Proposed new rule regarding reversed burden of proof

Introduction
Background
International rules
Proposal
Comment

Introduction

In June 2017 the legislation department of the Ministry of Justice issued a consultation memorandum regarding various changes to the IP laws. Among the proposed changes was the new rule regarding reversal of the burden of proof if an allegedly infringed patent is for a process used to obtain a product, which reads as follows:

"64 a. If the subject matter of a patent is a process for obtaining a new product, the same product obtained without the consent of the patent proprietor shall in civil procedures regarding patent infringement, be deemed to have been obtained by the patented process, unless proof to the contrary is submitted.

In connection with submission of proof to the contrary, the legitimate need of the defendant in protecting manufacturing and trade secrets shall be taken into account."(1)

Background

Although such a rule was included in the Patents Act 1910, it was excluded in the Patents Act 1967. However, it is unlikely that this exclusion occurred because the legislators wanted to change the legal situation in Norway in this respect.

The issue arose once again when the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) was ratified, but no changes to the law were deemed necessary.

According to the regular rules for burden of proof, an accusing party bears the initial burden. However, where the accused is in a unique position to provide proof of the situation, the burden of proof is reversed. This is typically the case when a party is making a product inside closed facilities and may be using a patented method to do so. Nevertheless, defendants in Norwegian patent cases have often been reluctant to provide the necessary proof and have referred to their need to protect trade secrets when providing heavily redacted documents, denying access to premises and refusing to provide other proof – an argument which the courts have often accepted.

As a result, patent owners must provide proof and, without access to direct proof, must:

• perform expensive testing and analysis of products that are believed to be obtained by the patented process;
• obtain testimonials from expert witnesses; and
• provide other evidence that indirectly supports the allegation of patent infringement.

This results in more expensive litigation, particularly for patent owners. A possible remedy would be to introduce a rule that corresponds to Article 34.1(a) of the TRIPS agreement into the Patents Act.

International rules

According to Article 34.1 of the TRIPS agreement, member states must implement laws that allow the courts to deem a product that is identical to another obtained by a patented process to have been made by way of the patented process in the absence of proof to the contrary in at least one of the following circumstances:

• if the product obtained by the patented process is new; or
• if there is a substantial likelihood that the identical product was obtained by the process and the owner of the patent has been unable to determine, through reasonable efforts, the process actually used.

A similar rule can be found in Article 55 of the Unified Patent Court Agreement (UCPA), which has yet to enter into force. Article 55 lists two circumstances in which a product that is identical to another obtained by a patented process will be deemed to have been obtained by the patented process in the absence of proof to the contrary. The two situations are substantially the same as those listed in the TRIPS agreement – namely:

• the product is new; or
• there is a substantial likelihood that the identical product was obtained by the patented process and the patent owner, despite reasonable efforts, has been unable to determine the process actually used.

In addition, the UPCA includes a rule for ensuring that a defendant's legitimate interests in protecting manufacturing and trade secrets are taken into account.

Similar rules can also be found in Section 64(a) of the Danish Patents Act and Section 57(a) of the Finnish Patents Act, although these laws only regulate situations where the product is new.

Proposal

Although the proposed rule explicitly introduces reversed burden of proof, it is not intended to change the way in which any proof that is presented is evaluated. In other words, standard preponderance of the evidence will apply. Consequently, a change should primarily affect situations where a defendant:

• refuses to present any proof; or
• would have refused to present proof in the absence of a rule of reversed burden of proof.

In all other situations, the legal situation is likely to remain unchanged.

The proposal, like the Danish law and the UPCA, also includes a rule protecting a defendant's legitimate need to protect its trade secrets.

Comment

The ultimate fate of this proposal remains to be seen, but it is likely that when enforcing a patent for a process to make a new product in future, defendants will bear the burden of proof to show that the patented process is not being used.

For further information on this topic please contact Tom Ekeberg at Zacco by telephone (+47 22 91 04 00) or email (tom.ekeberg@zacco.com). The Zacco website can be accessed at www.zacco.com.

Endnotes

(1) Translation provided by Zacco.