The Patents Court has recently determined that two patents held by British American Tobacco (BAT) were invalid for lack of inventive step over the prior art and added matter – but, if found valid, would have been infringed by Philip Morris International's (PMI) IQOS device on the basis of the construction of the patents. The case concerns 'heat-not-burn' (HNB) tobacco products and devices, where the tobacco is primarily heated, with the aim being to generate a nicotine-containing aerosol with potentially lower toxicant emissions compared to a conventional cigarette.
BAT's patents both emanated from a Patent Cooperation Treaty application (the "Grandparent Application"). PMI argued that the patents as granted contained added matter over the Grandparent Application. The test for added matter involves comparing the disclosure of the application as filed and the patent as granted. Subject matter will be deemed added unless it is clearly and unambiguously disclosed in the application as filed. If a patent is deemed to have added matter then it will be invalid.
Mr Justice Meade determined that it constituted added matter in BAT's two patents to combine "gathered sheet" reconstituted tobacco as the substrate for the aerosol forming material with the elongated heating element, since there was no disclosure of that combination (as opposed to each feature) in the Grandparent Application.
Further, taking the elongated heating element feature from Figure 3 of the Grandparent Application without taking other features that were described in the Grandparent Application constituted added matter by way of intermediate generalisation. This was because there was a lack of clarity as to the effect of omitting the upstream heater and the airflow sensing region. Further, a more specific and very plain added matter problem arose with the omission of a puff-actuated controller – it was accepted by BAT's expert witness that there was a necessary technical connection between the elongated heating element and a puff actuated heating controller (puffing affected the heating). This was important because, if the elongated heating element was powered all the time, the device would overheat.
PMI argued that BAT's patents were obvious in the light of an earlier PMI patent (Morgan). Particular attention was given to the third embodiment in Morgan (the first and second embodiments had formed the basis of PMI's HNB Accord product, which had not succeeded commercially).
BAT argued that, as the Accord device had not been successful, a skilled team would disregard the Morgan patent and as a result any similarities between Morgan and BAT's patents were not obvious. The Court rejected this argument as making little sense. The skilled team would be interested, as a technical matter, in finding ways to improve Morgan/Accord, including thinking of ways to improve the thinking that accompanied it.
BAT also argued that as PMI had commercialised Accord based on the first embodiment in Morgan, the skilled team would not 'go backwards' and revisit the selection between the three embodiments. Again, the Court rejected this argument, finding that the skilled team would have been interested in the third embodiment, especially as by the priority date, they would know that the Accord had not succeeded commercially and would be reopen to revisiting the design. Further, one of the reasons for Accord's relative failure was a 'papery' taste which the skilled team would reason would be avoided by the third embodiment. Accordingly, the skilled team would be interested in pursuing the third embodiment in Morgan.
Applying the Pozzoli test, the sole difference between Morgan and the claims in the patents was using a "gathered sheet" of reconstituted tobacco instead of the extruded form in the context of the third embodiment. This step would have been obvious to the skilled team. The step from Morgan to the claims in the Patents was "no more than taking one of a very small number of obvious starting points (the third embodiment), which would be seen to need a minor change (to get rid of the unattractive extruded form) and to replace it with an obvious form (gathered sheet) supported by the [common general knowledge]."
If the patents had been valid, the court would have found them infringed. The issue on infringement related to the way that power to the single, blade-shaped heater was controlled. The IQOS heater is controlled during periods of draw so as to provide extra power to bring it up to a target temperature. Mr Justice Meade found that this feature of PMI's IQOS device would, if the patents were valid, fall within their claims.
This judgment, concerning two big players in the international tobacco industry both seeking to develop their position in the reduced risk product market, is a significant one commercially and will no doubt therefore be appealed. The proceedings were expedited, in part given parallel proceedings in other jurisdictions (there are proceedings also in Germany and before the European Patent Office) and the imperative of the commercial situation.