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04 April 2016
On February 19 2016 the Supreme Court issued a second judgment in a dispute between the holder of a European patent for a liposuction device, and Swiss-based medical and dental equipment manufacturer Nouvag. The court confirmed that Nouvag had not complied with an order not to offer an infringing product in Belgium, essentially because the product was presented on its website, which mentioned that Nouvag's products were available throughout Europe. The judgment provides some clarity on 'offering' as an act of patent infringement in Belgium.
The plaintiff is the proprietor of a European patent for a liposuction device. He filed infringement actions against the Swiss company Nouvag in Belgium and Germany, alleging that Nouvag's Vacuson liposuction system infringed his patent. In Belgium, the Brussels Court of Appeal issued an injunction on October 15 2009. The court found that by importing, offering, commercialising, putting into circulation, having in stock and using the Vacuson device, Nouvag had infringed the patent. An injunction was issued at a penalty of €5,000 per violation and per day of non-compliance with the order within 30 days after service of the judgment. The court also awarded €40,000 in damages. Nouvag filed a point-of-law appeal against the judgment before the Supreme Court. That appeal was dismissed on February 3 2012.
Shortly after, the patentee instructed a bailiff to describe officially the contents of Nouvag's website. He then filed an action seeking no less than €915,000 in penalties for 183 days of non-compliance with the Court of Appeal's injunction from the expiry of the 30-day period after service of the judgment on May 6 2010. Nouvag's website included a detailed description of Vacuson. It mentioned that Nouvag distributed its products, including Vacuson, throughout the European Union. It also listed a specific distributor in Belgium. On that basis, the patentee argued that Nouvag's website was an offer of Vacuson in violation of the injunction imposed by the Brussels Court of Appeal.
Nouvag argued that it did not undertake direct sales and that the alleged offer was not made on Belgian territory. It further submitted that if the Belgian injunction meant that it could no longer list the product on its website, this would be a restriction of the free movement of goods in the European Union. On January 30 2014 the Brussels Court of Appeal rejected these arguments. It confirmed the first-instance court's finding that Nouvag had not complied with the injunction and that penalty payments were due.
The penalty award significantly upped the financial stakes of the proceedings for Nouvag. It filed a second point-of-law appeal with the Supreme Court against the appeal court's judgment. The Supreme Court dismissed the action and confirmed the appeal judgment.
The court relied on the preparatory works of the 1984 Patent Act (replaced in 2014 by Title 1 of Book XI of the Code of Economic Law) to find that an offer in accordance with the act covers offers not only to sell the product, but also to rent, licence, loan or otherwise provide the product. The court further explained that the offer can be made by any means, including verbally, by telephone or by presenting the product. Further, the product does not need to be physically present when the offer is made. On this basis, the Supreme Court confirmed the appeal court's finding that Nouvag had made an infringing offer by presenting the Vacuson product on its website, which stated that Nouvag sold products throughout the European Union, despite the fact that Nouvag claimed it did not undertake direct sales.
Nouvag argued that there was no link between the offer on its website and Belgian territory. The Supreme Court explained that when an offer is not issued from Belgium, it can still infringe a patent covering that territory if the offer has an effect on the territory in question. The Supreme Court agreed with the Court of Appeal's finding that an effect on Belgian territory was present in this case. The Court of Appeal drew on the European Court of Justice (ECJ) judgment in C-585/08 and C-144/09 to decide that the following factors were decisive in this case:
The Supreme Court also rejected Nouvag's argument that the decision to find that its offer of a product on its website amounted to patent infringement in Belgium ran counter to the principle of free movement of goods in the European Union. It accepted that the Court of Appeal had duly replied to this argument with its statement that Nouvag could easily have indicated on its website that the Vacuson product was unavailable in Belgium.
The Nouvag decision dispels the view that an infringing offer in patent law must contain all elements of an offer to contract in accordance with the Civil Code (ie, an offer containing all of the essential elements of a contract, so the party receiving the offer must only accept it to bind both parties). Instead, the concept is broadened to any offer of products covered by patent claims. This is in line with a judgment issued by the Antwerp Court of Appeal on September 19 2015 in Helm v Ajinomoto (2010/AR/2481, §4(2)11) and with legal doctrine on the issue (de Jong, Vrins and Ronse, RDC-TBH, 2007, p439).
The judgment appears to provide patentees with a relatively straightforward basis for jurisdiction in the Belgian courts in cases where the allegedly infringing product is promoted on a website that claims to sell products throughout the European Union. On the other hand, the Supreme Court reiterated many of the specific factual circumstances mentioned in the Court of Appeal's judgment which, in turn, referred to the ECJ's criteria in Pammer and Hotel Alphenhof to determine whether a website is directed to Belgian territory.
The court decided that an offer not issued in Belgium can amount to an infringement of a Belgian patent if that offer has an 'effect' on Belgian territory. While the court did not necessarily have such effects in mind with this decision, this effects-based approach to patent infringement may be relevant for other acts of infringement – for instance, where a feature of a patented process is provided by means of cloud-based internet services.
Nouvag's website now indicates that Vacuson is "not available in Belgium". With penalty payments just short of €1 million compared to the damages award of €40,000, that seems like an expensive lesson learned.
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