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Reinoud van Ginkel 1
Reinoud van Ginkel
Attorney at Law
The Role of Venture Capital
In the dynamic world of startups and innovative companies, venture capital (VC) plays a crucial role in funding growth potential. But what exactly is venture capital, how do Venture Capitalists work and what is their role in the investment ecosystem? In this article, I take a closer look at the definitions, processes and strategies behind venture capital, as well as the role VC plays in the Dutch startup economy. This article is the first in our series about venture capital. Definition of Venture Capital Venture capital is a form of financing that focuses on (innovative) start-ups and small companies with high growth potential. These target companies are in their development phase, are generally not yet profitable and depend on external money for their further growth and development ambitions. VC investors invest in these companies to further support their initial development or rapid growth. It is important to note that venture capital usually focuses on companies that have already achieved some degree of validation. This means they would have a working product, an initial customer base, or have demonstrated clear market potential. Venture capitalists rarely invest in completely untested ideas, which sets them apart from earlier funding sources such as angel investors or the 3Fs (family, friends and fools). How Does Venture Capital Work? Investors and Sources of Capital Venture capitalists are professional investors who put their capital into companies with high growth potential but also inherent risk. These investors obtain their capital from various sources, including external investors called Limited Partners (LPs) and sometimes from their own funds. LPs can be pension funds, university endowments, family offices or high net worth individuals. VC parties also often act jointly and, in the Netherlands, regularly with government-funded parties such as Regional Development Companies (Regionale Ontwikkel Maatschappijen). The consortium of collaborating investors then takes a joint position within a start-up. Phases of Investment The process of venture capital investment involves several stages: Investors use their personal networks, recommendations and online platforms to identify interesting young companies (deal sourcing). In the deal screening phase, startups are assessed based on criteria such as market potential, team expertise and innovation. A thorough due diligence is conducted to assess the feasibility and risks of the investment. This process includes a comprehensive audit of the startup to evaluate finances, operations, legal aspects, market position and more. At the investment committee stage, the final investment decision is made (FID) by a group of experts and partners. After due diligence, the venture capital firm generally prepares a term sheet and other relevant documents and structures the deal. Once the necessary documents are signed, funding is provided through capital contributions to the company (capital deployment). In practice, the actual capital investments often take in several rounds/phases, each with specific goals and conditions. The first formal investment round, also known as the seed round, focuses on product development and market validation. The subsequent series A round focuses on refining the business model and accelerating growth. All rounds (series B and beyond) after that focus on scale-up and expansion. Each round typically entails more capital and higher valuations, but often also contains more stringent requirements on the company’s performance. Conditions and Risks In return for their financial investment, venture capitalists receive partial ownership of the company and, often, a say in its operations. This then usually takes the form of a seat in the board, supervisory board or otherwise. Investors may also make other demands, such as the right to future investments, the right to get their investment back on a priority basis or the possibility to sell the company at a profit after a certain period of time. Venture capital is a risky type of investment because the companies are still in the early stages, have little or no revenue and have not yet proven that they will actually be successful. The exit strategy, or how the investor can sell its shares, may therefore be uncertain or unclear. It is crucial to understand that most venture capital investments are not successful. VC firms expect to earn their returns from a small percentage of their investments – often only 10-20% of their portfolio. These ‘winners’ must generate sufficient returns to offset losses on the other investments to still generate an attractive total return. This showcases the high risk-return ratio in the venture capital sector. Exit Strategies The main goal of investors is to earn a return on the money invested. This is usually done by selling the shares after a certain period, on average between 3-7 years, through an initial public offering, merger or acquisition by another company or investor. Although initial public offerings and acquisitions are the most common exit strategies, they depend heavily on market conditions and the performance of the startup. Not every company will achieve such a successful exit though. Venture capitalists consider different scenarios and then adjust their strategies as the company evolves. In some cases, a secondary sale of shares or a recapitalisation can provide an alternative to the usual exit routes. Role in the Startup Economy Venture capital is an essential source of funding for start-ups and innovative companies, especially when traditional bank loans are too difficult to obtain. It helps in the rapid growth and development of these companies and can lead to exponential growth across the startup ecosystem. Networking and relationships play a crucial role in deal flow. VCs often invest in startups with founders they know or through recommendations from trusted sources. A strong network can significantly improve access to high-quality investment opportunities. Networks not only play a crucial role in deal flow, but also influence the quality of due diligence and strategic decisions. Strong networks enable VCs to gather in-depth, reliable information on potential investments. They also facilitate access to industry experts, potential customers and partners, which significantly increases the value a VC can add to a startup. Moreover, good networks can help find suitable executives or board members for portfolio companies. VC firms based in thriving entrepreneurial regions, such as Silicon Valley, New York, Berlin, Stockholm or Tel Aviv and closer to home ‘Brainport Eindhoven’, BioScience Park in Leiden, the Amsterdam region or metropolitan region of The Hague-Rotterdam, generally have better access to deal flow than firms in less active areas. Said regions offer a rich ecosystem of startups, talent and resources. VC firms that specialise in specific sectors or industries are more likely to get a better deal flow as they have deeper understanding of the market and are better able to identify promising startups. Specialisation can also help make due diligence more efficient and make better investment decisions . The main sectors currently attracting VC investment are information technology, healthcare/biotechnology, fintech and consumer products and services. Conclusion To summarise, venture capital is a complex but essential part of the startup economy. By understanding the phases of deal flow, the key players in the VC ecosystem, and the factors that influence deal flow, both entrepreneurs and investors can develop strategies to be more successful. Mitigating challenges such as a limited deal flow, investor competition, time constraints and risk management is crucial to achieving success in the world of venture capital. By using technology, building strong networks, and implementing efficient processes, VC firms and entrepreneurs can effectively navigate the dynamics of deal flow and increase their chances of success. With the right strategies and mitigation measures, both entrepreneurs and investors can benefit from the potentially high returns that venture capital has to offer. Contact Do you have questions about bad leaver or good leaver clauses or want to exchange views? If so, please contact Mathijs Arts, Reinoud van Ginkel or one of our other Mergers and Acquisition (M&A) specialists.  
Tahir Bodha ranked "leading trademark professional" as he "excels in complex issues"
We are proud to announce that La Gro’s Attorney at law and certified trademark attorney Tahir Bodha has been recognized among the “top trademark professionals” in the WTR 1000 2025. Tahir Bodha is now listed among the top trademark professionals in key jurisdictions around the globe. He has been named a tenacious litigator and has earned this recognition for his excellence in complex issues before the courts. The WTR 1000, a unique guide that identifies the top trademark professionals in key jurisdictions around the globe, notes: “Tenacious litigator Tahir Bodha at La Gro excels in complex issues before EU and Benelux courts, particularly in the healthcare and life sciences, automotive, fashion, retail and ICT sectors.” The WTR 1000 focuses exclusively on trademark practice and has firmly established itself as the definitive ‘go-to’ resource for those seeking world-class legal trademark expertise. If you have any questions or would like to learn more about how Tahir can assist you, don’t hesitate to reach out via [email protected]
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Marleen van den Horst
Attorney at Law
NL District Court holds EP 2653873 of Biogen on DMF (Tecfidera) invalid
On 22 January 2025, the District Court of The Hague handed down its judgement in the final relief proceedings initiated by Biogen against Sandoz, Polpharm, Neuraxpharm and Mylan (collectively referred to as “the Generics”). It ruled that EP 2653873 (“EP 873”) of Biogen on dimethyl fumerate (DMF, marketed as Tecfidera®), is invalid. EP873 protects the use of an orally administered pharmaceutical composition containing the active ingredient DMF for treating multiple sclerosis (MS) with an effective daily dose of 480 mg DMF. DMF has been known since the 1990s as a drug for treating psoriasis. Inventive step Shortly after the Generics listed their generic 480 mg DMF products in the G-Standard (pricelist) for October 2022 and after health insurers designated some of these products as preferential in NL, Biogen sued  the Generics for infringement of EP 873. The Generics counterclaimed for revocation of Biogen’s patent, inter alia arguing that EP 837 lacked inventive step or sufficiency of disclosure (G2/21). The Generics relied on a clinical study that demonstrated the efficacy of 720 mg DMF per day and the potential for a lower dose to also be effective for the treatment of MS. The clinical study became part of the prior art through two pre-priority date presentations called ‘Kappos I’ and ‘Kappos II’. In the proceedings, both Biogen and the Generics acknowledge that Kappos I and II are full prior art and disclose the use of DMF as an effective drug for the treatment of MS. Starting from Kappos I or II, the Court found that the only difference between Kappos I or II and EP 837 relates to the 480 mg per day dosage set forth in claim 1. During the oral hearing it was established that both parties found that the administration of DMF to treat MS at a dose of 480 mg per day is as effective as administration of 720 mg per day. Therefore, the Court considered that the objective technical problem that the patent tries to resolve is to find an alternative treatment for MS that is as effective as the state of the art, namely the administration of DMF of a dose of 720 mg per day. Biogen argued that the objective problem was to find an improvement in the oral treatment of MS, but the Court rejected this argument and held that – unlike the apixaban case – the patent application (parent patent) of EP 837 did not describe an improved treatment. In addition, the Court found that the purpose of the patent application was not to find the best dose of DMF, but to screen for potentially MS-active substances similar to DMF. Agreeing with the Generics, the Court is of the opinion (5.39) that the skilled person, starting from Kappos I and/or Kappos II, and the general common knowledge,  knows that the efficacy (and therefore the effectiveness) of DMF is dose-dependent and that lower doses are also effective for the treatment of psoriasis. The skilled person would therefore have a reasonable expectation of success that this problem for an alternative dose could be solved in an obvious way by testing lower doses of DMF. Contrary to Biogen’s argument, the skilled person would then carry out those tests. In this way, with routine testing and thus without inventive effort, the skilled person would find that a dose of 480 mg per day has a therapeutic effect. Therefore, claim 1 of EP 837 is obvious. The two auxiliary requests filed by Biogen are also dismissed by the Court. Sufficiency of disclosure The Court also addresses the ‘squeeze’ that the Generics identified, namely that in case EP 873 would be found inventive (quod non), it lacks sufficiency of disclosure and is (also) invalid for that reason. The Court held that the patent or application must sufficiently disclose the subject matter allowing the skilled person to apply the invention over the whole range claimed by the patent without undue burden. Second medical use claims bring about that it must be tested whether the therapeutic effect of the composition and dosage regimen for the claimed medical indication (in this case MS) is disclosed in the application/patent or, in the absence thereof, is credible. In relation to G2/21, the Court states that if the desired technical effect is part of the claim, but the patent does not prove or at least make plausible that this technical effect is achieved by the teachings of the patent, nor does the person skilled in the art assumes this on the basis of the common general knowledge or the cited literature, then there is insufficient disclosure. The Court found that that the application says nothing about the efficacy of the claimed dosage of DMF in treating MS. Since the Court does not consider any experimental data other than Kappos I and II, EP 873 is lacks sufficiency of disclosure. Parallel proceedings  The decision handed down by the District Court of The Hague is the first decision in final relief proceedings to hold (the NL part of) EP 873 invalid. To date, only Sweden has ruled in final relief proceedings on (the validity of) EP 873. The Swedish Court found EP 873 valid and imposed an injunction on the generic companies. Earlier Biogen commenced several PI proceedings in various European countries. In the Czech Republic, Denmark, Latvia, Slovakia, Estonia, Ireland and Sweden, PI’s were granted. In contrast, in Austria, Belgium, Portugal, Slovenia, Italy, France, Spain, Estonia, Germany, Norway and Hungary, PI’s were rejected because the patent was found invalid on a preliminary basis. Conclusion It remains to be seen if the NL judgement on the invalidity of EP 873 is going to be followed by other European jurisdictions.
LGGA – Lennart Hoeksema
Lennart Hoeksema
Attorney at Law
WAMCA: victory for foundation in Essure case
On 8 January 2025, the District Court of Midden-Nederland gave judgment in the ‘Essure case’ (ECLI:NL:RBMNE:2025:10). Drug manufacturer Bayer marketed a permanent sterilisation method for women called ‘Essure’, which had to be implanted on the fallopian tubes. The Essure Claims Foundation (‘Foundation’) brought a mass tort action against Bayer. The Foundation claimed that many women became seriously ill from this sterilisation implant. In its judgment, the court ruled on a number of formal points regarding, among other things, the applicability of the WAMCA and the admissibility of the Foundation in the proceedings. The court ruled in favour of the Foundation on all points. Below, we highlight some noteworthy points of the judgment. Temporal application of the WAMCA: no cut-off The WAMCA applies to collective actions that (i) are brought after the WAMCA came into force on 1 January 2020 and (ii) relate to events that took place on or after 15 November 2016. Bayer believes there should be a cut-off in the claims of the Foundation. Bayer argues that with regard to implants placed before 15 November 2016, the old statutory regime (WCAM) should be applied; only with regard to implants placed on or after 15 November 2016 should the WAMCA be applied. The court is of another opinion. The court considers that there is a series of events, as the women have in common that they all had the Essure implanted, but at a different point in time. According to the court, this series of events consists of the same, repetitive event that caused the alleged harm to several individual women who belong to the circle of persons whose interests the collective claim seeks to protect. This series of events did not end until after 15 November 2016. Therefore, the court concluded that the WAMCA applies to all of the Foundation’s claims. The claims for material and non-material damage can be bundled An foundation who can start a mass-litigation case under the WAMCA can only bring an action if it seeks to protect similar interests of the persons involved. This similarity requirement is met if these interests lend themselves to bundling. As a result, the special circumstances of the individual parties need not be considered in the proceedings. In addition to material damages, the Foundation also claims immaterial damages for the women who had Essure surgically removed. The Foundation divided the women into 17 categories and claimed a lump sum of damages for each category. Bayer takes the view that the claims cannot be bundled in this case, as according to Bayer, immaterial damages depend on individual facts and circumstances. In doing so, Bayer also relies on the Supreme Court’s ruling on earthquake damage in Groningen. In this judgment, the Supreme Court ruled that immaterial damage due to impairment of the person cannot be determined on a flat-rate basis, as this is not compatible with the highly personal nature of such damage. Again, the court is of another opinion. The court considers that, unlike in the aforementioned Supreme Court judgment, in the present case, immaterial damages are not claimed for personal impairment. In the present case, immaterial damages are claimed because the women suffered personal injury. As a result, according to the court, immaterial damages are even more logical than for an impairment in person. According to the court, it is not necessary that the women also suffered mental injury. The court concludes by considering that it is therefore possible that it may find that the immaterial damages suffered by the women are at least a certain (lump sum) amount. The court concludes that the Foundation’s claim for compensation for both material and immaterial damages are bundleable. Thus, the Foundation is admissible in all its claims, including those relating to the immaterial damages. Litigation funder’s fee of 28.75% is not unreasonable In the context of the admissibility of the Foundation, it must be assessed whether or not the litigation funder’s fee is prima facie unreasonable. The amount of the litigation funder’s fee should not be such as to disadvantage the women or provide an unacceptable incentive for the litigation funder to push for an adverse outcome for the women. It has been agreed with the litigation funder that it will receive 25% of the potential damages. In addition, it has been agreed that the litigation funder may charge all its incurred costs up to a maximum of 5% on the potential damages. This therefore means that a minimum of (95% minus 25% =) 71.25% of the damages will accrue to the women; the litigation funder can therefore potentially receive 28.75% of the damages. Dutch case law states that a range of 10 to 25% can be considered the maximum fee for a litigation funder. The court finds that the Foundation has sufficiently substantiated why a fee of more than 25% is reasonable. The Foundation has substantiated that it intends to recover the costs of the proceedings from Bayer by means of an actual litigation cost order or an equal agreement in a settlement. The Foundation has further argued that it is still uncertain what costs will be eligible for reimbursement through a (litigation) order or settlement. The amount of costs to be incurred is also still uncertain. In view of this, the court concludes that the Foundation has sufficiently substantiated that the agreed fee is not unreasonably high. Therefore, this does not pose an issue for the admissibility of the Foundation. Conclusion The Foundation’s victory shows that both the applicability of the WAMCA and the admissibility of foundations that are litigating under the WAMCA can be applied practically. Questions about the WAMCA? Please contact Lennart Hoeksema, Arnout Koeman or one of our other WAMCA specialists.
Gerard Zuidgeest 1
Gerard Zuidgeest
Attorney at Law
The employment law implications of downloading (sensitive) company information 
Most employment contracts include a confidentiality clause. Under such a clause, the employee is obliged to keep sensitive company information confidential. It may happen that an employee downloads confidential and sensitive data, for example on his private laptop or phone. This could have major consequences for the employee.  Case Law  In a recent case before the District Court of Gelderland, both a confidentiality clause and a penalty clause had been agreed upon in the employee’s employment contract. The employer had informed the employee that he was dissatisfied with the employee’s performance and intended to terminate the employment relationship. A few days after the employer presented the employee with a settlement agreement, the employer received a security alert from Microsoft due to suspicious activity on the employee’s account.   When questioning the employee regarding the suspicious activities, it appeared that the employee had downloaded company files on his private laptop. The employee feared being excluded from access to his work environment and therefore could not defend himself against the alleged underperformance at work. However, the employee had downloaded a significant amount of files including reports from the company physician and performance of other staff members subordinate to employee.  The judge ruled that downloading all of this company-sensitive information was culpable. The employee thereby seriously damaged the employer’s trust. However, the high bar of serious culpability was not met because, in the judge’s opinion, the employee did not act intentionally to harm the employer.   In a recent similar case before the Court of Appeal in The Hague, an employee had also downloaded confidential and sensitive company information for the purpose of his defense at the the Netherlands Employees Insurance Agency (UWV). In this case it was not established whether the employee had only downloaded information which he could use for the procedure or also other (confidential) documents. The immediate dismissal by the employer was upheld.  Practical tips for employers  As an employer, it is wise to check whether an employee has downloaded information in the context of a dismissal case. Because the verification should not violate the General data protection regulation (AVG), it is good to have a policy in place when certain information may be checked. Sending confidential information can constitute  a violation of the confidentiality clause. If the employment contract includes a penalty clause for this circumstance, the employer can impose a fine on the employee.  It is wise to design the confidentiality clause so that even sending company information to employees’ own accounts counts as a violation.  Can La Gro be of assistance?   Do you have a question about confidentiality and protecting company information? Feel free to contact Gerard Zuidgeest, Rose Horstman or one of our other specialists in employment law. Do you have another question? With expertise in eighteen areas of law, La Gro is happy to assist  you.
Gerard Zuidgeest 1
Gerard Zuidgeest
Attorney at Law
Mediation for employee calling in sick due to conflict
It is often assumed that Dutch employment law requires an employer to initiate a mediation process before an employment contract can be terminated  on the grounds of irreconcilable differences in the employment relationship (the g-ground).  Such a requirement is based on  case law, where mediation is often deemed necessary as an effort that can be expected of an employer in order to restore the relationship. But is mediation always mandatory, or can the employer in some cases make a plausible case that there is no longer any point in initiating mediation?  The Court of Appeal of Den Bosch recently ruled that in that specific case an attempt at mediation was not  necessary. The case in question involved a small organisation with only six employees. The employee had been hired as a driver, with the prospect of becoming a shareholder. However, it soon became apparent that this partnership would not succeed. The employee had scolded his supervisor stating he was a  “bad manager” and the employee had been working under the influence of drugs. The employee claimed that his behavior stemmed from a lack of recognition, while the employer proposed a personal improvement plan. The employee refused to cooperate with this plan. He had also called in sick; the company doctor recommended mediation. Eventually, the employer proposed a settlement agreement to end the employment agreement, but an agreement could  not be reached.   The employer petitioned the subdistrict court to terminate  the employment contract because of a disrupted working relationship. The employee argued that the elements to terminate the employment agreement due to irreconcilable differences (g-ground) was not sufficient because no mediation had taken place, despite the company doctor’s advice.  The appellate court ruled that mediation was  not mandatory in this situation. The appellate court ruled that the relationship between the parties had hardened to such an extent that mediation had no chance of success. The size of the organisation also played a role: with only six employees, re-employment or avoidance of contact between the parties was impossible. The court emphasized that an employer is not obliged to start a mediation process “against his better judgment,” even if the company doctor advises it. According to the court, the company doctor’s advice in this case was a standard response, without knowledge of the actual gravity of the situation.  Practical implications   This ruling seems to be an exception to the general line in case law, where mediation is often seen as necessary. Especially if the company doctor advises mediation, since an employer will want to avoid being blamed for ignoring the advice of the company doctor in the context of illness.  At the same time, this case is quite common in  practice. In many cases it is quite clear that an employment relationship has been disrupted to such an extent that recovery seems out of the question. This ruling  may well set a precedent for smaller employers. However, it remains important to consider whether mediation can be useful in a particular case. If an employer skips mediation too easily, he runs the risk of a termination request being denied and having to (temporarily) retain the employee in question or to pay a high termination fee.  Do not come to the conclusion too quickly that no mediation needs to take place.    Practical tips for employers  Evaluate the situation carefully: seriously consider whether mediation really does or doesn’t have  a chance of success; it should not be ruled out too quickly; Document well: if mediation is not an option, make sure you can justify and corroborate this, such as with correspondence or statements about the seriousness of the situation.  Smaller organisations:  an additional argument for skipping mediation may be found in the fact that contact between severing quarreling colleagues cannot be prevented due to the size of the organization. In larger organizations, however, transfer will often be a possible outcome and thus mediation will more often be an obligation to which the employer must cooperate.  Company doctor’s advice: while the advice of a company doctor to start mediation is important, an employer does not always have to blindly go along with it if it is clear that the prospects of reconciliation are highly unlikely.  How can La Gro be of assistance?  Feel free to contact Gerard Zuidgeest, Jaap Harrijvan or one of our other specialists in employment law. Do you have another question? With expertise in eighteen areas of law, La Gro is happy to assist  you.
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