Legal Alert – Supreme Court Clarifies Evidence Rules and Burden of Proof in Patent Disputes
On 30 June 2015, the Supreme Court gave a preliminary ruling in a dispute concerning a pharmaceutical analogy process patent and a pharmaceutical process patent. In this ruling the Supreme Court considered questions of preclusion and admissibility of evidence and witness statements in patent law context as well as reversed burden of proof under section 57a of the Patents Act (550/1967) for the first time. As a result, the Supreme Court ended up revoking the Court of Appeal’s earlier judgment and the case was remitted to the Court of Appeal for reconsideration. Furthermore, on the same day the Supreme Court also rendered another decision in a different patent dispute concerning similar issues (Supreme Court Decision 1344/2015).
Presenting new evidence at appeal stage – allowed or not?
Under Finnish preclusion rules, one may not present new evidence at appeal stage without justifiable reason or an established probability of not being able to refer to the evidence in prior proceedings. In this case, the respondent presented new evidence in the Court of Appeal which evidence was excluded by the Court of Appeal as a separate procedural decision.
Firstly, the Supreme Court assessed whether the respondent’s appeal covered also the Court of Appeal’s decision to exclude the new evidence. On the grounds that one could not separately appeal the procedural decision and the fact that the respondent had noted that the appeal filed to the Supreme Court concerned the Court of Appeal’s judgment in its entirety, the Court found the appeal to cover also the procedural decision.
Secondly, the Supreme Court evaluated whether preclusion rules prohibited the respondent from presenting new evidence at the appeal stage and whether the evidence should have been presented already in the court of first instance. The Supreme Court assessed preclusion as a dynamic provision fit to adapt to the circumstances of the case. The Court acknowledged the importance of preclusion norms for promoting legal certainty, speed and concentration of proceedings to the court of first instance as well as the equality between the parties. On the other hand the Court pointed out that preclusion should not, without justification, prejudice the aim to ascertain the material truth. In the case at hand the Supreme Court concluded that the respondent may have justifiably deemed it necessary to present additional evidence still at the appeal stage and the new evidence should have been allowed by the Court of Appeal.
Witness statements are assessed under the principle of free evaluation of evidence
The Court of Appeal deemed the respondent’s witness statement inadmissible due to the fact that the witness represented the respondent’s co-operation partner manufacturing the allegedly infringing medicinal ingredient. The Supreme Court found the Court of Appeal’s decision to be erroneous and the actions comparable to denying a party from using this form of evidence. The Supreme Court confirmed as a main rule that the credibility and reliability of the witness, his statement and the evidentiary value and sufficiency of the proof in general should be assessed under the principle of free evaluation of evidence. Thus a witness statement should not have been excluded merely on the basis of the witness’s position.
Reversed burden of proof under the Patents Act and protection of trade secrets
The material question of the case was whether the respondent had infringed the patentee’s exclusive rights. Section 57a of the Patents Act turns the burden of proof to the respondent under certain circumstances. Under section 57a “if a patent has been granted for a process for manufacturing a new product, any identical product produced without the consent of the patent proprietor shall, in the absence of proof to the contrary, be deemed to have been obtained by the patented process. When presenting counter evidence the justified advantage of the respondent to protect its trade secrets shall be taken into consideration.”
The Supreme Court confirmed that in this case the respondent carried the burden of proof but the burden was limited of proving dissimilarities between the patented process and the allegedly infringing process. The Court further stated it to be clear that the trade secrets of the respondent were protected towards both third parties and the patentee. Threshold in the presentation of evidence should, however, be assessed independently as the respondent shall be obliged to reveal its manufacturing process to the necessary extent in the light of the proceedings.