EPLAW was formed in 2001 as a non-profit making Association of experienced patent lawyers in the European community with the aim of promoting the equitable and efficacious handling of patent disputes across Europe. This blog gives information about the same.
Nutrition Sciences N.V. v. Noba B.V., District Court The Hague, The Netherlands, 10 April 2019, Case no. ECLI:NL:RBDHA:2019:3424
Nutrition is active in the field of ingredients for live stock feed and alleges that Noba infringes on the Dutch part of its EP 1 294 371 B2 relating to “medium chain fatty acids applicable as antimicrobial agents”.
In a counter claim, Noba attacks the validity of EP 371. This attack is successful. Using the problem-solution approach, the Court comes to the conclusion that EP 371 is not inventive and invalidates the Dutch part of EP 371.
The Court of Milan departed from its previous position and decided that an urgent declaration of non-infringement can be granted even after the alleged infringer commenced marketing its product.
Bisio Progetti S.p.A. (“Bisio”), a company active in the research and development of coffee and instant drink capsules, sought before the Court of Milan an urgent declaration of non-infringement of EP 1472156 (“EP ‘156”) and EP 180832 (“EP ‘832”), both owned by the well-known Societé de Produits Nestlé S.A. (“Nestlé”), with respect to the new version of its capsules (“V3 capsules”).
In its decision published on January 14, 2019, the Court of Milan declared, as an interlocutory matter, that the Italian portions of EP ‘156 and EP ‘832 were partially invalid and held that Bisio’s V3 capsules did not infringe the Italian portions of Nestlé’s patents as so limited.
The Court deeply examined the subsistence of the three requirements for an interim measure to be granted: the interest in action, the prima facie case (so called fumus boni iuris) and the danger in delay (so called periculum in mora).
First, the Court held that Bisio’s interim action was admissible as it aimed at eliminating the “objective state of uncertainty” which was hindering its business decisions as to the marketing of V3 capsules. According to the Court such uncertainty was evidenced by the extensive litigation pending between the parties with respect to the two previous versions of Bisio’s capsules (“V1” and “V2”) and further confirmed by Nestlé’s conducts before and during the urgent proceedings.
In particular, the Court reckoned that: (i) Nestlé didn’t reply to Bisio’s ante litem request to confirm that V3 capsules did not fall within the scope of protection of EP ‘156 and EP ‘832; (ii) even though Nestlé didn’t file a counterclaim seeking a declaration of infringement, its defence was grounded on the alleged infringement of its patents by Bisio’s V3 capsules.
According to the Court both the requirements of fumus boni iuris and periculum in mora were satisfied.
The Court found that the Italian portions of EP ‘156 and EP ‘832 were partially invalid and that Bisio’s V3 capsules did not infringe, neither literally nor by equivalence, the Italian potions of Nestlé’s patents as so limited.
Once excluded literal infringement, the Court ruled out also infringement by equivalence by applying the “triple test”: while Bisio’s V3 capsules have the same function of Nestlé’s (i.e, the opening of the capsules to allow the exit of the drink), they work in a different way due to the use of different technical means -perforating means in Nestlé’s capsules and deforming means in Bisio’s- and thus reach a different result.
As to the urgency requirement, the Court reminded that periculum in mora is an autonomous requirement from interest in the action: the “objective state of uncertainty”, on which the requirement of interest in the action is grounded, is not sufficient in itself to prove also the existence of periculum in mora, which requires a case-by-case evaluation of the urgency to grant the interim measure.
Indeed, according to the dominant Italian case-law, in the context of interim non-infringement proceedings the requirement of periculum in mora is satisfied whenever the “objective state of uncertainty” directly limits and affects the business activities of the claimant.
According to the Court, in the case at stake the urgency requirement was grounded on the need of Bisio to immediately develop its own marketing strategy with regard to V3 capsules and to protect its reputation vis-à-vis its actual and potential customers and its distribution network, which were alarmed by the extensive litigation pending between the parties.
In consideration of the above, the Court held that the urgency requirement subsisted even though Bisio had already started the marketing of V3 capsules. In this respect, the Court departed from its previous position followed also by other Italian courts, according to which the urgency requirement lacks, if the claimant has already begun the marketing of its products. Indeed, until such decision the Court of Milan interpreted this as an evidence that patentee’s conduct has not in fact impaired the claimant’s economic freedom, nor that the outcome of the interim proceedings would in any way influence its business decisions.
However, as the Court noted, the assessment of periculum in mora is a factual evaluation based on the particular circumstances of each case. Therefore, whilst such decision provides some guidance, it is not possible to establish general rules “mechanistically” applicable to all kind of situations.
Indeed, in determining the existence of the urgency requirement even though Bisio had already started marketing the allegedly infringing products, the Court valued the specific circumstances of the case at stake, and in particular:
(i) the fact that the marketing of V3 capsules hadn’t already reached its maximum extension, neither quantitatively, nor qualitatively; and
(ii) that Nestlé had already denounced to Bisio’s distributors the marketing of capsules fully comparable with the new ones, thus potentially harming the company’s reputation.
A copy of the judgment (in Italian) can be read here.
Headnote and summary: Luca Giove and Giulia Pasqualetto, Studio Legale Giove
Ablynx NV & Vrije Universiteit Brussel v VHsquared Limited & Unilever Nederland B.V. & 4 others  EWHC 792 (Pat), 29 March 2019
This judgment of the High Court follows a preliminary hearing to determine if the UK courts have jurisdiction to hear main proceedings.
HHJ Hacon held that the UK courts had exclusive jurisdiction to hear the case under art.24(4) of Brussels I recast despite there being a prima facie case that the relevant agreement had an exclusive jurisdiction clause. An exclusive jurisdiction clause has no legal force if it purports to exclude the exclusive jurisdiction of a national court under art.24(4) and so art.31(2) is not engaged. The claimants successfully argued that the proceedings would be concerned with the validity of UK patents, so the case will proceed in the UK.
The proceedings were brought primarily by the first claimant, Ablynx. The second claimant, VUB, is the patentee for the EP 0 656 946 patent family, consisting of three patents relating to immunoglobulins derived from camelid antibodies (“the Patents”).
One of the Unilever defendant entities had been a licensee of the Patents for the use of the inventions in a defined field called the ‘Reserved Sector’ since 1997. The first defendant, VHsquared, later became a non-exclusive licensee under the Patents in relation to the Reserved Sector. In 2001, Ablynx became a sub-licensee under the patents with the exclusive right to exploit the Patents for certain medical uses outside of the Reserved Sector.
Since 2012 Ablynx has alleged that VHsquared exploited uses of the invention in the field in which Ablynx is the exclusive licensee. VHsquared denied this, leading to litigation in the UK, Netherlands and Belgium. Ablynx named six defendants, VHsquared and five Unilever companies.
The Defendant’s Application
The defendants applied for a declaration that the UK courts had no jurisdiction to hear this case and a stay of the action (pending the outcome of litigation in Belgium). HHJ Hacon refused both the declaration and the stay.
The defendants had stated that if the proceedings were to continue, they intended to allege that the Patents are invalid in the UK. Under art.24(4) of Regulation (EU) 1215/2012 (“Brussels I recast”), this would typically result in the UK courts having exclusive jurisdiction.
However, the defendants argued that this general rule did not apply for two reasons:
1. First, the defendants were licenced to carry out the acts under a licence which granted exclusive jurisdiction to the ‘Court of Brussels’. Under arts.25 and 31(2) of Brussels I recast, the UK courts should stay the proceedings until the Brussels court declares itself not to have jurisdiction (should that happen). Article 24(4) could not, therefore, be engaged.
2. Secondly, the validity of the Patents would form only an incidental part of the proceedings, and so the proceedings are not ‘concerned with’ the validity of the Patents, as required by art.24(4).
Which court decides if Art.24(4) is engaged in the proceedings?
HHJ Hacon considered the interplay of three main provisions of Brussels I recast:
• Under art.24(4), a national court has exclusive jurisdiction over proceedings concerned with the validity of a patent.
• Under art.25(1), if two parties have agreed that a particular court shall have exclusive jurisdiction to settle disputes between them in relation to an agreement, then that court shall have the exclusive jurisdiction to do so.
• Under art.31(2), where a party begins proceedings in a court which is not the court with exclusive jurisdiction under art.25, the court of the country in which the action is started must stay the proceedings until the country with exclusive jurisdiction declares that it has no jurisdiction.
The defendants argued that where an art.25(1) agreement was in place, art.31(2) was engaged even where the proceedings were concerned with a relevant patent, as art.31(2) overrides art.24(4). HHJ Hacon disagreed. In his view, art.25(4) went on to make clear that any agreement which attempted to remove the jurisdiction granted to a court under art.24(4) would have no legal force. The jurisdiction conferred by art.24 is ‘more exclusive’ than that of art.25. Accordingly, art.31(2) is without prejudice to art.24.
Are the proceedings ‘concerned with’ the validity of a patent?
The defendants had argued that art.24(4) was not engaged if the validity of the relevant patent is a peripheral issue to the proceedings. Having reviewed the case law, HHJ Hacon concluded that proceedings were ‘concerned with’ the validity of a patent if, pursuant to an overall assessment, the proceedings are in substance or principally concerned with validity, but not otherwise. He also concluded that the proceedings could not be severed into separate validity and infringement portions, but an overall judgment must be reached about whether they fall within art.24(4).
When considering whether art.24(4) is triggered, this is not to be done by looking just at the pleadings as they stand, but by looking at all of the evidence available and coming to a view on as to the form the proceedings will most likely take at trial, including the relative significance of the likely issues.
Taking into account the usual practice in relation to patent validity proceedings in the UK, and the arguments which are typically run, HHJ Hacon concluded that there was no real doubt that if the proceedings progress to trial they will be concerned with the validity of the Patents within the meaning of art.24(4). Art.24(4) was therefore engaged.
Relevant Agreements under Art 25 and Art 31(2)
In case he was wrong about art.24(4) being engaged, HHJ Hacon also considered the position under arts.25 and 31(2). HHJ Hacon had to consider two legal questions in relation to art.31(2). First, whether in order to rely on this article a party merely has to assert that there is an agreement under art.25, or if there is a need to prove this to some higher standard (and, if yes, to what standard). Secondly, is the court before which the stay is sought entitled to consider the validity and true effect of the alleged agreement relied on.
HHJ concluded that a party seeking a stay has to satisfy the court that they have a prima facie case that there is an agreement granting jurisdiction to courts of another member state, that it is valid and that it covers the relevant proceedings. If this low threshold is met, then the court must stay the proceedings and cede jurisdiction to the chosen forum.
Having reviewed the agreements, HHJ Hacon found that the defendants had at least a prima facie case that the agreement would have conferred exclusive jurisdiction over the proceedings on the courts of Brussels.
Defendants’ Request for a Stay
A separate request for the proceedings to be stayed under the Arbitration Act 1966 was rejected on the grounds that the clause pointed to in the agreements did not cover these proceedings. The defendants also tried to argue that the claimants were estopped from bringing these proceedings because the previous Dutch action had involved the same parties, but this was dismissed on the grounds that the proceedings related to different patents and products.
TQ Delta, LLC v ZyXEL Communications Limited & Anor  EWHC 745 (Pat), 18 March 2019
In this judgment Mr Justice Carr granted an injunction against ZyXEL, following on from his earlier decision that TQ Delta’s EP (UK) 1,453,268 (“the 268 Patent”) was valid, essential and infringed. See our previous headnote here.
ZyXEL submitted that an injunction would be disproportionate given that the 268 Patent will expire in a just a few months (on 25 June 2019), and before any RAND licence is settled by the Court, they did not seek such a licence. Mr Justice Carr accepted TQ Delta’s arguments that this was a case of “hold out”, whereby ZyXEL had sought to postpone any possible payment for as long as possible whilst infringing standards essential patents with a view to exhausting the resources and will of the patentee.
The judge summarised his reasoning as follows:
“They have not paid any royalties to TQ Delta (or any other patent holder) in respect of any standards essential patent. Of the two patents from TQ Delta’s portfolio which have now been litigated in this jurisdiction, infringement of the ‘268 Patent has been established, and has been continuing for many years. ZyXEL have blown hot and cold as to whether they will accept whatever licence is considered by the Court to be RAND. They have refused to ‘agree to submit to the outcome of an appropriate [RAND] determination’ and yet have claimed the benefit of the RAND undertaking.”
As such it would be unjust to deprive the patentee of injunctive relief in these particular circumstances. In the judge’s view it would be wrong in principle to effectively provide a compulsory licence from the court where ZyXEL had elected not to enforce the RAND undertaking in respect of the 286 Patent.
Refusing to grant a stay or carve-out from the injunction that would enable ZyXEL to fulfil pending orders, the judge stated that “[w]ithout sight of the contracts, and the full terms on which ZyXEL have agreed to supply the relevant goods, it is not possible to assess the extent of any prejudice to ZyXEL if these orders are not fulfilled.”
Mr Justice Carr also refused permission to appeal, both in respect of the technical trial and the grant of the injunction. For the technical trial, he rejected a ground of appeal that the term “frame”, the interpretation of which was central to the finding that the 268 Patent was valid, was a term of the art. He also held that as the decision on the 268 Patent was “a standard case of obviousness which required a multifactorial value judgment” an appeal would not have any realistic prospects of success.
Regarding his refusal of permission to appeal from the grant of the injunction, he stated:
“I consider that it would be wrong to grant permission, the Court of Appeal already having indicated at  –  of Unwired Planet v Huawei the correct general principles. I also bear in mind that were I to refuse injunctive relief it would amount to a compulsory licence of the patentee’s exclusive rights and deprive it of meaningful protection in circumstances where the Defendants have elected not to enforce the RAND undertaking. Whether to grant an injunction in these circumstances is an exercise of discretion, from which it is difficult to appeal. For those reasons I do not consider that an appeal would have any real prospect of success and I refuse permission to appeal.”
Exceptions to patentability – Plant products produced by essentially biological processes – Referral G 3/19
The President of the EPO has referred the following points of law to the Enlarged Board of Appeal:
1. Having regard to Article 164(2) EPC, can the meaning and scope of Article 53 EPC be clarified in the Implementing Regulations to the EPC without this clarification being a priori limited by the interpretation of said Article given in an earlier decision of the Boards of Appeal or the Enlarged Board of Appeal?
2. If the answer to question 1 is yes, is the exclusion from patentability of plants and animals exclusively obtained by means of an essentially biological process pursuant to Rule 28(2) EPC in conformity with Article 53(b) EPC which neither explicitly excludes nor explicitly allows said subject-matter?
When the President of the EPO announced its intention to refer a point of law to the Enlarged Board of Appeal (EBA) following decision T 1063/18 on the patentability of products of essentially biological processes, observers speculated how the requirement of Article 112 (1) (b) EPC could be fulfilled that “two Boards of Appeal have given different decisions on that question.” Now the secret is unlocked, the referral was filed and is available on the EPO’s website.
Question 1 seems to be intended as the entrance door for question 2. Question 1 is concerned with a methodological question, i.e. how to assess whether a provision of the Implementing Regulations is in conflict with a provision of the Convention when applying Article 164 (2) EPC. T 1063/18 felt bound by the Enlarged Board’s interpretation of Article 53 b) in the cases Tomatoes II and Broccoli II and the referral suggests that there are divergent decisions in this respect, referring to decisions acknowledging the Administrative Council’s competence to give “a more detailed interpretation of the meaning of provisions of the Convention.”
The referral submits that the admissibility of question 2 should follow from the admissibility of question 1 since the compliance of Rule 28(2) EPC with Article 53(b) EPC depends on whether the earlier interpretation of said Article in decisions Broccoli II and Tomatoes II is seen as precluding the Administrative Council’s clarification of Article 53(b) EPC. Whereas the relation between the two questions can hardly be contested, it is also apparent that the referral does not present decisions of the Boards of Appeal which have given different answers on Question 2.
This may be the reason for the referral’s alternative approach for the admissibility of Question 2: Application of Article 112 (1) b) EPC by analogy. Analogy has been accepted in the case law of the EBA as a legitimate means of developing the law. However, the EBA has been reluctant in applying this legal tool when the jurisdictional structure of the European patent system was at stake.
In G 1/97 – Request with a view to revision/ETA, the EBA observed that in a codified legal system such as the EPC, the judge cannot simply decide, as the need arises, to substitute himself for the legislator, who remains the primary source of law. The scope of the competence of the President of the EPO to refer points of law to the EBA is an eminently political question touching the principle of separation of powers. In G 3/08 – Programs for computers, the EBA speaks of the exhaustive list of admissibility criteria for a referral and observes that it is time for the legislator to take over when judiciary-driven legal development meets its limits.
ArcelorMittal France v. Tata Steel IJmuiden B.V., Court of Appeal The Hague, 26 March 2019, Case No. ECLI:NL:GHDHA:2019:575
ArcelorMittal was the holder of European patent EP 2 242 863 B1 (“EP 863″), which relates to a “process for manufacturing stamped products, and stamped products prepared from the same”.
Tata Steel and other parties initiated opposition proceedings against the grant of EP 863 on 7 October 2014. The opposition division revoked EP 863 on 28 March 2017. ArcelorMittal appealed against this decision, which was rejected by the Technical Boards of Appeal on 8 November 2018.
Separately to the opposition proceedings, Tata Steel also initiated proceedings before the District Court of The Hague. Tata Steel requested the District Court, amongst others, to invalidate EP 863 as well as to order ArcelorMittal to pay the full costs of the proceedings pursuant to Article 1019h Dutch Code of Civil Proceedings (“DCCP”).
ArcelorMittal, on the basis of Article 83(4) of the Dutch Patents Act, requested the District Court to stay the proceedings until a final decision has been delivered in the opposition proceedings (“Motion 1”). In a decision on this procedural issue the District Court rejected Motion 1 as Tata Steel had argued that it would like to bring a potentially infringing product to the market. For this reason the District Court decided not to stay the proceedings and ordered ArcelorMittal to deliver a statement of defence.
In its statement of defence ArcelorMittal again requested to stay the proceedings. In addition and because Tata Steel had indicated that its potentially infringing product prevented a stay, ArcelorMittal also requested the District Court, pursuant to Article 223 DCCP, that Tata Steel should be ordered to inform ArcelorMittal’s counsel: (1) about all the properties of the products which Tata Steel was considering to manufacture and bring to the market, as far as they could fall within the scope of protection of EP 863, and (2) on a monthly basis on all envisaged, intended and/or adopted changes to those properties (“Motion 2”).
ArcelorMittal based Motion 2 on the fact that Tata Steel itself indicated that it was considering to bring a new product to the market, without specifying it. According to ArcelorMittal, the fact that the District Court considered this to be of sufficient interest not to stay the proceedings meant that the new product of Tata Steel should be considered to be a potentially infringing product. As a patent holder, ArcelorMittal therefore has a legitimate interest to receive further information on this product, on the basis of which ArcelorMittal would be able to assess whether or not it would like to enforce its patent.
On 13 September 2017, so before the Technical Boards of Appeal had decided on the appeal in the opposition proceedings, the District Court ruled that EP 863 is indeed invalid. The District Court therefore rejected Motion 2. The District Court, however, did not award full legal costs pursuant to article 1019h DCCP, as it qualified the proceedings as pure invalidity proceedings.
ArcelorMittal appealed against the judgment of the District Court of The Hague and Tata Steel lodged a cross-appeal to set aside the judgment of the District Court in order to award full legal costs pursuant to article 1019h DCCP.
During the appeal proceedings, however, the Technical Boards of Appeal denied the appeal in opposition proceedings, for which reason EP 863 was revoked. As a result of this, the parties agreed that ArcelorMittal no longer had an interest in its appeal. The Court of Appeal thus rejected ArcelorMittal’s appeal.
The only question that remained in appeal, was whether or not these proceedings allow for a full compensation of legal costs pursuant to Article 1019h DCCP.
Firstly, the Court of Appeal cites the Bericap decision of the CJEU (C-180/11 of 15 November 2012). The Court of Appeal then rules that the proceedings between Tata Steel and ArcelorMittal indeed qualifies as pure invalidity proceedings. After all, Invalidity proceedings are made available to a party such as Tata Steel which, without invoking its own intellectual property right, acts against the protection that ArcelorMittal could derive from EP 863. The invalidity proceedings are not intended to protect holders of intellectual property rights as referred to in the Enforcement Directive (Directive 2004/48/EC).
Under certain circumstances full compensation of legal costs may nevertheless be awarded, in the event that the invalidity proceedings are to be qualified as a defence against imminent enforcement by the holder. However, this is not the case in the present proceedings.
In order to qualify invalidity proceedings as an advanced defence against imminent enforcement, clear indications must be present that the IP holder actually has intentions to take enforcement action(s). There are no such indications in this case. The requests of ArcelorMittal to obtain information regarding the potentially infringing product (Motion 2) do not make this different. Contrary to what Tata Steel argues, such procedural requests should not be regarded as enforcement activities within the meaning of the Enforcement Directive, let alone that the main proceedings come to fall within the scope of Article 1019 DCCP as well.
The Court of Appeal therefore holds that ArcelorMittal has not enforced EP 863 by filing Motion 2. With Motion 2, ArcelorMittal only wishes to obtain information in order to be able to assess whether enforcement in the future is possible. Without that information, ArcelorMittal cannot determine whether enforcement would be possible, necessary and promising. After all, it was not clear to ArcelorMittal whether there is actually a product of Tata Steel and if indeed there is such a product, what the specifications of such product are.
Tata Steel’s argument that Motion 2 is essentially comparable to a claim to get access to documents pursuant to Article 843a DCCP does not hold. That is not the criterion. The criterion is to determine whether any enforcement actions within the meaning of Article 1019 DCCP and the Enforcement Directive have taken place or are imminent. Motion 2 cannot be regarded as an act of enforcement.
Finally, Tata Steel invoked Article 6 ECHR and Article 47 Charter of Fundamental Rights of the EU: a fair trial and more specific the principle of equality of arms. The Court of Appeal does not accept this argument. There are substantial differences between enforcement proceedings and invalidity proceedings. The legislator has chosen to introduce a specific legal costs regime for enforcement proceedings, to ensure a high, equivalent and homogeneous level of protection in the internal market in accordance with Art. 17 paragraph 2 of the Charter, by introducing a deterrent effect for enforcement proceedings (cf. also CJEU United Video). That does not automatically apply to pure invalidity proceedings.
The decision of the Court of Appeal (in Dutch) can be read here.
Headnote: Eelco Bergsma and Misja Boeken, Taylor Wessing
Contracting States discussed next steps regarding the patentability of plants obtained by essentially biological processes – T 1063/18 referred to Enlarged Board of Appeal
During last meeting of the Administrative Council it was decided that T 1063/18 (previously discussed here on the EPLAW Patent Blog) is to be refereed to the Enlarged Board of Appeal in an attempt to end the legal uncertainty surrounding the topic of the patentability of plants exclusively obtained by essentially biological processes.
From today’s press release:
“In the 159th meeting of the Administrative Council, the representatives of the 38 EPO Contracting States together with the European Patent Office discussed the need to find a solution in the short term following the decision T 1063/18.
“The Contracting States expressed their concerns with regard to the legal uncertainty caused by decision T 1063/18. The President of the EPO expressed his view that a President’s referral of the case to the Enlarged Board of Appeal is justified and necessary. The aim is to obtain an opinion from the Enlarged Board of Appeal on the patentability of plants exclusively obtained by essentially biological processes, hereby considering recent legal developments (interpretations and statements of the European Commission, the EU Council, European Parliament and EPO’s Administrative Council on the interpretation of the European Patent Convention and the EU Bio-Directive, all of them concluding that there should be no patentability in these cases).
“The President’s proposal received broad and overwhelming support from almost all Contracting States. President António Campinos announced that the EPO will proceed swiftly to submit the referral. The EPO endeavours to restore legal certainty fully and speedily in the interest of the users of the European patent system and the general public.”
Actavis Group PTC EHF and others (Respondents) v ICOS Corporation and another (Appellants)  UKSC 15 – 27 March 2019
The UK Supreme Court has agreed with the Court of Appeal that a dosing regimen patent was invalid for lack of inventive step.
The case concerns EP 1,173,181 (“EP’181”) owned by ICOS and exclusively licensed to Eli Lilly (together referred to as “Lilly”) for tadalafil (marketed by Lilly as Cialis) for the treatment of erectile dysfunction (“ED”). The claims of EP’181 in question were both Swiss-form and EPC 2000 claims for the dosing regimen of 1 to 5mg of tadalafil per day for the treatment of ED.
At first instance Birss J had found EP’181 to be valid and infringed. The Court of Appeal reversed the decision, finding EP’181 to be invalid for lack of inventive step. In their opinion, it would have been obvious to the skilled team to arrive at the surprisingly low (but effective) dose using routine dose ranging studies.
Lilly appealed the decision, leading to the Supreme Court reviewing the English court’s approach to inventive step, in particular the “obvious to try” test.
Common General Knowledge and the Prior Art
It was of central importance to Actavis’ case that the development of new drugs follows a well-established four phase programme of pre-clinical and clinical trials.
The key prior art document, “Daugan”, disclosed that doses of tadalafil would generally be in the range of from 0.5 to 800mg daily for the average patient.
Obvious to try?
Before Birss J, Actavis had submitted that in light of Daugan it would be obvious at the priority date for the notional skilled team to take tadalafil forward into routine pre-clinical and clinical trials as an oral treatment for ED. While costly and time-consuming, the trials would involve nothing more than routine work and no inventive effort was required. In the course of the programme to establish tadalafil as a safe and effective treatment for ED, a 5mg dose would be one of the doses used as it was obvious to determine the lowest dose at which the drug was effective. Standard dose-ranging studies would lead to the claims in EP’181.
Lilly’s response was that the discovery of the dosage regime was the result of costly and unpredictable research which was entitled to patent protection. Secondly, at the start of the programme it was not obvious to try a low dose such as 5mg per day as there was no reason to think that tadalafil would be effective at that dosage.
Lord Hodge, giving the only judgment with whom the other Justices (Lady Hale, Lord Kerr, Lord Sumption and Lord Briggs) agreed, ran through 10 factors which the court should consider when assessing obviousness in such a case:
1. Whether at the priority date something was “obvious to try”, in other words whether it was obvious to undertake a specific piece of research which had a reasonable or fair prospect of success.
2. The routine nature of the research and whether there was any established practice of following such research through to a particular point.
3. The burden and cost of the research programme.
4. The need for and the nature of the value judgments which the skilled team would have in the course of the research programme.
5. The existence of alternative or multiple paths of research as these will often be an indicator that the invention is not obvious.
6. The motive of the skilled team.
7. The fact that the results of research which the inventor actually carried out are unexpected or surprising as this may point to an inventive step.
8. The courts have repeatedly cautioned against the use of hindsight.
9. Whether a feature of a claimed invention is an added benefit in a context in which the claimed innovation is obvious for another purpose.
10. The nature of the invention.
The Supreme Court concluded that the skilled team’s task in this case was to implement Daugan. Their target would be to ascertain the appropriate dose, which would usually be the lowest effective dose. The pre-clinical and clinical trials involved routine procedures and normally progressed in Phase IIb to the discovery of the dose-response relationship.
Birss J’s findings of what would have been the sequence of the tests, included the finding that having found a therapeutic plateau, the skilled team would be very likely to test lower doses and so come upon the dosage regime in question.
The Supreme Court found that the lack of an expectation of efficacy at a 5mg dose is a factor of little weight if, as was found, the skilled team would be very likely to study such a dose in the search for a dose response relationship.
Further, the Court of Appeal was entitled to treat the judge’s failure to appreciate the logical consequences of his finding, namely that it was very likely that the skilled team would continue the testing – as an error of principle which allowed an appellate court to carry out its own evaluation. As such, the Supreme Court was satisfied that the Court of Appeal was entitled to interfere with Birss J’s assessment of inventive step and to hold that EP’181 was invalid for lack of inventive step.
Higher Regional Court Düsseldorf, 15 March 2019, docket no. I-2 U 62/18 – Ezetimibe/Simvastatin
On March 15, 2019 the Higher Regional Court Düsseldorf finally dismissed MSD’s request for a preliminary injunction based on their SPC for ezetimibe and simvastatin and thereby confirmed the result of the first instance decision of the Regional Court Düsseldorf of October 2018.
The facts and background of the case, including the course of the proceedings before the Regional Court Düsseldorf, have already been reported on the EPLAW blog previously here.
In the appeal decision, the Higher Regional Court provides a detailed reasoning, particularly with respect to art. 3c) of Regulation (EC) No. 469/2009 (“SPC-Regulation”) which provides helpful guidance for future litigation on SPCs.
Here is an overview of the key findings:
Applicable Standard The CJEU decisions in re Actavis/Sanofi (C-443/12) and Actavis/Boehringer (C-577/13) are decisive for the assessment of art. 3c) of the SPC-Regulation. The Higher Regional Court stresses that all decisions by the CJEU are binding for the national courts in order to ensure a uniform application of the EU-provisions. This is particularly true if the facts in the case in dispute are sufficiently similar to the already decided scenarios. Therefore, it is irrelevant whether the parties or the national Courts may have a different view.
In this context, the Higher Regional Court also clarifies that the decision in re Teva/Gilead (C-121/17) is irrelevant for the interpretation of art. 3c) of the SPC-Regulation. This decision only relates to art. 3a) of the SPC-Regulation and a national Court may not disregard the absolute binding effect of CJEU decisions (particularly the relevant Actavis-decisions).
Application of Actavis/Sanofi and Actavis/Boehringer
It follows from the Actavis-decisions that the mere fact that a combination is encompassed by the claims of the basic patent is not sufficient for fulfilling the requirements of art. 3c) of the SPC-Regulation. However, the Higher Regional Court points out that the CJEU has not named clear criteria with which one can determine whether several products can be identified. Therefore, the Higher Regional Court uses clues taken from the facts and findings of the CJEU Actavis-cases:
• To ascertain whether one or two SPCs can be granted, it needs to be determined how many inventions the basic patent contains. If, as in the Actavis-cases, the combination product is not more than a mere modification of the inventive mono product, only one SPC can be granted (namely for the mono product, which represents the relevant technical contribution).
• In light of this, a mere additive effect would not be sufficient to grant a second SPC on the combination product (cf. Actavis/Sanofi).
• However, according to the Higher Regional Court, unexpected synergistic effects or unexpected additive therapy effects including lesser side effects or surprisingly lower side effects could render the combination to be a distinct product (invention) of the basic patent – with the consequence of a second SPC.
The Higher Regional Court then indicates that in its view the existence of one or several inventions should be determined on the basis of the basic patent specification, i.e. what the skilled person would identify as the invention(s) in view of the claims, specification and drawings of the basic patent.
Combination of ezetimibe and simvastatin
The Higher Regional Court concluded that an SPC for the combination of ezetimibe and simvastatin could not be granted because the combination is already the subject of the previous SPC for ezetimibe (art. 3 c) of the SPC Regulation).
In particular, the Higher Regional Court stresses that the case at hand is quite similar to Actavis/Sanofi, for which the CJEU already rejected a second SPC.
According to the appeal decision, the basic patent would not include sufficient clues that the combination of ezetimibe and simvastatin provides unpredictable benefits at the priority date, which could indicate that the combination is more than just an embodiment of the ezetimibe-invention. Rather, the combination of ezetimibe and simvastatin would only provide a mere additive effect. This would even be shown by the current studies, which were the basis for the MA grant. What is more, the Higher Regional Court determines that it is a “technical triviality” that the side effects are lesser, if the dose of an ingredient with high side effects is reduced (Simvastatin) and replaced by an active ingredient with lower side effects (Ezetimibe).
In addition, the Higher Regional Court was not persuaded by deviating decisions in other jurisdictions. Rather, the Court holds that these foreign decisions are already not based on a correct legal starting point, because the strict binding to the preliminary rulings already handed down by the CJEU in the Actavis/Sanofi and Actavis/Boehringer cases is disregarded.
Prospects for future SPC litigation
• A preliminary injunction only seems realistic, where the case in dispute deviates so greatly from the cases already negatively decided by the CJEU that a different assessment cannot reliably be presumed. The Higher Regional Court Düsseldorf made quite clear that there can be no interim relief that anticipates the main proceedings where the legal validity of the asserted property right is uncertain, which must be presumed without a preliminary ruling by the CJEU.
• There may be further referrals to the CJEU in the near future. Notably, even the Higher Regional Court indicates that it expects the CJEU to clarify criteria as to when one can assume a basic patent to contain several products or only one product.
A copy of the judgment can be found here (German original) and here (English translation).
Reported by Dr. Anna Wolters-Höhne and Dr. Annika Schneider, LL.M. both Bird & Bird LLP, who represented one of the generics.
ATK Race S.r.l. (“ATK Race”), the owner of the European patent no. EP 2.345.463 (“EP ‘463”), concerning a heel piece for an alpine ski attachment, brought an infringement action before the Court of Genoa against Fritschi AG Swiss Binfings (“Fritschi”), Nuovi Orizzonti s.a.s. of Rizzo Riccardo & C. (“Nuovi Orizzonti”) and Socrep S.r.l. (“Socrep”), which were, respectively, the manufacturer, the retailer and the supplier of the allegedly infringing product.
In its decision No. 3192/2018, published on 18th December 2018, the Court of Genoa held that the patent was valid and infringed by equivalents.
The Court then examined ATK Race’s claims for reimbursement of damages and loss of profits, disgorgement of profits and non-economic damages.
As to the criteria for the relevant quantification of the profits made by the infringers, ATK Race complained that the Court had deducted from their profits the research and development costs relating to the infringing product. The Court rejected the claimant’s complaint, arguing that where, as in the case at stake, it is not found literal infringement, but only infringement by equivalents in relation to an infringing product which possesses also certain original “creative” features, such costs shall be considered in calculating the unfair profits accrued by the infringer.
Once established the criteria for determining the consequences of the infringement, the Court reminded that the right to the reimbursement of damages arises only in cases of wilful misconduct or negligence.
On that premise, the Court ordered both damage compensation and disgorgement of profits only to Fritschi, especially considering that, unlike the other two defendants, Fritschi, being the manufacturer of the infringing product, certainly knew its constructive characteristics, including the fact that it incorporated the patented invention.
On the contrary, in the Court’s view it could not be proved neither the willful misconduct, nor the negligence of the other two defendants. According to the Court, they were mere intermediaries in the marketing of the infringing product, and they did not have the expertise necessary to understand the inner workings of the product, which in fact externally appeared rather dissimilar to the patented one.
However, ATK Race objected that the disgorgement of profits could nevertheless be ordered to Nuovi Orizzonti and Socrep, since, unlike damage compensation, the restitution of unfair profits does not necessarily require the assessment of the infringer’s subjective element.
The Court acknowledged that the principle invoked by the claimant was in line with many and influential courts’ decisions and doctrinal opinions, which argue that:
i) Article 13 of the Enforcement Directive 2004/48/CE does not necessarily require the negligence of the infringer to order the recovery of profits;
ii) Article 125(3) of the Italian Intellectual Property Code (IPC) provides that the disgorgement of profits can be awarded “in any case”, which, in their view, shall mean “regardless of the infringer’s fault”;
iii) the wording used by our national legislator – i.e., “restituzione degli utili” (disgorgement of profits)- appears to denote by itself the essentially objective restoration function of the institution.
However, the Court ruled the case in stark contrast with the interpretation of Article 125(3) IPC established by prevailing Italian case law and doctrine.
As to the Enforcement Directive, the Court noted that the possibility to award the disgorgement of profits even in the absence of the infringer’s fault is merely an option granted to Member States, and not a mandatory provision.
Besides, Article 125 IPC strictly refers to the criteria for the quantification of the amount that the right holder is entitled to obtain. Thus for the Court it is difficult to see in the aside “in any event” of Article 125(3) IPC a reference to the constitutive elements of the infringing activity, and to the infringer’s subjective element. For the Court, it is much more logical to link the aside of Article 125(3) to Article 125(1) and (2), and thus argue that the disgorgement of profits can be claimed whether it is made an “analytical” quantification pursuant to Article 125(1), or a “global” quantification pursuant to Article 125(2).
The Court also weighed the fact that if the legislator had wanted to introduce such a revolutionary element in our system, by creating a case of strict liability, it would have done it explicitly.
Lastly, according to the Court, the wording “restituzione degli utili” (disgorgement of profits) shall not be regarded as an institution conceptually and normatively distinct from the liquidation of damages, which, pursuant to Article 125(1) IPC, has not a purely compensatory purpose and expressly includes also the profits achieved by the infringer.
Therefore, the Court established the principle that, according to Article 125 IPC, the disgorgement of profits, exactly as the reimbursement of damages, cannot be awarded regardless of the assessment of the infringer’s fault, which, in the case at stake, were not found in respect to the retailer and the distributor.
A copy of the decision (in Italian) can be read here.
Headnote and summary: Luca Giove and Giulia Pasqualetto, Studio Legale Giove