the seized evidence would be superfluous. It can also not be required that the plausibility of the (imminent) infringement is already such, that it allows, for example, for an order or injunction to be obtained to cease an infringement  in summary proceedings or proceedings on the merits. The claimant does, however, need to submit facts and circumstances from which a reasonable suspicion can be derived of an (imminent) infringement, and which can reasonably contest the arguments of the defendant in so far as these constitute  a legitimate challenge of those facts and circumstances. Furthermore, in that light it must be required - which follows from article 6 paragraph one of the Enforcement Directive - that the claimant submits sufficient evidence of the kind that is already reasonably available, to substantiate the alleged infringement (for which the claimant seeks to file a claim). The claimant must also claim that the seized material amounts to (additional) evidence with which the alleged infringement can be substantiated. Moreover, the degree of confidentiality of the information forming the object of the claimed inspection also plays a role. The more confidential that information, - provided the defendant  relies on that confidentiality  - the more the party claiming the inspection will be required to prove the alleged infringement plausible; in the balancing exercise between the interests involved, these are more or less communicating vessels.  

4.4. It follows from the above, that the criterion to be applied to determine whether there exists a reasonable suspicion of infringement, is less stringent than the test to be applied in summary injunctive proceedings. Simultaneously - and contrary to Astellas’ arguments - it is not sufficient that the Presiding Judge who gave permission for the seizure has already established that an infringement or an imminent infringement was made sufficiently plausible. Because the permission for seizure does not grant a right to inspection, the threshold for obtaining permission for seizure  is relatively low. Moreover, generally the proceedings to obtain permission for a seizure are non-contentious, so that the arguments of the alleged infringer could not be judged yet. Contrary to Astellas’ arguments, Synthon not having requested for the seizure to be lifted, does not alter this.  

4.28 In the light of the arguments put forward by the parties and the to a great extent contradictory expert statements,  the question whether the Synthon-products fall within the scope of protection of EP 045 is highly questionable. Therefore, the infringement can at this point not  at all be established.  

4.29 However, as it has already been set out in paragraph 4.3,  the criterion to be applied in these proceedings to determine whether the claimed inspection is to be granted, is less stringent than  the criterion to be applied in  summary injunctive proceedings or proceedings on the merits to establish whether a claim for an injunction is to be upheld. Within the framework of the balancing exercise, it should furthermore also be taken into account and considered a substantial interest for the purpose of the balancing test, that Synthon did not argue at all that and for what reason the information for which Astellas seeks to obtain inspection is confidential, so that, accordingly, it cannot be presumed that the information is to be regarded as confidential. Therefore, it needs to be assumed that the measure claimed is not excessive for Synthon. This also plays a part in the determination of the criteria applicable to proving infringement. Taking all the relevant circumstances into account, this leads to the conclusion that Astellas has put forward enough and sufficiently challenged the defences of Synthon in order to assume a reasonable suspicion of infringement.  

4.30 Based on the reasonable suspicion of infringement, Astellas has a legitimate interest in the claim for inspection of the data in so far as those contribute to finding infringement. Although Astellas does not require the data to be able to substantiate its statement that the Synthon products fall within the scope of protection of EP 045, it does require them for providing insight into the performance of acts reserved for the patentee by Synthon or parties related to Synthon. Based on the instructions for use, Astellas showed that Synthon was named in those instructions as manufacturer of the generic tamsulosine tablets found in Spain and in Europe. Despite Synthon having submitted a  statement of its statutory director J.M. Lemmens, stating that Synthon does not manufacture medications (including tamsulosine tablets) for commercial sale through its establishment in Nijmegen, the Presiding Judge agrees with Astellas that this statement is insufficiently clear. Moreover, during the hearing Synthon upon request stated  that it “is involved in the trade of tamsulosine in Europe”. On that basis, there also exists a reasonable suspicion that Synthon has performed acts reserved to the patentee or has been unlawfully involved in such acts.’  

The decision in appeal  

Synthon appealed against this decision before the Court of Appeal Arnhem-Leeuwarden.    

The Court of Appeal established that, in essence, the question dividing the parties concerns the criterion that must be applied to establish whether there exist a legitimate interest and a legal relationship in the meaning of article 843a DCCP in conjunction with article 1019a DCCP. Especially in the present case, in which the seized evidence is not needed to substantiate the alleged patent infringement as such, but to obtain information regarding the question who infringes the patent, such a question is significant.  

According the Court of Appeal - having taken into account the views of the parties - it is necessary to obtain clarification from the Dutch Supreme Court on this question, because the existing case law on this point is not clear and unambiguous.  

With its decision of 6 October 2015, the Court of Appeal referred the following questions of interpretation to the Dutch Supreme Court (these questions of interpretation were finalised after the Court consulted the parties regarding draft questions of interpretation):

  1. 'If a party on the basis of article 843a DCCP in conjunction with article 1019a DCCP claims inspection, surrender or an abstract of certain documents,  which criterion must be met at least to establish a ‘legal relationship to which he or his legal predecessor is a party’, as required to grant a claim based on article 843a DCCP, in case such a legal relationship concerns an obligation arising out of an unlawful act consisting of infringement of an intellectual property right?  
  2. Does the same criterion apply to, on the one hand, cases where the seized evidence claimed to be inspected or to be surrendered or of which an abstract is claimed, serves to substantiate an alleged infringement as such and, on the other hand, cases where the seized evidence claimed to be inspected or to be surrendered or of which an abstract is claimed serves to  substantiate, inter alia, the question by whom, in which country and to which extent the alleged infringing acted are being committed?  
  3. If the second question is answered in the negative, which criterion should at least be met in these respective cases to establish a ‘legal relationship to which he or his legal predecessor is a party’ as required for granting a claim based on article 843a DCCP?  
  4. If a party on the basis of article 843a DCCP in conjunction with article 1019a DCCP claims inspection, surrender or an abstract of certain documents and the ‘legal relationship to which he or his legal predecessor is a party’ as required in article 843a DCCP concerns an obligation arising from an unlawful act consisting of infringement of an intellectual property right, and   the defendant claims that the invoked intellectual property right is invalid, which criterion should be applied to judge the invalidity defence?  
  5. If the second question is answered in the negative - and the criterion to be applied when judging the alleged legal relationship depends on the question whether the required evidence is needed to substantiate the infringement as such or to substantiate, inter alia, the question by whom, in which country and to which extent the alleged infringing acted are being committed - does that     have any influence on the criterion, addressed in  4, to be applied for the judgement of an invalidity defence and, if so, in which way?’

Some final remarks  

These questions of interpretation are rather important in order to obtain further guidance on the seizure of evidence in intellectual property matters under Dutch law. Obtaining permission for the seizure of evidence, does not automatically give the claimant the right  to access the evidence. Follow-up proceedings are needed to be granted such access. In most cases,  intermediary proceedings will be started for that purpose, in which the claimant has to argue and defend that there exists a legitimate interest and a legal relationship which justifies access to the evidence. The defendant, on the other hand, can contest such claims on several grounds (such as - most commonly - non-infringement and/or invalidity of the invoked intellectual property right). It appears that no hard and fast rules can be relied upon here, but that it all comes down to balancing the interests of both parties and meticulously applying subtle criteria. The Dutch Supreme Court is now to establish these criteria. But the Supreme Court might not be the final institution to have a say in this. Since the applicable DCCP provisions partially constitute an implementation of provisions of the Enforcement Directive , the case may end up at the CJ EU. It will most probably take six months for a decision of the Supreme Court to be delivered.