What’s Trending in Patents? Illegality for cross-undertakings, Teva v Leo, Wearables, Generics Litigation, China and Innovation Statistics

1. The recent UK Supreme Court decision Servier v Apotex concerned whether patent infringement in another territory is an ‘illegality’ which would be relevant to payment of cross-undertakings. The decision can be found here. IPKat’s post can be found here. Wragge & Co’s post can be found here.

2. We’ve written for IPKat on Teva v Leo (see the decision here, see the post here). However we were interested in the observations of Wragge & Co (see here) which ask whether Birss departed from the Pozzoli test for inventive step, whether he had freedom to do so, and how this may have affected the result.

3. This is not strictly a patent topic, but we hear so much about ‘Wearables’ being an important sector for innovation, we thought we’d mention TechCrunch’s article critically assessing the technology (see here).

4. We liked the present edition of Patent Lawyer (see here), particularly the articles on US patent litigation, software patents and making amendments at the EPO. See our post on the Post-Alice Post-Myriad Post-Mayo World here.

5. A recent Pharmalot article (see here) discusses the fact that more generics are filing for litigation.

6. China continues to be topical. Xconomy wrote about its growth plans (see here). Iam wrote about Chinese R&D spending (see here). A post from Freshfields gives some insights into China’s policies on company acquisition (see here). See our post on China and the Patent system here.

7. PWC’s Strategy& have interesting stats on innovation on their website (see here). See our post 10 Points on Ernst & Young’s Biotechnology Industry Report 2014 ‘Unlocking Value’, here.

Reasons to go to Mediation in a Pharma Patent Dispute

Michael Fysh spoke at fieldfisher’s Pharma Seminar on 16 October 2014. The following points are based on the handout he gave at the event.

Advantages of Mediation in General and in Pharma Cases

1. Cost savings in a field where litigation is normally very expensive.

2. Avoiding uncertainty, anxiety and commercial ‘downtime’.

3. There are no appeals to worry about.

4. There is no ‘judge risk’. Litigation inevitably has uncertainties.

5. It is possible to settle international disputes involving the same parties and IP.

6. Resolution of collateral disputes is possible.

7. A wider range of possible solutions is available, and a skilful mediator will be able to provide solutions beyond the power of a Court to provide.

8. Mediation is faster than litigation.

9. Mediation allows confidentiality of sensitive commercial information.

10. Mediation allows for a ‘win-win’ situation, for example by the setting up of a new commercial relationship.

11. There is no costly enquiry into damages.

12. Psychological/cultural benefits. For example there is no ‘loss of face’ as the parties themselves choose what to accept.

13. What happens in mediation is ‘without prejudice’ and is not binding if mediation fails. The parties can go on to litigate confident that the mediation discussions remain confidential.

14. Even unsuccessful mediation can lead to a better mutual understanding of the parties’ positions.

Disadvantages of Mediation in Patent Cases

1. It needs the agreement of the other party to set up mediation. That requires time and so mediation is not suitable where emergency action is needed, such as an interlocutory injunction.

2. It is impractical where a party wishes to create a legal precedent, for example the construction of a patent claim or contractual clause, or the Court’s view on a legislative development.

3. It is unattractive to parties seeking summary judgment.

4. It is not of interest where publicity is actively sought by a party.

5. It is irrelevant where revocation of IP is sought where a Court will need to be involved.

You may also wish to see related posts Top 10 Points on Arbitration in UK Patent Disputes and Top 8 Points On the Disadvantages of Having a Specialist Patent Court.

EU Pharma Patent Settlements

These points are from a talk given by John Cassels at fieldfisher’s Pharma Patents Seminar on 16 October 2014.

1. Anticompetitive behaviour can arise either due to agreements between parties or from unilateral behaviour, and patent settlements are agreements that may be anticompetitive. Anticompetitive behaviour can be approached either through looking at the ‘object’ of the agreement or through the ‘effect’. The EU normally analyses the ‘object’ as this is easier to prove.

2. Pay for delay (or ‘reverse settlement’) agreements are where a patent holder pays a competitor to not enter the market and not to challenge the validity of the patent. See TaylorWessing comments on pay for delay here.

3. EU case law is still evolving in this area and decided cases so far focus on individual bad behaviour of the parties, rather than developing principles to guide which pay for delay settlements are anticompetitive. However in the recent Servier case it was relevant that the ‘product’ patent had expired and Servier was relying on a ‘process’ patent. Servier was also found guilty of abusing its dominant position over a particular ‘molecule’. See Law360’s report here.

4. In the Lundbeck decision the internal documents of the parties were very damaging, referring to a ‘club’ being formed and ‘piles’ of cash being made.

5. The EU fining guidelines can be found here. The fines increase for repeat offending and refusal to cooperate.

 You may also wish to see related articles Evergreening in the Pharma Sector and Mazzucato’s ‘Innovation as Growth Policy’.

Injunctions in UK Pharma Cases

These points are from a talk given by Beatriz San Martin at fieldfisher’s Pharma Patents Seminar on 16 October 2014.

1. There are 4 types of injunction: pre-action (very rare in the UK), interim, final and cross-border.

2. The Enforcement Directive 2004/48/EC made interim and final injunctions available across Europe. They are discretionary and subject to national law, and are not harmonised.

3. Cross-border injunctions are only available if validity is not challenged (GAT v Luk [2006]). Though Solvay v Honeywell [2012] decided interim injunctions were available even if validity was challenged. See Bird & Bird’s comments on GAT v Honeywell here and comments on Solvay v Honeywell from CMS here.

4. In the UK an injunction is a discretionary remedy where no other form of remedy is adequate. It is contempt of court to not comply and the applicant has a duty of full and frank disclosure.

5. The American Cyanamid guidelines view the granting of injunctions as a ‘serious question’ in issue. The adequacy of damages, balance of convenience and special factors (e.g. the undertakings) must be considered.

6. Interim injunctions are more common in pharma cases and final injunctions are standard. When granting an injunction the Court may look at whether the alleged infringer acted to ‘clear the way’ of infringed patents (SmithKline Beecahm v Apotex [2002]). However in Cepahlon & Ors v Orchid & Anor [2010] failure to clear the way did not lead to an injunction being granted. Merck v Teva [2012] and Novartis v Hospira [2013] though seem to show a hardening of approach towards infringers. See Bird & Bird’s comments on Cepahlon & Ors v Orchid & Anor [2010] here.

7. In other EU countries:

In Germany different courts have different approaches. The Dusseldorf court is seen as a friendly court for interim injunctions in pharma cases. The focus is more on the merits of the case rather than economic arguments. It may grant ex-parte interim injunctions. The bifurcated system often results in injunctions before the outcome of the validity action.

In France an injunction will be granted based on the likelihood of patent infringement.

In Austria injunctions are common and this is considered a pro-patentee system.

8. The Unified Patent Court raises new issues. A pan-European injunction will be possible and forum shopping will probably happen when asking for injunctions.

You may also wish to see related articles 10 Points on What Patent Judgments Achieve and 10 Points on Open Innovation.