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French statute of limitations in patent nullity actions

TGI, 3ème chambre. 1ère section, LuK GmbH & Co KG v. SAS Valeo Embrayages, No. 17/01156

14 December 2018

In a recent decision dated October 5, 2017, the Paris First Instance Court has confirmed that the starting point of the limitation period in patent nullity actions must be assessed "in concreto" and corresponds to the date on which the claimant knew, or should have known due to progress in the development and industrial implementation of its technology, that the litigious patent could impede it. The Court has further ruled that the publication of the grant of the patent is not a suitable starting point.

On 5 October 2017, the Tribunal de Grande Instance (First Instance Court) of Paris ("TGI"), issued a decision on a hot topic: the statute of limitations in patent nullity actions and, in particular, the starting point of the limitation period (TGI, 3ème chambre. 1ère section, LuK GmbH & Co KG v. SAS Valeo Embrayages, No. 17/01156). 

Questions on the statute of limitations in patent nullity actions were not previously a hot topic in France since the applicable limitation period was set at, and understood to be, a fixed 30 years. However, an important change occurred following a 2008 reform which established the general limitation period in ordinary civil law procedures to five years (article 2224 of the French civil code). Since then, the statute of limitations is commonly raised as a legal defence in the course of patent nullity actions, sometimes successfully. 

Nevertheless, the applicability of article 2224 of the French civil code ("CC") which provides that “personal or real actions are time-barred five years from the day when the owner of a right knew or should have known the facts making the action possible“ to patent nullity actions is still debated. Indeed, some legal practitioners hold the opinion that a patent nullity action is neither in personam (based on a debt obligation) nor an action in rem (action based on a thing), the only two actions covered by article 2224. These practitioners also emphasise the fact that a nullity action is in the public interest.

Despite those arguments repeatedly brought before the TGI, the TGI has consistently ruled that the nullity action is a “personal” action under article 2224 CC and thus subject to the five-year limitation period . 

Apart from the question on the very applicability of article 2224 CC, most of the recent legal disputes have formed around the starting point of the limitation period and interpreting the provision "when the owner of a right knew or should have known the facts making the action possible."

In its LuK decision of last October, the TGI ruled that the starting point must be the date, determined in concreto (i.e. based on the facts and circumstances), on which the claimant knew, or should have known due to the progress in the development and industrial implementation of its technology, that the patent could impede it. The Court also declared that "the publication of grant of the patent is not a suitable starting point, as it would in fact demand an unrealistic watch from interested parties and is not linked to the performance of the project which provides standing to sue. Neither is the knowledge of the grounds of nullity of the patent, which may arise well before the knowledge of facts and economic considerations giving rise to standing to sue and actually is equivalent to the publication of grant". 

Though this decision is in line with TGI prior case law , it was not entirely expected or certain. A very recent ruling of the Paris Appeal Court had generated doubts. This ruling could have been interpreted as setting the start date of the limitation period to the date of patent grant, at least with respect to professionals who operate in the same area as the patent holder . The Court had ruled that "article 2224 CC provides for an in concreto assessment of the limitation period, by setting the starting point of the limitation period to the day on which the right holder knew or should have known the facts making it possible for them to assert this right. Although the publication of a patent application does not create rights for its owner, the publication of the patent is an acknowledgment of its rights. It cannot be denied that the publication of a patent is a way for third parties to know their rights, and that a professional who operates in the same area as the patent holder and who puts on the market a new product must comply with rights which have been made public, without possibly relying on its lack of knowledge". 

The TGI thus confirms the application of the in concreto approach. Yet, its practical implementation is not easy. In fact, the starting date coincides with the date when the claimant acquires standing to sue. Such a standing is recognised when the claimant, whose economic activity is within the same technical field as the invention, establishes there is an actual and serious threat by the patent.

Key Take-Away Points
  • The statute of limitations in patent nullity actions, and in particular calculating limitation periods, has become a recurring topic of interest following a 2008 reform which set up the general limitation period in ordinary civil law procedures to five years.
  • The very applicability of this general limitation period to patent nullity actions is still debated but the Paris First Instance Court consistently applies it.
  • Most of recent legal disputes have formed around the starting point of the limitation period which, pursuant to the French civil code, should correspond to the moment "when the owner of a right knew or should have known the facts making the action possible".
  • Despite a recent decision of the Paris Court of Appeal which had generated doubts, the Paris First Instance Court follows previous case law pursuant to which the starting point must be assessed depending on the facts and circumstances of the case