Review of Patent Cases in the English Courts in by Brian Cordery, Ewan Nettleton, Sam Tuxford and Lorna Ballington

Transcription

1 Review of Patent Cases in the English Courts in 2008 by Brian Cordery, Ewan Nettleton, Sam Tuxford and Lorna Ballington

2 2 Quotation of the Year:... It is hard to see how the notion that something is worth trying or might have some effect can be described as an invention in respect of which anyone would be entitled to a monopoly. It is therefore not surprising that the test for obviousness which the trial judge devised for such an invention was whether it was obvious to try it without any expectation of success. This oxymoronic concept has, so far as I know, no precedent in the law of patents. Per Lord Hoffmann, Conor v Angiotech 1. 1 Per Lord Hoffmann in Conor Medsystems Inc v (1) Angiotech Pharmaceuticals Inc (2) British Columbia University [2008] UKHL 49.

3 Review of Patent Cases in the English Courts in Index Introduction 2 Construction/Infringement 2 Indirect Infringement 3 Validity 3 Novelty 3 Obviousness 5 Insufficiency 6 Patentability 7 Industrial Application 8 Added Matter 9 SPC Regulation 10 Amendment 10 Entitlement 11 Procedural Issues 11 Interim Injunctions and other Interim Relief 11 Damages for Groundless Threats 13 Declaratory Relief 13 Costs 13 Stays of English Litigation pending EPO Proceedings 14 Res Judicata and Estoppels 15 Jurisdiction 15 Appeals 16 Provision of Information 16 Independently Valid Claims 16 Experts 17 Experiments 17 Community Patent/EPLA 18 Looking ahead 2009 and beyond 19 The Authors 20

4 2 Introduction 2008 was another busy year for the English Patents Courts and for higher courts hearing appeals in patent cases. There were no fewer than 85 decisions handed down in relation to some of the most contentious areas of patent law including patentability of software, insufficiency and obviousness. In terms of the number of decisions rendered, 2008 was the busiest year of the decade so far. Of particular interest to patent practitioners were the following developments: The assessment of inventive step by the House of Lords in Conor v Angiotech 2 ; was universally respected and much admired for his razorsharp mind. Among many of his notable achievements was the streamlining of Patents Court procedure which he undertook (together with Jacob and Pumfrey JJ) in the late 1990s and which minimised the impact of the introduction of the Civil Procedure Rules in that Court. As with previous years, this article attempts to summarise the decisions of the English Patents Court, the Patents County Court and higher courts on a topic-by-topic basis. The authors have focused on the cases which contain the most important developments and, given the volume of decisions this year, it has not been possible to mention every case in this condensed review. The clarification of the scope of insufficiency by the Court of Appeal (bolstered by Lord Hoffmann) in Generics v Lundbeck 3 ; The first modern case addressing the principles involved in calculating the compensation payable under a cross-undertaking where the patentee had obtained an interim injunction but subsequently lost at trial in Servier v Apotex 4 ; What is thought to be the first English decision on the validity of a gene sequence patent in Eli Lilly v HGS 5 ; The appointment of Richard Arnold QC as a Patents Court Judge in October Having adjudicated a number of important cases as a Deputy, Arnold J has already produced several robust and well-reasoned judgments as a High Court Judge. As Henry Carr QC observed in his welcome speech for Arnold J this is the job that you were always destined to do. On a sadder note, the former Patents Court Judge, Sir Hugh Laddie, who had remained very active in the field of intellectual property since his resignation from the Bench, particularly as Chair of Intellectual Property Law at University College London, passed away in November 2008 having been unwell for some time. Like Pumfrey LJ, who died last year, Sir Hugh will be much missed. Not afraid to court controversy in the interests of justice, he Construction/Infringement In line with other decisions from the last few years, the 2008 cases where construction was considered invariably applied the overriding principle from Kirin Amgen 6. For the most part, there was no mention of the Improver or Protocol questions 7, which in the authors experience, tend no longer to be applied as part of English patent law. It is perhaps also significant that in many of the cases, the Judges did not feel the need to set out the longer summary of the construction principles Amgen approved 8. This may be an indication that the Courts are now comfortable with what is required and will simply apply the overriding principle of construction asking what the skilled person would have understood the patentee to be using the language of the claim to mean outright. An example of this direct application of the Amgen principle was the case of Ancon v ACS Stainless Steel Fixings 9, in which Ancon alleged infringement of its patent for a bolt with a generally elliptical cone shape. ACS product was neither cone shaped nor elliptical but achieved the same resulting effect. Relying on Amgen s emphasis of the importance of the language used in the claim, ACS argued that as the generally elliptical cone shape was a defining feature of Ancon s claim, they did not infringe. Patten J agreed and found ACS product to be noninfringing. This important illustration, from the mechanical field, of the approach to construction serves to highlight 2 See Footnote 1 ante. 3 Decision of Court of Appeal of 10 April, [2008] EWCA Civ Decision of Norris J of 9 October, [2008] EWHC 2347 (Ch). 5 Decision of Kitchin J of 31 July, [2008] EWHC 1903 (Pat). 6 [2005] RPC 9. 7 See e.g. Wheatley v Drillsafe [2001] RPC 7. 8 As for example enunciated by Pumfrey J in Halliburton v Smith [2005] EWHC 1623 (Pat). 9 Decision of Patten J of 21 October, [2008] EWHC 2489 (Pat).

5 Review of Patent Cases in the English Courts in Validity the differences between the old Improver 10 test and the new Amgen approach, and the increased importance of the language of the claims. An interesting minor point on construction arose in Actavis v Janssen 11. This case is discussed in more detail below in the section on novelty but it is worth noting here that Floyd J was prepared to recognise as a valuable canon of construction...but not a rigid rule the notion that the Court should not, if it can help it, arrive at a construction of a claim which has the result that the claim will read on to the prior art referred to in the patent. The principal cited authorities for this proposition were Beloit v Valmet 12 and Ultraframe v Eurocell 13. Indirect Infringement pursuant to section 60(2) of the Patents Act 1977 The claims in Qualcomm v Nokia 14 concerned an apparatus and method for reducing power consumption in a mobile phone. As is often the case for patents in this field, the claims described the various elements of the claimed system (mobile phones and base stations) by reference to their function (e.g. system for communicating at periodic intervals (and thereby saving power by avoiding continuous transmission)) rather than the specific elements as such. When such language is used, the key question for assessing infringement under section 60(2) is often whether the system in question is suitable for use in the way claimed. If such a system requires physical modification before it can be used in the manner contemplated by the patent then prima facie it is not suitable for the use and does not infringe. Although it was common ground that the Nokia s phones working in the GSM/GPRS network (i.e. a 2G network) did not in fact operate as claimed, the GSM/ GPRS Technical Standard provided for the phones and network to operate as claimed. Nokia s phones were therefore suitable for infringing use having been set up for operating in the manner claimed. Hence, Nokia s supply of mobile phones was found to amount to the supply of essential means for operating a system falling within the claims of the patent. However, Qualcomm s victory on this issue may be regarded as pyrrhic as Nokia successfully invalidated the two patents in suit. Novelty Actavis v Merck 15 provided the Court of Appeal with the opportunity to address the dichotomy between UK and EPO law in relation to second medical use claims and in particular the situation where the alleged invention lies purely in the novel dosage regime for a known drug. The case concerned the drug finasteride. At the priority date of the patent in suit, finasteride had been used in the treatment of androgenic alopecia with a daily dose of 5mg or more. The patent in suit claimed a dosage regime for the treatment of androgenic alopecia of about 0.05mg to 1.0mg, i.e. at least five times lower than the previous dosage regime. At first instance, Warren J had found that the patent was not obvious but that he was bound by the decision of the Court of Appeal in BMS v Baker Norton 16 to hold the patent anticipated and unpatentable as a method of treatment pursuant to section 2(6), Patents Act On appeal, Jacob LJ noted that the EPO s Technical Board of Appeal in Genentech 17 had considered and expressly permitted claims concerned with novel dosage regimes for a known drug. He then subjected the judgments of the panel of the Court of Appeal in BMS to close analysis and held that the ratio of that case was narrower than the trial Judge had concluded. On this basis, Jacob LJ considered that the rule in Young v Bristol Aeroplane 18 (which obliges the Court of Appeal to follow the ratio of previous Court of Appeal cases) did not apply and that the Genentech approach should be followed. Separately from concluding that the ratio of BMS was not the same as the present appeal, Jacob LJ also concluded that there was a limited exception to the rule in Young, namely that the Court of Appeal should be free (but not bound) to depart from the ratio of its own earlier decision if it was satisfied that the EPO Boards of Appeal have formed a settled view which is inconsistent with that earlier decision. Having applied Genentech, and having considered that the trial Judge had not erred in principle by finding the patent inventive, the order for the revocation of the patent was rescinded [1990] FSR Decision of Floyd J of 30 June, [2008] EWHC 1422 (Pat). 12 [1995] RPC [2005] RPC Decision of Floyd J of 3 March, [2008] EWHC 329 (Pat). 15 Decision of Court of Appeal of 21 May, [2008] EWCA Civ [2001] RPC T1020/03, [2006] EPOR 9 (EPO (Legal Board of Appeal)). 18 (1944) KB 718 CA. 19 Many readers will already know that the issue of dosage regime patents was referred to the Enlarged Board of Appeal in 2008 in the Kos Life Sciences case (T1319/04 (pending as G2/08)). A decision from the EBA could be expected in late 2009 or 2010 and should serve to provide clarity for the English Court as well as the EPO.

6 4 As well as second medical use claims, the arguments raised by the patentee in Actavis v Janssen 20 provided Floyd J with the opportunity to consider the scope of claims for an alleged new use of a known product more generally, as laid down by the Enlarged Board of Appeal in Mobil/Friction reducing additive 21, as well as the standard of proof required to succeed on an allegation of anticipation by inevitable result. The patent in suit concerned nebivolol, which is used in the treatment of high blood pressure. The principal claim covered the use of one of a specific pair of mirror-image molecules or enantiomers as a potentiator for other drugs for treating high blood pressure (i.e. for improving the effect of other agents). The prior art patent relied on by Actavis disclosed as an example the enantiomers claimed in the patent (together with another pair of stereoisomers). It also stated that the compounds taught by the patent were useful in the treatment of high blood pressure. Although there was no evidence that the isomers in the prior art would have the potentiating effect described in the patent, the Judge held that it was necessary to consider what the inevitable result of working the prior art would have been only on the balance of probabilities, rather than according to some quasi-criminal standard. On the evidence before him, the Judge concluded that the inevitable result of carrying out the teaching of the prior art patent example was the potentiation of the other blood pressure-reducing isomers by the potentiating enantiomer. The Judge also held that the patentee could not rely on Mobil to save the patent in suit from anticipation. He considered that the ultimate purpose of the teaching of the patent and prior art, namely use as a blood pressure-reducing agent, was far removed from the prevention of rust/friction reduction agent in Mobil. The law of novelty was considered in the context of selection patents in Dr Reddy s Laboratories v Eli Lilly 22, where Dr Reddy s sought revocation of Lilly s patent covering the widely-prescribed antipsychotic drug, olanzapine. The question central to the case was whether the disclosure of olanzapine as one of the compounds falling within in a Markush formula 23 in the prior art rendered the patent invalid for inter alia lack of novelty.in the prior art patent filing considered, the formula covered some ten billion billion (10 19 ) compounds, of which 86,000 were said to be preferred. Olanzapine was one of the 86,000 but was not named specifically or described in the examples. Floyd J reviewed the decisions of the EPO which has had to deal with these sorts of issues on a regular basis as for example in T296/87 Hoechst Enantiomers 24. Having reviewed the authorities, he came to the conclusion that a prior disclosure did not take away the novelty of a claim to a specific compound unless the compound was disclosed in individualised form. Floyd J also considered the requirements of selection patents, citing in particular Maugham J in IG Farbenindustrie s Patent 25, which he did not consider to be out of step with the EPO s approach. However, as he concluded the patent was not a selection patent, he upheld it as new on the general principles of novelty. Kitchin J s decision in Generics v Daiichi 26 contained several points of general interest. The case concerned the validity of a patent and SPC for the anti-microbial agent levofloxacin which is the (-)enantiomer of a racemic compound named ofloxacin. Relying on a series of decisions of the German Federal Patent Court, Generics argued that if the skilled person would recognise that the disclosed compound comprised a racemate and if he could resolve the mixture using conventional techniques, then the disclosure would serve to deprive each enantiomer of novelty. However, Kitchin J refused to follow this approach, finding it to be a conflation of novelty and obviousness and instead preferring the two-step approach of disclosure and enablement as laid down by the House of Lords in Synthon v SmithKline Beecham 27. On this basis, since the patent disclosing the racemate did not teach or even suggest resolution of the racemates into its enantiomers, there was no anticipation 28. An interesting point also arose in relation to a temporary disclosure: namely a poster which was available for a period of two hours at a conference in Toronto three years before the priority date. Relying on Lux v Pike 29, the Judge held that the limited availability of the poster did not mean that it was not part of the state of the art, and that once it had been made available to the public, it did not cease to be part of the art after it had been withdrawn. Thus it was legitimate to rely on a combination of the poster and the common general knowledge at the priority date. 20 See Footnote 11 ante. 21 G2/88 [1990] EPOR Decision of Floyd J of 13 October, [2008] EWHC 2345 (Pat). 23 Markush formulae are used by organic chemists to represent a large number of compounds depicted by a general structure containing a variety of combinations of defined substituents. 24 [1990] EPOR 337 EPO (Technical Board of Appeal). 25 (1930) 47 RPC Decision of Kitchin J of 15 October, [2008] EWHC 2413 (Pat). 27 [2006] RPC The same principle was applied by Floyd J in Actavis v Janssen (See Footnote 11 ante) where it was held that an amendment of the claim to substitute the words consisting of (i.e. including but not limited to the claimed pair of enantiomers) to comprising (i.e. consisting only of) avoided anticipation by a disclosure of both stereoisomeric pairs. 29 [1993] RPC 107.

7 Review of Patent Cases in the English Courts in A prior user novelty attack failed in Qual-Chem v Corus 30 before the Patents County Court. Here the patent related to process for killing slag (reducing certain oxide impurities present in the slag prior to treatment). Although some demonstrations made by the patentee to Corus before filing of the application for the patent were held to be an enabling disclosure of the patented process, His Honour Judge Fysh held that the circumstances of the disclosure were not such that Corus employees were free in law and equity to use the process they had witnessed. The decision is also notable for the rejection of the description of the skilled person in the art by the advocate for one of the parties as a Regular Joe who makes steel, the Judge noting that such a person would be more likely to be encountered in a Steinbeck novel than the skilled addressee in a patent infringement action. An appeal of the decision 31 was quickly dismissed and practitioners should note the comment by Jacob LJ that:...the Judge had to deal with what by my count were no less than 10 discrete points or sub-points. The taking of many points is often the mark of a party which does not feel that it has a single killer. So it proved before the Judge who rejected all of them. Although the general trend in 2008 was increasingly favourable to patent holders, the decision of the Court of Appeal in Servier v Apotex 32 showed that the English Courts can still take a robust approach to patents which they regard as unmeritorious. Here, the patent in suit for a particular salt of perindopril was held anticipated by Servier s own prior art patent. In giving his judgment, Jacob LJ described the patent in the following terms: It is the sort of patent which can give the patent system a bad name. I am not sure that much could have been done about this at the examination stage... The only solution to this type of undesirable patent is a rapid and efficient method for obtaining its revocation. Then it can be got rid of before it does too much harm to the public interest. It is right to observe that nothing Servier did was unlawful. It is the court s job to see that try-ons such as the present patent get nowhere. The only sanction (apart, perhaps, from competition law which thus far has had nothing or virtually nothing to say about unmeritorious patents) may, under the English litigation system, lie in an award of costs on the higher (indemnity) scale if the patent is defended unreasonably. Obviousness The most significant decision of 2008 on obviousness was the decision of the House of Lords in Conor v Angiotech 33. As we noted last year, with legal principles applied to other key areas of patent law having been reassessed in recent years, commentators had started to speculate that obviousness might be next, and that is exactly what happened last year. However, it was not the four-step approach of Windsurfing 34, restated recently in Pozzoli 35, that was at issue. Rather, it was the identification of the alleged invention of Angiotech s patent that was under scrutiny. The patent concerned coronary stents coated with the anti-cancer drug taxol for use in angioplasty. Stents are inserted into an artery during such procedures as a tubular scaffold leaving the artery open and the presence of taxol helps prevent the subsequent closure, or restenosis, which can occur following the body s healing response after surgery. Notably, although the patent claimed taxol-coated stents as its principal claim following opposition in the EPO, and although it included data suggesting taxol could be effective in preventing cell proliferation, it said very little about how or why taxol prevented restenosis. The trial Judge, with whom the Court of Appeal agreed, had therefore considered that the success of taxol-coated stents in preventing restenosis was not relevant to the assessment of obviousness, and the patent had been invalidated. Giving the leading judgment, Lord Hoffmann criticised this approach as illegitimate amalgam of the requirements of inventiveness and insufficiency and/or support. He considered the invention was prima facie that specified in the claim, i.e. a stent coated with taxol, and that this taken in combination with other information in the specification provided the clear teaching that a taxol-coated stent would prevent or treat restenosis. The disclosure certainly went beyond the plausibility threshold which he considered was required. Hence, the relevant question was whether it was obvious that taxol might have that effect, and on this basis the invention was not obvious. Although the patentee had been at risk of a finding of insufficiency had taxol not worked, the fact that it did meant it was not, and why taxol worked did not matter. 30 Decision of HH Judge Fysh of 7 February, [2008] EWPCC Decision of Court of Appeal of 29 October, [2008] EWCA Civ Decision of Court of Appeal of 9 May, [2008] EWCA Civ See Footnote 1 ante. 34 [1985] RPC [2007] EWCA Civ 588.

8 6 The House of Lords emphasis on the claims is inkeeping with their ruling on construction in Amgen 36, and further reinforces the importance of the claims. Although Lord Hoffmann s assessment of obviousness meant there was perhaps less need to consider the merits of applying the obvious to try test considered at some length by the Court of Appeal, it is notable that the test received some criticism from Lord Walker. The judgment brings the English Courts finding into line with that of the Dutch Court, and it is also interesting for its discussion of EPO authorities T939/92 and T1329/04 37 the facts of which Lord Hoffmann considered to be far removed. Eli Lilly v HGS 38, which is thought to be the first English decision on the validity of a gene sequence patent, provided an interesting consideration of obviousness in this context. In addition to an obviousness argument linked to the industrial applicability and insufficiency attacks, Lilly argued that the patent was obvious in light of a prior art sequence of a portion of the relevant polypeptide, Neutrokine alpha, which had been present amongst over a million sequences in a public database. It also argued obviousness over a clone comprising a bacterial host into which a fragment of DNA had been inserted which encoded part of the Neutrokine alpha sequence. This was one of some 9,000 clones sent to Washington University. Both these allegations failed on similar reasoning. There was nothing to motivate the skilled team to use either of these (as opposed to the many other sequences and clones available) as a starting point. However, an alternative obviousness attack based on lack of contribution to the art succeeded. In certain cases in recent years including Ivax v Akzo Nobel 39 and Novartis v Ivax 40, the Courts have seemed to extend the concept of common general knowledge to include not only the standard toolkit as set out in leading cases such as Beloit v Valmet 41 but also to information that the skilled person would acquire before starting to work on the problem faced in the art. This emerging principle appeared to be reined-in slightly in the judgment of Kitchin J in Daiichi 42 who observed that: I can readily accept that, faced with a disclosure which forms part of the state of the art, it may be obvious for the skilled person to seek to acquire further information before he embarks on the problem to which the patent provides a solution. But that does not make all such information part of the common general knowledge. The distinction is a fine one but it may be important. If information is part of the common general knowledge then it forms part of the stock of knowledge which may inform and guide the skilled person s approach from the outset. [emphasis added]. This approach was followed in Ratiopharm v Napp 43. As will be discussed further below in the section on procedure, there was a developing tendency in 2008 for the Court to order parties to provide further particulars of the case they intend to advance at trial at an early stage of the proceedings. Specifically in relation to the issue of inventive step, Floyd J observed in Ratiopharm v Napp that: I consider that the time has come when the matter which is said to be common general knowledge ought to receive some more formal exposition in advance of the expert evidence stage. Whether this principle will be developed in the case-law or whether the Patents Court Guide will be amended, remains to be seen. Insufficiency For the second year running, the most eye-catching decision on insufficiency was Lundbeck v Generics, with the 2007 first instance decision 44 being overturned by the Court of Appeal 45. This was one of two Appeal Court decisions last year where one of the Law Lords (here Lord Hoffmann) stepped down an instance to hear the case, and commentators have speculated that this was in order to clarify his judgment in Biogen v Medeva 46. The case concerned the antidepressant drug, Citalopram which is a so-called racemic mixture made up of its two enantiomer forms in equal proportions. Of the two forms it is the (+)enantiomer which possess the biological activity, and the patent in suit was directed to that enantiomer and how to make it. Although everyone 36 See Footnote 6 ante. 37 Agrevo / Triazole Sulphanamides (T939/92) [1976] EPOR 171 EPO (Technical Board of Appeal) and John Hopkins / Factor-9 (T1329/04) [2006] EPOR 8 EPO (Technical Board of Appeal). 38 See Footnote 5 ante. 39 [2006] EWHC 1089 (Ch). 40 [2006] EWHC 2506 (Pat). 41 See Footnote 12 ante. 42 See Footnote 26 ante. 43 Decision of Floyd J of 16 December, [2008] EWHC 3070 (Pat). 44 [2007] EWHC 1040 (Pat). 45 See Footnote 3 ante. 46 [1997] RPC 1. See for example the comments of the Editor in the report of the Lundbeck decision in the April 2008 issue of the CIPA Journal (pp ).

9 Review of Patent Cases in the English Courts in had known the (+)enantiomer existed and the innovative aspect of patent was how it could be made, the patent included both product and process claims. At first instance, Kitchin J had upheld the process claims, but found the product claims covering the (+)enantiomer itself and pharmaceutical compositions containing it to be Biogen -insufficient because he thought Lundbeck s contribution was one way of making the (+)enantiomer, and it should not be entitled to a monopoly covering every way of making it. Lord Hoffmann, with whom the two Lord Justices agreed, sympathised with this instinctive reaction. However, both he and Jacob LJ pointed out that this was the case for any claim to a new product. Lord Hoffmann suggested that Biogen was limited to claims to classes of products. Such claims would be enabled only where the skilled person could work the invention in respect of all members of the class. That was not the situation with Lundbeck s patent which was directed solely at the (+)enantiomer. The technical contribution to the art was the (+)enantiomer product, even if the only inventive step was the process by which it could be made. Just as he had done in the House of Lords in Conor 47, Lord Hoffmann emphasised the need to keep insufficiency and inventive step separate, stating that what needs to be disclosed for sufficiency should not change as a result of the nature of the inventive step involved. The decision in Lundbeck was considered subsequently in the context of selection patents in Dr Reddy s Laboratories v Eli Lilly 48. Floyd J pointed out that Lord Hoffmann had taken care to limit his observations to the case of ordinary product claims. The Judge commented obiter that a claim to a selection invention would not fit the ordinary product claim mould, and additional requirements would need to be fulfilled 49. However, as Floyd J considered he was not dealing with a selection patent, the insufficiency attacks fell away. In addition to being held invalid for lack of industrial application and obviousness, HGS gene sequence patent was also found to be insufficient in relation to a set of narrower claims as proposed to be amended in the Eli Lilly case 50. The situation was quite different from Lundbeck which was concerned primarily with a single product, and Kitchin J noted that where a patent includes claims to a number of discrete methods or products, the patentee must enable each of them. Patentability Like 2007, 2008 was another active year in the field of software patents, with many applications challenged on the ground of patentability. However, last year was more significant for two reasons. First, in Symbian v Comptroller 51, the Court of Appeal looked again at the four-step test it had put in place in Aerotel / Macrossan 52. The decision must be given particular weight because Lord Neuberger came down to the Court of Appeal to hear the case. The Comptroller appealed against Patten J s decision of earlier in the year 53 overturning the IPO s decision to refuse Symbian s application concerning a software method for accessing data in a dynamic link library (or DLL ). DLLs store functions common to several programs in a single location saving space, and Symbian s application sought to overcome the difficulties which can occur when further functionality is added, e.g. on adding hardware. Patten J considered that the IPO had applied the Aerotel test too narrowly and held that the improved reliability achieved by the application took it outside the computer program exclusion. The Court of Appeal reached the same conclusion. In its assessment of the law which should be applied, the Court was at pains to point out that Aerotel had not changed the UK s existing law, as the Court had been bound by its earlier decisions in Merrill Lynch 54, Gale 55 and Fujitsu s Application 56. It also considered the position in the EPO and, perhaps surprisingly given it acknowledged the strong and contrary views expressed in the two jurisdictions, it suggested the great majority of UK and EPO cases were reconcilable. It considered that, for Symbian s application at least, the critical issue was whether the claimed technical contribution to the art was excluded, and given the improved computer performance achieved, the Court held it was not. 47 See Footnote 1 ante. 48 See Footnote 22 ante. 49 E.g. as enunciated by Maugham J in IG Farbenindustrie s Patent (See Footnote 25 ante). 50 See Footnote 5 ante. 51 Decision of Court of Appeal of 8 October, [2008] EWCA Civ [2007] RPC Decision of Patten J of 18 March, [2008] EWHC 518 (Pat). 54 [1989] RPC [1991] RPC [1997] RPC 608.

10 8 Although the Court of Appeal noted that some of the most recent EPO decisions seemed to follow the any hardware -type approach so deprecated in Aerotel, it considered that the absence of any EBA decision and the inconsistency between Technical Board rulings, meant that it should not depart from its previous precedents to follow the EPO. Since Symbian however, questions on software patentability have now been referred to the Enlarged Board 57, and the authors look forward to more discussion of whether the English approach should be changed in light of what the EPO decides in the years to come. In another case on a software patent 58, RIM, suppliers of the well known Blackberry wireless handheld device, sought revocation of Visto s patent concerning a system for synchronising storage folders which addresses the problem of roaming users accessing firewall-protected work s outside the office by using a smartphone. Floyd J found the patent invalid for want of patentability (as a computer program as such) as well for obviousness (over Lotus Notes). Applying step three of the four-stage Aerotel test, the Judge held the contribution to be the idea of communicating s through a firewall using a smartphone. He considered that Pumfrey J s guidance in Shopalotto.com s Application 59 at paragraph 9 was particularly useful to bear in mind when applying step four: The real question is whether this is a relevant technical effect, or more crudely, whether there is enough technical effect: is there a technical effect over and above that to be expected from the mere loading of a program into a computer?. Although the use of a smartphone was enough to confer novelty, he considered the presence of any new hardware was not adequate for patentability. The patent merely defined the way in which data were transmitted, providing for data to be delivered from one element to another, so that the data were accessible on the smartphone. There were several other decisions on alleged inventions in the field of computer software in 2008, and the principles of Aerotel were referred to in each case. However, the patentees fared perhaps a little better than in 2007 with several achieving remittal back to IPO for further prosecution of their applications 60. Of those which failed 61, one concerned a patent which we had seen before. Aerotel s patent, which had been upheld on the ground of patentability by the Court of Appeal in Aerotel/ Macrossan 62, was invalidated on that same ground as well as that of obviousness in Aerotel v WaveCrest 63. Noting that the Court of Appeal s judgment was made without the benefit of prior art, His Honour Judge Fysh used the Aerotel / Macrossan test and concluded that the patent was excluded because the contribution made to the art fell solely within excluded subject matter. Industrial Application The Patents Court was required to undertake an indepth analysis of the rarely-considered requirement of industrial application in Eli Lilly v HGS 64. The patent in suit concerned the nucleotide and amino acid sequence of a novel member of the Tumour Necrosis Factor (TNF) ligand superfamily called Neutrokine alpha. This ligand was identified by HGS in 1996 using the then emerging technique of bioinformatics in which banks of computers are used to analyse sequence databases for similarity to known genes and proteins. HGS patent was filed before any traditional lab work had been undertaken, and Lilly argued that predictions made in the application were wholly speculative and that the application failed to disclose an invention capable of industrial application. In assessing the issue, Kitchin J noted that there was very little authority on the requirement of industrial application of Article 52(1) and 57 EPC. He observed that the requirement seeks to ensure there is a use for which the invention can be employed and this will usually be clear. However, gene or protein sequence inventions are more likely to run into problems because, even after being identified and isolated, their functions may not be known. After quoting briefly from the only two English cases 65 to which he had been referred, the Judge devoted most of his analysis of the applicable law to EPO authorities. Based on his analysis, he set out nine principles which must now be regarded as the definitive statement of the English law on industrial application, and when these principles were applied to HGS patent, the lack of coherent teaching was its downfall. The idea that 57 The EPO president, Alison Brimelow, referred several questions to the Enlarged Board in October These are now pending as G3/08. In the light of this the IPO has indicated it will not appeal the decision in Symbian to the House of Lords. 58 Decision of Floyd J of 28 February, [2008] EWHC 335 (Pat). 59 [2005] EWHC E.g. Astron Clinica and others v Comptroller [2008] EWHC 85 (Pat) and Rajesh Kapur v Comptroller [2008] EWHC 649 (Pat). 61 Which included Autonomy v Comptroller [2008] EWHC 146 (Pat). 62 See Footnote 52 ante. 63 Decision of HH Judge Fysh of 14 May, [2008] EWHC 1180 (Pat). 64 See Footnote 5 ante. 65 Chiron Corporation v Murex and Others [1996] RPC 535 and Aeomica s Application BLO/286/05.

11 Review of Patent Cases in the English Courts in Neutrokine alpha could be used to treat the extraordinary range of diseases identified was fanciful. In the Judge s view, the skilled reader would have concluded that the inventors had no idea of the activity of Neutrokine alpha when drafting the patent and in these circumstances he held it lacked industrial application. The Court in Blacklight Power 66 had to consider an appeal from the Comptroller s rejection of two patent applications which had been deemed to be contrary to the generally-accepted laws of physics and therefore lacking in both industrial application under section 1(1) (c) and sufficiency under section 14(3) Patents Act The appeal was allowed because, in the Judge s view, the hearing officer had applied the incorrect test. The test he had used when assessing the theory was whether it was more probable than not that the theory was valid. Floyd J held that the correct question to ask was whether there was a reasonable prospect that the theory may be valid. Added Matter As reported last year, Document Security Systems (DSS) filed a claim against the European Central Bank in the Court of First Instance of the European Court of Justice for alleged infringement of a patent relating to banknotes and more particularly a Method of making a nonreplicable document 67. Following a jurisdictional challenge, the CFI ruled that the claim was inadmissible. In response to the claim by DSS, the ECB sought to revoke the asserted patent at a national level in several jurisdictions including the UK. In 2008, upholding the first instance decision of Kitchin J, which is now starting to be viewed as the definitive test for added matter, the Court of Appeal observed that An applicant should not be allowed to improve his position by adding subject matter not disclosed in the application which would give him an unwarranted advantage and could be damaging to the legal security of third parties relying on the content of the original application 68. As part of its counter-offensive, the ECB had also started revocation proceedings in France, Germany, the Netherlands, Spain, Italy, Belgium, Luxembourg and Austria. Interestingly, the German Federal Patent Court held the patent valid whilst the French Court found the patent invalid. As the UK Court of Appeal noted, All this is deeply regrettable. It illustrates yet again the need for a one-stop patent shop (with a ground floor department for first instance and a first floor department for second instance) for those who have Europe-wide businesses. The progress on this topic in 2008 is discussed at the end of this review. The case also illustrates the UK Court s preference for hearing validity and infringement together. Both the English Patents Court and Court of Appeal noted that the positions adopted by DSS before the UK Courts and the CFI were radically different. Kitchin J observed: This case therefore seems to me to be a very powerful illustration of why it is desirable to try infringement and validity issues together, where at all possible. If they are tried separately it is all too easy for the patentee to argue for a narrow interpretation of his claim when defending it but an expansive interpretation when asserting infringement. The Court of Appeal agreed: Professor Mario Franzosi [a leading Intellectual Property scholar] likens a patentee to an Angora cat. When validity is challenged, the patentee says his patent is very small: the cat with its fur smoothed down, cuddly and sleepy. But when the patentee goes on the attack, the fur bristles, the cat is twice the size with teeth bared and eyes ablaze. In Ratiopharm v Napp 69, the patentee sought to expand the circumstances, set out by the Enlarged Board of Appeal in G1/03, in which an introduced disclaimer would be taken not to add matter. The expansion sought by Napp related to disclaimers in divisional applications. However, it was rejected by Floyd J who held that disclaimers in divisional applications were different from the categories set out in G1/03 such as accidental anticipations. However, on the facts, the added matter attacks failed. 66 In the Matter of the Patents Acts 1977 & in the Matter of Applications GB & GB Decision of Floyd J of 18 November, [2008] EWHC 2763 (Pat). 67 [2007] EWHC 600 (Pat). 68 Decision of Court of Appeal of 19 March, [2008] EWCA Civ See Footnote 43 ante.

12 10 SPC Regulation An additional attack by Generics in the Daiichi 70 case concerned the interpretation of the SPC Regulation 71. Generics argued that earlier marketing authorisations for the racemic product ofloxacin counted as an authorisation to sell the (-)enantiomer levofloxacin (as part of the mixture) and that the date of first authorisation to place the product on the market in the Community was several years earlier, which in turn reduced the duration of the SPC to nil. Having reviewed various English and ECJ authorities, Kitchin J concluded that an authorisation to sell ofloxacin on the market as a medicinal product could not be considered an authorisation to place levofloxacin on the market as a medicinal product. The Judge also noted that his conclusion was consistent with the scheme and objects of the SPC Regulation as he had already concluded that it required invention to make levofloxacin and that if SPC protection was limited as Generics had contended, Daiichi would have only had nine years in which effectively to exploit their invention. A further decision of interest on the SPC Regulation was Gilead s Application 72. Article 3 of the Regulation sets conditions for obtaining an SPC, including the requirement that: The product is protected by a basic patent in force. Gilead s patent disclosed new antiretroviral compounds useful in the treatment of HIV and other diseases. Claim 1 covered a class of compounds including tenofovir disoproxil and claim 25 was directed to tenofovir disoproxil itself. The specification explained that the formulations of the invention comprised at least one active ingredient and potentially other active ingredients. Such combination products were purportedly claimed in claim 27: A pharmaceutical composition comprising a compound according to any one of claims 1-25 together with a pharmaceutically acceptable carrier and optionally other therapeutic ingredients. Gilead obtained a marketing authorization for a medicinal product comprising tenofovir disoproxil and another antiretroviral called emtricitabine and later filed an application for an SPC in respect of the combination based on this patent. The SPC application was refused by the Hearing Officer of the UK IPO and Gilead appealed to the High Court. There, Kitchin J held that the test that emerges from Takeda is to identify the active ingredients in the product which are relevant to a consideration of whether the product falls within the scope of a claim of the basic patent. It is those ingredients, and only those ingredients, which can be said to be protected. Accordingly, in the case of a product consisting of a combination of ingredients A and B and a basic patent which claims A, it is A which brings the combination within the scope of the monopoly. Hence it is A which is protected by the basic patent and not the combination of A and B (even though for patent infringement purposes combinations of A plus B would infringe by virtue of A being present). A product comprising tenofovir disoproxil and emtricitabine was not protected by claims 1 or 25 of the basic patent within the meaning of Article 3, as such a product only falls within the scope of these claims because of the presence of tenofovir disoproxil. Claim 27 however, was directed to a composition comprising tenofovir disoproxil with other active ingredients. The product containing both tenofovir disoproxil and emtricitabine therefore falls within this claim. The product was therefore protected by claim 27 of the basic patent and the SPC application was granted. Amendment An application to amend a patent in proceedings before the Court should usually be made in good time to allow the opponent and third parties to consider whether they wish to object. The Court will however normally apply the rules fairly liberally provided that the opponent at least has the opportunity to review the application and make submissions to the Court. In Wobben v Vestas 73, the Court considered that an application to introduce a new set of claims, filed after the judgment partially upholding the patent had been handed down, was too late. In addition to issues of added matter, the Court in M-Systems v Trek 74 also considered the IPO s rejection of amendments to a patent on the basis that it had not been provided with sufficient information to permit it to exercise its discretion to allow the amendments. Although the Judge considered the situation under the old law and 70 See Footnote 26 ante. 71 Council Regulation (EEC) No. 1768/ Decision of Kitchin J of 31 July, [2008] EWHC 1902 (Pat). 73 Decision of Kitchin J of 8 February, [2008] EWHC 235 (Pat). 74 Decision of Kitchin J of 28 January, [2008] EWHC 102 (Pat).

13 Review of Patent Cases in the English Courts in upheld the IPO s finding, he noted that section 75 of the Patents Act 1977 had since been amended by section 2(5) of the 2004 Act such that any principles relevant under the EPC had to be taken into account, radically altering the approach to be adopted. The authors look forward to seeing how amendment applications are dealt with under the new provision going forward, bearing in mind that the EPC essentially provides for amendment as of right. Entitlement The Court of Appeal in Cinpres v Melea 75 had to consider an appeal of an entitlement claim under section 37 of the Patents Act 1977 relating to a granted patent which had already been subject to earlier entitlement proceedings brought under section 12 when it was an application. The subsequent challenge came about because one of the witnesses in the earlier proceedings, to whom the Court of Appeal referred merely as Hendry because it considered him undeserving of the title Mister, had later informed the losing party, Cinpres, that he had perjured himself. On the law of entitlement, the Court applied the principles from the House of Lords decision in Yeda 76, concluding that Hendry was the actual devisor of the invention. The case is also of interest because of the issues of res judicata it raised. Cinpres managed to overcome these (see below), and, as Hendry s previous evidence that he had not devised the invention when consulting for Cinpres was a lie, and his consulting agreement gave Cinpres the right to apply for the patent, the Court allowed the appeal, holding Cinpres was entitled. Procedural Issues Interim Injunctions and other Interim Relief The requirement for a party to clear the way of any patents which may be asserted against it 77 still continues to be applied in the English Patents Courts. Although the courts will generally refer to the American Cyanamid test 78 when assessing whether to grant an interim injunction, the requirements of the Civil Procedure Rules for litigants to behave reasonably towards each other and to avoid litigation where possible have acquired increasing importance in recent years compared with traditional grounds such as delay in seeking relief. This slight shift in focus can be demonstrated by the facts of Leo Pharma v Sandoz 79. The case related to a drug called calcipotriol which is used in the treatment of psoriasis. Leo s patent in suit related to the monohydrate crystalline form of the drug which was said to possess certain benefits over the previous anhydrate form. In awarding the interim injunction sought by Leo notwithstanding the fact that Sandoz generic product had been on the market for several months, Mann J was openly critical of the evasive tactics deployed by Sandoz and in particular the refusal to provide samples of the alleged infringing product upon request, even on a confidential basis. The Judge held: Those accused of infringement do not have to fall over themselves to be co-operative and nice towards patentees. They are entitled as a matter of law to take a tactical view and not, for example, to provide samples. But such tactical views and the implementation of such tactics are not without consequences. In the present case they have consequences both in terms of the balance of convenience and the status quo. An appeal of this decision was quickly dismissed approximately three months later 80. Another interim injunction was granted by the Patents Court in Novartis v Dexcel-Pharma 81. Here Dexcel wished to market a formulation of cyclosporin which Novartis alleged would infringe its patent teaching a microemulsion pre-concentrate of this hydrophobic drug. The principal point of interest concerned the extent to which the Court was bound by the construction placed on a claim by a previous Court. Novartis patent had previously been the subject of litigation against another formulation of cyclosporin and, according to Dexcel, the construction reached by Pumfrey J and the Court of Appeal meant that Dexcel s formulation did not infringe. However, following the limited guidance of the Court of Appeal in SKB v Apotex 82, Floyd J considered that although the construction of a patent was a question of law, it was nevertheless highly dependent on the factual and technical evidence before the Court, and that it was at least arguable that the Court was not bound by a previous construction. 75 Decision of Court of Appeal of 24 January, [2008] EWCA Civ [2007] UKHL As set forth by Jacob J (as he then was) in SKB v Generics [2002] 25(1) I.P.D [1975] RPC Decision of Mann J of 17 March, [2008] EWHC 541 (Pat). 80 Decision of Court of Appeal of 25 June, [2008] EWCA Civ Decision of Floyd J of 10 June, [2008] EWHC 1266 (Pat). 82 [2004] FSR 26.

14 12 One of the potential advantages of litigation in the English Courts is the availability of disclosure and the broad discretion of the Court to order disclosure either on an interim basis or even before proceedings have been commenced. Whilst the Civil Procedure Rules specifically provide for Pre-Action and Third Party disclosure, it is clear that the Court retains a general discretion to order a third party to disclose information in its possession where it has become mixed up in wrong-doings, whether inadvertently or otherwise according to the principles set down in the Norwich Pharmacal case 83. In another set of proceedings relating to olanzapine in 2008, this time against Neolab, the Court ordered that Neolab should disclose the names and addresses of the customers to whom it had supplied its generic version of the drug. The decision is interesting as, in coming to the conclusion that the disclosure should be ordered, the Court decided to apply the American Cyanamid criteria, which, as noted above, are invariably used to evaluate whether an interim injunction should be granted. An attempt by a generics company to obtain an anti-suit injunction against a patentee ultimately failed in Hospira v Eli Lilly 84 although the observations made by the Court were such that the generics company probably considered that it had achieved its goal. Hospira wished to market its version of a drug called gemcitabine and was concerned that a patent belonging to Lilly would be asserted against it in order to try to disrupt the launch. To clear the way as far as possible, Hospira had the process for the synthesis of its gemcitabine witnessed in China by Dr Robert Adlington, a leading chemist at Oxford University. It also disclosed confidential extracts from its Drug Master File (which is submitted to the relevant healthcare authorities to indicate how the product is made) to Lilly. It then sought a declaration from the Court restraining Lilly from commencing proceedings against it. Although recognising that the Court did have power to restrain the commencement of future proceedings, Floyd J considered he was unable at this stage to find categorically that the future proceedings would be an abuse of process. The Judge therefore refused the application although he stated that he had considerable sympathy with Hospira s position and noted that on the evidence before the Court at the time, he could not see how any representative of Lilly could sign a Statement of Truth stating that they believed there was a basis for an allegation of infringement. There is very little case law on the quantification of a patentee s cross-undertaking in damages in connection with an interim injunction that is subsequently overturned at trial, as the majority of cases settle before reaching the point when the Court is called upon to assess the payment to be made. Much helpful guidance on this topic was provided by Norris J in the case of Servier v Apotex 85 in which the parties were unable to negotiate the quantum of compensation to be paid to Apotex. In his carefully-reasoned decision, which contains a sophisticated analysis of the market, the Judge confirmed that the approach to assessing damages under a cross-undertaking is essentially compensatory (as in general contract law). Apotex was trying to enter a new market for the sale of generic perindopril and it was certain that it would have continued to supply the market and would have made a profit from so doing throughout the period for which the interim injunction was in force. However, the Court held that the outcome of such exploitation (i.e. Apotex s actual profit) was uncertain. In reaching his decision, the Judge also relied on an old case relating to the glamorous field of beauty pageants 86 and in particular dicta from the Court of Appeal that whilst the presence of all the contingencies on which the gaining of the prize might depend makes the calculation not only difficult but incapable of being carried out with certainty or precision damages for a lost opportunity are assessable. In particular, an assessment of the probability of a particular hypothesis was required with the actual damages award reduced by reference to the percentage chance of the hypothesis occurring. On the facts, Norris J identified two competing hypotheses, one of which would have occurred if the interim injunction was not granted: Scenario 1, the duopoly, where Servier would have competed head-to-head with Apotex in an endeavour to preserve the position pending the establishment of the validity of the patent in suit and the restoration of Servier s monopoly at the substantive trial, and Scenario 2, the open market, where Servier 83 [1974] RPC Decision of Floyd J of 21 July, [2008] EWHC 1862 (Pat). 85 See Footnote 4 ante. 86 Chaplin v Hicks [1911] 2 KB 786 (per Vaughan Williams LJ at p.791).

15 Review of Patent Cases in the English Courts in would have not only have competed head-to-head with Apotex, but would also have supplied other generics seeking to exploit the generic market. Norris J assessed the likelihood of Scenario 1 to be 67% with Scenario 2 assessed at 33%. Computing 67% of Apotex s estimated loss in a duopoly in addition to 33% of Apotex s estimated loss in an open market led to a final damages award of 17,500,000 in favour of Apotex under the cross undertaking. Damages for Groundless Threats Although it is widely recognised that such rules run contrary to the talk first, sue later philosophy of the Civil Procedure Rules, it is still possible to seek relief from the Court in respect of groundless threats made against anyone except a primary infringer. In DuPont and Constellation v Smurfit 87, an employee of Smurfit threatened a customer of DuPont by indicating that action would be taken against it and its customers if it carried out business transactions with DuPont. The customer withdrew its business from DuPont until any legal matter had rescinded. DuPont subsequently took action against Smurfit for damages in view of the fact that, under the earlier case between DuPont and Smurfit 88, DuPont was found not to have infringed Smurfit s patent. DuPont was successful in its claim for damages and received a sum calculated based on loss of production. Declaratory Relief InterDigital 89 brought proceedings against Nokia seeking declaratory relief that 35 patents belonging to Nokia were not essential to a telecommunications standard. Nokia s Defence (and certain Requests for Further Information) denied that InterDigital had any legitimate or sufficient interest to entitle it to the discretionary declaratory relief sought, alleging that the action was not brought for real commercial reasons but for tactical reasons relating to the ongoing litigation between the parties in Delaware and before the International Trade Commission. InterDigital made an application to strike out these aspects of Nokia s defence on the basis that they did not amount to a reasonable defence or were an abuse of process. Floyd J dismissed InterDigital s application noting that it was premature to say at this interim stage that the reasons advanced by Nokia as to why the litigation was started and pursued by InterDigital could not influence whether the declarations should be granted. Declaratory relief is a developing area of law and the authorities emphasise the need for scrutiny and caution in the exercise of the Court s discretion. The right place for that to occur was when all the relevant evidence which a party wanted to adduce was before the Court. Costs An issue-based approach to costs is now the norm in patent cases 90. As Floyd J explained Where the Court decides to disallow the costs of a successful party in relation to a particular issue, it can sometimes go further and order the successful party to pay the unsuccessful party s costs of that issue as it did in the case of RIM v Visto 91. There was no dispute that RIM was the overall winner having successfully revoked Visto s patent. Nor was there any dispute that RIM s costs should be reduced to reflect the fact that it lost on infringement, added matter and insufficiency. However, RIM s failure to produce an adequate Product and Process Description led to an award of costs on infringement in Visto s favour. Visto were also awarded its costs of resisting the unsuccessful added matter and insufficiency attacks. The striking feature of this case was however the staggering disparity between the parties legal costs. Visto s costs were approximately 1.6m which Floyd J considered to be not out of line with his usual expectations for a hard-fought patent trial such as this. However he stated that he found RIM s costs of 6m to be extraordinary. Noting that he was Entirely satisfied that the sums expended by RIM are disproportionate to what was at stake, Floyd J also directed the Costs Judge to proceed with the detailed assessment on an item by item basis and on the basis that items claimed by RIM are only to be allowed if necessary and reasonable. 87 Decision of Roger Wyand QC of 6 June, [2008] EWHC 1231 (Ch). 88 [2007] EWHC 510 (Pat); [2007] EWCA Civ Decision of Floyd J of 17 March, [2008] EWHC 504 (Pat). 90 See SmithKline Beecham v Apotex [2004] EWCA Civ 1703; Actavis v Merck [2007] EWHC 1625 (Pat); Generics v Lundbeck [2007] EWHC 1606 (Pat) and Monsanto Technology v Cargill International [2007] EWHC 3113 (Pat). 91 Decision of Floyd J of 17 April, [2008] EWHC 819 (Pat).

16 14 Kitchin J also applied an issued-based approach to assessing costs in Eli Lilly v HGS 92. However, this case also demonstrates that other factors can come into play. Although Lilly had clearly won, it had failed on grounds of obviousness involving complex bioinformatics issues. HGS costs were one and a half times Lilly s, and, whilst Lilly ascribed 30% of its costs to the unsuccessful parts of its case, HGS claimed to have expended 70% dealing with the bioinformatics points. In terms of the numbers, this meant that HGS claimed to have spent 1,148,000 on these issues which was just less than Lilly s costs for the case as a whole ( 1,380,000). The Judge acknowledged that using the numbers in this way would require Lilly to make a payment to HGS, but considered this would be wholly unjust. Weighing things up, he concluded it would be fair and proportionate to disallow Lilly s costs of the bioinformatics issue and to introduce a modest uplift in the amount deducted. In this way he arrived at a 60% costs award in favour of Lilly. Following the decision that two of Evysio s three patents in suit in Abbott v Evysio should be revoked and that the third was not infringed, Kitchin J had to decide whether to award an interim payment of costs 93. Although Evysio argued for a payment based on its significantly-lower costs or no payment at all, the Judge ordered a 650,000 interim payment based on 50% of 75% of Abbott s costs. When it came to the Judge s consideration of the full costs award 94, it was notable that, as well as being close to double Evysio s, Abbott s 2.63 million costs included 622,659 of expert fees, some 400,000 of which were fees of Abbott s co-ordinating US attorneys. Evysio argued that the US fees should not be recoverable and requested an issue-based assessment with separate costs orders being made for each party. Kitchin J was reluctant to make such an Order. Instead he considered the costs applicable to various issues taking into account the parties submissions and the respective sizes of their bills, and he ordered Evysio pay a percentage of Abbott s costs. Coincidentally, the percentage he arrived at was the 75% he had envisaged when making the interim costs award. Although the provision of an estimate for costs is a normal feature of most commercial litigation, patent cases have tended to be an exception to the rule. This is because CPR 63 dispenses with the need to file an allocation questionnaire and therefore an estimate of costs. Faced with subsequent proceedings and concerned that RIM s costs would again be very high, Visto made an application for both parties to provide a statement on costs to-date and an estimate for future costs. Arnold J made the Order sought. In light of the Court s general concerns over the escalating costs of patent litigation it will be interesting to observe whether the exchange of costs estimates becomes common practice. Stays of English Litigation pending EPO Proceedings Welcome guidance from the Court of Appeal on the circumstances when the English Court should exercise its discretion to stay proceedings pending the outcome of an EPO opposition was given in Glaxo v Genentech 95. Although the Court of Appeal stated that the guidance was not intended to fetter the discretion of the Patents Court, it noted that the duplication of proceedings in the EPO and national Patents Courts was expressly provided for in the European Patent System. It also noted that the most important factor in deciding whether to grant a stay would most liwkely be the length of time that the respective proceedings would require to be resolved so that commercial certainty for the parties could be achieved. The Court concluded that If the likelihood is that proceedings in the Patents Court would achieve this resolution significantly sooner than the proceedings in the EPO, it would normally be a proper exercise of discretion to decline to stay the Patents Court proceedings. This guidance seems to supplant the previous line of authority 96 that a stay of the English litigation should be the norm. In possibly the largest case to be pending before the Patents Court in 2008, InterDigital sought declarations that no fewer than 35 patents belonging to Nokia were not essential to a telecommunications standard 97. The third Case Management Conference between the parties concerned the listing of trial dates for the 92 Decision of Kitchin J of 17 October, [2008] EWHC 2511 (Pat). 93 Decision of Kitchin J of 13 May, [2008] EWHC 1082 (Pat). 94 Decision of Kitchin J of 21 May, [2008] EWHC 1083 (Pat). 95 Decision of Court of Appeal of 31 January, [2008] EWCA Civ Kimberly Clark Worldwide Inc v Procter & Gamble Ltd (No.1) [2000] RPC Decision of Floyd J of 19 February, [2008] EWHC 297 (Ch).

17 Review of Patent Cases in the English Courts in actions that comprised this dispute. Of particular interest was the Court s discussion of stays pending opposition at the EPO, with Floyd J going as far as to suggest that a party which unsuccessfully brings proceedings for a declaration of non-essentiality against a patent, knowing full-well that the patent may be amended at the EPO, may be prevented from bringing further proceedings against the amended patent by way of abuse of process. Six of the patents in suit were under opposition in the EPO. It was common ground that none of the opposition proceedings were likely to be concluded before the trials in the UK. As Floyd J explained The final form of the claims would not be known until the oppositions and any appeals were brought to an end. Indeed, some amendments had already been put forward by Nokia, and the amendments had the potential to affect the issue of whether the patents were essential. If InterDigital were to fail to get their declaration on the broad granted claims, subsequent narrowing amendments might render the patents non-essential. Nokia argued that InterDigital should either consent to a stay of the action or agree not to make any claim for a declaration in relation to any claim which may be amended at the EPO. Floyd J agreed: It seems to me that Nokia is right, that the best way of dealing with the problem would be to stay the action in relation to those patents. There is however no application for a stay of the proceedings before me...whether or not InterDigital could commence a fresh action based on any amended claims would have to depend on all the circumstances pertaining at the time that the action was commenced. One of the circumstances will be that an action was commenced and pursued to judgment based on the unamended claims when InterDigital could at least, in theory, have waited for the EPO proceedings to come to an end. But it is not open for me to say now that it would be an abuse of process to commence that further action. It would all depend. Perhaps spurred on by the Judge s remarks, InterDigital subsequently applied for a stay but on balance, a stay was refused. This illustrates the Court s increasing reluctance to grant stays, even when a good deal of Court resources will be used in the trial of the national proceedings. Res Judicata and Estoppels Interesting issues of res judicata were considered in Cinpres v Melea 98 outlined above. The difficulty Cinpres faced having failed in the earlier proceedings against Melea s predecessor in title was that res judicata potentially applied and the exception in Odyssey v OIC Run-Off 99 could assist only where a judgment was obtained by the fraud of a party rather than that of a mere witness. A variety of arguments were raised by Cinpres against res judicata. Perhaps the most notable was Cinpres argument that the decision should be overturned based on the bill of review procedure applied before the fusion of administration of law and equity in 1875 which made a previous decision impugnable where fresh evidence entirely changed the aspect of the case. The Court rejected this argument based on the authorities but was not entirely happy with the position, suggesting application of the principle would make for better justice. However, Cinpres succeeded on the basis that the Odyssey requirements were fulfilled as the Court considered that the witness who perjured himself was effectively a party and that his fraud had been adopted by Melea s predecessor and subsequently by Melea. Jurisdiction RIM 100 brought proceedings in the English Patents Court seeking a declaration of non-infringement of Visto s patent before issuing proceedings in an Italian Court seeking a declaration of non-infringement of the Italian designation of the patent, as well as the German, French, Spanish, Dutch and Belgian designations in the same Italian proceedings. Such Italian proceedings, designed to give the Italian Court jurisdiction over several designations of a European Patent, are commonly referred to as Italian Torpedoes. Visto responded in the English action by seeking damages under Article 96 of the Italian Civil Procedure Code alleging that the Italian action was brought in bad faith, in the knowledge that it would be slow-moving and obstructive of any infringement action being taken in the National Courts. The High Court ordered Visto s damages action to be stayed and Visto appealed to the Court of Appeal arguing that the English Court was the Court first seized 98 See Footnote 75 ante. 99 [2000] EWCA Civ Decision of Court of Appeal of 6 March, [2008] EWCA Civ 153.

18 16 and that therefore, under Article 28(1) of the Brussels Regulation 44/2001, the English Court could not stay the proceedings. Article 28 provides that Where related actions are pending in the courts of different Member States, any court other than the court first seised may stay its proceedings...actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings. The key question was therefore whether the English and the Italian proceedings were related within the meaning of the Regulation. The Court of Appeal held: Article 28 requires an assessment of the degree of connection, and then a value judgment as to the expediency of hearing the two actions together (assuming they could be so heard) in order to avoid the risk of inconsistent judgments. The alleged abuse of Italian process was merely a link between the two proceedings (and the only link), so it was only in relation to the Article 96 claim that there was a risk of inconsistent judgments from the English and Italian Courts. The Court of Appeal concluded that the English case was different to the Italian claim and that the English case raised matters not raised in the Italian proceedings. On this basis the Court decided It does not seem to us to be at all expedient that those actions can be heard together, not least because we do not see how they can be, whether here or in Italy... The substance of the English proceedings is a declaration about an English patent and a particular product. The substance of the Italian proceedings is other designations, but not focusing on the same product. Therefore the English and Italian actions were held not to be related and the English Court had jurisdiction to stay Visto s damages action. Appeals The procedure that will be adopted for an appeal where the parties have settled litigation in which a patent was invalidated in the lower Courts was confirmed in Conor v Angiotech 101. As with the proceedings before the Court of Appeal in Halliburton v Smith 102, the House of Lords invited the Comptroller to present the arguments against the patent s validity, with the patentee (here Angiotech) paying the Comptroller s costs. Provision of Information It was noted above that Floyd J has suggested that in future a party challenging a patent on alleged lack of inventive step should give particulars of the matter alleged to form the common general knowledge. Further evidence of a trend towards the provision of information at an early stage came in Novartis v Johnson & Johnson 103, where Novartis was ordered by the Court to respond to certain requests for information concerning the construction of the patent in suit. In considering whether to grant the order, Floyd J recognised that in the previous leading authority on the issue, Lux Traffic v Staffordshire Public Works 104, Aldous J had considered it was generally inappropriate for a patentee to be ordered to particularise the construction of its patent at an early stage of the proceedings. However he also noted that this case was prior to the introduction of the Civil Procedure Rules, and relied upon very old authorities. Weighing up all the considerations, the Judge agreed with the Defendant that certain of the requests sought could narrow the issues and thus save costs, particularly with regard to experiments. Independently Valid Claims It is common practice for the party alleging invalidity in patent cases to ask the patentee which claims are said to have independent validity at an early stage and such an obligation is placed on the patentee in the Patents Court Guide, Section 12. Where an answer is not forthcoming, an order may be sought requiring that the independently valid claims be identified and such an order had been made in Edwards Lifesciences v Cook Biotech 105. Cook had responded by suggesting all 34 claims would be relied upon, which Floyd J clearly viewed as unhelpful. Although he did not grant the order requested which would have required a witness statement from a third party (Cook s expert) who was yet to be named, he ordered Cook to serve a revised list of independently valid claims on the date the parties were due to name their experts. This direction from the Court should serve as a direction to patentees to consider the question of independent validity early on in the litigation and to keep the matter in mind as the case progresses to trial or face cost penalties. 101 See Footnote 1 ante. 102 [2006] EWCA Civ Decision of Floyd J of 19 February, [2008] EWHC 293 (Pat). 104 [1991] RPC Decision of Floyd J of 25 July, [2008] EWHC 1900 (Pat).

19 Review of Patent Cases in the English Courts in Experts Criticism was levelled at one of Abbott s experts in Abbott v Evysio 106. Kitchin J noted that it had become clear during cross-examination that the expert had acted in three or four patent actions for Abbott and a related company and was very familiar with patents. Sweeping statements made in the expert s report about the extent of use of stents across Europe were found under crossexamination to have no basis, leading the Judge to suggest that preparation of the report had been unduly casual. The expert s approach to obviousness was also criticised after it became clear under questioning that his views had been formulated with knowledge of the inventions of the patents and a measure of hindsight. The take-home message is clear an expert s overriding duty is to the Court and cross-examination will inevitably expose any partiality. Experiments It is not uncommon in cases before the English Patents Court for a party s experts to comment on experiments conducted by that party without having had any input in the design of those experiments. Whilst not making it obligatory to adduce evidence from the designer of litigation experiments, Kitchin J commented in Daiichi 107 that if questions arose as to the design and conduct of experiments and witnesses attending Court were unable to address such questions, the weight the Court would attach to the experiments could be substantially reduced. 106 Decision of Kitchin J of 21 April, [2008] EWHC 800 (Ch). 107 See Footnote 26 ante.

20 18 Community Patent / Pan-European Patent Litigation System 108 In 2008 we reported that the prospects for a Community Patent and a pan-european patent litigation system remained bleak. In relation to the latter, we cited a raft of potential deal-breakers in the ongoing negotiations. As we enter 2009, little has changed. The problems remain. Exhortations may still be heard that it is crucial to EU competitiveness to have a single litigation system and a Community Patent, and that progress is being made. But these words are little more than platitudes. The reality is that progress is painfully slow and that Member States remain divided on a number of big issues. So what did happen in 2008, and what are the prospects for 2009? One interesting development was the tabling in the summer of a new proposal for the Community Patent. In fact the epithet new is a misnomer. What was actually tabled was the failed 2003/04 proposal with a provision for machine translations which would then have no legal effect. As all who have read machine translations will be aware, the quality is to say the least poor, and one suspects that the idea of machine translations is to provide a political sop to the governments of countries such as Spain which have stated firmly that it is unfair on their nationals to have to read patents in a foreign language. Under the new Community Patent proposal, the litigation system for such patents would be shared with existing European patents, and in 2008 this system was given a new acronym. What was once the EPLP and more recently the EPLA is now the EUPJ (European Union Patent Judiciary). This is more than just a change of name, however, for it indicates that the EU intends to drive this proposal, rather than it remaining under the auspices of the EPC, regardless of the fate of the Community Patent. Relatively detailed draft proposals for the EUPJ were discussed at numerous Working Party meetings organised by the Slovenian and then the French Presidencies. However, these drafts are very far from being agreed. Perhaps the most significant issue is whether validity and infringement issues will be heard together. Interestingly the current Presidency, the Czech Republic, itself has a German-style bifurcated system, which may make it more difficult for the majority view (that such a system would be undesirable) to prevail. The Czechs have said publicly that they would like to reach a compromise on this issue, but it is difficult to see what that might be when the issue is very much of a one thing or the other nature. Other important areas of difference also remain, and it is very difficult to see any consensus emerging. One new problem is the role of the ECJ. It is understood to be constitutionally impossible to exclude the ECJ from having jurisdiction over an EU right such as the Community Patent, and yet many are fearful that the opaque judgments of the Court on trade mark issues would be repeated in the equally difficult (and for the ECJ even more alien) field of patents. Law which is reasonably well-established under the EPC could be thrown into a state of confusion by an ill-informed ECJ. But perhaps there is some hope for progress in An emmental option remains a possibility a system with holes in it, with an agreement between some EU states for a system with effect in those states alone, as used for the introduction of the Euro. Were this mechanism to be actively pursued, perhaps those countries resisting the majority wishes on major issues would be more likely to fall into line for fear of being left behind. Certainly this seems the best hope for the moment, since unanimous agreement for the EUPJ, let alone the Community Patent, seems as remote a prospect as ever. 108 The authors are grateful to Bristows partner, Alan Johnson, for his contribution of this section.

21 Review of Patent Cases in the English Courts in Looking ahead 2009 and beyond 2009 is not expected to be as busy as 2008 in terms of numbers of decisions. However the first month of 2009 has already seen the handing-down of several lengthy judgments 109. Other important developments in 2009 are likely to include: Guidance from the House of Lords on the law of insufficiency in the Lundbeck case. It will be interesting to see how far the other Law Lords agree with the analysis of Lord Hoffmann and whether Kitchin J s restrictive approach will be preferred; With six referrals on subjects ranging from methods of surgical treatment to software patentability currently before the Enlarged Board, 2009 could also be an eventful year in the EPO. For example, if a decision is handed down in G2/08 in 2009, it will be interesting to compare the EBA s approach to dosage regimes with that taken by the Court of Appeal in Actavis v Merck based on the EPO s earlier decision in Genentech; Further judgments of significance from Arnold J who, as noted above, is already proving Henry Carr QC to be correct in his analysis; It will be interesting to see how far the UK Courts progress towards their stated aim of alignment with the EPO 110, particularly as regards the issues of obviousness and the patentability of computer programs. On the latter, practitioners will also follow any developments 111 in the EPO in the President s referral in G3/08 with great interest. 109 e.g. Corevalve v Edwards (9 January 2009 [2009] EWHC 6 (Pat)); Actavis v Novartis (16 January 2009 [2009] EWHC 41 (Ch)); Dyson v Samsung (22 January 2009 [2009] EWHC 55 (Pat)); and Almirall v Boehringer Ingelheim (23 January 2009 [2009] EWHC 102 (Pat)). 110 See e.g. Lord Hoffmann in Conor v Angiotech (See Footnote 1 ante) when the issue is one of principle, it is desirable that so far as possible there should be uniformity in the way the national courts and the EPO interpret the EPC. 111 Such as whether pending Technical Board appeals in this area will be stayed pending the Enlarged Board s decision, and third party observations in the case which the EPO has recently announced should be filed by end-april 2009.

22 20 The Authors 01 Brian Cordery Partner 01 Brian specialises in contentious intellectual property matters. His practice is divided equally between patents and other intellectual property rights. Brian s experience and knowledge of patents have led him to be involved with several leading patent cases in recent years. He also has a strong interest in brands-related disputes and in particular, interim relief practice and procedure Ewan Nettleton Associate Ewan Nettleton is a senior associate in the Intellectual Property Department at Bristows. He specialises in Intellectual Property Law with an emphasis on litigation. He has an MA in Chemistry and a D.Phil in Protein Chemistry and is particularly interested in matters relating to the IT and pharmaceutical industries Sam Tuxford Associate 04 Sam Tuxford is an associate in the Intellectual Property Department at Bristows. He specialises in Intellectual Property Law with an emphasis on litigation. He has a masters degree in engineering and is particularly interested in matters relating to the engineering, technology and telecommunication industries. 04 Lorna Ballington Senior Paralegal Lorna Ballington is a Senior Paralegal in the Intellectual Property Department at Bristows. Prior to joining Bristows, Lorna studied for a BSc in Biology and an MSc in the Management of Intellectual Property. Lorna is presently engaged in a global lifecycle management programme for one of the world s best-selling drugs.