Gordon Harris gives his annual review and summary of 2020's important patent cases. Alex Brodie and Michael Carter join him to deliver the statistics, provide an expert view on one of the big judgments of the year and will also give you a helicopter view of the cases to watch out for in 2021.
Gordon Harris: Good day ladies and gentlemen, wherever you may be in the world and welcome to our annual review of patent law and statistics.
This is the twenty-third of these annual events but the first to be held online in this format.
The title of the key note talk on patent case is Swings and Roundabouts and that applies equally to this virtual format.
It is a great shame not to be in a room with our audience, many of whom are loyal veterans of this event. I certainly miss not seeing you in person, however in this format we are able to reach out to a wider audience and there are people here today from many countries around the world, so it is great to have the opportunity to reach that wider audience.
Of course, you can see me but I cannot see you, so I will not know if you have a little snooze. It has actually happened at the live event a few ago, I well remember the late, great and much missed David Kelty sleeping soundly through my talk.
I hope we have enough to keep you awake and interested today anyway, there is certainly a lot to get through.
In a few moments I am going to hand over to my partner Alex Brodie, who will give you a helicopter view of the statistics behind this year's cases, which are, I think you will agree, perhaps surprisingly impressive for a Covid year.
I will then come back to deliver the review of the 2020 patent cases at all levels and then, making his second appearance at one of these events, my colleague Michael Carter will get out his crystal ball and look ahead at what might be happening in the world of patents in the year to come.
At the end, two things will happen. You will be sent a feedback form, which we would be very grateful if you would complete. We learn a lot each year from your feedback and this year, in changed circumstances it would be great to see a response.
You will also have the option, from a link which will be posted in the chatbox right near the end, to join one of two break-out rooms. In one of them, I will be waiting with Ailsa to take your questions on the main session.
In the other, Alex and Michael will be there to take questions on the statistics, step-frand cases and the outlook for next year.
I am conscious we will have taken up a lot of your time by then, but please do feel free to join us, and you can pour your own drink.
You can post questions in the Q&A box as we go along. I am not going to be pausing to answer, but Alex and Michael may have the chance to write a response and in any event, we will be collecting all unanswered questions at the end to deal with in a subsequent publication.
Finally, please do not feel the need to take notes. We will be sending you, probably tomorrow, a soft copy of the full paper which underpins the main talk. The paper is a lot more detail than what I have to find to say today. If you read it, you will not need to look at anything else to be fully up-to-date on 2020 patent case law. So I really do commend that to you.
If you have any practical difficulties, reading or printing a soft copy, please do let us know and we will mail you a full hard copy.
Right, that is quite enough formalities, so without further ado over to Alex to look at the numbers underlying 2020 in the Patents Court. Alex, take it away.
Alex Brodie: Thanks Gordon. And good afternoon everybody, or good morning! Depending on where you are calling from.
So, for our regular attendees, you will know that we have been looking at the data. Now for me this is a bit of a pet project. Because people will come out with bold statements about what the UK Patents Court is or is not. Is it pro-patentee, pro-defendant, does it find everything invalid or does it find infringement.
People are quick to repeat these things but I thought, well I do not know and I want to know. So since 2015, with the help of Ailsa Carter we have been gathering the data! It is starting to build into a dataset that is worth noticing because it now includes six years' worth of numbers!
So, how is this looking? Well if we go to the next slide, you will see there on your screen the data between 2015 and 2020.
And in particular, I was interested to see if Covid had had any impact on the rate of production in the Patents Court.
So you will see there, a column saying reported decisions and if you look down to the bottom you will see 2020 70! So that is totally within the range of normal for the UK Patents Courts and do not forget this is across IPEC, Patents Court, Court of Appeal, Supreme Court.
Over to the next column, validity infringement, you will see that 20 of those 70 reported decisions, so these are reported, 20 of them dealt with infringement and/or validity and again that is an entirely within the boundary of normal range across the six years.
The eagle eyed amongst you will be looking across to 2020 figures and thinking, those coloured numbers do not add up to twenty. What has she done?
That is just to say that we do track data across three sectors in particular: tech, pharma and medical devices. So that is why the coloured numbers will not necessarily add up to the black numbers.
The other eagle eyed lot of you will have looked across and said, hang on, I know there was more than one Supreme Court patents judgment this last year and you will be right! Because there was Regeneron and there was Unwired Planet. Unwired planet was not to do with infringement and validity, it was to do with FRAND and more on that later.
The good news here is the Patents Court up and running, producing in the normal fashion, normal number of cases, normal number of infringement and validity. So how are those falling out? If we go to 2020's breakdown on the next slide, you will see here that we have split this up by outcome.
There were not any cases where it was only infringement in issue. We did have some where it was only validity. We had some findings of valid in part. We had valid and infringed - obviously the crown jewels if you are the patentee. Valid but not infringed - so you keep your patent but you lost your infringement, invalid - nightmare if you are the patentee and not infringed - where only infringement in issue.
So looking at our 20 cases for 2020, you can see that if you are a patentee you are interested in the blue segments. So that is valid and infringed or valid in whole or in part. And of those you have got 12 out of 20 in patentee favour. You have got seven out of 20 in defendant favour and one - the purple one I think is a sort of nil score draw because the patent remains, you have been trying for infringement but you did not get home.
What this tells me is that 2020 was a pro-patentee year but not in a dramatic way and it is interesting to see how that data stacks up with the past five years. So moving to the next slide.
You will see there that if you are a patentee, you are interested in the green and the blue and the blue segments. So when you are a patentee, looking at the last five years across 111 judgements, it is coming out that 48 of those 111 were pro-patentee and you had a number in the nil score draw camp.
What this is telling us, is 2020 was slightly more pro-patentee than the past five years of consolidated data, but in the main there is not a lot to judge but it is pretty much 50/50. And what that tells me is that you are dealing with a jurisdiction that is not biased.
It is looking at case law and the facts. And the reason why I would say 50/50 is a non-bias jurisdiction, is because if either defendant or the patentee's case were overwhelming or compelling, you would not have got all the way to a trial and appeal of the Supreme Court. You would have settled in some way or another, usually.
And so, this outcome to me tells me that you have got a jurisdiction that is looking at the facts in a fairly dispassionate fashion.
Does it differ across sector? Well if we go onto 2020 in sectors, obviously you do not have a vast body of judgments here to draw any statistical deductions but I think it is interesting again that - unless your medical devices where you had a stonking year as a patentee - again, you are looking at a fairly 50/50 split. And I think that just reflects the cases before the Court.
Moving on though to the next one, you are probably wondering what happened to the other eight cases.
So we had 20 dealing with infringement and validity in 2020. 12 of which were in the three sectors we follow and eight of 20 in the other sectors. Again, 50/50 split for patentee and defendant.
In case you are wondering what 'other' amounts to, there are some really interesting ones here actually. We have had everything from railway track bedliners to garden hoses to crypto-currency from banking and even the humble coat hanger made an appearance and some jeans, which Gordon will get to later and that's of the cloth variety.
Does this make a difference per year in terms of the sectors? Are we having an unusually high 'other' category this year?
Again, no! Pretty even performance across six years. You will see there: red is tech, green is pharma, gold is other and blue is automotive. I think the interesting thing if you are coming from the German jurisdiction is the low incidents of automotive sector cases across the six years, which is a very different story when looking at the German district Courts.
I was also interested to see about Covid and whether it had affected the judgements - you know, were all seventy of these judgements all bunched into a certain point in time? And no. I mean, full hats off to our judges. They kept going throughout the year in their normal fashion. August off usually in Italy but I am guessing everyone stayed home this year and February I have no idea, but I really hope they were not skiing in Italy.
Moving onwards to outcome of appeals because that is the next biggie is it not? You can win at High Court but what is going to happen on appeal?
What you can see here is: blue is confirmed and that magenta colour is overturned and in the main, more often than not - certainly more than 50/50 you will find that the Court of Appeal affirms the lower Courts. This is data across six years. Thirty-four appeals, of which twenty-six have been affirmed and only eight overturned.
I think that gives party's some degree of confidence in the reliability of the judgement they receive at first instance.
Just lastly, the outcome across all of those years is there in each year in particular, which shows again that there has been no particular year where it was good to be in the appellate Court or bad. This is a consistent and reliable, predictable jurisdiction.
Back to you Gordon, as to what they have actually been up to!
Gordon: Thanks very much Alex. So, now we move onto the review of the 2020 patent cases.
No-one could describe 2020 as normal, in almost any way. Even at the time I was preparing and delivering the update for the 2019 cases this time last year, the dreaded name Covid-19 was already imprinting itself on our consciousness.
At some point earlier in the year, I thought that preparing this year's talk would be a very simple task, I mean how could there possibly be many cases to report on?
Well, as you have just seen I was as wrong as I could be. There have been plenty of cases in 2020 and one particular aspect of the stage that we are at in the judicial cycle, has meant that judgments are not, by any means, brief. There has been a lot of change. New judges in new positions. Lots of deputy judges filling gaps, lots of general chancery judges filling gaps and an IP specialist in the Supreme Court, who keeps getting excluded because he heard the cases in the Court of Appeal.
The upshot of this is that there have been a lot of judges finding their way in IP and doing what they always do in this situation. Revisiting some well-established principles to apply their own touch and their own gloss.
Now there are pros and cons to this. Can get a bit long-winded when you are working your way through these judgments but it can also provide a welcome recap and revision. Sometimes the thoroughness of the new judges means they get it very right! Sometimes non-experts tinkering in our field get it very wrong.
New judges also have a habit of delving into deepest history and aged case law. There has been a lot of that this year. Again, this can be good or bad. Anyone with a fascination for legal history - like me, finds it massively interesting. Others probably wish they would just get up-to-date and cut the reflections.
It is a case of swings and roundabouts. Let us treat this year as an opportunity to have a recap and catch-up on some basics. I am going to adopt my usual structure. We start with construction infringement evidence remedies, then move onto validity and finally a sweep-up of technical issues.
The last section contains some interesting cases dealing with the new normal: remote hearings and how to conduct them. Now that is not going to an issue unique to these Covid years. The Courts have made it quite clear the new practices are here to stay, so we will have a little look at that.
Buckle up! Here we go!
Let us start with construction. Recap. In 2017 Neuberger's judgment in Actavis and Lilly overhauled the law of patent infringement. Questions as to collateral upheaval in other areas of patent law, were immediately apparent not least in respect of construction.
We have discussed this at length in the reviews of the 2018 and 19 cases, so entering 2020 the position was fairly established. But nevertheless, there has been useful clarification this year.
Case law in 2020 has confirmed that when interpreting or construing the meaning the claim language, the normal purpose of approach is a contextual interpretation. So when considering the context of the specification of the patent in a case called Akebia and Fibrogen, Lord Justice Arnold said "there is no principle that the skilled team are deemed to read all documents cited in a patent. It is a context - and fact-dependent question, and so it depends firstly upon the wording of the specification and secondly on the evidence". In Akebia, the patent specifications in issue referred to other publications.
There was a dispute as to whether and if so to what extent the skilled team would read those documents. In light of the evidence, the judge concluded the skilled team would not necessarily follow-up any of the cited publications and they may have been more likely to read some than others.
So moving onto infringement, following Actavis and Lilly, in the first stage - limb one of the assessment of infringement the Court considers whether the alleged infringing product or process falls within the scope of the claim of the patent when the claim has been given its normal interpretation.
Second stage, limb two is the doctrine of equivalence. Now in patent disputes that reach the Court, the answer to the limb one test tends to follow without much further reasoning from the determination of issues of construction. So I will just briefly mention a couple of cases in respect of the limb one test before turning to limb two, which has continued to develop in 2020.
So starting on limb one then, there is a case called Communisis and The Tall Group. This was a case about security measures for cheques. Anyone remember cheques? It consisted of converting visible data on the cheque - sort code, account number, serial number - into a higher base and then printing the generated code, or part of it in at least one place on the cheque as well.
An issue of construction was whether by conversion to a higher base meant that the code had to be generated by that conversion or whether it covered a process involving encryption by another cryptographic process, followed by a presentation of the output in a higher base.
The judge, Her Honour Judge Melissa Clarke said that the latter approach involved ignoring words that were present in the claim and in doing so, fundamentally altered its meaning. The patent only taught counter-generated code by base conversions so that is the limit of the monopoly. The Tall Group actually said that the Communisis' claimed invention was like translating a word from one language into another and even the Communisis' expert described the security as "frankly pretty awful". So, not much surprise that that patent went down and we will hear a little bit more about it later.
Right! Time for the comic relief! A little bit early in the session I am afraid but here it is. Just think of this as the porter's scene in Macbeth. Freddy and Hugz was a case about a patent relating to panels in clothing for shaping the female buttocks and hips. Claim one was crafted in dry language, but my favourite integer says "and that second element comprises two parts, each adapted to cover only one of the two central parts of the buttocks, said two parts being secured together along respective lateral edges provided at the inter-gluteal cleft of the buttocks by a central seam adapted to be positioned at said inter-gluteal cleft. Carry on patents!
Here are some figures from the Freddy patents. You can see there is a picture of them being worn and then a picture of the Hugz jeans that were alleged to infringe.
The word 'element' was construed as not meaning a totally separate piece of material. So the portions labelled one and two in Hugz jeans were separate elements. Even with the inter-connecting bridge of fabric between the larger first and second elements.
So the Hugz design infringed. The judge also concluded that Hugz were liable for passing off and unregistered design writing infringement. So the Freddy case is an interesting one for the breadth of intellectual property rights that proved useful and showing that patents can be a valuable asset to the fashion industry.
I also suspect it holds the record for the judgement with the most frequent use of the word 'buttocks'. Indeed I doubt if there is a lot of competition for that title.
Right! Let us move onto the doctrine of equivalence. It is all serious from now on.
In Actavis and Lilly, of course, Neuberger described limb two as addressing the following issue: Does the variant nonetheless infringe because it varies from the invention in a way or ways which is or are immaterial?
Now in that context, he considered the old improver or protocol questions helpful but they needed some reformulation. He did that. Various Courts have tinkered a bit since and in 2020 Mr Justice Birss reiterated the questions in their current format and so it is worth just recapping them briefly.
Question one: Does the variant achieve substantially the same result in substantially the same way as the invention?
Question two: Would it be obvious to the person skilled in the art, reading the patent at the priority date, but knowing that the variant achieves substantially the same result as the invention, that it does so in substantially the same way?
Question 3: Would such a reader of the patent have concluded that the patentee nonetheless intended that strict compliance with the literal meaning of the relevant claims of the patent was an essential requirement of the invention?
In Evalve and Edwards this is a case about treating mitral valve regurgitation by a trans-catheter technique. Evalve's patent claimed a fixation device for engaging tissue and you can see how that works in the drawings and then you can see the Edwards Pascal device that was alleged to infringe and various operations of the Pascal device are depicted there. I am not going into too much detail.
There was no infringement on the normal interpretation. We do not need to look into that. So we move onto equivalence.
Now, for question one, Birss said that the first step must be to identify the variant and the necessary aspect of the analysis must be to identify the missing feature of the claim. He noted that in the first question one should examine what was the problem underlying the invention and how the patents solved the problem.
The judge rejected Edwards' attempts to distinguish the elongated position of Pascal from the inverted position of the patent and he said the Pascal device solved the problem in essentially the same way.
Question two - of course repeating it, asked whether it would be obvious to the person skilled in the art, that the variant achieves substantially the same result as the invention. That it does so in substantially the same way as the invention. Evalve contended that the skilled reader would easily understand how the Pascal device worked and so, the answer 'yes' followed automatically from that understanding.
Birss said that in a fairly simple mechanical device like this, that is a legitimate way of dealing with question two, so that was fine.
Question three says, well would the patent - the reader of the patent - have concluded that the patentee intended strict compliance with the literal meaning of the claim.
The judge said here, that he could not think of anything in the patent that would lead the skilled person to think that the various relevant features of the variant were intended to be excluded. So, the patent was found to be valid and infringed on the doctrine of equivalence.
Now, we will return to the consequences of that decision a bit later on.
The operation of the doctrine of equivalence was considered by Lord Justice Arnold in Akebia and Fibrogen. At 61,089 words and 639 paragraphs, this was the longest patent's judgment of the year. Lord Justice Arnold came down to the High Court, at a time when they were short of judges, to hear this case. Every year there is a case that turns up under pretty much every heading and this year, it is this one.
The case concerns six Fibrogen patents in two families. Many of the claims were found to be invalid on a variety of grounds, however, Claim 17a of EP531 survived the invalidity challenges during prosecution, with amendments. This claim was limited to something called 'Compound C' and the question became whether the allegedly infringing product was infringed on the doctrine of equivalence and the limitation to 'Compound C' became important.
Lord Justice Arnold noted, from what Lord Neuberger had said, that the reformulated questions were guidelines, not strict rules and the language of some or all of the questions may sometimes have to be adapted to apply more aptly to the specific facts of a particular case.
Of course, the Court of Appeal in iScape, Lord Justice Kitchin as he then was, said that the determination of equivalence is to be determined by asking the protocol questions. More than hinting that they are more than a guideline, so bearing in mind where he now sits, that adjustment may be restated at the highest level at some stage.
Continuing with the governing principles, Lord Justice Arnold said that question one is partly a question of interpretation of the specification? And partly a question fact. In so far as it is a question of fact, the burden of proof must lie with the patentee.
He observed that given the way in which question two had been formulated, there would rarely be scope for a negative answer if the answer to question one is yes! And that really follows on from the other case as well.
For question three, as the test had been laid down by the Supreme Court, the answer could not be dictated by the fact that the variant did not fall within the wording of the claim on its normal interpretation because otherwise there would be no point in asking or answering the question.
What mattered, was the reason why the addressee would think that the claim was limited, in the relevant respect. Arnold gave some notable commentary, going to the legitimacy of narrowing from very broad claims to say validity, whilst still seeking broader protection through equivalence.
As counsel for the defendants submitted, it is contradictory for the claimants on the one hand to be amending the claim down to just Compound C, particularly in order to save its validity, and yet at the same time to be asserting that the scope of protection of the amended claim extends well beyond Compound C to a structurally rather different compound and by implication to a large number of other compounds as well.
By amending down to Compound C, the claimants are disclaiming the other ways of achieving the same effect, disclosed in the specification.
So turning to the assessment of the doctrine of equivalence on question one, Arnold accepted that the inventive concept of Claim 17a was the use of Compound C for treating anaemia, associated with kidney disease so that was fine, tick that box.
Question two, was not independently considered. Tick that one as well.
On question three, Arnold gave multiple reasons for answering the question 'yes, there was an intention to limit'. And so declining on the second count, the operation of the doctrine of equivalence to find infringement.
The reasons included the narrowing point. If they narrowed the claim they must have meant it and to have intended limitation. Now the claim was actually narrowed by amendment but during the prosecution process, Fibrogen said that it was not seeking to contend that the patent, if granted, would have a scope beyond the confines of compounds similar to C.
Of course, this is getting very close to Estoppel and Arnold said that this was a case where it would not be in the public interest for the contents of the prosecution file to be ignored. Now, you may recall he sent that particular hare running at first instance in Actavis and Lilly.
A little tiny point but one that might have fairly big implications in the future. This case of Viiv and Gilead, Birss J refused to strike out aspects of the patentee's pleading on the doctrine of equivalents, going to the knowledge and intent of Gilead when seeking to develop its alleged infringing product.
So although the test for infringement is objective, he is saying subjective facts may be relevant to the assessment of an objective question. Does this mean, that the question of whether a party intends to create an equivalent, can be relevant to the issue of whether what they have created is actually equivalent. That would seem to be the implication and if it is, we will definitely be hearing more of that.
Evidence is always an important topic and something that we look at closely and a real theme this year has been evidence in the context of expert evidence. Now, expert evidence is critical to the outcome of almost every patent dispute and leads to notable case law every year.
Nevertheless, the guidance emerging in 2020 has probably set the course for the next few years, so let us go back to a Akebia and Fibrogen - I told you it would set up everywhere. Revisiting the instruction of expert witnesses and the preparation of reports, Lord Justice Arnold reiterated the responsibility of instructing lawyers, not to put experts in a position in which it looks like they have failed in their duty to the Court.
In particular, he said it is the instructing lawyer's responsibility to spot and flag drafting errors and to make sure the expert discloses their own previous relevant publications and where appropriate, explains them.
So Arnold put the burden on the lawyers to make sure expert's reports are in line. On the order on which experts are shown relevant documents and which in practice, can mean many stages of contact with an expert or potential expert, Arnold said it can be advantageous to try to instruct witnesses in sequence. First asking them about the Common General Knowledge, then showing them the prior art and asking them questions such as what steps would be obvious in the light of it and only then, showing them the patent in suit.
This is a process known as 'sequential unmasking' in the psychological literature.
So the judge went onto say that such sequential disclosure was not always possible for a variety of reasons but this guideline has gained a lot of currency now.
On cross-examination, he said reign it in. Less ad hominem attacks please. They can be unfair to witnesses, unhelpful to the Court and waste expensive time. Yes, it is okay to ask some questions about how the expert was instructed, but do not turn it into a witch-hunt to try and undermine them.
Now in the Akebia case, no technical primer had been prepared which, with the benefit of hindsight the judge said had been a mistake. He made clear his expectations for future cases, said in future the preparation of a technical primer should be regarded as mandatory in Category four and five cases unless there are good reasons to the contrary and the newly appointed Mr Justice Meade agreed with him in another case later in the year.
One of the reasons judges like technical primers by the way, is because they can save/ they can lift lots of the agreed technical background and dump it straight into the judgment. It saves them time while removing scope for complaint about the content.
In Neurim and Mylan, Neurim's expert - Professor Roth was described by the judge as a colossus in his field and an extremely impressive witness.
In contrast, Mylan's expert - Professor Morgan was heavily criticised. He was disingenuous and his reports were written in a matter that seemed calculated not to assist, but to mislead the Court.
Marcus Smith laid the blame for the professor's failings with the expert himself, noting that an expert is responsible for his or her evidence, including the precise wording of any report submitted to the Court in their name.
Now, as we have seen, Lord Justice Arnold was critical of instructing lawyers. It is a little harsh to blame an expert for their failure to understand relevant principles of patent law, but perhaps fair that they should take primary responsibility for the technical content of their report.
Now, I said we would come back to the implications of Birss' finding of validity in infringement in Evalve and Edwards and it has raised an interesting point which I think we will be seeing more of in the years to come.
Having found the patents valid and infringed, Birss had to have another hearing to assess the appropriateness of granting an injunction, which would effectively prevent the sale and distribution of a potentially life-saving device.
Edwards submitted that even if its Pascal device was found to infringe a valid claim, no final injunction should be ordered because it would be contrary to the public interest. Now in his public interest judgment, Birss took an opportunity to have a thorough look at this area of patent law, beginning with the basics, so the Patents Act, the Enforcement Directive, the TRIPS Agreement, article 28, the Senior Courts Act - all described the power to grant an injunction.
Going back to 1995 in Chiron and Organon you get the Court's take on this, from Mr Justice Alders as he then was, he gave detailed consideration to the protection of the public interest in the context of patents. In particular, when an infringer is seeking to invoke that public interest as a reason to withhold an injunction.
He noted that the opportunity to acquire monopoly rights in an invention, stimulates technical progress in at least four ways. First, it encourages research and invention. Secondly, it induces an inventor to disclose his discoveries instead of keeping them a secret. Thirdly, it offers a reward for the expense of developing inventions to the state of which they are commercially practical and fourthly it provides an inducement to invest capital in new lines of production which might not appear profitable if many competing producers embarked on them simultaneously.
And he went onto say "it is a good working rule that an injunction will be granted to prevent continued infringement of a patent, even though that would the effect of enforcing monopoly, thereby restricting competition and maintaining prices."
Now, as an aside please, can we place flag one on this endorsement of the patent monopoly. We will be returning to the point later.
Birss broadly agreed with that. He said when the Court is considering withholding an injunction it is relevant to have regard to the fact that the patent legislation itself already praises limits on patent rights in order to safeguard the public interest. That includes a power to make life-saving treatments available to the public without the permission of the patentee. So he drew it all together and adopted seven principles to consideration of the public interest in this context.
First: A general injunction to restrain future infringements is the normal remedy.
Two: The burden is on the defendant to give reasons why such an injunction should not be granted.
Three: All the circumstances should be considered, the public interest such as the impact on third parties is a relevant consideration.
Four: In a proper case the public interest may justify refusal of or carve out from an injunction and an award of damages.
Five: The starting point of any consideration in the public interest in relation to a remedy after patent trial, is that the patent system as a whole is already criss-crossed with provisions to strike the balance between different interests.
Six: Availability of an exclusionary injunction is an important manifestation of the monopolistic nature of a patent right. Once a patent has been found valid and infringed, the patent monopoly is something which it is in the public interest to protect, by injunction, in order to further the purposes of the system as a whole, such as to promote investment in innovation.
And finally: Therefore when as here, various public interests are engaged and pulled in different directions, one should have in mind that the legislator is better equipped than the Courts to examine these issues and drawn the balance.
Second flag there please at point six on the issue of the appropriateness of the patent monopoly.
Now in the present case, Edwards had not even attempted to prove that Pascal was objectively better and nor had any such conclusion emerged yet in the clinical literature. So, the most Edwards had set out to prove was not enough to justify refusal or carve-out from the patent injunction. Edwards submission that no final injunction should be ordered because to do so would be contrary to public interest failed. Injunctive relief was ordered, with a very limited carve-out in relation to special cases where the Evalve product was not appropriate.
Now the Courts in England and Wales will be as likely to award an injunction following a finding of infringement as the Courts in any other European jurisdiction or maybe more so than the Courts in the USA and this is a helpful message.
However, with second medical use cases, FRAND issues and possibly vaccine cases queueing up, I do not think we have heard the last of this avenue of argument over the next few years.
Now! In a first for this event. I am going to be using parliamentary language give way to allow Alex Brodie to deal with the cases regarding standard essential patents and FRAND issues. As one management consultant once said to our partners at a conference, you can probably teach a turkey to climb a tree, but it is much more efficient to employ a squirrel. Now, I am a turkey in these cases, Alex very much the squirrel. Over to you.
Alex: Well, thanks turkey Gordon. I think I prefer to be a squirrel than a turkey, but yeah let us see. As long as I am not one of those mangy ones. Right. Okay. Unwired Planet and the Supreme Court. This is obviously excited a great deal of attention in the last twelve months, so what I thought might be helpful, given that this has been running since 2014, is just to quick recap of what lead into this judgment.
So first thing to remember is, the Supreme Court judgment deals with two cases. You have got Unwired Planet versus Huawei and then you have got Conversant versus Huawei ZTE. So, UP Huawei. First up. 2014 Unwired Planet sued Huawei, Samsung, Google. Got six patents in suit, they have all been declared as being or potentially being essentially to the standard. Unwired Planet sues patent infringement, asks for injunction.
Proceedings were also in Germany and China which is very much the norm in these sorts of cases. Unwired Planet later managed to settle its case against Samsung and Google, so only Huawei is left when we got to trial. There were multiple technical trials and Huawei was held to infringe at least one valid and essential patent. So they are infringers!
2017 - the High Court is asked to consider the relevant remedies and it is saying, okay. The FRAND undertaking because Huawei had relied on the patentee's FRAND undertaking to say, you should not be granting injunctions here. The Court said, the FRAND undertaking is a justiciable and enforceable issue before the English Courts. An implementer who refuses to take a licence on terms determined by the Court to be FRAND, can be enjoined from infringing a patent held to be valid and infringed.
So, its injunction in the UK versus a FRAND licence to be determined by the Court.
2018 the Court of Appeal upholds the High Court, see the figures from earlier, except it rejects one small element of the lower Court judgment where the lower Court had said, only a single set of terms can be FRAND. The Court of Appeal said, no that is not right, there can be many.
That is the first case that is going at. The second one, Conversant versus Huawei and ZTE. Unlike the first one, this is an interim judgment. So 2017, Conversant - with an eye to what Unwired Planet is up to, sues Huawei and ZTE. Four patents ensued, FRANDs injunction requested.
The defendants immediately challenge jurisdiction saying it is new determined terms of FRAND licence that goes beyond the territory of the UK, you are effectively pre-determining the validity of foreign patents and their value. They challenged the form saying, well look you are just not in the right place to be doing this and in that the claimant was also seeking permission to serve the UK proceedings out of the jurisdiction on the Chinese defendants.
Again, parallel proceedings in Germany and China.
2018: interim judgment. Dismissed the jurisdiction challenges and form at large and grant permission to serve out.
2019: Court of Appeal. True to form, upholds the lower Court.
So that is what is going on and we get to the Supreme Court, 26 August 2020 this year it answers five questions and I have put those up on the slides so you can see the phrasing.
So the first one was: Can the UK Courts grant an injunction to restrain infringement of a UK patent where it is basically an essential patent. And the implementer has not entered into this licence.
And the answer was quite short and sweet: Yes it can. Whether it will, depends on the facts and evidence in each case and we have got to remember in all of this, injunctions are a discretionary remedy.
Second one: Can the Courts determine the rates and terms of such a global licence as opposed to UK only? Yes they can.
And the point there is, the injunction is a remedy for UK infringement of a UK patent. The FRAND licence is something the defendant is bringing to the Court saying, look at this undertaking. This patent has been declared as essential to a standard. This is my defence. It is a contractual defence. So you are not saying to the Court, what is the licence applicable to a UK patent. You are saying to the Court, what are the terms of the FRAND licence bearing in mind this portfolio, this patentee, this implementer, its commercial activities, what do people do?
Are the Courts the appropriate forum to determine such matters, and in this case in particular they were arguing well, look we do most of our manufacturing in China, the bulk of our sales are in other countries, we are not a UK company, we are Chinese or a different jurisdiction.
Answer again: Yes. Because do not forget, as I mentioned earlier, the claim is one for patent infringement over UK patents. Of course the Court can hear it. But, should the Courts refuse to grant the injunction on the grounds the patentee has breached the EU competition law, because it did not comply with guidance in Huawei ZTE. Now if you are Unwired Planet, you are probably thinking a little used at this point because the Huawei ZTE judgment came down in 2015 and they bought their case in 2014 when it did not exist.
But the point is, does the Huawei ZTE judgment lay down mandatory steps for both the patentee and the implementer or is it more a sort of guidance as to the kind of thing that is going to be seen as FRAND behaviour.
UK Courts Huawei ZTE is guidance. It is not mandatory. Obviously be a smidge English to ignore it, so best advice is to follow it carefully and slavishly as far as you can.
Lastly, can the Court grant a prohibitory injunction or should it simply award damages in lieu? The argument there was, well patentee's in this space make a great deal of their corporate revenue from licencing so why should they have injunctions they are not competitive product manufacturers in the main.
The Court was alive to this one and said, no. it can have an injunction. It is a patent. It is an infringement. This is what you are allowed to do.
So far so good! But is this madness? And I use the word because this is what Conversant said in the first instance decision. He said, of course licence is a global, 'it would be madness' was his word, if people went round negotiating patent by patent, country by country and exhaust financial resources and frankly will to live.
I just put up a quick quote there from Lord Kitchin's judgment in the Court of Appeal which encapsulates this slightly more elegantly than saying it is madness.
That is how you can see the Courts are approaching this issue of multi-territoriality.
If it is not madness, what about the madness going forwards? What madness has this decision brought about? Well it is had a big impact. China has decided, unlike in the UP case where the evidence was that China would only decide FRAND rates in terms of the Chinese patents, to go global.
There have been declaratory rate setting actions in the US and China. You will recall I said UK actions were all based on patent infringement. Anti-suit injunctions and anti-anti-suit injunctions are very much the flavour of the moment. If you are going to read up on anything, this is the thing to read up on in terms of advice giving and the Chinese Courts have gone one further, they have gone anti-suited globally! So every Court in the world you cannot do what you want to do and what is more, a daily fine if you try it and so many of the other country's Courts are being quick to issue anti-anti-suits in this sort of situation.
The value of injunction enforcement bonds in Germany has been a big topic, particularly in automotive cases. Invalidity actions before the USPTO nullity actions in China are through the roof. If you sue anywhere you can expect to be dealing with a raft of those. Anti-trust actions are gaining popularity before Courts in terms of defences and counter-claims and also the various anti-trust boards such as the Commission and SAMR.
The German Courts have gone again on their referral to the Court of Justice. It was they who started all this, as Huawei ZTE in the first place but they are off again and the madness looks set to continue.
Just going forwards, will the madness end this year in 2021 and I am not talking about vaccinations here.
Topics: Damages versus past payments in licensing terms. Michael will take a look at that.
Reciprocity: If the patentee has got to undertake irrevocably to grant a licence on FRAND terms. Why should the implementer undertake to take one.
Is Unwired Planet the only way to assess FRAND terms and rates? I do not think so. Do not forget, that was the first time this topic had come before the UK Courts and the judge, Colin Birss was reactive to the evidence in positions and arguments put before him. Because he cannot go off on a frolic of his own, so there will be other ways to do this. There is room for creative thought.
Anti-suits and anti-anti-suits. Well, jurisdiction has moved on from 'can the UK Courts do it'. Yes they can to 'stop doing it'. So that is the new topic.
How can the madness end? I do not know but anyone for arbitration?
Thank you Gordon.
Gordon: Thanks very much Alex and welcome back to everybody from the madness and I am referring to the topic obviously not the speaker!
Let us start now on validity. There is a lot to get through but this is where we are going to get to the meat of it this year. There are some controversial stuff coming up. It has all been a bit bland to date, but now we are really going to hit it.
First of all, the concept of the skilled addressee of the patent - also the person skilled in the art is a staple part of patent law and a stable part of patent law.
Although frequently illustrative judicial comments do emerge, explaining the principles so let us look at one from this year in Neurim and Generics. Marcus Smith addressed the territorial nature of the person skilled in the art. Now he noted some comments from Mr Justice Arnold as he then was in Generics and Warner-Lambert that at a minimum it must be shown that the matter in question was Common General Knowledge in the UK because a UK patent, whether it is GB or EPUK is concerned with the right in respect of the UK.
Reasoning that has been followed in a number of cases since and Marcus Smith added 'the skilled person will be looking at an invention that is claimed within the United Kingdom and whose territorial ambit is defined by the United Kingdom and that must be the starting point for determining the nature of the skilled person'.
Of course that does not mean that the skilled person will not have an international outlook and will not consider prior art published anywhere in the world.
Right let us move onto CGK now. Common General Knowledge.
In Fisher and Paykel and Flexicare a good 2020 case there which is about ventilators. Meade gave a short description of the Common General Knowledge. He said - it is just useful revision really - " CGK is that which is generally known and generally regarded as a good basis for further action by the bulk of those in the particular art".
Now, later in the year in Optis and Apple, this was a case about handover between various different radio access technologies. Birss made some notable observations on the Common General Knowledge on the facts of that case for telecommunication standards cases, now as we have just heard from Alex, there is going to be more of them so it is well worth just noting what he said here.
And basically what he said is this, the standard documents themselves will be CGK but not necessarily every document presented to the various meetings and the transcripts of those meetings, that is going too far. The standards themselves will be the CGK. Anything else - well you are going to have to show me evidence and clear evidence to demonstrate that that represents CGK.
I cannot help but feel that the judge is opening up a whole new field of evidence here. We have heard arguments about the amount of detail reaching the levels of CGK even within a single document! And given we are told earlier there should be evidence on lead on what publications referred to in a patent should be considered, some trials are going to be pretty evidence heavy going forward.
Now by 1999, there was a textbook on the field of standards. It had been published in '92. He said that would be regarded as a good introductory text to be given to a new engineer or something like that, but that was all. The standard themselves were the primary source.
Then finally here, MSD and Wyeth. Mr Justice Meade agreed that textbooks can be important. He said "these happy advantage that their contents scope and intended audience are readily ascertainable". Not all textbooks are well-known and widely accepted, and that has to be proved by evidence, but frequently it is not disputed.
Right. Moving onto anticipation. Now year on year there seems to be less to say about anticipation. It is the most established area of patent law and for the most part, judges wield out the usual quotes from General Tyre and Lumbek and Generics and whatever and that all makes our lives a little easier.
Just to illustrate that this year, Geofabrics and Fiberweb. This is a case about railway track bed technology. A very simple case, which makes a very simple point. The law is established and the task of assessing whether or not prior art gives directions and which provide clear instructions to make something within the scope of the patent is a fairly black and white issue in most cases. So very little controversy under that heading this year.
The same cannot be said of obviousness.
First of all, a little look backwards here. Delving into the patent law history can be enlightening as well as fun. Sometimes it can indicate where senior judges might reset a path as Neuberger did in Actavis and Lilly. More frequently it can provide helpful support, trying to persuade a judge to follow and develop a particular line of authority.
Often the technology in old cases is easier to understand and sometimes they are just enjoyable to read anyway. In that Geofabrics and Fiberweb case, Deputy Judge David Stone got quite carried away, he went back to look at a case called Non-Drip and Strangers from 1943. British Westinghouse and Browleck from 1910 and by implication from 1929, Samuel Parkes against Cocker Brothers.
Non-Drip Strangers was a case about new design of metered drinks optics and the House of Lords overturned the Court of Appeal to hold the patent insuit valid not obvious. In his judgment Lord Russell went back to the Samuel Parkes case where Mr Justice Tomlin had given the following famous passage:
"The truth is that when once it has been found, as I find here, that the problem had waited solution for many years, and that the device is in fact novel and superior to what had gone before, and has been widely used, and used in preference to alternative devices, it is, I think, practically impossible to say that there is not present that scintilla of invention necessary to support the patent."
Now, we have all heard that phrase. Remember those words about a scintilla of invention when we move onto the main case and obviousness this year.
The general approach to the assessment of obviousness is the same. It was re-affirmed by the Supreme Court in 2019 and we had several cases this year - we call it the Pozzoli approach, or the Pozzoli questions. By way of revision, here they are again:
First of all, we have 1A and 1B. You will identify the notional persons' skill and the art, and you identify their Common General Knowledge.
Secondly, you identify the inventive concept of the claim in question, or, if that cannot be readily be done, you construe it.
Thirdly, you identify what, if any, differences exist between the matter cited as forming part of a state of the art and the inventive concept of the claim that the claim has construed and, fourthly, we viewed without any knowledge of the alleged invention is claimed. Do those differences constitute steps that would have been obvious to the person skilled in the art, or do they require any degree of invention?
Now, case of the year on obviousness this year is Emson v Hozelock in the Court of Appeal because two giants on our legal stage, Lord Justice Arnold and Lord Justice Floyd locked horns and could not really agree on how the principles applied. In 2019, Mr Justice Nugia handed down a first instance Judgment which concerned a new type of garden hose
He said that Emson's two patents in issue were invalid for obviousness over a piece of prior art called McDonald. The case went off to the Court of Appeal, Lord Justice Arnold and Lord Justice Floyd both gave substantive judgments and Lord Justice Henderson held the balance or flipped a coin or whatever he did in the end.
McDonald was a US patent application that described a way of providing oxygen to crew on an aircraft using an expanding flexible gas hose. The Emson garden hose - you have probably see this product, it has a rubbery inner tube and a fabric outer tube which is ruffled. The outer tube and the inner tube are only connected at the ends, the inner tube expands under pressure from water, maybe from a tap. The outer fabric limits the expansion both longitudely and radially, so as the outer tube expands its ruffles unfurled and the ruffles reformed when the pressure was released and the hose simply contracted. The primary benefit - space saving.
On the question of obviousness over McDonald, Lord Justice Floyd thought that the judge had made a fundamental error of principle in treating the document as a real practical machine, something that had actually been made and tested as opposed to what it was, which was a mere paper proposal.
He said that was hindsight and it had infected the judge's reasoning and his treatment of the evidence. Floyd stepped back and had a look at the over-arching principles. He said "it is undoubtedly the law that an invention may have been published in, or rendered obvious by a document which no person skilled in the art would ever be likely to have seen".
The policy justification for the rule is that once the possibility exists that a skilled person could obtain the document, and consider what to do in the light of it, a subsequent patent should not interfere with his freedom to take it forward. The policy justification does, however, lose its force in the situation of which this case is an example, where the evidence establishes positively that the person skilled in the art would not even look for the document.
Floyd said the more distant the prior art document is from the field of technology covered by the patent, the greater the chance that an intelligent but uninventive person would fail to make the jump to the solution when they saw it.
He said that a further factor, which can in places mitigate the unfairness of the rule, is documents which have not resulted in practical application have less force, in an obviousness argument than those which have been implemented or well-known.
Now, interestingly he quoted Mr Justice Arnold, as he was at the time where he had made a similar point in the context of the value to be attributed to a mere paper proposal, in a case called Vestergaaardem Bestnet. Arnold said there "particular care is needed with unworked proposals in patent specifications. The patent specification is not a declaration of what a patent here has done, it is a description of an idea."
Now, Mr Justice Nugee had concluded that there was nothing to put the skilled person off seeing that this new type of hose might have a wider application. Floyd said, well that is not the right question. The correct question was whether there was anything to cause him to make the connection. Floyd's view, this was not merely a linguistic error on the part of the judge, it was redolent of hindsight.
Lord Justice Arnold did not really agree with all that. He took the more clinical approach to the judge's reasoning. First thing he did was say, well we are the Court of Appeal. We are not supposed to intervene unless there has been an error of law or principle on the part of the judge and we have heard that line adopted quite a few times by an overworked Court of Appeal in recent years.
He said the judge had adopted the Pozzoli approach, so he had not erred in that respect. The judge had accepted the evidence of Hozelock's expert that the general hose designer would have been well used to designing hoses for both liquids and gases.
He observed that the judge was clearly conscious of the need to avoid hindsight as he had expressly noted it. Now, this is another line we hear a lot from the Court of Appeal. It always seems to me that just because a judge says he was not influenced by hindsight, does not mean that he was not to some extent. That is to be worked out from reading the case and looking at the evidence.
Now, Emson had submitted that McDonald was addressing issues that simply did not arise with garden hoses and in particular, the need for air crew to don gas masks in five seconds or less. Space saving, which was the big advantage of the Emson hose was not the big issue for McDonald. The judge had been more influenced they thought, by the idea that if an invention was obvious for one reason, the fact that it also had other non-obvious benefits was immaterial.
The judge had actually said "whatever his mindset as to how garden hoses were usually constructed, I do not see that this would put him off seeing that this new type of hose might have a wider application including to garden hoses".
Arnold's view was that there had been no error in the judge's approach when concluding that the skilled person would be readily able to make the necessary adaptions to turn McDonald into a garden hose.
Stepping back, he expressed sympathy with the inventor of the patents but then came an important passage which explained the balance as he sees it in the patent system. He said "the patent system aims to incentivise technical innovation and investment in and disclosure of such innovation by conferring limited monopolies. Monopolies are generally contrary to the public interest because they prevent competition. Patent law contains a number of mechanisms which are designed to strike a balance between those conflicting considerations. Among these mechanisms are the requirements of novelty and inventive step. The public is deemed to have the right to do anything which is disclosed by or obvious in the light of an item of prior art no matter how obscure, which was made available to the public anywhere in the world before the relevant date, without infringing a patent. For that reason, when attacking the validity of a patent, the party doing so is allowed to select the prior art used as the foundation of the argument with 20/20 hindsight. To that extent, but only to that extent hindsight is not really permitted, it is an inherent feature of the current design of the European patent system and indeed most patent systems worldwide."
So there are two really important assertions in that passage.
One is that in this context 20/20 hindsight is not really permitted but necessary and normal.
For the other, plant flag three please in the patent monopoly issue. Arnold says patents are contrary and monopolies are contrary to the public interest because they supress competition.
Lord Justice Arnold concluded that he could not see any error in the judge's approach whether of hindsight or otherwise. Now, the way he put it it felt terribly close to me, like saying, well he might have been wrong but he had the right to be wrong.
This is a line I have personally experienced in the Court of Appeal before and it does not make for happy litigants, at least on the appellant's side.
He was supported in that decision by Lord Justice Henderson and so he prevailed in the battle of the giants. Now, for my part if I had been sitting, that would be great, the score would have been two all and penalties would have been required.
I think that Lord Justice Floyd got it right and Arnold was far too strict in his interpretation. Floyd cited the case of Dyson and Hoover in support of his decision and I have to say that was the first case that sprung to my mind by way of relevant analogy.
Fact batching is a dangerous game, we do not do it often but there are clear parallels between the potential relevance of a large scale cyclonic dust extractor in the mine and the McDonald hose designed for use in the aviation industry for use with gas, not liquid and certainly not in someone's back garden.
Right, now we get to the really nitty gritty bit. Sufficiency.
Most years, I slide over sufficiency as fast as I can, but in the last few years that has simply not been possible and certainly not this year. It has been turbulent to say the least. There has been clear disagreement as to whether plausibility was merely a low threshold test or a higher standard in the Warner-Lambert case, the Supreme Court rejected the Court of Appeal's approach and opted for a very high standard. But in reasoning that, there can only really simply be read onto second medical use claims in pharmaceutical sector. The Supreme Court also failed to address its own previous reasoning on plausibility in Linear HGS, even though that reasoning was drawn upon by the Court of Appeal in the Warner-Lambert case that the Supreme Court then rejected the Court of Appeal.
Anyway, this left uncertainty as to how the principles governing the assessment of sufficiency should be defined, particularly in cases concerning arguments about excessive claim breadth. So now we move onto Akebia and Fibrogen - I said it came up everywhere, it comes up here. This is Lord Justice Arnold sitting in the patents Court and he did a very neat job of straightening out the mess for a few weeks.
On the principles regarding sufficiency, he said that although insufficiency is a single ground of invalidity, it embraces three distinct types of objection.
Where the invention cannot be performed at all, without undue burden that is classical insufficiency.
Where the invention cannot be performed across the breadth of the claim without undue burden, that is Biogen insufficiency.
And where the claim does not enable the skilled person to know whether they are within the claim or outside, that is ambiguity but recently renamed uncertainty.
On the principles regarding excessive claim breadth insufficiency, Arnold confirmed that the specification must be sufficient to enable the invention to be worked over the whole scope of the claim without undue burden in terms of experimentation.
But he said that must not be taken too far. It is well established that it is permissible for a claim to describe an invention in general terms provided it is plausible in the light of the disclosure in the Common General Knowledge that the invention will work with anything falling within the scope of those claims.
Now, he had a look at all the historical case law but then summed it up in his own words, which I think was a very sensible thing to do, bearing in mind the mess that he was trying to unpick.
"Accordingly", he said, "the authorities establish that the Court must undertake a two stage enquiry. The first stage is to determine whether this disclosure of the patent read in the light of the Common General Knowledge of the skilled team makes it plausible that the invention will work across the scope of the claim. At this stage it is not permissible for either the patent to be or the party attacking the patent to rely on evidence which post-dates the patent. If the disclosure does make it plausible, the second stage is to consider whether the evidence establishes that in fact invention cannot be performed across the scope of the claim without undue burden. At this stage. Evidence which post-dates the patent is admissible".
So stepping back from that, is a sensible workable statement of the principles governing insufficiency and would work very well. He did not deal with, because it was not an issue the date at which the assessment of sufficiency is assessed but that point very definitely raised its head in the Supreme Court's judgment in Regeneron and Kymab.
I have been to several presentations about this case to try and understand it. My complaint has been that the presentation is far too much on the science and not enough on the law so I am going to limit myself to a very short summary of the science and then I am going to show you a picture of a mouse.
Regeneron's patents concerned transgenic mice that could be used as platforms for antibody discovery. By the priority date of the patents which was February 2001, it was known that in order to have given avoided immune response in a human against therapeutic antibody, it would be preferable for the antibody to be a human antibody as opposed to a murine i.e. mouse antibody or a chimeric antibody with mouse variable regions and human constant regions.
Humanised antibodies were the complimentary determining regions of the murine antibody had been grafted onto a human antibody, were better than chimeric antibodies. But there were problems with the mice engineered to produce such antibodies becoming immunologically sick. So glad you have got all that and now here is a picture of a mouse.
In the Patents Court and the Court of Appeal it was agreed that the patents were, if valid, infringed. At first instance, the late and much lamented missed Henry Carr concluded that the patents were not anticipated or obvious. On sufficiency as the Supreme Court subsequently summed him up, they said the judge held that the teaching in the patent did not enable any type of mouse with an arrange to be made, let alone mice across the whole of the relevant range.
So off we go to the Court of Appeal. Now Regeneron argued that in view of Kymab's evidence on obviousness, the use of mini-genes would have been a Common General Knowledge item and by employing this method of a skilled person could make an in-situ replacement. Lord Justice Kitchin agreed with that. He noted that the technical contribution of the patent was the concept of a reverse chimera to avoid immunologically sick mice and he held this was a principle of general application that worked across the scope of what was claimed, so the claim was justified the appeal was upheld.
Now, of course Lord Justice Kitchin had given the judgment in the Court of Appeal so when the case reached the Supreme Court he could not hear it. The bench comprised Lords Reed, Hodge, Briggs and Sales and Lady Black. The first three were alumni of the Warner-Lambert case - that is not exactly a badge of honour. Lord Briggs, with whom Lords Reed, Hodge and Sales agreed, began his reasoning by stating the date for the assessment of a question of sufficiency is the priority date.
The correct date for assessment was not actually an issue before the Court, however, with reference to the House of Lords judgment in Biogen Medeva, Lord Briggs said "it is a general requirement of patent law both in this country and under the EPC that in order to patent an inventive product, the patentee must be able to demonstrate if challenged, the skilled person can make the product by the use of the teaching disclosed in the patent, coupled with the Common General Knowledge which is available already at the time of the priority date."
Throughout the judgment, the Supreme Court continued to emphasise the date for assessment is the priority date. Now there has been a rumour building for years among the patent professionals in England and Wales that the House of Lords judgment in Biogen Medeva is authority for this point. That is, to quote a not lamented former figure - fake news.
It is perhaps easiest to take a look at the interpretation of the House of Lords judgment in Biogen from an objective source. We have heard that textbooks are useful so let use one now.
Terrell and the law of patents 19th edition under the heading "On what date is the sufficiency of a specification to be judged?" says " The House of Lords in Biogen Inc v Medeva Plc held that the correct date for assessing sufficiency for the purposes of the 1977 Act was the date of application, because matter may not be added and an insufficient application should not become sufficient because of general developments in the state of the art after the filing date. It had previously been considered that the relevant date was the date of publication of the complete specification (under the 1949 Act)."
Now if the date for the assessment of insufficiency really is the priority date as the Supreme Court says then tests for entitlement to priority and sufficiency have been conflated. This is because a patent will be invalid for insufficiency if the priority document combined with CGK at the priority date does not provide the skilled person with an enabling disclosure of the claimed invention of patent is eventually granted. This obliterates in the UK one of the two rationales on which the international system of priority filings is founded.
This means, for example, data from experiments or even clinical trial results occurring between the priority date and the application date which can be up to a year, which should be included in the assessment of sufficiency, would in fact be excluded. Now already shackled by the Supreme Court's high bar test of plausibility, this makes the patentee's life even harder.
The previously understood approach has been the foundation on which patents have been drafted for decades. So, how has the Supreme Court got this completely wrong?
Well, as the point was not an issue between the parties in Regeneron and Kymab, the non-IP specialists hearing the Regeneron case did not have the benefit of submission by a counsel on the point that they were not brought up to speed on the authorities in respect of the point. The Supreme Court seems to have missed that point entirely when it started reasoning here. In fact, part of the Supreme Court's reasoning is internally illogical.
The passage just quoted, paragraph two of the judgment, it refers to what is disclosed in the patent. Well the patent does not exist at the priority date. The patent is the document at the filing date. Not the priority document.
Let us go back to basic principles for a minute now and take a look at classical insufficiency as dealt with by the Supreme Court.
They did some very odd stuff here as well. They considered a number of EPO and UK authorities. These included their own and the House of Lords judgment in Actavis and ICOS, Biogen etc.
But a little puzzlingly, the Supreme Court did not refer to its most recent judgment - Warner-Lambert or to HGS and Lilly which addressed the concept of plausibility in the context of industrial application.
So with reference to Actavis and ICOS, Lord Briggs introduced his discussion of the basic principle with these words, "sufficiency as one of the established tools by which is measured the correspondence or lack of it between the protection afforded by the claim with the technical contribution to the art made by the disclosure of the invention of the patent. The other main tools are novelty inventive step and industrial application".
He had a look at the authorities and he said that they yielded eight principles, we do not need to look at all eight. I am going to put four of them up now on a slide, I am not going to read them out, you can have a look at them yourself while I am just talking on from here. They do not really take you that much further forward.
[Excerpt from slide]
- The requirement of sufficiency imposed by article 83 of the EPC exists to ensure that the extent of the monopoly conferred by the patent corresponds with the extent of the contribution which it makes to the art
- In the case of a product claim, the contribution to the art is the ability of the skilled person to make the product itself, rather than (if different) the invention
- Patentees are free to choose how widely to frame the range of products for which they claim protection; but they need to ensure that they make no broader claim than is enabled by their disclosure
- The disclosure required of the patentee is such as will, coupled with the CGK existing as at the priority date, be sufficient to enable the skilled person to make substantially all the types or embodiments of products within the scope of the claim - that is what, in the context of a product claim, enablement means.
In a Supreme Court it was common ground that the outcome for validity turned on the validity of claim one of the 163 patent to the transgenic mouse. This was the claim the Court of Appeal had focussed on and upheld. Lord Briggs said that applying the principles to the facts showed clearly that the claim failed for insufficiency. He said at the priority date, the disclosure of the two patents coupled with the Common General Knowledge did not enable transgenic mice to be made with the reverse chimeric locus containing more than a very small part of the human variable region gene locus.
Lady Black dissented. She broadly agreed with the approach that had been taken by Lord Justice Kitchin as he then was, in the Court of Appeal.
So the law relating to insufficiency has been a bit mangled by these two Supreme Court panels. Both comprising only non-IP specialist judges.
First Warner-Lambert and now Regeneron have both gone fifteen rounds with the established law and left it battered and bleeding on the canvas. This is not just because the reasoning is difficult to follow and hard to condense into principles of general application but because in some respects, they are just wrong. It is very much to be hoped that Lord Kitchin will get an early opportunity to put things right with a comprehensive review revisiting the basic law and if he does, he would do a lot worse than to read an excellent article published by Professor Sir Robin Jacob in bioscience review in 2020.
And although Sir Robin is focussing on the plausibility issue, the overall consideration of how the law of insufficiency developed and evolved is very useful and leads in a completely different direction to that adopted by the judiciary in recent years. That a back to basics consideration of the actual law and the complete absence anywhere in that law of the word plausibility, is a good starting point for a general reconsideration.
Another important aspect which is conceptually important, is the rarely noted point that sufficiency itself is not a requirement of patentability. For grant, the requirements and novelty, inventiveness and capability of industrial application. The latter is not the same thing as sufficiency.
Lack of sufficiency is not a requirement for grant. It is a ground for revocation. It is an 'after the event' consideration which begs the question, why other after the event considerations may not be taken into account when assessing it. Now some of the old cases cited by Sir Robin are quite compelling here.
If the nature of the deal is that the inventor gets a monopoly in return for making public something which contributes to the field of human knowledge and endeavour, why does it matter at all if that contribution was plausible before grant if it actually does make a contribution?
Sir Robin cites a case called Electric Lamp against Marples which I think is from 1943 - oh a bit earlier than that actually where the patent actually contained a fundamental error of scientific principal. However, the invention it described, worked to achieve the desired benefit. Looked at from the perspective of scientific understanding at the priority date or the date of application, the invention was clearly implausible.
However, in practice it worked and a patent was granted and was maintained by the Courts. There is a lovely quote from Mr Justice Pumfrey which Sir Robin deploys in support of his argument. He says "it has to be remembered that perfectly valid patent may be written by a person who does not stir from his armchair, thinks it is all obvious and does no experiment to prove his hunch".
Off we hopefully go to the Supreme Court. Both Warner-Lambert and Regeneron contain errors and are inconsistent with previous House of Lords, Supreme Court decisions by judges much better equipped to deal with the issues.
Akebia and Fibrogen could be just the case to do this, it is due in the Court of Appeal in June we understand, where Lord Justice Arnold will not be able to sit as he heard the first instance one, so Lord Justice Birss may enjoy his only chance to mark Arnold's homework.
Right, moving onto technical matters. Every year there is lots of these. This year, we have got a bit of stuff on remote and hybrid hearings. So let us have a look at some stuff on Covid litigation.
The challenges of 2020 are forced evolution in Court operation. Procedural rules and litigation practice that might have taken decades are now normal. In 23 March 2020, the Prime Minister told the country that we must be locked down, but the Lord Chancellor was ready on 19 March contingency arrangements had been published and on 20 March a protocol regarding remote hearing.
Within days, new practice directions were pushed out regarding pilot scheme mechanisms for various other things like the conduct of hearings, video hearings, flexibility and procedural time limits etc.
In Edwards and Meril, Mr Justice Birss happily described the process that had led to a successful hybrid trial. He talked about the number of people in court, the specially created system for secure video communication, the fact that four of the witnesses gave evidence from the USA, that witnesses were able to watch other witnesses give evidence and that some member of the public were able to attend through the link.
That, ladies and gentlemen is a glimpse of the future not a snapshot of 2020.
Now, a little touch onto competition law. And this is where all our flags suddenly become relevant I hope. I just want to touch on Birss' judgment in a case called Teva and Chiesi and I am interested in it, not because of any particular point of patent law interest in that case, but by way of cross-referral to the comments on patents and monopolies that we have considered earlier from Mr Justice Alders, Birss himself and of course, Lord Justice Arnold who does not like monopolies.
So here is your fourth flag and I think it is the most telling. This is a judgment quoted by Birss and the judgment comes from the lead judge Mr Justice Roth in the competition appeal tribunal. It was a unanimous judgment of that tribunal in the Paroxetine case. Here is the quote:
" In our view, an outcome of the litigation whereby the patent was upheld and the generic company found to infringe is not to be regarded as less competitive than an outcome the other way, since the purpose of the patent system is to stimulate innovation, which promotes dynamic competition. A court determination that a patent is valid and infringed therefore cannot properly be regarded as a 'negative' result for consumers even if it means that they will continue to pay higher prices or the patented goods. Such determinations are a necessary means of ensuring that patent-holders receive the proper rewards for their innovations".
So, listen up patents judges the competition courts think that the patent monopoly is not contrary to the public interest and stimulates competition rather than supresses it.
Right, we are nearly there. We are nearly there. One more case to go and I do like to end on a light note.
Patent judgments usually reveal some eccentric characters and another judgment of Marcus Smith's certainly did that in Thaler v Comptroller and the question was whether a patent could be granted where the inventor named by the applicant, Mr Thaler, was an AI machine and this was commonly known as the DABUS case.
The judge said, while he was quite prepared to accept that there is a general rule that the owner of a thing is the owner of the fruits of that thing - for example the owner of a fruit tree will generally own the fruit produced by the tree, no such rule had been framed in the Patents Act.
Moreover, merely inventing something does not result in a patent being granted to the inventor. Further steps are needed. With a nod to the way that arguments that might go in the future, he said it would be far easier to contend that Dr Thaler was entitled to the grant of a patent pursuant to Section seven of the Patents Act on the ground that he owned the machine that did the inventing. That would actually be a much closer analogy to the general proposition that if you owned the machine, you own the output of that machine.
However, as I have noted this was not a contention advanced by Dr Thaler. Indeed, it was positively not advanced. Why not? Obviously this is going to remain a question for another day, Dr Thaler declined to adopt this course, he said that in moral terms by doing so, he would illegitimately be taking credit for an invention that was not his. So he wanted to be fair to the machine.
Now the judge didn't lose sight of the bigger picture here. He went onto say this. "It may very well be that the common law or a scheme laid down in statute does, when appropriately construed or understood, cater for future developments including developments that were, until they surfaced in litigation, unforeseen. To take a somewhat extreme example, were an alien from outside the galaxy to present itself before the Courts of England and Wales, I would like to think that it would not be denied legal personality simply on the grounds of unforeseen extra-territoriality".
The Courts are well able to differentiate between a alien artefact, say a meteorite or a thing and an alien which, if capable of interacting as a natural person, is or ought to be a person!
The Courts have proved so flexible this year in dealing with Covid that they would not be averse to dealing with aliens presenting themselves in front of them.
Right, so what kind of a year has this been?
In the words of Frank Sinatra "and now the end is near" but I am certainly not claiming that I did it my way. This paper involves the paper of many people, but most particularly Ailsa Carter who is assiduous observations of cases as they arise through the year, enables us to assemble this compendious review of the outpourings of our judiciary.
I ended last year's review in a rather grumpy mood. I was not impressed by the little England thinking that seemed to be creeping in and I was very concerned that the lack of experienced judges was compromising the quality and consistency of our bench, for which a well-deserved and longstanding reputation had been gained and that had to be retained if the UK is to continue to be an attractive patent jurisdiction in the post-Brexit world.
The shortage of judges was compromising the timely delivery of justice.
Now, strangely perhaps, in the light of other events, I find myself in much better spirits now. We now have a real expert IP judge in the Supreme Court and I hope he gets the opportunity to sort a few things out quite quickly.
Lord Justice Arnold now graces the Court of Appeal where it occurs to me, his awesome intellect and insightful reasoning will be to the fore! Without the need for his meticulous attention to detail giving rise to quite such lengthy judgments. Lord Justice Birss is joining him in readiness for the retirement of Lord Justice Floyd later in the year.
Answering my call this time last year, we have new judges in the High Court. At first instance, Mr Justice Meade has joined a strong group of general chancery judges and deputies, backed by His Honour Judge Hacon and Her Honour Judge Clarke in IPEC.
Another new IP specialist judge has just been appointed, James Mellor QC. Another judge capable of hearing complex technical patent cases. This really is the cherry on the icing on the cake.
Now I recently had the great pleasure of interviewing Professor Sir Robin Jacob for a video podcast. I asked him to compare the current crop of judges to the days when he, Hugh Laddie and Nicholas Pumfrey sat behind Lord Justice Alders and Lord Hoffmann. Perhaps modestly, he felt that we were as well served, if not better by the new team. I certainly can see cause for optimism.
The cost of patent litigation remains a concern. Last year I mentioned the possibility of pursuing a cost cap for the shorter trial scheme cases. Still out there, probably stalled, a little bit of a victim of the Covid crisis, but I hope it will re-emerge in 2021.
Great credit must go to the judges but also the incredibly patient court staff in respect of the ongoing delivery of justice through the Covid crisis. Ingenuity, inventiveness, determination and hard work have combined to ensure that not only have the courts continued to function with barely any delay, but new systems are in place that will outlive the pandemic and probably improve service overall.
Mr Justice Birss has already indicated that a great many more basic interim hearings will be done remotely. Avoiding the need for the parties and their representatives to travel from wherever they may be for short and sometimes adjourned hearings in London.
Many trees will now survive the hungry needs of court bundles which are often redundant as soon as the hearing is over.
I must also pay tribute to the IP world as a whole. I have seen so many examples of pragmatic rights sharing, free licences and general co-operation to help the overall cause of supporting those affected by the pandemic, from ventilators to vaccines. The IP professionals have come together for the common good.
Judge of the year! Once again there is an element of lifetime achievement here. There have been some outstanding efforts by all the judges and Mr Justice Meade already looks likely to be a future winner of this award for sure. By the time we regather next year, hopefully in person, Lord Justice Floyd will have retired.
His contribution to the IP world over the years as counsel and subsequently as a judge, has been incomparable. His calm, courteous and tolerant manner in court have made appearances before him a pleasure. Do not think I have always agreed with him, but I think I can safely say, that he has never made a clearly bad decision.
This year he particularly endeared himself to me in the Hozelock case, stuck to his guns and although he went down fighting in a split judgment, I personally think he was right in his stand for the surprising discovery invention was the way we should be going.
So this year's award goes to Lord Justice Floyd with gratitude for his many years of service to the IP profession and I hope looking at that picture that when he gets this news, it will cheer him up a bit!
That is a wrap! Thank you. Whether it is because I was doing this in the comfort of my own warm home or because of the sheer quality and interest of the judgments, I really enjoyed the preparation of this year's paper. I hope I can say the same for Ailsa.
As ever, we are very happy to invite comments, criticism and downright disagreement from anyone else who wishes to engage. As I said at the beginning, in a first for us at this event, having reflected on the past and just the last year, we are turning our sights on the future. So I am going to hand over to Michael Carter now, who will gaze over the horizon and let you know what he sees there. Michael! Over to you.
Michael Carter: Thank you Gordon and good afternoon everybody. So we thought that an interesting way to conclude today's webinar would be to look into the Gowling WLG crystal ball and make some predictions about what to expect in the current year.
In the next ten minutes, I will curtail a handful of the cases Gordon referred to, might develop and also look at some of the other cases and trends that might develop and feature in his review of 2021.
If we skip forward a couple of slides. Let us start with a new arrival. As Gordon mentioned, we are pleased to see the Honourable Mr Justice Mellor appointed from 8 February this year joining the recently appointed Mr Justice Meade in the Patents Court.
I do not think it is much of a prediction to say they will be busy. Indeed the Chancellor of the High Court, Mr Green because the current application process of High Court deputies makes it clear that applications are especially welcome from candidates with expertise in patents work.
So what will be keeping them busy? Well, echoing a trend of recent years, we would expect that alongside the usual mix of cases which Alex referred to, FRAND litigation is likely to continue to occupy a significant amount of court time and it is only likely to get busier as we see an increasing number of cases relating to the overlap of mobile technology with other industries.
That is already apparent in Germany, with the automotive industry but do not be surprised to see similar cases coming before the UK courts, whether in relation to vehicles or more likely, other connected devices.
In the Court of Appeal, Mr Justice Birss will be stepping up to join Lord Justice's Arnold and Floyd before the latter's retirement later this year. As Gordon mentioned, one of Mr Justice Birss' first outings in June, could be the Akebia appeal which would provide an opportunity to the Court of Appeal to comment on the Supreme Court's approach to insufficiency in Regeneron.
It remains whether to be seen whether Mr Justice Birss will be part of this panel, but if he is, then his judgment in Illumina and Latvia handed down last Wednesday might provide a preview as to likely approach.
In that case, Mr Justice Birss explained a feature in the claim that could cover a variety of things, i.e. a range, would not be a relevant range in the Regeneron sense provided that variety of things it covers does not significantly affect the value of the inventive product or process in achieving its relevant purpose.
The judge noted and I quote that "once the concept of a relevant range is properly understood, I think it would be an unusual case in which the kind of ordinary descriptive or functional language once used in most patent claims, will be regarded as a relevant range in the Regeneron sense".
So perhaps if the Court of Appeal follows this approach, Regeneron would be quickly confined to its facts. Who knows the Akebia case might even provide an early opportunity for reconsideration at the highest level if further appealed. Something that Gordon would no doubt welcome.
If we move onto the next slide, and a trend that we started to see last year which is only likely to accelerate in 2021 is the jurisdictional dispute will become increasingly common. This is particularly so in FRAND cases where anti-suit and anti-anti-suit injunctions are the current global hot topics, as Alex mentioned.
Do not be surprised to see the UK court being asked to consider these issues in the context of anti-suits, forum challenges and case management stays in the next twelve months.
Sticking with FRAND, Vestel and HEVC-Advance is an interesting case that is heading to the Court of Appeal in March and this will look at whether the UK Courts have jurisdiction to determine FRAND terms in a claim brought by an implementer under Article 102 for abuse of a dominant position.
His Honour Judge Hacon held at first instance, that Vestel's claim did not satisfy any of the jurisdictional gateways under the CPR. It will be interesting to see whether the Court of Appeal uses this as an opportunity to address the question of whether an implementer can ask a UK Court to settle FRAND terms or whether it is only open to a patentee bringing a claim for patent infringement.
Another key question that is likely to be addressed in at least one of the FRAND trials occurring over the next twelve months, is whether and if so how, the UK Courts should take account of parallel proceedings to determine FRAND terms for a local portfolio of patents, in circumstances where the UK Court will be determining global terms. This was due to be addressed in a fifteen day hearing between Conversant and Huawei last April but that trial was adjourned and the case was subsequently settled.
Consequently, the Court is likely to have to grapple with this issue the first time in 2021.
And finally, jurisdictional issues are not just gaining traction in FRAND disputes. We have seen it become a battleground in all types of IP litigation. Indeed there have already been three decisions this year in cases involving IP rights that relate to jurisdiction. Including one from the Court of Appeal. So it is definitely 'watch this space' in relation to jurisdiction and we expect that the implications of Brexit are only likely to exacerbate this trend, at least in the short-term whilst the UK awaits a decision on whether it will be permitted to exceed the Lugano Convention.
In the meantime, expect lawyers to be looking for loopholes and clever arguments on issues that are affected by Brexit such as jurisdiction and service.
Moving onto the next slide, another trend that will demonstrate how important it is for patent lawyers to have a grasp of more than just substantive patent law is to increasing focus on the scope and availability of patent remedies. We are expecting a number of interesting developments in this space over the next twelve months.
First, in relation to defences there is an appeal from Douglas Campbell QC's judgment in IPCom Vodafone, finding that the defendants were entitled to rely on a crown use defence in the context of the use of a mobile phone network by the emergency services. That appeal is being considered today before Lord Justice's Lewison and Arnold and Lady Justice Asplin and it will be an opportunity for them to address an area of law that is considered relatively infrequently and where developments in the nature and complexity of technology and the contractual arrangements involving the state, probably merit a professional.
The second case is an appeal from Mr Justice Birss' decision in IPCom and HTC concerning the scope of damages for infringement of standard essential patents, in circumstances where the defendant has not taken a FRAND licence.
IPCom argue that the quantum of damages for infringement of a UK SEP should reflect the value of the global FRAND licence they say would have been entered into by a willing licensor and a willing licensee and this is an argument that we have seen made a number of times in the past twelve months. However Mr Justice Birss held in November that it was not right and struck out that part of IPCom's damages claim.
He did, however, allow the claim to proceed in respect of handsets sold in the UK that did not necessarily infringe the patent in suit. Both IPCom and HTC have therefore appealed that decision and the Court of Appeal it due to consider it before October.
And whilst we are on damages, we understand that a rare damages enquiry listed for November between L'Oréal and Olaplex and assuming that case does not settle beforehand, it is worth watching giving the relative scarcity of such enquiries means that when they do occur, they often contain useful guidance.
And finally, another development in the FRAND space that we will see is that the High Court will hold its first ever willingness trial in the Apple and Optis proceedings in July. That trial will determine whether a defendant has to commit to taking a FRAND licence before the parties embark on a lengthy and costly FRAND trial which, given the amount of time taken up by those trials in the list, would seem a sensible approach to managing these cases. Do not be surprised to see willingness trials become part of the FRAND landscape going forwards.
So what else to expect from 2021? Well as Gordon has already mentioned, as things return to something hopefully akin to normality, we will see which of the practices the Court has implemented during the pandemic, will continue into normal times.
We will also see how Lord Justice Arnold's comments in Akebia regarding technical primers being mandatory in Category four and Category five patent trials play out and of course, the criticism of such primers is that they inevitably increase costs, and as Gordon said, one of the proposals that he has put forward in the past is a half a million pound cost cap for cases in the shorter trial scheme.
We will see whether that gets picked up in 2021. And finally, as Gordon mentioned, an interesting case to look forward to in July is the appeal in the Thaler DABUS case as to whether an AI machine can be an inventor under the Patents Act.
So that is what we are expecting in 2021. In short, expect to see some new faces tackling some old problems, including making sense of the Supreme Court's guidance on sufficiency in Regeneron, but also expect ancillary issues of law that are often taken for granted in patent litigation, such as jurisdiction and remedies to come more to the fore.
I would like to close by saying that we would be delighted to hear your predictions for the year. So please do feel free to share them with us, either in the breakout rooms or via the feedback forms and thank you for listening. Now back to Gordon to close proceedings.
Gordon: I am unmuted. Right, thank you Michael. That, ladies and gentleman is that for another year. Next year I hope we will all be together again but maybe we can deploy some clever technical stuff to allow the event to be broadcast to continue to reach the wider audience as well. Normally we do this in Birmingham and London, we get a combined audience of just over one hundred?
This year we have peaked at about 268 I think, which is just fantastic and I am absolutely overjoyed to reach this wider audience today, so that is great and thank you to the very many of you who are still here for your attention over a very long and detailed consideration of the patent issues in the UK over the last year.
I hope we will see some of you in the breakout rooms in a moment. We are going to leave the webinar open now to enable you to go to the link in the chatroom if you want and in the meantime I will leave and go and be ready in the breakout room for anyone who wants to come and have a word. Try not to be too rude.
Okay, thanks very much indeed. Thank you very much to Alex and thank you to Michael. Thank you as ever to Ailsa for her fantastic work and the other name on the panel alongside Joy Litchfield who has done a fantastic job of organising this and pulling the technology together to make today possible. So thank you very much to everyone involved and I hope you enjoyed it and I hope to see a few of you now in the next few minutes.
Thanks very much indeed. Goodbye.
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