The Court of Appeal has held that the availability in principle of a declaration that an intended product was not new or was obvious at the priority date of a patent application which the owner reserved the right to assert against that product on grant.

Background

The validity of a patent may be put in issue as a defence in proceedings for: patent infringement; for groundless threats; for declarations of non-infringement; or in revocation proceedings. Patent validity may not be put in issue in any other proceedings and proceedings cannot be brought seeking only a declaration of validity or invalidity (section 74, Patents Act 1977) (section 74).

In Arrow Generics Ltd v Merck & Co Inc, the High Court held that it had a discretionary power to grant a declaration (an Arrow declaration) that a generic pharmaceutical was known or obvious at the priority date of divisional patent applications ([2007] EWHC 1900 (Pat)). An Arrow declaration can be used as a Gillette defence to any later claim for infringement of a granted patent.

A Gillette defence consists of showing that a product or process was neither new nor obvious over the prior art at the priority date of a patent it was said to infringe (Gillette Safety Razor Co v Anglo-American Trading Co Ltd (1913) 30 RPC 465). In such a case the patent would be invalid if there was infringement.

In Nokia Corp v Interdigital Technology Corp, the High Court confirmed its jurisdiction to grant declarations of non-essentiality in relation to standard essential patents (www.practicallaw.com/9-380-5181).

Facts

A owned patents protecting a drug used to treat inflammatory diseases, and a related supplementary protection certificate (SPC), which were due to expire soon. A filed numerous applications for secondary patents protecting dosing regimes, formulations and uses of the drug (the secondary applications).

F intended to launch a biosimilar equivalent in the UK when the SPC expired, so wanted to clear the way of any patents granted on A's secondary applications. F brought an action against A seeking revocation of two European patents and an Arrow declaration (the first action). The High Court dismissed A's application to strike out the claim for an Arrow declaration.

F brought an action against A (the second action) seeking:

  • An Arrow declaration to provide F with protection against subsequent claims for infringement of any patents within a family of the secondary applications.

     

  • An injunction to restrain A from threatening or commencing proceedings for patent infringement in respect of acts covered by the declaration.

The High Court dismissed A’s application to strike out the second action (www.practicallaw.com/3-634-9064). A appealed against the decisions in both actions.

Decision

The court dismissed the appeals.

The first issue was whether it was permissible to grant an Arrow declaration. The modern approach was that the grant or refusal of declaratory relief in relation to commercial disputes should not be constrained by artificial limits, but by the exercise of the court's discretion. Negative declarations were an unusual remedy, but could be granted when useful to do so. Statutory remedies, if available, should in principle be regarded as exclusive, but, for example, Nokia had shown that declarations were permissible if they served a legitimate and useful purpose beyond that achievable by the statutory remedy.

The correctness of the Arrow decision depended on section 74. As the validity of an application cannot be challenged, if there were no relevant granted patents validity could not be put in issue. Section 74 also did not apply where the patent had been revoked. Section 74(2) prohibited proceedings seeking only a declaration of validity or invalidity of a patent. The word "only" made it clear that there was nothing to prevent a declaration of invalidity being sought in conjunction with revocation of the patent. The declarations sought here did not ask for a declaration that a granted patent was invalid. Arrow declarations could still be covert attacks on the validity of a patent, in breach of section 74. However, here the declarations did not correspond to the claims of a granted patent, so they did not offend against section 74.

A declaration that a product, process or use was old or obvious at a particular date did not necessarily offend against section 74 simply because it was sought against the background of pending applications. However, the existence of pending applications was not a sufficient justification for granting a declaration. Whether a declaration was justified depended on the exercise of the court's discretion in accordance with established principles. The court preferred not to give detailed criteria for the grant of Arrow declarations, leaving these to be developed by the Patents Court. 

An important factor in the exercise of the discretion was the existence of statutory proceedings for revocation, which should be regarded as the normal vehicle for obtaining any findings of invalidity. Here it appeared that A was deliberately trying to shield the claims of their patents from scrutiny in the EPO and in the national court. Had the patents not been voluntarily de-designated or revoked by A, F would have had the opportunity to seek findings of invalidity of granted patents in the usual way, and so establish its freedom to operate before launch. Because of the way A had acted, the court could intervene by way of declaration to provide F with useful commercial certainty.

As to the second issue, the court doubted whether the grant of an injunction would be justified in the wide terms sought, but that the question was whether there was a real prospect of any injunction being granted at trial. It held that the claim for an injunction ought not to be struck out at this stage, because an appropriately framed injunction might be an alternative to the declaration.

Comment

This is an interesting example of the UK courts’ ability to devise equitable remedies where statutory remedies are inadequate. An earlier example was the creation in Nokia of a declaration of non-essentiality of patents which had been declared essential to a standard. Here, the decision was clearly influenced by the behaviour of A and it remains to be seen how far it will be confined to its particular facts and whether it will be used in areas other than life sciences. Confirmation of the availability in principle of Arrow declarations may provide useful ammunition for generic pharmaceutical companies confronted by delaying or other tactics effectively preventing the usual remedy of revocation proceedings in respect of granted patents. More broadly, for businesses in any technology faced with patent applications in the pipeline but not yet granted, Arrow declarations may be available to provide commercial certainty, allowing them to test intended products or processes before launch in order to avoid potential damages claims for infringement of granted patents.

No Arrow declarations have as yet been granted after full trial. Judicial consideration has only taken place, as here, on applications by patentees to strike out or obtain summary judgment dismissing such declaratory relief.

Case: Fujifilm Kyowa Kirin Biologics Co, Ltd v AbbVie Biotechnology Ltd & Another [2017] EWCA Civ 1.

First published in the March 2017 issue of PLC Magazine and reproduced with the kind permission of the publishers. Subscription enquiries 020 7202 1200.

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