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Patents Court rejects estoppel and abuse of process arguments in latest instalment in Neurim v Mylan

Posted on 8 February 2022

Background

We have previously reported on the dispute between Neurim/Flynn and Mylan relating to Neurim's second medical use patent relating to Circadin ('the Patent'). On 4 December 2020, the Patents Court found that the Patent was valid and had been infringed by Mylan, and made consequential orders on 16 December 2020. However, subsequent developments in opposition proceedings against the Patent at the European Patent Office (EPO) changed the course of the case. On 18 December 2020, following a hearing before the EPO Technical Board of Appeal (TBA) (where the TBA orally expressed its opinion that the Patent lacked sufficiency), Neurim withdrew its appeal against the finding of invalidity by the Opposition Division. This meant that the Patent was therefore revoked before the EPO – "as if the Patent never was" - and this finding 'trumped' the Patent Court's finding that the Patent was valid. 

The Patents Court therefore subsequently decided that it should vary the orders it had made. Neurim no longer sought a declaration of validity and infringement, and related remedies. The Court also found that Mylan could not appeal the findings of validity and infringement to the Court of Appeal because it was now the 'winner'.

Neurim has now sued Mylan for infringement of a divisional patent, also relating to Circadin, European Patent (UK) 310343 ('the Divisional Patent'). The Divisional Patent proceeded to grant in June 2021, and expires in August 2022. Given the short time period before expiry, the Court determined a number of preliminary issues on an expedited basis in a judgment of Meade J handed down on 24 January 2022.

The Divisional Patent

Neurim seeks unconditionally to amend the claims of the Divisional Patent into a form which is 'patentably indistinct' from the claims of the Patent as found valid in the 2020 trial. Neurim alleged that Mylan was estopped from challenging the validity of the Divisional Patent, due to the 2020 judgment in relation to the Patent. Mylan meanwhile argued that Neurim's conduct in amending the Divisional Patent was an abuse of process, and its conduct in seeking to shut out the challenge to the validity of the Divisional Patent was an abuse of a dominant position contrary to competition law (the Court ultimately decided not to deal with the competition law arguments).

Mylan's key argument against the validity of the Divisional Patent is one of plausibility insufficiency, described as the 'lay-patient' argument. Whilst the EPO Opposition Division had found the Patent invalid over a piece of prior art, the TBA had indicated orally following the appeal hearing that the Patent was invalid for insufficiency. Neurim had decided to withdraw its appeal from the Opposition Division to the TBA because: (1) the Examination Division would not proceed with examining the application for the Divisional Patent until it saw reasons from the TBA, and withdrawing the appeal would mean there would be no reasons from the TBA; and (2) if the TBA gave reasons supporting the finding of insufficiency, this might adversely affect the prosecution of the application of the Divisional Patent.  

Mylan's key concern was that it would be unjust if, Mylan having won at the TBA, Neurim's strategy in withdrawing its appeal, then suing on the Divisional Patent with amended claims identical to the Patent, and then relying on estoppel, meant that Mylan did not have the chance to seek permission to appeal the 2020 judgment relating to the Patent on the lay-patient argument. Neurim meanwhile were concerned that, unless estopped from challenging the validity of the Divisional Patent in these proceedings, Mylan could insist on a full trial on the Divisional Patent – this would obviously introduce delay, and the litigation would not be resolved before the Divisional Patent expired in August 2022.

Decision

Following the trial of preliminary issues, the Court had to consider the proper approach to take where an estoppel is alleged against the 'winner' of earlier litigation, especially if they could not appeal. Concluding that Mylan could not appeal on validity in relation to the Patent at the relevant time (because it was the 'winner' following revocation at the EPO), the Court decided there could be no issue estoppel. 

Mylan's abuse argument before the Court was focused not so much on the nature of the proposed amendment to the Divisional Patent, but more on Neurim's overall strategy of using a divisional patent as a backup in case of the Patent failing, which meant that Mylan was being sued twice in the UK on the same invention. However, the Court reiterated that using divisional patents as backups was a well-established practice (the problems associated with it could be dealt with by, for example, Arrow declarations where appropriate and by case management). In any event, Mylan had not pleaded an argument of abuse based on using a divisional patent as a backup. The precise form of the claims of a divisional patent and their degree of similarity to that of the patent could not give rise to a finding of abuse.

The case will now return to the same judge who heard the 2020 trial, so that he can decide whether his judgment should be adopted (given the further invalidity arguments raised at the EPO), and whether Mylan can seek permission to appeal to the Court of Appeal.

Comment

This case has raised several unusual issues. However, there are many actions in the Patents Court where national and parallel proceedings in the EPO have to be co-ordinated – here, the Court noted that it was 'unfortunate' that significant complexity and confusion had arisen, with attendant resource having to be spent, which could have been avoided if the trial on the validity of the Patent had been scheduled to take place after the TBA. It reiterated that parties in disputes before the Patents Court where there are parallel EPO proceedings should ensure that they inform the Court about scheduling issues, 'whether or not it suits their strategy'.

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