UPC: UK will not be involved, but what about Germany?
Life Sciences businesses have, no doubt, become used to the twists and turns surrounding the Unified Patent Court and Unitary Patent regime. In the immediate aftermath of the Brexit vote, and under the May Government, the generally accepted line was that it was possible for the UK to remain a participant in what was described as an 'international court'. Indeed, the UK took steps to ratify the UPC Agreement in 2018.
However, reflecting its more hardline stance to negotiations with the EU, the Johnson Government has now formally confirmed that the UK will not seek to participate in the UPC after the end of the Brexit transition period. In a letter in March 2020 to the House of Lords, the newly appointed IP Minister stated:
"Continued participation in the Unified Patent Court would mean ceding jurisdiction over key patent disputes in the UK to a court that is bound to apply and respect the supremacy of EU law, including judgments of the CJEU. Participating in such a system would be incompatible with our overall approach to future relations with the EU …. Consequently, the Government will not be seeking the UK’s continued participation in the Unitary Patent and Unified Patent Court."
Around the same time, all eyes were also on developments in Germany and the outstanding constitutional challenge. On 20 March 2020, the German Federal Constitutional Court upheld (by a majority of 5:3) a challenge against the German Parliament's ratification of the UPC Agreement. Given that the challenge succeeded on technical grounds, this may be rectified by a fresh vote but it has, of course, injected yet further delay and uncertainty into the UPC timeline. The UPC Committee has issued a statement that, whilst the decision will result in further delay, the "preparatory work will continue, while the judgment and the way forward is further analysed". Given the current focus of many in the industry on the implications of COVID-19, businesses will not be forgiven for putting thoughts about the UPC to one side for the foreseeable future.
Patent Case Law Update
Abbott v Edwards – public interest defence to infringement not successful
In Abbott v Edwards, the Patents Court found in March 2020 that Edwards' PASCAL device infringed patents licensed to Abbott in relation to medical devices used to treat mitral valve regurgitation by a transcatheter technique. Abbott's product is the successful Mitraclip, which has been on the market since 2008, described in the judgment as a "transformative advice" in the treatment of the disorder. When it came to the question of injunctive relief, Edwards raised a public interest argument, on the basis that some doctors had the reasonable clinical opinion that its device would be better for certain patients.
The normal remedy for a successful patent is a general injunction to restrain future infringements, Birss J stressing that the availability of an exclusionary injunction for infringement of a valid patent represents an important manifestation of the patent monopoly. However, he did accept that the public interest can be a relevant consideration, both under UK law and under the EU Enforcement Directive, and may justify refusal of an injunction or a carve out from its general terms, or for an award of damages in lieu of an injunction. But, his starting point was that patent laws already put restrictions on patent rights to protect the public interest, such as for example provisions relating to Crown use, compulsory licensing and patentable subject matter. As such, the Court's power to refuse or qualify a patent on public interest grounds should be used "sparingly and in limited circumstances".
Applying these principles to the scenario before him, Birss J concluded that the following were relevant factors:
- Whether the drug or device is concerned with treatments for serious medical conditions, and perhaps only for life-saving treatments (but this would not necessarily be sufficient on its own)
- The nature of the competitive product. Whilst Birss J doubted that a generic version of a life-saving drug would usually engage a public interest defence, he said there may be special cases, such as a novel pandemic disease.
Simply because there are clinically tangible differences between two products, which mean some doctors prefer (non-negligently) to use one product over another, was not sufficient to engage a relevant public interest. The Judge went further and concluded that, even in the 'harder case' where, for some patients, the patentee’s product was not an adequate treatment but the infringing product was, the public interest was still not engaged because it did not examine the basis for the reasonable view of doctors. Reasonable choices or opinions in their own context were not enough.
To engage the public interest defence, it would be necessary to examine the evidential basis for the clinical judgments: there must be sufficient objective evidence that there are patients who ought not be treated with the patented product but could, in the reasonable opinion of a body of doctors, be treated using the rival product. Accordingly, the defence would only apply where the infringing product was the only suitable treatment to protect the lives of patients, where that fact was established by objective evidence.
Viiv v Gilead: Patents Court considers approach to infringement by equivalents
In this claim relating to infringement and validity of a patent claiming anti-HIV drugs (HIV integrase transfer inhibitors, represented by the commercial product called dolutegravir (DTG)), Viiv is seeking certain declarations and financial compensation, but no injunction. Unusually, the infringement claim against Gilead's drug, bictegravir (BIC) is not made on the basis of a normal construction of the patent, but focuses only on infringement via the doctrine of equivalents as set out by the Supreme Court in its 2017 decision in Actavis v Lilly.
Gilead applied unsuccessfully to strike out an argument in Viiv's claim relating to a 2016 paper by employees of Gilead. Viiv relies on the paper to demonstrate that: the development of BIC started from and relied on knowledge of DTG, and that BIC was developed with the aim of maintaining the characteristics of DTG by the use of similar structural features. Gilead argued it was not legitimate in a patent infringement case to ask the Court to take into account the Defendant's intention.
The Court accepted Gilead's point that the test for infringement was an objective one and the Court did not need, when considering that question, to consider the Defendant's/its employees' intentions. However, when assessing whether objectively BIC works in the same way as DTG, a factual scenario that BTG was found by looking for a compound which did operate in the same way as DTG was, on a reasonably arguable basis, relevant.
Mexichem v Honeywell: Court of Appeal considers Arrow declaration
In this case, Mexichem seeks revocation of six Honeywell patents relating to compounds that are useful in refrigeration systems, and also declaratory relief in the form of Arrow declarations relating to certain divisional patent applications currently before the EPO. Mexichem seeks declarations that the mere idea of using certain refrigerants in a mobile air-conditioning system (MAC) was obvious at certain dates, which could then be used as a defence if Honeywell sues Mexichem for infringement based on those divisional patents. Whilst the decision therefore is not in the life sciences space, it is an interesting consideration of the Court's jurisdiction to grant Arrow declarations.
In particular, Honeywell sought to strike out the claim for Arrow declarations (or for summary judgment on those claims) on the basis that the declaration was not sought in relation to a specific product or process which Mexichem intended to market in the UK, it was not sufficiently clear, and that a declaration in the broad terms sought lacked any utility.
The Court of Appeal decided that Arrow declarations do not need to be sought in relation to a specific product or process, and declarations sought in more general terms could still serve a useful purpose. It reiterated that the Court has a broad and flexible discretion to grant declaratory relief where it would serve a useful purpose to do so. Whilst the declaration must be formulated with clarity, there is no requirement that it identify all of the features of the product or process. Further, there is no threshold requirement that the party seeking the declaration has a fully formulated product description, and far less that it must have a product in actual production. All that needs to be established at trial is that it would be useful for specified features of a product which the party wishes to sell to be declared old or obvious. Of course, the extent of generality or particularity of the declaration could affect, as a matter of degree for the trial judge to assess, the utility of the declaration.
In terms of the alleged breadth of the declaration sought, it was not correct to construe the declarations sought as if they were patent claims so that every conceivable product which could fall within the declaration was declared to be obvious. All Mexichem was seeking was a declaration that the mere idea of using the disclosure of the two refrigerants in a MAC was obvious; the declaration said nothing about whether combinations of those refrigerants with lubricants and other refrigerants were obvious or not.
The Court of Appeal did think there was greater force in Honeywell's argument that granting a declaration in such broad and general form might lead the court into the sort of step-by-step analysis of obviousness which has often been criticised by the courts as being unfair. However, it noted that such an approach may be legitimate in a case where the pattern of the research programme the notional skilled person would undertake can be clearly foreseen. Further, no step-by-step analysis may be necessary in any event, if Honeywell were seeking to protect an inventive concept in equally broad terms. Mexichem had a real prospect of establishing at trial that a declaration in these terms would be of utility in fighting off such equally broad claims to protection.
Akebia v Fibrogen: Broad claims found invalid on various grounds
In a lengthy judgment dealing with a number of issues, Arnold LJ (on return to the Patents Court) has held that six Fibrogen patents (exclusively licensed to Astellas) concerning the use of enzyme inhibitors (HIF-PHI) for treatment or prevention of anaemia and related conditions were invalid (apart from one claim). The patents were held invalid variously on the grounds of obviousness and/or insufficiency for lack of plausibility, undue burden and/or uncertainty. The number of compounds in the claims covered by a formula in the patents was described by one expert witness in the case, with whom Arnold LJ agreed, as "staggeringly large". Interestingly, in relation to a claim that was held to be valid, Arnold LJ rejected a claim to infringement on the basis of equivalence.
In giving his judgment, Arnold LJ took the opportunity to address some general points relating to expert evidence, in particular his concern that lawyers instructing experts should not make the often arduous task of giving expert evidence even more difficult. Lawyers have a heavy responsibility to ensure that the expert is not put in a position where they can be made to appear to have failed in their duty to the court, even though conscientiously they believe they have complied with that duty. For example, lawyers should ensure that the expert discloses their own previous relevant publications and, where appropriate, explains them in their report; and also that they annex their CV to their report.
Arnold LJ also returned to a procedure he had previously advocated, known as 'sequential unmasking', i.e., instructing expert witnesses in sequence, first asking them about the common general knowledge, then showing them the prior art and asking questions as to what steps would be obvious in the light of it, and only then showing them the patent. For Arnold LJ, such an approach will reduce the risk of hindsight, albeit he noted that there may be real practical problems in instructing experts on a sequential basis.
Further, he reiterated that too much time is often spent in cross-examination on ad hominem attacks that are unfair to the witness, unhelpful to the court and waste expensive time. This case demonstrated that his prior warnings in relating to instructing and cross-examining experts were still not being sufficiently heeded. If practitioners continued not to observe the required standards, the Court would have to enforce those standards.
Another practical problem was that the Judge hearing the Case Management Conference had decided not to order a technical primer. For Arnold LJ, this was a regrettable mistake. The case involved two moderately complex areas of science and the preparation of a primer at an early stage would have been beneficial, particularly as there was no dispute over much of the technical background. He reiterated that a technical primer should be mandatory in Category 4 and 5 cases going forward, unless there are good reasons to the contrary.
A further interesting point was whether, when considering insufficiency, the skilled person was deemed to read with interest the considerable number of scientific papers, books and earlier patents and applications referred to in the patents. Arnold LJ said that there was no legal principle that the skilled team is deemed to read all documents cited in a patent. Further, none of the documents were expressly advanced as relevant to the sufficiency of the patents. He concluded that the skilled team would not necessarily follow up any of the cited publications; they would appreciate there were a large number of them and the specification gave little, if any, direction as to which would be worth following up. Whether the skilled team would review the cited publications would depend in part on the time and resources available, which would vary between skilled teams.
SPC Case Update
Genentech v Comptroller General: Failure to pay fee loses two years of SPC protection
In an expedited appeal heard as a remote hearing shortly after the UK went into lockdown, the Court of Appeal rejected appeals by Genentech and its agent Master Data Center (MDC) which would have had the effect of allowing Genentech's SPC relating to Lucentis to continue in force for its maximum potential duration, i.e., until 23 January 2022. The background for the appeal was that, despite Genentech's instructions to MDC to apply for an SPC for the maximum duration, MDC had mistakenly only applied for a two-year SPC. As part of its evidence, MDC stated that there had been "several instances in the past" where the UKIPO had notified MDC of underpayments where it had mistakenly paid for a shorter term than the maximum, which it had then been able to rectify. On the basis of the renewal payment by MDC, the SPC expired on 2 April 2020.
The Court of Appeal rejected MDC's submission that there is only one prescribed fee for an SPC, i.e., one appropriate to the maximum duration of the SPC as laid down in Article 13 of the SPC Regulation. The salient features of the UK SPC fee scheme were as follows:
- The prescribed fee is the total of specified annual fees, albeit payable in one go and in advance.
- By paying a prescribed fee appropriate to something less than the full term, the applicant 'may elect to take the certificate for a shorter period'.
- The applicant is not permitted to pay top-up annual fees, or annual fees as if they fell due year by year.
- If the applicant chose a shorter period than the maximum, the SPC would lapse at the end of the chosen period.
Accordingly, the Court also rejected the submission that the UK SPC scheme does not permit an applicant to elect and pay for a shorter period of protection than the full term available. The notice from the UKIPO adequately identified the prescribed annual fees, depending on the term of SPC elected by the applicant. There was no irregularity for which the Comptroller was partly responsible and which would justify correction.
Further, Genentech could not argue that it was entitled to pay a further fee to make up the shortfall by applying for a paediatric extension – the paediatric extension of six months is added to the duration of the original SPC, it is not a separate SPC.
Royalty Pharma: CJEU confirms 'core inventive advance' of the patent is not relevant
On 30 April 2020, the CJEU delivered its decision (not yet available in English) in a reference from the German court for interpretation of Article 3(a) of the SPC Regulation. The CJEU's decision follows the decision of the CJEU Grand Chamber in 2019 in Teva v Gilead which had also considered Article 3(a) of the SPC Regulation, and clarifies certain aspects.
The Court's conclusion was as follows:
- The concept of the 'core inventive advance' of the basic patent is not relevant under Article 3(a) of the SPC Regulation. In Teva v Gilead, the 'core inventive advance approach' had been rejected by the Advocate General, but had gained support in a number of territories. The UK Court of Appeal had said that the CJEU had "definitely set its face against the introduction of such a test", and this further clarification from the CJEU is therefore welcome.
- A product falling within a functional definition used in the claims of the basic patent, but which is not derivable from the patent as a specific embodiment in individualised form, may be protected by the basic patent under Article 3(a) where it is specifically identifiable by a person skilled in the art on the basis of all information disclosed in the patent, and their general knowledge in the field and the state of the art at the date of filing/priority date.
- A product will not be protected by a basic patent under Article 3(a) where, although it falls under the functional definition given in the claims of the patent, it was developed after the filing date following an independent inventive step.