The UK Supreme Court today delivered judgment in Eli Lilly v Human Genome Sciences, the first patent case it has heard since replacing the House of Lords as the final appellate court in the UK.   It reversed the decisions of the lower English courts which had found the patent to be invalid and so in effect upheld the validity of the UK designation of Human Genome Sciences' (HGS) patent EP 0,939,804, as the other issues that remained open in the Court of Appeal and to which the case was remitted are unlikely to result in the patent being held invalid.

HGS applied for the patent in 1996 based on its work on sequencing the human genome.  HGS identified a novel gene sequence which it postulated, because of its homology with certain known gene sequences, would code for a previously unknown member, designated as neutrokine-α, of a known "superfamily" of proteins.   HGS also identified in the patent the tissue distribution of neutrokine-α, and its expression in T-cell and B-cell lymphomas.  This suggested a wide range of potential physiological effects for neutrokine- α, the modulation of which offered scope for a wide range of therapeutic applications.  The patent was granted by the European Patent Office (EPO) with claims to the gene sequence in issue and also neutrokine-α itself, but the most commercially important claims have proved to be those to monoclonal antibodies (MABs) that would modulate the effect of neutrokine-α.  As a result GlaxoSmithKline, whose new MAB Benlysta (Bemilumab) for the treatment of lupus falls within such claims, has taken a licence under the HGS patent. 

The underlying issue in Eli Lilly's challenge to the validity of the patent was common to the different legal grounds of objection raised against the patent; namely, had HGS, in its original application, disclosed enough to move out of the realm of mere speculation as to the possible therapeutic utility flowing from its identification of neutrokine-α and the sequence which codes for it, into a more concrete disclosure of possible applications and which merited a patent. 

The Patents Court and Court of Appeal both held the patent to be invalid; the Patents Court because of both lack of industrial application (Article 57 EPC) and insufficient disclosure (Article 83 EPC).  The Court of Appeal only considered the Article 57 objection and upheld the Patents Court decision.  The Court of Appeal decision was controversial because it had differed from an EPO Technical Board of Appeal which, after the Patents Court decision, had upheld the validity of the patent, although the Court of Appeal had sought to explain that its reasons for so differing were that the Patents Court, whose judgment it upheld, had had different evidence before it to that which was before the Board of Appeal.

The Supreme Court accepted that the Court of Appeal would have been entitled to come to a different conclusion to the Board of Appeal if there had indeed been such a difference. However it saw no difference between the central findings of fact of the Board of Appeal and the Patents Court and held, after close analysis, that the reason for the Court of Appeal differing from the Board of Appeal was that it, and the Patents Court, had incorrectly applied the accepted principles established by the EPO case law as to Article 57 to the findings of the Patents Court.  There were two reasoned speeches in the Supreme Court, from Lord Neuberger and Lord Hope, both of whom recognised the difficult nature of the case and identified their marked reluctance, which they had only with difficulty overcome, to reverse the judgments below.  Of the three concurring speeches that from Lord Walker summarised the policy arguments for allowing the appeal which to his mind justified the Court in taking what would otherwise to him be a questionable course - the one was to reduce the risk of a chilling effect on investment in bioscience (though here he noted that the arguments are certainly not all one way), and the other was to align the UK interpretation of the European Patent Convention (EPC) more closely with that of the other EPC contracting states.

As to the policy issues, Lord Hope and Lord Neuberger both referred to an intervention that the Supreme Court had allowed in an amicus brief from the BioIndustry Association, the trade association for innovative enterprises in the UK biosciences sector.  Although it had not set out to support either of the two parties to the appeal it did suggest that if the reasoning of the Court of Appeal were upheld there was at least a risk that it would "make it appreciably harder for patentees to satisfy the requirement of industrial applicability in future cases" and that if that were so, this "would cause UK bioscience companies great difficulty in attracting investment at an early stage in the research and development process".   This was a consequence of the reasoning of the lower courts that there would normally be a need to conduct tests to provide experimental data to establish to the requisite standard that a protein (or its antagonists) have a therapeutic use, which would be expensive, when funding would be hard to obtain for a project of this sort which had no existing protection in the form of a patent application.  It had however also accepted that it would be wrong in principle to enable applications for patents to be made when the applicant can reveal no more than "a vague indication of possible objectives that might or might not be achievable by carrying out further research", given that the purpose of the patents system is not "to reserve an unexplored field of research for the applicant nor to give the patentee unjustified control over others who are actively investigating in that area and who might eventually find ways actually to exploit it."

Lord Neuberger started his speech by observing that although the present case could be said to raise an important question of principle, its resolution was inevitably fact-sensitive, and therefore its answer might be of limited wider application.  He analysed the relevant EPO case law on Article 57 in detail, an exercise which the lower courts had also undertaken, there being no relevant UK case law, but went further and extracted from this, at paragraph 107, a list of fifteen principles which he derived from such case law.  Applying these principles to the conclusions of the Patent Court as to what the patent disclosed, namely the existence and structure of neutrokine-α and its gene sequence, and its membership of a particular ligand superfamily, this should to him have sufficed, taking into account the common general knowledge, to hold that the patent did indeed satisfy the Article 57 EPC threshold.  He went on to consider, and dispose of, various specific arguments to the contrary, one of which lay in the suggestion that the "extravagant and wordy" assertions in the patent would have diverted the notional addressee from what their search of the literature, coupled with common general knowledge, would otherwise have led them to understand represented the teaching of the Patent.   The argument failed as there was no finding from the Patents Court to this effect and the Technical Board of Appeal had held this was not the case.  Having held that the patent did satisfy Article 57 EPC, Lord Neuberger went on to consider the Article 83 EPC objection (insufficiency), which he rejected, having noted the close connection in EPO case law between the two grounds of objection in situations such as this, and having construed the product claims as not being in any sense functionally limited.

Lord Hope in his speech identified indications in the decision of the Court of Appeal that the standard which it set for Article 57 was a more exacting one than that used by the Board of Appeal in that it had been looking for a description that showed that a particular use for the product had actually been demonstrated rather than that the product had plausibly been shown to be "usable".

So the first judgment of the Supreme Court in the field of patents establishes no new legal principles (although it does provide a most useful summary of ones extracted from the EPO case law and it does adopt the standard for Article 57 set by the EPO) and may be of limited wider application.  It does however show the importance of policy considerations to the thinking of the Supreme Court in areas such as patents, and the increasing relevance to such policy considerations of amicus briefs filed by third party interveners.

Trevor Cook, Partner, London

If you have further queries in relation to this newsflash, please contact trevor.cook@twobirds.com or gerry.kamstra@twobirds.com