JURISDICTION REPORT: NETHERLANDS
COST SPECIFICATIONS HINDER FINAL APPEAL DECISION
Michiel Rijsdijk Arnold + Siedsma
Te Dutch cattle-breeding market is one of the largest in the world. To increase the production of meat, these animals receive food containing the additive L-lysine, an amino acid that is an essential building block of proteins and helps optimise the growth of animals.
Te production of L-lysine is therefore a profitable business. Te Japanese company Ajinomoto is the world’s largest L-lysine producer and owner of three relevant European patents. Te patents are registered for numerous countries, including Te Netherlands, for the process of producing the amino acid L-Lysine using genetically modified bacteria.
According to Ajinomoto, the Chinese company Global Bio-Chem Technology Group (GBT) and its European distributors infringe the patents. Ajinomoto started legal proceedings against GBT. Te Court of Appeal at Te Hague recently rendered an interlocutory decision in the litigation. Ajinimoto stated that GBT directly or indirectly infringed its patents and asked GBT to cease and desist.
On December 22, 2007, the district court that originally took the case declared that it lacked jurisdiction outside Te Netherlands. Furthermore, the court declared that GBT directly infringed two of the European patents in question, despite the absence of the full continuous DNA sequence in GBT’s L-lysine end product. With regard to the third patent, the court postponed ruling until the European Patent Office decides on the opposition procedure against it.
GBT appealed against this decision at the Dutch Court of Appeal in Te Hague and claimed that the two patents it allegedly infringed are invalid because of a lack of inventiveness. Te decision of the district court was followed for the most part by the court of appeal. Both parties produced various scientific articles to state their claims. But the court could not find any evidence in the article to demonstrate that the patents lacked inventive step. It upheld the findings of infringement, and agreed with the district court to defer ruling on the third patent until the EPO opposition decision.
Te final decision of the appeal court has also been deferred to give the parties the opportunity to specify their costs in the proceedings. Tis decision changes the course set out by the Supreme Court in its famous Endstra case. In this case, it was decided that a cost award can only be allowed when the costs are specified promptly so that the opposing party can defend itself properly. Tis is based on the Dutch Code of Civil Proceedings, the equivalent of Article 14 of the EU Directive on the enforcement of intellectual property rights. Based on the Endstra case, cost estimates require a specification not only of the hourly rate
62 World Intellectual Property Review May/June 2011
and the hours spent on the case, but also a concrete specification of the activities. The courts are in general very strict when applying this legal standard because of the fundamental principle of hearing both sides. It is common for courts to reject the complete costs of the proceedings due to a lack of specification. In this case, Ajinomoto’s specification did not meet the requirements, and although the appeal court is aware of this strict interpretation, it gave Ajinomoto the opportunity to fulfil the obligations.
Patent litigation is expensive. Since Ajinomoto largely won the case, it is fortunate to get a second chance to specify its costs. Usually, the lower courts follow the strict interpretation formulated in the Endstra case. It therefore remains to be seen whether this decision will be followed by other courts.
Michiel Rijsdijk is a partner at Arnold + Siedsma. He can be contacted at:
mrijsdijk@arnold-siedsma.com.
www.worldipreview.com
“ BASED ON THE ENDSTRA CASE, COST ESTIMATES REQUIRE A SPECIFICATION NOT ONLY OF THE HOURLY RATE AND THE HOURS SPENT ON THE CASE, BUT ALSO A CONCRETE SPECIFICATION OF THE ACTIVITIES. THE COURTS ARE IN GENERAL VERY STRICT WHEN APPLYING THIS LEGAL STANDARD BECAUSE OF THE FUNDAMENTAL PRINCIPLE OF HEARING BOTH SIDES.”
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84