Judgment Taste of Nature - Cresco

COURT OF THE HAGUE

Civil-Law Division

case number/cause-list number: 408315 / KG ZA 11-1414

Judgment in summary proceedings, dated 31 January 2012

in the case of

TASTE OF NATURE HOLDING B.V.,

a private limited liability company,

having its registered office in Monster, municipality of Westland, the Netherlands;

Claimant,

lawyer: P.J.M. Steinhauser in Amsterdam, the Netherlands;

v.

1. CRESCO PRODUKTIE MAATSCHAPPIJ B.V.,
a private limited liability company,

2. CRESCO HANDELS B.V.,
a private limited liability company,

both having their registered offices in Honselersdijk, municipality of Westland,

Defendants,

lawyer: T. Berendsen in ‘s-Hertogenbosch, the Netherlands

The Claimant is referred to below as “Taste of Nature” and the Defendants as “CPM” and “CH”, respectively, or jointly as “Cresco”. Mr Steinhauser is assisted by B.W. Swinkels, a patent attorney, and Mr Berendsen by J. Brants, also a patent attorney.

1. The proceedings

1.1 The course of the proceedings is apparent from:

· the writ of summons dated 5 December 2012 and the amended writ dated 7 December 2012, with Exhibits 1 to 10;

· the Statement Containing Exhibits submitted by Cresco, with Exhibits 1 to 22;

· the Statement Containing Additional Exhibits submitted by Taste of Nature, with Exhibits 11 to 15;

· the Statement Containing Additional Exhibits submitted by Cresco, with Exhibits 23 and 24, of which Appendix D3 to Exhibit 23 (“future analysis reports”) has not been submitted, because it was not yet available;

· the letter dated 10 January 2012, in which Taste of Nature objects to Cresco’s Exhibits 23 and 24;

· Exhibit 25, sent to the Summary Proceedings Judge by (fax) letter from Cresco dated 12 January 2012, being a revocation summons issued on 11 January 2011;

· the breakdowns of cost submitted by both parties; and

· the hearing, on the occasion of which counsel for both parties submitted their pleadings.

1.2 At the hearing Taste of Nature persisted in its objection to Exhibit 23 (a report by Cresco’s patent attorney with 12 appendices) and Exhibit 24 (an e-mail regarding an investigation yet to be performed). It argued that its defence was being harmed by the late stage at which Cresco submitted the exhibits, which, according to Taste of Nature, could have been made available at an earlier stage. According to Taste of Nature, Cresco thereby violated the principle of fair play and for that reason the exhibits should not be taken into account.

1.3 Taste of Nature acknowledged, when asked, that it was previously familiar with some of the appendices to Exhibit 23. However, the objection is not directed against those documents.

1.4 The Summary Proceedings Judge ruled at the hearing that Cresco had complied with the time schedule for submitting exhibits that was drawn up for this case. If exhibits are submitted in accordance with that time schedule, the parties are deemed, in principle, to have sufficient opportunity to properly respond in the context of a hearing in summary proceedings. Taste of Nature has insufficiently substantiated why that is otherwise in respect of Cresco’s Exhibits 23 and 24, which are not unusually large or complex. The Summary Proceedings Judge therefore considers those exhibits admissible.

1.5 At the end of the hearing Cresco’s lawyer, at the request of the Summary Proceedings Judge and with the other party’s approval, sent the Summary Proceedings Judge the digital version of the Minutes of a hearing held on 8 November 2011 in opposition proceedings that are relevant to this case before the Technical Board of Appeal (the “TBA”) of the European Patent Office (the “EPO”).

1.6 Finally, judgment was scheduled to be passed today.

2. The facts

2.1 Taste of Nature operates in the field of the production and sale of a certain type of sprout or seedling that is suitable for consumption. Sprouts and seedlings are edible young vegetable plants that are harvested shortly after germination. If the plants develop into cotyledons (seed-leaves), the term “cress” is used.

2.2 Cresco is also involved in the production and sale of sprouts.

2.3 Taste of Nature has developed a seedling of radish (Raphanus sativa) that is characterised by a high anthocyanin level. Anthocyanin is an antioxidant that gives the plant a red, purple or black colour, and is regarded as a favourable substance from a health perspective.

2.4 Taste of Nature is the holder of European patent EP 1 290 938 (the “Raphanus Patent” or “EP 938”) for “Raphanus with increased anthocyanin levels”, granted on 25 June 2008 on the basis of an application filed on 7 September 2001. EP 938 is valid in the Netherlands, among other countries. No opposition was filed to the granting of the patent.

2.5 The Raphanus Patent relates to a plant and a sprout of a plant of the radish species Raphanus sativa with an increased anthocyanin level, and to methods for its production.

2.6 The Raphanus Patent was originally held by a third party (Gain Harvest Developments Ltd). The patent was transferred to Taste of Nature under an agreement between that third party and Taste of Nature.

2.7 On 23 December 2011 – after the writ of summons had been issued in these summary proceedings – it was recorded in the patent register that Taste of Nature is (or had become) the holder of EP 938.

2.8 In the original English language, claims 1, 5, 8, 9 and 10 of EP 938 (invoked in these proceedings) read as follows.

1. A Raphanus sativa plant, obtainable by screening Raphanus sativa plan far [this should probably be: “plants for”; Summary Proceedings Judge] their ability to produce sprouts with at least some purple coloring, selfing and/or crossing said plants for several generations and selecting progeny having sprouts with purple coloring, characterized in that the sprout of said plant comprises anthocyanins at a level of at least 800 nmol per gram fresh weight of sprout.

5. A sprout obtained from a plant according to claim 1.

8. A sprout according to claim 5, wherein the sprout is a plantlet that has at least two leaves and a height of less than 20 cm.

9. A container containing a plurality of plantlets according to claim 8.

10. A container according to claim 9, wherein the container contains at least 3 plantlets per cm².

2.9 The (uncontested) Dutch translation of the claims read as follows.

[Translator’s note: Dutch translation of the above claims]

2.10 Taste of Nature has not invoked the method claims protected in EP 938 for the production of sprouts according to claim 5.

2.11 The description of EP 938 includes the following sections:

[0012] The Raphanus plant of the invention preferably is a plant of the species Raphanus sativa, more preferably the plant is obtained through breeding and selection from the Raphanus sativa lines CGN 6924, CGN 7240, or both. Most preferably, the Raphanus plants of the invention are obtained through breeding and selection from the Raphanus sativa line V33, (i.e. ATCC No. PTA-3630).

[0013] Methods for breeding and selection of the Raphanus plants of the invention are well known to the skilled person. Generally such methods may include self- and cross-pollination and selection of new lines on the basis of colour, colour intensity, time of fading of (purple) colour to green, seed production, uniformity of germination time, height/length of the plant(let)s, absence of green descendants, taste, and size/shape of cotyledons. In order to intensify breeding, two generations may be grown per year, alternating growth in the Northern and Southern Hemisphere. In case interesting lines have not produced (sufficient) seed it may be necessary to maintain the line vegetatively in order to re-attempt seed production in the next season. This may require cutting of plants fully flowering. Several methods for cutting such plants are known in the art. A particularly advantageous method concerns cutting small shoots on the radish turnip together with some turnip tissue, treating it with cuttings-powder and incubating the slip under high humidity to grow roots.

[0020] Methods for producing Raphanus sprouts of the invention at least comprise the steps of (a) germinating seed of a Raphanus plant as herein defined above, in a suitable medium, under suitable conditions, and optionally in a container; and (b) growing the germinated seeds obtained in (a) under suitable conditions until a sprout of a desired developmental stage is obtained. The desired developmental stage may be a sprout prior to the appearance of the cotyledons, or may be a plantlet having at least two leaves and preferably no more than two leaves. A suitable growth medium preferably just contains water. Depending on the local quality of the tap-water further purification of the water may be required to demineralise the water and/or to remove chlorine, organic residues or other contaminants. The water is preferably free of microbial contaminants Germination is preferably carried out at a temperature of 15-25°C., preferably at high humidity, most preferably a relative humidity of 100%. Germination may suitably be performed in a germination cell or room with controlled temperature and humidity.

2.12 In respect of the patentability of essentially biological processes within the meaning of Article 53, opening lines and (b), of the European Patent Convention (the “EPC”), the Enlarged Board of Appeal (the “EBA”) of the European Patent Agency ruled as follows in its judgment of 9 December 2010 in the case with number G2/07 and the (consolidated) case with number G1/08:

Hence, in more general terms, the conclusion to be drawn is that a process for the production of plants which is based on the sexual crossing of whole genomes and on the subsequent selection of plants, in which human intervention, including the provision of a technical means, serves to enable or assist the performance of the process steps, remains excluded from patentability as being essentially biological within the meaning of Article 53(b) EPC.

However, if a process of sexual crossing and selection includes within it an additional step of a technical nature, which step by itself introduces a trait into the genome or modifies a trait in the genome of the plant produced, so that the introduction or modification of that trait is not the result of the mixing of the genes of the plants chosen for sexual crossing, then that process leaves the realm of the plant breeding, which the legislator wanted to exclude from patentability. Therefore, such a process is not excluded from patentability under Article 53(b) EPC but qualifies as a potentially patentable teaching.

The above applies only where such additional step is performed within the steps of sexually crossing and selection, independently from their number of repetitions. Otherwise the exclusion of sexual crossing and selection processes from patentability under Article 53(b) EPC could be circumvented simply by adding steps which do not properly pertain to the crossing and selection process, being either upstream steps dealing with the interpretation of the plant(s) to be crossed or downstream steps dealing with the further treatment of the plant resulting from such crossing and selection process. Any such additional technical steps which are performed either before or after the process of crossing and selection should therefore be ignored when determining whether or not the process is excluded from patentability under Article 53(b) EPC. For the previous or subsequent steps per se patent protection is available, This is the case, for example, for genetic engineering techniques applied to plants which techniques differ profoundly from conventional breeding techniques as they work primarily through the purposeful insertion and/or modification of one or more genes in a plant (of T 356/93 supra). However, in such cases the claims should not, explicitly or implicitly, include the sexual crossing and selection process.

As a result this means that, while the presence in a claim of one feature which could be characterised as biological does not necessarily result in the claimed process as a whole being excluded from patentability under Article 53(b) EPC (...), this does not apply where the process includes sexual crossing and selection.

2.13 In this case the EBA ruled as follows:

1. A non-microbiological process for the production of plants which contains or consists of the steps of sexually crossing the whole genomes of plants and of subsequently selecting plants is in principle excluded from patentability as being “essentially biological” within the meaning of Article 53(b) EPC.

2. Such a process does not escape the exclusion of Article 53(b) EPC merely because it contains, as a further step or as part of any of the steps of crossing and selection, a step of a technical nature which serves to enable or assist the performance of the steps of sexually crossing the whole genomes of plants or of subsequently selecting plants.

3. If, however, such a process contains within the steps of sexually crossing and selecting an additional step of a technical nature, which step by itself introduces a trait into the genome or modifies a trait in the genome of the plant produced, so that the introduction or modification of that trait is not the result of the mixing of the genes of the plants chosen for sexual crossing, then the process is not excluded from patentability under Article 53(b) EPC.

4. In the context of examining whether such a process is exoluched from patentability as being “essentially biological” within tho meaning of Article 53(b) EPC, it is not relevant whether a step of a technical nature is a new or known measure, whether it is trivial or a fundamental alteration of a known process, whothor it does or could occur in nature or whether the essence of the invention lies in it.

2.14 Both cases (T-83/05 (the broccoli case) and T-1242/06 (the tomato case)) were referred back to TBA, where the proceedings were continued. The patent holders had responded to the ruling passed by the EBA by omitting the method claims and limiting the patent to product-by-process claims for the products of the non-patentable methods. During the hearing held on 8 November 2011 in the tomato case, the TBA stated that it intended to (again) present questions to the EBA (“The Board announced its intention to refer questions of law to the Enlarged Board of Appeal”). One of the parties involved (Appellant II, the opposing party) proposed presenting the following questions to the EBA:

(1) Is a claim which is not directed to an essentially biological process per se as defined in Article 53(b) EPC and G01/08 patentable if such claim would render inoperative the exclusion from patentability as defined in G01/08?

(2) Is a claim patentable if such claim is directed to a plant, fruit, seed or any other part of an essentially biological process as defined in Article 53(b) and G01/08 if such claim would render inoperative the exclusion from patentability as defined in G01/08?

(3) If such claim is patentable, which other requirements are there to be met?

(4) If such claim is unpatentable, which other requirements need to be met to escape the exclusion from patentability as defined in G01/08?

3. The dispute

3.1 Taste of Nature is requesting the Summary Proceedings Judge – briefly summarised – to prohibit Cresco, by judgment enforceable at once, regardless of appeal, with immediate effect (if the Summary Proceedings Judge understands correctly: in the Netherlands), from directly or indirectly infringing EP 938, on pain of a penalty, while ordering Cresco to pay the entire costs of the proceedings in accordance with Article 1019h of the Dutch Code of Civil Procedure.

3.2 Taste of Nature bases its claims on the argument that Cresco is trading in cresses that are literally infringing claims 1, 5, 8, 9 and 10 of EP 938.

3.3 Cresco has filed a substantiated defence. The parties’ arguments, insofar as relevant, are addressed below.

4. The assessment

urgent interest

4.1 Taste of Nature’s urgent interest in its claims is due to the continuous nature of the alleged infringement.

no cause of action?

4.2 Cresco is arguing that Taste of Nature has no cause of action because it was not the holder of EP 938 when the writ of summons was issued, or in any event because at that time not Cresco but a third party was registered in the public register as the holder of the patent.

4.3 That defence is rejected. In a situation such as this it suffices that the right invoked by a party exists on the date of the decision. That condition has been met, since Taste of Nature has argued at the hearing, and it has not been disputed, that the patent right was transferred to it before the date of the writ of summons already, and it was therefore already the rightful owner of EP 938 when the writ of summons was issued. It argued this in the writ of summons, and it may therefore be assumed that Cresco became aware of that fact on the day on which the writ of summons was issued (at the latest). It also cannot be held against Taste of Nature that the deed of transfer had not yet been registered when the writ of summons was issued (that was done on 23 December 2011), since Taste of Nature must be regarded as the rightful owner also according to the registers in any event on the date on which this judgment is passed. Taste of Nature’s claims can therefore be allowed (see the Court of The Hague, 26 May 2010, IEP T20100526 (VR Construct v. Jurenco)).

4.4 Cresco is furthermore arguing that Taste of Nature has no cause of action against CPM because CPM is not involved in the alleged infringing acts.

4.5 Since Taste of Nature has not substantiated CPM’s involvement in a substantiated manner and has not disputed Cresco’s arguments in this context, the Summary Proceedings Judge will assume that CPM is not involved in the alleged infringing acts. However, this does not mean that Taste of Nature has no cause of action, as Cresco has argued, but rather that the claims against CPM must be dismissed.

unsuitable for handling in summary proceedings?

4.6 Although this is not a simple case, it is not too complicated for summary proceedings, as Cresco argues. The Summary Proceedings Judge first of all notes that restraint must be exercised in refusing to grant summary relief on the grounds that a case is too complicated. The patent addressed in these proceedings furthermore does not relate to extremely complicated technology. The parties involved have knowledge of the field and must be deemed able, while engaging expert lawyers and patent attorneys, to conduct a sound substantive debate within the preconditions that apply to summary proceedings, also within the short term involved in summary proceedings.

patentability in light of Article 53, opening lines and (b), of the EPC

4.7 It is apparent from the decision of the EBA of the EPO, quoted in paragraphs 2.12 and 2.13 above, which decision addresses in detail the meaning of Article 53, opening lines and (b), of the EPC and Rule 26(5) and 27(c) of the Implementing Regulations, also in light of the Biotechnology Directive (and its legislative history) (Directive 98/44/EC of the European Parliament and of the Council of 6 July 1988 on the legal protection of biotechnological inventions), the UPOV Convention (and its conclusion) (the International Convention for the protection of new varieties of plants, of 2 December 1961, as revised at Geneva on 10 November 1972, 23 October 1978 and 19 March 1991) and the earlier case law of the Boards (in particular judgment T 320/87, OJ 1990, 71) that a method for crossing and breeding a plant in order to obtain a certain result (a plant with specific properties) is patentable only if it involves “an additional step of a technical nature, which step by itself introduces a trait into the gnome or modifies a trait in the genome of the plant produced, so that the introduction or modification of that trait is not the result of the mixing of the genes of the plants chosen for sexual crossing”. If such a (nontrivial) step is missing, patentability is excluded on the grounds of Article 53, opening lines and (b), of the EPC in conjunction with Rule 26(5) of the Implementing Regulations (both of which provisions were not reconsidered during the drafting of the EPC 2000). The “ban on dual protection” is thereby implemented, which is aimed at having the results of selection activities come under either plant variety law or patent law (but not both).

4.8 For the plant breeding method that must be applied as apparent from the description of EP 938 (see paragraph [0020], presented in paragraph 2.11 above) in order to arrive at the alleged invention no additional technical steps are required in the aforesaid sense – as Taste of Nature has also acknowledged. Only a classical breeding process is involved, i.e. a method of essentially a biological nature. That method in itself therefore does not qualify for patent protection in light of the judgment of the EBA quoted above.

4.9 Taste of Nature is nevertheless arguing that a patentable invention is involved because EP 938 relates to products (a plant, a sprout, a holder with sprouts or plants and material of a plant) obtained by using a certain method, rather than that method itself. In the judgment in cases G2/07 and G1/08, according to Taste of Nature, no ruling was given on the admissibility of such a product-by-process claim in the case that the method is unpatentable (but the EBA may be requested to present its views on this point after all, as is apparent from the TBA’s intention stated in the tomato case). Because no express judgment has been passed that such a product-by-process claim is unpatentable, the principle applies, according to Taste of Nature, that such a claim does not come under the exception of Article 53, opening lines and (b), of the EPC.

4.10 The Summary Proceedings Judge disagrees with Taste of Nature on this point. In its provisional opinion it is plausible that under Article 53, opening lines and (b), of the EPC, not only an essentially biological method is unpatentable, such as the “classical breeding” in this case, but also a product directly obtained by using that method, because a method claim also protects the product directly obtained using that method (see Article 64(2) of the EPC). If it were to be ruled that a product-by-process claim is admissible for the directly obtained product of an unpatentable essentially biological method, that would render the exclusion in Article 53, opening lines and (b), of the EPC as interpreted by the EBA in G1/08 pointless, because in that case the same situation would be involved as if the EBA had considered the process claims admissible, which is not the case. The view proposed by Taste of Nature – which, when requested, it was unable to substantiate otherwise than arguing that that the EBA did not expressly state its opinion on a product-by-process claim – is not a useful interpretation of, and does not do justice to, what must be regarded according to the EBA, as stated in its judgment substantiated in detail, as the purpose and scope of Article 53, opening lines and (b), of the European Patent Convention, and is dismissed.

4.11 Judgment G1/98 of the EBA dated 20 December 1999, related to transgenic plants, does not alter the above. That judgment dates from long before the recent G1/08 judgment of the EBA, and G1/98 is furthermore not directly relevant to the interpretation of the exception of essentially biological processes from patentability, as the EBA itself also concluded in G1/08 (paragraph 3.2.2 of the judgment). This applies all the more to the lower case law of the TBA cited by Cresco (judgment T 1854/07 of 12 May 2010).

4.12 This leads to the provisional ruling that there is a serious possibility, which cannot be neglected, that a court will rule in proceedings on the merits that claims 1, 5, 8, 9 and 10 of EP 938 invoked in this case should not have been granted, because subject matter is involved that is unpatentable.

conclusion

4.13 In light of the above, Taste of Nature’s claims against CH must (also) be disallowed. Since in the provisional opinion of the Summary Proceedings Judge the claims invoked of the Dutch part of EP 938 are not considered valid, a ban on infringement cannot be imposed.

4.14 In light of this state of affairs, the other defences presented by Cresco regarding validity and non-infringement need not be addressed.

costs of the proceedings

4.15 Taste of Nature, as the unsuccessful party, will be ordered to pay the costs of these proceedings. Cresco is claiming a full cost order in accordance with Article 1019h of the Dutch Code of Civil Procedure. Taste of Nature has objected to the amount of the costs itemised by Cresco, arguing that an excessive amount of time has been spent on the case. It refers in this case to its own cost breakdown, which is significantly lower. The Summary Proceedings Judge rejects that objection, since neither the time itemised by Cresco as spent on the case nor the related costs appear to be disproportional or unreasonable, in light of the nature and complexity of this case. It has not been established that Cresco has also included costs in its cost breakdown for the proceedings on the merits that have been instituted, in which nullification of the Dutch part of EP 938 is being claimed, as Taste of Nature has also argued. The costs on the part of Cresco are therefore estimated at EUR 77,072.70 in lawyer’s fees in accordance with the cost breakdown, increased by EUR 575 in court fees.

4.16 Since Cresco has not so requested, the cost order will not be declared enforceable at once, regardless of appeal. The Summary Proceedings Judge sees no reason to do so ex officio on the grounds of Article 258 of the Dutch Code of Civil Procedure.

5. The judgment

The Summary Proceedings Judge:

5.1 disallows the claims; and

5.2 orders Taste of Nature to pay the costs of these proceedings, estimated to date on the part of Cresco at EUR 77,647.70.

This judgment was passed by J.Th. van Walderveen and was pronounced in public on 31 January 2012 in the presence of registrar R.P. Soulllié.