Litigating Patents in Portugal in 2024

Introduction

Last year was an interesting year regarding patent litigation, although since 2021 the number of judicial and arbitration cases has been decreasing.

In fact, contrary to the years 2012–2017 – during which hundreds of arbitral actions were filed and judged – and since Law 62/2011 was amended by the current Industrial Property Code (2018), the number of patent cases has significantly decreased.

The reason is quite simple: there was a mandatory arbitration system under the mentioned law which established that in what concerns disputes between pharmaceutical patents and generic drugs, the publication of a Marketing Authorisation (MA) application of a generic medicine triggered a legal term of 30 days for the patent holder to file an arbitration proceeding. This caused a significant patent litigation scenario in Portugal until the end of 2017.

The amendment of Law 62/2011 was the establishment of a voluntary arbitration instead of the mandatory one. Since January 2018, the publication of a MA application of a generic medicine has triggered a legal term of 30 days for the patent holder to file a voluntary arbitration proceeding – which implies the agreement of the parties to submit the dispute before an arbitral tribunal – or in case there is no agreement on that question, the patent holder must file a legal action before the Intellectual Property Court. Considering that normally there is no agreement of the parties to follow the arbitration route the patent litigation cases were filed in the mentioned Estate Court and this actually produced a decrease in the patent litigation cases in Portugal regarding pharma and biotech patents and generic medicines.

The law change has also determined that a considerable number of agreements between pharma originator companies – patent holders – and generic companies have resulted in the avoidance of costs and in sluggish legal proceedings.

In relation to other patents, eg, mechanical patents, some important cases are pending, notably regarding medical devices.

Patent cases

Although the number of patent litigation cases has not been high, there have been a couple of interesting proceedings regarding the enforcement of pharma and biotech patents as well as cases related to patented medical devices.

Specifically, the firm has represented pharma companies in legal proceedings where the discussion of classical matters like literal infringement, infringement by equivalence, novelty, inventiveness and sufficiency took place.

There is a tendency of the IP court to assess sufficiency in a much more in depth way contrary to what happened in the past few years. The judgments on infringement by equivalence with a much better technical approach are also growing. The IP court is also increasing the assessment of infringement and validity within expert evidence which is normally requested by the parties or ordered by the court on an ex officio basis.

Patented medical devices

In such cases, the discussions on the inventiveness of the enforced patents are basically concentrated on the problem–solution approach following the European Patent Office’s (EPO’s) Boards of Appeal case law.

Appeals before the Court of Appeal of Lisbon regarding decisions of the IP Court are also being argued, with some of them still pending.

In preliminary injunctions, if there is no actual launch onto the market of a generic product that infringes a patent, the patent holder must evidence irreparable harm within the legal concept of periculum in mora.

On the contrary, if the generic is launched onto the market the patent holder should only evidence the existence of the patent right and the infringement which is what the Enforcement Directive expressly states.

As to the mandatory legal action before the IP Court under Law 62/2011 – if no voluntary arbitration has been agreed by the parties – the jurisprudence of the Court of Appeal of Lisbon remains stable regarding the legal standing and procedural interest of a patent holder in filing such action. In other words, there is an explicit procedural interest of the patent holder in filing this specific legal action to legitimately enforce its patent rights.

Supplementary Protection Certificate (SPC) cases

In what concerns SPC litigation, the pending cases are still focused on the fulfilment of the legal requirements established by Article 3 a) and c) of the relevant EU Regulation. The tendency of the IP Court and Court of Appeal of Lisbon is to follow the ECJ, notably the decisions MIT (C-431/04), GSK (C-210/10), Fosgren (C-631/13), Bayer Cropscience (C-11/13), Eli Lilly (C-493/12), Gilead (C-121/17) Santen (C-673/18) and Royalty Pharma (C-650/17).

The authors recall that the IP Court has decided that a product protected by an SPC is protected (i) where the active principle is claimed in the basic patent and (ii) where the active principle is not directly claimed in the basic patent but the functional definition formulae of the claims, interpreted in light of the description of the basic patent, implicitly contain and necessarily identify the active principle in a specific form.

In addition, the authors also recall that a very important decision from the Court of Appeal of Lisbon granted an SPC based on the following assumptions.

“If it is demonstrated that a non-active principle (excipient) – combined with an active principle – produces a pharmacologic, immunologic or metabolic effect per se covered by the therapeutic indications contained in the Marketing Authorisation.

An excipient can be included in the definition of the product established by Articles 1 b) and 3 a) of EU Regulation 469/2009 in the case that the excipient of a pharmaceutical product per se has therapeutic efficacy on its own covered in the Marketing Authorisation.”

This is a landmark judgment not only because it reverted the refused SPC decision from the Patent Office and the IP Court decision rendered in an appeal, but also because the authors believe that it was the first grant of an SPC in the EU under the noted circumstances.

The trend of information technology and trade secrets litigation

In Portugal, we have been seeing an increasing litigation regarding patents in the field of telecommunications and information technology. Furthermore, the so-called computer implemented inventions are also subject to a large number of litigation cases, also involving copyright issues.

Software in general is not patentable in Portugal, however, if the software has a technical contribution which is novel, inventive and has industrial applicability, it can be protected by a patent. The computer implemented inventions are, thus, software patents and this area is being quite well developed in Portugal notably through a large number of start-ups.

Following this notable development, it is inevitable that disputes over software patents are increasing. Trade secrets is also an area where there are some legal disputes and the authors believe that this will be equally increased.

The local division of the Unified Patent Court (UPC) in Portugal (Lisbon)

The local division in Lisbon is composed of one Portuguese judge, and two non-Portuguese judges, in order to maintain constant jurisprudence between the various local divisions of the UPC, regardless of their geographical location. The local divisions will have jurisdiction to settle, among other matters, patent infringement actions, cease and desist issues and damages actions. In addition, some matters of invalidity or non-violation of a patent may also fall within the jurisdiction of these local divisions.

There is a special advantage regarding patent litigation in the Portuguese local division which relates to the costs of the proceedings (both court and legal fees) which are lower than in several other EU countries. As a matter of fact, the legal fees of the Portuguese market are quite less expensive compared with other legal markets. This is something that companies should really evaluate more closely.

In general, it should be mentioned that the main objective of the UPC is the offer of a much more efficient, faster and high-quality patent enforcement system, as well as regarding patent validity challenges. Judges are specialised in patent rights and have technical backgrounds so they have expertise in the various fields of patents, eg, pharma, biotech, mechanical and information technology.

In addition to the local divisions being able to opt to have competence for the above-mentioned matters, they may either second a judge with technical training in the area concerned or, alternatively, refer them to the central division in Paris or Munich.

Many questions and doubts have been raised about what developments and benefits this new court will bring and whether patent holders can expect faster decisions regarding disputes within its jurisdiction. According to EU forecasts, this court will bring faster rulings, predictably within one year, which will represent a significant advance.

But the major issue is definitely the risk of a single decision which may invalidate a patent in all the territories of the UPC. For this reason there is an opt-out possibility – excluding some patents of the competence of the UPC during a period of seven years – which means that patent holders can still rely on the competence of the regular national courts in EU countries in relation to patent enforcement and validity discussions.

Expectations in the UPC are high and demanding because for the first time there is a centralised forum for patent litigation in the EU. Consequently, the patent holders will pay much attention to the quality and consistency of the judicial decisions notably because they do not want to face uncertainties regarding their patent portfolio. Additionally, the UPC is rather costly.

Hence, the mentioned advantage of the local division in Lisbon should be duly considered.

Outlook for 2024

It is expected that the trend of more judicial litigation regarding (i) patented medical devices; (ii) IT, TMT patents and Computer Implemented Inventions; and (iii) trade secrets, will continue in 2024.

Legal questions related to the scope and extension of protection through SPCs shall also remain, and the new legislation that is being prepared should be carefully examined.

Substantial changes regarding the technical and legal approach from the IP Court and Court of Appeal of Lisbon are not expected.

The impact of the Unified Patent Court is now in course notably with the first decisions already rendered.

So far, no cases have been filed before the local division of the UPC in Portugal.