5 Points from Pharma Patents Case Law in the UK in 2013

This is the first part of a talk given by Neil Jenkins at the CIPA Life Sciences Conference on 14 November 2103.  In the second part of the talk Neil addressed the issue of Regulatory Data Exclusivity which can be accessed here.

1. There was not much in the way of developing substantive patent law in 2013.  Instead there more developments concerning procedure.  There were 3 first instance pharma cases, of which 2 were ‘clearing the path’ cases and one concerned infringement.  There were 4 cases at the Court of Appeal, of which 3 were ‘clearing the path’ cases.  Essentially the finding of the first instance decisions were mostly upheld.

2.  In Generics v Yeda there was the issue of whether post dated evidence could be used to demonstrate that the technical effect described in the specification did not occur. The first instance had said it could not, but the Court of Appeal disagreed and said a party could rely on post dated evidence to show a technical effect did not occur.

3.  In Actavis v Lilly there was the issue or whether a UK Court could give a declaration of non-infringement on the French, German, Italian and Spanish designations of a European Patent.  The Court of Appeal confirmed a UK Court did have the right to give a declaration in respect of the foreign patents which represents a shift in the attitude of the English judiciary.

4.  On the issue of whether UK proceedings should be stayed whilst EPO opposition proceedings are pending the pendulum has shifted over the years.  In the 80s and 90s the UK Courts were reluctant to stay based on the fact EPO opposition proceedings take so long, and therefore this is a case of justice denied.  From 2000 onwards there was more consideration of the issue and in Glaxo v Genetech in 2008 it was decided that in the normal course of events a stay would not granted. 

This summer in Virgin v Zodiac before the UK Supreme Court the Unilin issue came up, which concerns the situation where damages given on a patent later found by the EPO to be invalid or where the patent was subsequently amended at the EPO to a scope where infringement did not occur.  The Supreme Court decided that the case law up to that point was incorrect, and that damages were not appropriate where the EPO revoked or amended the patent.

5.  In Novartis v Hospira the Court of Appeal decided that an interim injunction could remain pending during an appeal, even where the first instance decision had found the patent to be invalid. This means that generics companies will need to now also consider the time taken for appeal when attempting to ‘clear the path’.

 You may also wish to see related articles 10 Points from EPO Case Law in 2013 and 10 Points from IPO Decisions in 2013.

10 Points About the State of the Pharma/Biotech Sector

These points are gleaned from a talk given by Tony Rollins at the CIPA Life Sciences Conference on 14 November 2013.

1.  Drug discovery used to be a much simpler process, essentially involving chemistry, biology and pharmacology components.  However today it is much more complex and multidisciplinary, being carried out in a networked environment and involving many more types of analysis, such as pharmacogenomics.

2.  A new drug needs to satisfy many criteria, including:

- being able to target the relevant pathway to give an appropriate efficacy,

- being able to target the right tissue,

- being safe, with the risks versus benefits being clearly understood,

- targeting the appropriate patient group, and

- having the appropriate value proposition, i.e. being able to compete in the market with other drugs.

There is a trend towards drugs which are more personalised, rather than one drug being able to treat all people.

3.  The sector very much relies on patents in its business model, and differs from other sectors in that a product might be covered by very few patents, and perhaps only a single patent.  This is necessary because chemical drugs are easy to copy.

 4.  Development of a single drug costs $1 billion, requires 7 million hours of work, 6587 experiments done by 423 researchers.  Drug development typically takes 10 to 15 years, starting with 5000 to 10,000 initial candidate compounds to give a single drug.  Research continues even after registration of a drug in the form of post-marketing surveillance.

5.  At the moment there are many candidates in the pipelines, in many cases 100 or more different drugs are being tested across the industry for many diseases.  There is increasing research being carried out into neglected diseases, many of which are vaccines.  No other sector spends more on innovative research.

6.  Pharma R&D is being eroded in Europe, with much of it going to the US in the 90’s and then to the Far East in recent years.  Between 1990 and 2009 pharma R&D investment grew by 5.6 times in the US, and 3.5 times in Europe.

7.  Clinical trials in particular have shifted to Asia where many new research sites have opened.  The UK government is in the process of reconsidering the Bolar exemption to counter this.

8.  Incremental innovation is becoming increasingly important.  Typically this would be discovering new formulations for existing drugs to improve their properties, versus radical innovation (e.g. finding new classes of compounds)  and revolutionary innovation (e.g. finding new pathways). However it is no always easy to get patents for incremental innovations.

9. Personalised medicine is increasingly important. Essentially this concerns identification of the optimally responding patient subgroup.  However it means reduced market size for the drug, whilst R&D costs are often the same.  Many drugs are only effective in subpopulations or exhibit toxicity only in subpopulations, and therefore this provides the opportunity of revisiting previously rejected drugs. Statins have surprisingly been found to not work in 40% of patients.  For warfarin it has been found that half the dose used Caucasians is therapeutic in the Chinese population.

10.  However personalised medicines come with other complexities.  The party with the rights to the technology which identifies the subpopulation may not be the same as the party that has the rights to the drug.  Patent life on the drug may not be long enough to take full advantage of the personalised use of it.  One may not be able to get a patent for the personalised use, phrasing of the patent claims may be difficult and it is unclear whether SPC’s will be available for personalised uses.

You may also wish to see related articles What Do You Need to Know about Commercial Biotech? and What is Wrong with Pharma R&D?

10 Points On the Ethics and Morality of Patents in Europe

These points are gleaned from a talk by Julian Cockbain at the CIPA Life Sciences Conference on 14 November 2013.

1.  Why should morality be dealt with in the EPC as part of patentability?

Morality could instead have been dealt with during infringement. However by making it part of the EPC the aim was to give uniformity of approach across Europe.  Also a patent is in a sense approval of an invention by an official body, and so it is appropriate for morality to be relevant.

2.  The unique position of a Patent Office

Unlike general law-making a Patent Office is in the unique position of being able to look at ethics on a case by case basis, providing an opportunity to consider the ethics of individual new technologies.

3.  Key questions

- do immoral acts infringe Europe patents?  This is the slightly theoretical issue of how infringement relates to claim scope when looking at morality. Can an immoral act ever infringe a patent even though on the face of it it would be within the scope of the claims?

- how do we work out whether something is contrary to morality?

- can the chain of complicity be broken, and if so, how?  The chain of complicity concerns how the invention relates to an immoral act.  For example in the case of inventions concerning cells derived from human embryos, the act of destroying a human embryo might not be mentioned in the claims, but the claims may refer to cells whose production required destruction of an embryo.

4.  Who decides?

From the travaux preparatoires of the EPC it would seem that morality is interpreted by ‘European institutions’.

5. Case Law.  Complicity and the utilitarian approach.

In the CJEU decision Brustle v Greenpeace the chain of complicity was essentially held to be unbreakable, so that if a claim required use of a technology that relied on destruction of a human embryo at any previous stage the invention was held to be unpatentable.

In the EPO decision T19/90, Harvard Onco-mouse, morality was considered by weighing up the suffering of an animal versus the usefulness to mankind, i.e. a utilitarian approach based on maximising benefit.

6.  Deontological approach

In the embryo stem cell case at the EPO, T1374/04 & G2/06 Stem cells WARF, a different approach was used; a deontological one, where the concept of ‘human dignity’ was given priority over a utilitarian analysis.

7. Human Dignity

Human dignity is an accepted concept and is defined in The Charter of Fundamental Rights of the European Union as inviolable. This has four aspects:

- the intrinsic value of human beings and life,

- the non-instrumentalisation (i.e. non-commodification of human beings),

- the non-commercialisation of human beings,

- the foundation of the duty to respect human rights.

8. Complicity

Complicity concerns how parties which are neither totally innocent nor totally guilty relate to the immoral act.  The patent concept of ‘contributory infringement’ is an example of this.  Complicity occurs by:

- direct encouragement through agency, i.e. using someone else to achieve it, or

- benefitting from the immoral act.  This can provide powerful incentive for misconduct.  An example of this would be buying stolen cars, and the chain of benefit continues as the car is sold on.

9.  How the chain of complicity is broken

The development of some vaccines can be traced back to immoral acts, and yet many people would be of the opinion that information gained from previous acts should be used to provide present benefits.  Arguably therefore the chain of complicity can be broken by using information gained from an immoral act, but not when using something material, like a stolen car.

10.  Is the chain of complicity broken in the EPO WARF decision?

The EPO decided in the WARF case that inventions that used cells from libraries were patentable, even though such cells may have been obtained by immoral means, such as destruction of a human embryo.  Therefore it would seem that an invention concerning cells derived from human embryos could become patentable simply by the patent applicant depositing the cells in a library where they would be publically available before filing a patent application.  This does not seem consistent with the usual thinking on a chain of complicity.

You may also wish to see related articles Top 10 Controversial Issues in Biotech Patents and Top 10 Debateable Aspects of Biotech and Patent Topics in the UK.
 

10 Points from Burrill’s Biotech Predictions for 2014

These points are taken from an article on the Burrill Report website.

1. The IPO market will cool to around 30 in the next year, as investors look more at a company’s present value rather than its prospects.

2. Biotech will raise $110 billion, slightly more than in 2013.  Crowdfunding will start to be taken advantage of by early stage companies.

3. For M&A, big biotechs will take on the role of big pharma in becoming buyers of small companies.

4. Pharma will continue to externalise their research, with early stage partnering with biotech companies and academic institutions.

5.  Increased dealmaking will happen in emerging markets as drugmakers revise their strategies for doing business there.

6. NIH funding will continue to be constrained forcing researchers to look at other sources of funding.

7. Drugmakers and CRO’s are moving to adaptive clinical trial design allowing them to modify studies based on data that is being collected.

8. The FDA will approve around 30 new drugs in 2014.  Biosimilar issues will become more important in the US where the approval pathway has still not been defined.

9. Diagnostics- and drug- makers will need to increasingly demonstrate value as buyers push for value-based pricing.

10.  Digital health care and provision of health care will continue to evolve with costs become more and more important to contain.

You may also wish to see related articles What Do You Need to Know About Commercial Biotech? and Biotech Patents in Europe.

10 Points on the EPO Boards of Appeal

These points are gleaned from a talk by Alexander Clelland (ex-head of a Board of Appeal) given at the CIPA Life Sciences Conference on 14 November 2013.

1. Statistics

There 28 Technical Boards of Appeal, as well as an Enlarged Board, Legal Board, Disciplinary Board and Legal Research & Admin Unit.  In 2012 a total of 2,659 appeals were filed and 2,071 were settled (i.e. decided or otherwise terminated).  On average ex parte appeals take 27 months and inter partes take 26 months.  However there are wide variations of 8 to 36 months depending on the workload of the Boards.  The average Board deals with 80 appeals per year.

2.  Backlogs of Appeal Cases

The backlog of appeals is increasing by about 600 a year and there is no immediate prospect of this decreasing.  The reason for this is that the number of appeals filed is increasing as more applications are filed. However the EPO does not wish to keep expanding indefinitely and so recruitment has been limited. The problem of ensuring uniformity of procedure and case law across the Technical Boards of Appeal. This would get more difficult if the number of Boards was increased.

Previous EPO President Alison Brimelow had the idea of ‘raising the bar’, i.e. improving the quality of granted patents.  This led to the theory that more Examiner rejections have led to more appeals, but not everyone thinks this is the case.

3.  Backlogs in the Area of Business Method Inventions

There are still many US originating patent applications being filed to subject matter which is not patentable in Europe, particularly business method inventions.  This is essentially considered a waste of time by the Boards and an area where the backlogs are highest.  The Boards were hoping that by ‘sitting’ on these long enough US applicants would get the message.  However that has not worked and appeals continue to be filed at the same rate for business method inventions.

4.  Possible Solutions for Decreasing the Backlog

Each appeal costs the EPO around €40,000.  Should the appeal fees be increased?

Should the first instance approach be changed to make better use of procedure (e.g. interlocutory revision)? So far this approach has not succeeded and there does not seem to be much scope for using it to reduce appeal backlogs.

Should the appeal procedure be streamlined? For example by:

- reducing or abolishing auxiliary requests or charging for them

- aggressive case management, e.g. no extensions, but this does not make sense unless the Boards also speed up

- appeals should not be a re-examination, so strictly limited to first instance decision, i.e. no new requests or documents, and perhaps even no new arguments.  This is already being implemented by Boards to different degrees.

5.  Uniformity Across Boards

Each Board has own character.  The Enlarged Board exists to improve uniformity in jurisprudence and Presidium has the task of keeping procedure in uniformity.

6. Divergence Across Boards

Boards differ in:

- providing opinions on patentability before Oral Proceedings

- actively debating with parties about the issues

- admitting late filed requests, documents or new arguments

- changing the hearing date (many Boards will not be sympathetic if another attorney is available at that firm)

- strictness on the issue of added matter (generally the Boards are becoming stricter, and it is very convenient for a Board to reject a case based on added matter).

7.  Best Practice for Attorneys

File everything as soon as possible in the appeal process, and be aware that after the initial filing of the appeal the Board’s discretion applies.  The attorney should be aware of the character of Board on such issues.  In general Boards are becoming much stricter on this. The criteria for exercising discretion are complexity of the late filed matter, the current state of the proceedings and the need for procedural economy.

Be aware of the possibility of requesting accelerated processing.  Clearly there are specific grounds for this, such as infringement, but sometimes Boards will be lenient towards accelerated processing for other reasons.

8.  General Advice for Patent Attorneys

Keep your submissions short, so that important points do not get lost in noise.  Being concise comes across better.  The Board will be alert to what you don’t seem to believe yourself (‘my client believes’).  It might be better to admit what can’t be denied.  Don’t come across as acting as post box.

Don’t call a Board member for advice.  A Board is not like an Examining Division in the way the members interact.  They have less informal contact with each other.  This is clearly not appropriate in inter partes cases. If you really need to call then the registrar for the case should be contacted, and they can contact Board members if required.

9. Changing Dates for Oral Proceedings

Request a change of date immediately if you need to, due to the shortage of hearing rooms at the EPO.  Tuesdays and Thursday are favourite days for a hearing as then you don’t need to travel at the weekend.  There needs to be 2 months 10 days notice for a change in date to be possible (based on the way room bookings work).

10.  Oral Proceedings General Points

Bear in mind providing interpreters is expensive for the EPO.  If you request translation you should use it.

The Boards are alert to US Patent Attorneys masquerading as technical experts, and are averse to US Patent Attorneys speaking.  However Boards can be lenient towards trainee European Patent Attorneys speaking.

Boards really do not like being faxed the night before about a party not turning up.  There have been cases of the EPO reporting Attorneys to the epi on disciplinary grounds for failing to turn up without informing the Board.

Ties and jackets are expected at Oral Proceedings.

You should address yourself to the Board, not another party.

The Boards are vigilant to use of recording devices during breaks which may hear what they are discussing in private whilst the parties have been sent out.

Ask for a break when needed.  Sometimes new arguments, documents or difficult questions need thinking time.

Using projection devices tends to be troublesome.  Try to do avoid having to do PowerPoint presentations using them.

You may also wish to see related posts Top 10 Tips for Success in EPO Appeals on Biotech Cases and Tips for Opposition Success.