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Court of Appeal refuses Arrow declaration claimed solely for the purpose of influencing a decision by a foreign court

Posted on 20 December 2022

In a dispute concerning Novartis' European patent (EP894) for a dosage regime of its multiple sclerosis medication, marketed as Gilenya®, the Court of Appeal has refused Teva's claim for an Arrow declaration. The decision was made on the basis the claim was sought solely for the purposes of influencing the decision of the Court in infringement proceedings in Germany (Teva v Novartis). While EP894 was still a patent application, Teva had commenced proceedings asking the court to grant a form of declaratory relief, an Arrow declaration (named after the seminal case Arrow Generics v Merck, in which Campbell Forsyth, a Partner in the Mishcon de Reya Patents Group acted for Arrow).

An Arrow declaration is a declaration granted in the discretion of the Court that a particular product, process or use was obvious or not novel at the priority date of a patent application: in this case, the Arrow declaration element was that the importation, disposal, use and keeping of generic fingolimod for treating relapsing-remitting multiple sclerosis at a daily dose of 0.5 mg orally would have been obvious as at the priority date of EP894.

In deciding whether to grant an Arrow declaration, the Court does not need to decide whether the patent would be invalid or infringed should it proceed to grant. An Arrow declaration that something was obvious at the priority date provides a pre-emptive defence to any subsequent claims for patent infringement even before a patent has been granted.

Following Teva's claim for an Arrow declaration Novartis issued an infringement claim against Teva and other generic drug manufacturers and suppliers based on its EP894 patent application (Mishcon acted for Zentiva Pharma UK in this action). It  also applied for an interim injunction to restrain generic fingolimod from being supplied in the UK. Novartis' application for the interim injunction was refused. Pending the reserved decision on the preliminary injunction, and for the period following that decision to the determination of permission to appeal by the Court of Appeal, the supply of generic fingolimod was restrained by undertakings alongside cross-undertakings in damages from Novartis.

Mr Justice Roth ordered an expedited trial to take place in October 2022. However, on 10 August, Novartis informed Teva and the other generic manufacturers in the action that it was removing the UK designation from EP894 and a related divisional patent. The effect of this, and later undertakings offered by Novartis, meant there would be no patent in place for that dosage regime in the UK and no ongoing uncertainty in the UK market.

However, Teva continued its claim for an Arrow declaration requesting that the Court exercise its discretion to grant such a declaration on various grounds. A key point of relevance here was the potential impact (i.e., spin-off value) of a judgment of the Patents Court on the Court in Germany considering Novartis' claim there against Teva for infringement of EP894. Bacon J refused to grant the Arrow declaration on 19 October and the Court of Appeal granted permission to appeal. The hearing of the appeal was expedited as Novartis had applied for preliminary injunctions against Teva in the EU, including in Germany with a hearing due to take place on 15 December 2022.

The Court of Appeal refused Teva's appeal and rejected its application for an Arrow declaration. In refusing the appeal, Lord Justice Arnold explained that:

"…as a matter of principle, it is wrong for an English court to make a declaration solely for the purpose of influencing a decision by a foreign court on an issue governed by the law of the foreign court."

Specifically, the Court of Appeal addressed the question of whether an Arrow declaration should be granted solely for the purpose of influencing a decision by a foreign court applying that country's patent law. The Court considered the principles from leading cases. These included that a court "will look carefully at a case in which the only or predominant purpose of the declaration sought is to use the court’s judgment in foreign jurisdictions” (Pfizer v Hoffmann-La Roche). Further, an important reason to grant a declaration can be to resolve outstanding uncertainty in the UK (Fujifilm v Abbvie) but, on the other hand, where there are no pending UK patents and "a complete absence of the possibility of UK rights in the future", this is a reason not to grant a declaration (Pfizer v Roche, above). Therefore, the spin-off value of a judgment can be part of a legitimate useful purpose for seeking a declaration of the courts of England and Wales, but there must remain a connection to the UK.

In this context, the Court was mindful to discourage "forum-shopping" and avoid enabling Claimants to pick and choose their trial venue by exercising "jurisdictional imperialism". Lord Justice Arnold explained that:

"It is not the function of the courts of England and Wales to provide advisory opinions to foreign courts seised of issues which fall to be determined in accordance with their own laws."

The Court therefore concluded that the Patents Court was correct not to grant the Arrow declaration.

The decision provides useful clarity on how and when an Arrow declaration may serve a useful purpose – there will need to be more than spin-off value alone.

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