Sabine Agé and Agathe Caillé of Hoyng Rokh Monegier Véron provide answers to questions about the COVID-19 measures in France and their impact on IP enforcement and protection.
(1) Did the French government invoke any existing provision in law that is likely to affect IP holders and their rights?
As far as we are aware, the French government did not invoke any existing provision that could affect IP holders, but such action may be possible in the near future because some provisions of the French Intellectual Property Code (IPC) empower the government to do so.
The IPC provides that compulsory (non-exclusive) licences could be granted ex-officio by the IP minister under any of the following conditions:
- in the interest of public health (Art. L. 613-16 IPC) at the request of the ministry of public health, notably when the quantity of the products based on the patent made available to the public are not sufficient or too expensive;
- in the interest of national economy (Art. L. 613-18 and R. 613-26 IPC), when the patent owner does not exploit the patent or does so insufficiently;
- in the interest of national defence (Art. L. 613-19 IPC) at the request of the ministry in charge of national defence, without providing further justification.
In such cases, a third party may request that an ex-officio compulsory licence be granted. The IP minister would issue a decision determining the terms of the license, except for the royalties, which are determined by the Paris First Instance Court in the absence of an agreement between the patent holder and the licensee. To the best of our knowledge, those provisions have never been implemented.
2. Did the government introduce or change any law or regulation that is likely to affect IP rights or practice?
On March 23, the French Parliament passed the Act No. 2020-290 (Emergency Act) which put France in a ‘state of health emergency’ for two months from the publication of the Act, i.e. March 24.
The Act limits civil liberties and allows for health emergency measures, including ensuring the availability of medicines (Article 2 of the Act, introducing Article L. 3131-15 in the French Public Health Code). This provision could be implemented in a far stricter fashion than the compulsory licensing regime mentioned above because it is unconditional and does not contemplate any compensation.
In addition, the Act allows the government to legislate on matters which are ordinarily the Parliament’s prerogative, such as the adaptation of civil court rules and the extension of time limits in non-criminal matters (for example, Orders No. 2020-304 and No. 2020-306, dated March 25 2020, which are interpreted by two circulars issued by the Ministry of Justice). They establish a so-called “legally protected period” between March 12 2020 (when President Emmanuel Macron announced the lockdown measures) and the expiry of one month from the end of the state of health emergency (i.e. from May 23 2020, although some legal commentators believe it should be May 24 2020).
Effects on civil proceedings
During the legally protected period, Order No. 2020-304 adapts the ordinary rules of the civil courts (first instance, appeal and Cour de cassation) as follows:
- Order No. 2020-306 on the extension of time limits shall apply to these courts (Article 2).
- Oral hearings could be cancelled when the judge considers that he/she can rule on the matter without hearing the parties (if they are represented by a lawyer) or postponed to a later date in non-urgent matters (Articles 4 and 8).
- Should the oral hearing take place, the court may determine the matter as a single-judge court in first instance and on appeal or by means of audiovisual communication or by any means of communication, including telephone (Articles 5 and 7).
- Summary proceedings which failed to meet the legal requirement could be dismissed by a non-adversarial order (Article 9).
- Ordinary formal communication requirements are simplified: for the parties, written pleadings and exhibits may be exchanged by any means, as long as the judge can ensure that they have been exchanged in due time; and on the clerk’s side, the judgment can be sent to the parties by any means (Articles 6 and 10).
Order No. 2020-306 extends the time limits due during the legally protected period in the following ways:
a) For any events and steps related to a legal action (for example, any procedural act, recourse, court action, notification prescribed by law or regulation, or any application of the statute of limitation), the prescribed time limit shall be postponed for a maximum of two months from the end of the legally protected period (Article 2); this does not apply to contractually agreed deadlines or deadlines set by the judge during the case preparation.
b) For administrative or judicial measures (for example, conservatory measures and alternative dispute resolution), the time limits shall be extended by two months from the end of the legally protected period (Article 3).
c) For periodic penalty payments and contractual clauses aimed at sanctioning any breach by the debtor (Article 4), the time limits shall be deferred for one month from the legally protected period if the periodic penalty payments have taken effect during the period and shall resume after the protected period if the periodic penalty payments had started to run before the period.
d) In case of agreements which could be terminated at a certain time, the time limits shall be extended by two months from the end of the legally protected period (Article 5).
Effects on matters before the IP Office
This Order also provides that time limits after which a decision, an agreement or an opinion may or shall be reached by the State administrations, including the French National Industrial Property Office (INPI), or is implicitly acquired and which have not expired before March 12 2020 shall, as of that date, be postponed until the end of the legally protected period (Articles 6 and 7).
In the light of this Order, the INPI has confirmed that the time limit extensions apply to those provided for by the IPC, except when they derive from international agreements or European law. Accordingly, the following deadlines are extended: filing a French trade mark or patent opposition; payment of the annual patent renewal fee; renewing a trade mark or extending a design and the corresponding grace period; lodging an administrative or judicial recourse; filing comments by third parties; and replying to a notification from the INPI. The following deadlines are, however, not extended: time limits applicable to priority for an international extension and to apply for a supplement protection certificate (SPC).
The INPI is operational, albeit remotely, and therefore it is advisable to follow, as far as practicable and possible, the ordinary deadlines and avoid clogging up the procedures at the end of the legally protected period. The decision of the INPI General Director on March 16 (Decision No. 2020-32) extended time limits, except for trade mark oppositions, to four months and a subsequent decision on March 25 also extended the deadlines falling between March 12 and the end of the emergency period.
3. How has the pandemic affected IP litigation and enforcement in your jurisdiction? How are the relevant courts and tribunals dealing with this?
Orders No. 2020-304 and No. 2020-306 have an immediate impact on IP litigation as the relevant courts have been forced to implement the emergency measures.
As to proceedings brought before March 12 2020, most of the scheduling conferences and oral hearings have been postponed sine die as IP proceedings are not considered to be critical and urgent, unlike certain family or criminal matters. However, in the last few weeks, some courts are reported to have organised days of hearings by means of audiovisual communication and plan to extend the experience to other less urgent matters. Other courts have taken orders encouraging the judges to organise hearings by means of audiovisual or telephone communication, as long as it is possible to ascertain the identity of the parties and guarantee the quality and confidentiality of the transmission.
The deadlines set before the court’s closing for the filing of written submissions are not affected by the extension provided by Order No. 2020-306 (subject to some deadlines legally set for the first exchanges of written submissions in appeal). Although the scheduling conferences with the judges in charge of case preparation are currently postponed, the parties should behave as proactively as possible to avoid appearing as though they have taken advantage of the crisis to slowdown the proceedings.
As to initiating new actions during the legally protected period, the clerks of the civil courts do not organise oral hearings on short notice on IP matters, such that it is not possible to bring summary proceedings. However, in principle, there is nothing to prevent an action on the merits from being initiated during this period. However, the first scheduling conference (where the judge in charge of the case preparation organises the first exchanges of submissions between the parties) is very likely to occur only after of the legally protected period.
Lastly, at the moment it is not possible to be granted a saisie-contrefaçon ex-parte order (search and seizure order) to collect evidence of the existence and extent of acts of infringement of IP rights. Nonetheless, IP right holders can still secure the evidence of the availability of a product at a given date through a bailiff report (commonly used in France), especially through a report of internet purchases as most shops are closed.
4. What is the key legal risk for both IP owners and manufacturers of patented inventions?
Manufacturers should be aware that, in addition to an ex-officio compulsory licence, Article L. 613-12 of the IPC provides that any party which can prove both its ability to exploit the invention and the inability to obtain a negotiated licence from the patent owner may initiate proceedings before the Paris First Instance Court seeking a compulsory licence due to the lack of exploitation of the patent by its holder. Therefore, a licence could be granted if the patentee has not been exploiting or seriously preparing for the exploitation of the patent or has not been commercialising its patent enough in the European Union for three years following the grant of the patent, or four years following the publication of the application.
A third party could commit acts of infringement by manufacturing drugs, masks or solutions to help diagnose and treat patients with the COVID-19 disease and claim thereafter the benefit of a compulsory licence. The IP right holder could collect evidence of these acts and, once the pandemic is over, bring an action to obtain lost royalties. Alternatively, the IP right holder could adopt a different approach, following recent moves by some IP rights holders, and make its invention available royalty-free to help fight the pandemic.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, any other of its practitioners, its clients, or any of its or their respective affiliates. This article is for general information purposes only and is not intended to be and should not be taken as legal advice. Please contact the author(s) if you have any questions about this article.
Authors
Sabine Agé (Partner)
