Trade Secrets – added protection in force

The Trade Secrets (Enforcement, etc.) Regulations 2018 (the “Regulations”) came into force on 9 June 2018 and transpose Directive (EU) 2016/943 (the “Directive”) into UK law.

Summary:

  • The aim of the Directive is to create a level playing field by harmonising this area of law across the EU.
  • The UK already has well-developed legal protection for trade secrets governed by common law breach of confidence and by contract law.
  • A trade secret holder may now apply for remedies under breach of confidence in addition to or as an alternative to remedies under the Regulations.
  • Changes mainly concern limitation periods, procedural issues for the courts when hearing cases in relation to trade secrets and certain remedies.

Business Impact:

Businesses should continue to take steps to ensure that trade secrets are kept confidential and with limited access. This should be reflected in company policies, procedures and contractual provisions.

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Filed under Consumer products, Format rights, Media, Technology, media & telecommunications, Trade secrets, UK

Changes to the SPC regime? The EU Commission proposal

The European Commission issued a proposal on 28 May 2018 to change the rules around Supplementary Protection Certificates (Regulation (EC) 469/2009), which if approved will substantially impact patent rights in the pharmaceutical sector.

Before being launched on a European market, a product must first undergo lengthy testing and clinical trials on efficacy and safety before being granted marketing authorisation by the competent authorities. For patented innovator products, which require substantial investment in terms of research & development, the process effectively shortens the duration of a patent’s protection to the extent it no longer reflects or justifies the heavy R&D investment required.  This is where an SPC comes into play. An SPC extends patent protection for medicinal products by recouping the time needed from the date of the marketing authorisation application to the actual MA grant. SPCs take effect immediately after the patent expires and can last for up to five years, so are an important incentive for research and development in the pharmaceutical sector.

According to the Commission, although SPCs encourage investment in innovation and safeguard intellectual property rights, the current regime creates a significant disadvantage for EU-based manufactures of generics and biosimilars. This is because EU-based generics and biosimilars manufacturers are prohibited from manufacturing and stockpiling their products for the duration of the relevant SPC, even for exportation to non-EU countries where SPC protection does not exist or has expired. The end result is that the EU-based manufacturers use operations based in countries where there is no SPC protection, such as China, India and Brazil, or where SPC protection is less stringent or shorter.

SPC export manufacturing waiver

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Filed under EU, Patents, Pharma, SPCs

UKSC judgment in Cartier – who pays for website blocking orders?

In a blow for rights-holders, the UK Supreme Court (UKSC) has today decided that ISPs should not bear the implementation costs for website blocking orders in Cartier International AG and others v British Telecommunications Plc and another [2018] UKSC 28.   Whilst the UKSC has endorsed the availability of blocking orders for rights-holders, it has reversed the costs position, finding that rights-holders should indemnify the ISPs for the reasonable costs of implementing the orders.

This is a very important case in relation to the ability of brand owners and others to obtain blocking injunctions against intermediaries, such as ISPs to prevent third party website operators offering infringing or counterfeit branded products. The UKSC decided the pivotal question of who should bear the cost of implementing blocking orders, in terms of deploying monitoring, filtering and web blocking technology – the ISP or the brand owner?

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Filed under Advertising, Consumer products, Copyright, Counterfeiting, Designs, Media, Passing Off, Technology, media & telecommunications, Trade marks & Passing-off, UK

THE ENGLISH COURT GRANTS CARVE-OUT PRELIMINARY INJUNCTION WHERE NO ALTERNATIVE TREATMENT AVAILABLE

Arnold J’s judgment in Edwards Lifesciences LLC v Boston Scientific SCIMED, Inc and others [2018] EWHC 1256 (Pat) handed down on 24 May 2018 demonstrates the English Court’s willingness to adopt a flexible and tailored approach to final relief by allowing both a stay and exception to a final injunction so that it accounted for the public interest in ensuring patients could continue to receive appropriate treatment.

At first instance ([2017] EWHC 755 (Pat)), Hacon HHJ granted an injunction but stayed it pending appeal. In doing so, Hacon HHJ indicated in his judgment that, in the absence of a stay pending appeal, he would have granted a “carve-out” injunction excluding from its scope a group of patients whose lives or health would potentially be put at risk by the injunction. Arnold J’s judgment followed the Court of Appeal’s decision ([2018] EWCA Civ 673) confirming that Edwards’ transcatheter heart valve, Sapien 3, infringed a patent held by Boston.

Arnold J’s starting point when considering the appropriate final injunction was that even on terms in which Boston receives a financial remedy for future sales of Sapien 3, any stay or qualification to a final injunction would deprive Boston of remedy to which it would ordinarily be entitled.  As a consequence, Arnold J highlighted that the length of any stay or qualification must be proportionate in balancing that interest (even though Boston was not exploiting its patent in the UK) against the public interest in ensuring that patients receive appropriate treatment.  Save for where it is aligned with public interest, Edward’s interest was not a relevant consideration.

Arnold J considered the evidence before him from which he concluded that:

  1. for a limited but growing group of patients the only available treatment required Sapien 3;
  2. there was a large body of clinical opinion, but little hard data, suggesting that for a larger group of patients Sapien 3 was superior to the alternatives available on the market; and
  3. the clinicians currently using the infringing device would need re-training if the injunction was granted.

In light of this, he granted an initial stay of the injunction for a 12 month period to allow enough time for all relevant clinicians to be retrained to use alternative devices, with permission to apply for an extension if required. With regard to those patients for whom no alternative to Sapien 3 was available, he granted an exception to the injunction requiring that the responsible clinicians for those patients provide declarations certifying that each patient falls within this exception. Although this exception was not time-limited, Arnold J gave Boston permission to apply to terminate the exception should alternative treatments become available.

Author

Jonathan Turnbull
Jonathan Turnbull
Partner
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+44 20 7466 2174
Monika Klajn
Monika Klajn
Associate
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+44 20 7466 7604

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ADVOCATE GENERAL PROVIDES OPINION ON THE INTERPRETATION OF ARTICLE 3(A) SPC REGULATION

Advocate General Wathelet (the “AG”) has provided his opinion to the Court of Justice of the European Union (the “CJEU”) on the interpretation of Article 3(a) SPC Regulation (Case C-121/17 Teva v Gilead). In doing so, the AG rejected the suggestion of the English referring court that the concept of the “core inventive advance” was a relevant consideration in determining whether a basic patent protects an active ingredient within the meaning of Article 3(a).

In his view, the means of determining whether a basic patent protects an active ingredient within the meaning of Article 3(a) is to be found only in the wording, or interpretation of the wording, of the claims of the granted patent, and nowhere else. A product is protected by a patent in accordance with Article 3(a) of the SPC Regulation if, on the priority date of the patent, it would have been obvious to a person skilled in the art that the active ingredient in question was specifically and precisely identifiable in the wording of the claims of the basic patent. In the case of a combination of active ingredients, each active ingredient in that combination must be specifically, precisely and individually identifiable in the wording of the claims of the basic patent.

1. Business Impact

  • This non-binding opinion is of interest to all stakeholders in the pharmaceutical industry. It is the latest in a line of pronouncements from the CJEU in which the interpretation of Article 3(a) of the SPC Regulation has been discussed.
  • This opinion is of interest in that it rejects the “core inventive advance” test that has previously been proposed by the English Courts.
  • Whilst the opinion is non-binding on the CJEU, if the CJEU were to follow the reasoning of the opinion in its decision, the validity of an SPC in subsequent national proceedings would depend on the facts before the national court as to whether it would have been obvious to a person skilled in the art that the active ingredient in question was specifically and precisely identifiable in the wording of the claims of the basic patent.
  • The CJEU’s decision is expected in the coming months and it will be interesting to see if that decision will be broad enough to dispose of two other pending references on the interpretation of Article 3(a) that have been referred by the English Court of Appeal and German Federal Patent Court.

2. Background

Gilead’s UK SPC covers pharmaceutical compositions comprising the combination of tenofovir disoproxil and emtricitabine, a preferred “backbone” of active ingredients for the treatment of HIV. Such products include Gilead’s blockbuster anti-HIV treatments TRUVADA® and ATRIPLA®.

In 2016, Teva, Generics UK (t/a Mylan), Accord and Lupin commenced proceedings against Gilead in the High Court of England and Wales. They sought to revoke the SPC on the basis that the product the subject of the SPC is not protected by the basic patent.

Mr Justice Arnold delivered his judgment in January 2017. He found he was unable to decide on validity of the SPC on the basis of the existing CJEU case law and he therefore referred a single question to the CJEU: “What are the criteria for deciding whether ‘the product is protected by a basic patent in force’ in Article 3(a) of the SPC Regulation?” (Case C-121/17).

The case was heard before 15 judges of the Grand Chamber of the CJEU on 20 February 2018, reflecting the importance of the question.

3. The AG’s Opinion

Advocate General Wathelet delivered his opinion on 25 April 2018. The AG considered the line of CJEU cases dealing with Article 3(a) SPC Regulation since the key 2011 decision in Medeva.

As part of his considerations, the AG rejected the suggestion of the referring court that the concept of the “core inventive advance” was a relevant consideration in determining whether a basic patent protects an active ingredient within the meaning of Article 3(a).

In his view, determining whether a basic patent protects an active ingredient within the meaning of Article 3(a) is to be found only in the wording, or interpretation of the wording, of the claims of the granted patent, and nowhere else. A necessary starting point for determining this is whether a substance or combination of substances falls within the scope of protection of a patent, in particular under Article 69 of the EPC and the Protocol on its interpretation and the provisions of relevant national law.

The AG’s conclusion was that a product is protected by a patent in accordance with Article 3(a) of the SPC Regulation if, on the priority date of the patent, it would have been obvious to a person skilled in the art that the active ingredient in question was specifically and precisely identifiable in the wording of the claims of the basic patent.

The AG’s opinion is not binding on the CJEU and it is not certain that the CJEU will follow the same reasoning when it decides the case in the coming months. However, if the CJEU does adopt the AG’s opinion, it will be for the national courts to determine the validity of the SPC at issue, based on the facts before them as to whether it would have been obvious to a person skilled in the art that the active ingredient in question was specifically and precisely identifiable in the wording of the claims of the basic patent.

It will be interesting to see if the CJEU’s decision will be broad enough to dispose of the two other pending references on the interpretation of Article 3(a): one referred by the English Court of Appeal (Case C-650/17 Sandoz v Searle), and the other referred by the German Federal Patent Court (Case C-650/17 Royalty Pharma/Sitagliptin).

Author

Sebastian Moore
Sebastian Moore
Partner
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+44 20 7466 2801
Alex Freelove
Alex Freelove
Senior Associate
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+44 20 7466 7452
Julian Gauld
Julian Gauld
Senior Associate
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+44 20 7466 7453

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Filed under Patents, Pharma, SPCs

The UK ratifies the Unified Patent Court Agreement on World IP Day

The UK has ratified the UPC Agreement today, 26 April 2018, which also happens to be World IP Day.

The UK IP Minister announced the ratification at a World IP Day event at the House of Commons this afternoon. It seems that the UK Government has listened to the many representative groups in the Patent arena who suggested that being part of the new system prior to Brexit was preferable to trying to join it post-Brexit.  Now we need to wait to see if the German constitutional challenges can be resolved before the end of March next year.

The UK, along with France and Germany, is one of three signatory states which must ratify before the Agreement can come into force. France ratified long ago (2014), so German ratification is all that is now needed. Ratification by Germany has been held up by challenges to the legislation which was passed to allow Germany to ratify in both the Bundestag and the German Constitutional Court. Neither has yet been resolved.

15 other countries have already ratified the UPC Agreement. Once Germany ratifies, the Agreement will come into force on the first day of the fourth month after the month of that last required ratification. Assuming the constitutional challenges fail, German ratification will likely be timed to coordinate with the new Unitary Patent Court being ready to operate. Once in effect, the UPC court will operate across all current EU states except Croatia, Poland and Spain which have not signed up to the Agreement. A European patent with unitary effect (otherwise known as a unitary patent) will be available, covering all the participating states, once the UPC is established. Unitary patents will be enforced through the UPC which will also have jurisdiction over European patents which have not been opted out of the new system.

For more on the UPC Agreement including the other states which have ratified already see the UPC Agreement section of our UPC hub (www.hsf.com/upc).

Authors

Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, London
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+44 20 7466 2217

 

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Filed under Brexit, EU, Patents, The Unified Patent Court and the Unitary Patent, UK

CONSULTATION ON THE DRAFT TRADE SECRETS (ENFORCEMENT, ETC) REGULATIONS 2018

The Trade Secrets (Enforcement, etc.) Regulations 2018 (the “Regulations”) are intended to be in force by 9 June 2018 to transpose Directive (EU) 2016/943 (the “Directive”) into UK law. The UK IPO is in the process of consulting on the proposed Regulations.

Summary:

  • The UK already has well-developed legal protection for trade secrets (either in common law, statute or by means of court rules), therefore the Directive does not require substantial changes to be made to UK law.
  • Changes mainly concern limitation periods, procedural issues for the courts when hearing cases on breach of confidence in relation to trade secrets and certain remedies.
  • Although the EU has largely adopted UK law concepts the changes will be more radical in some other EU jurisdictions. The aim of the Directive is to create a level playing field for enforcement by harmonising this area of law.
  • Certain provisions of the language proposed for the Regulations differ from that used in the Directive.  In addition, it is proposed that some parts of the Directive will not be transposed and it is not clear why this is the case.  If this approach is adopted, it may lead to a lack of clarity in the UK law on trade secrets.

Business Impact:

  • Greater protection for a business trade secrets and a common approach to enforcement is to be welcomed across the EU.  Trade secrets are increasingly important in protecting valuable information and technology, especially where the other forms of IP protection like patents may not be available or appropriate.

Read more on the proposed regulations on trade secrets.

 

Authors

Joel Smith
Joel Smith
Head of IP - UK
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+44 20 7466 2331
Clare Blendis
Clare Blendis
Senior Associate, London
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+44 20 7466 2165

 

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Targeting Online Risk

In our latest publication in our Future of Consumer series on issues facing the Consumer sector, we look at some of the online risks threatening businesses today.

We examine the options available to tackle IP infringements online, such as the sale of counterfeit goods, with a focus on the most powerful weapon for rights holders – blocking junctions from the courts. We also provide some practical tips to help tackle and combat online infringements.
Authors

Joel Smith
Joel Smith
Head of IP - UK
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+44 20 7466 2331
Sarah Burke
Sarah Burke
Senior Associate, London
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+44 20 7466 2476

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Filed under Advertising, AI, Augmented reality (AR), Consumer products, Copyright, Counterfeiting, Databases, Designs, EU, Format rights, Media, Passing Off, Technology, media & telecommunications, Trade marks & Passing-off, UK, Virtual reality (VR)

UK Government agrees elements of the European Commission’s proposals for post-Brexit protection of EU-wide IP rights in the UK in the latest draft of the Withdrawal Agreement

In the latest draft of the Withdrawal Agreement (19 March 2018) the UK Government and European Commission negotiators appear to have agreed text providing for the replacement of EU-wide IP rights having effect in the UK with equivalent UK rights at the end of the transition period post-Brexit (until 31 December 2020). Further, during the transition period, EU-wide rights will still apply to the UK due to the effect of Article 122 which provides that EU law will be applicable to the UK during the transition period and that it will produce the same legal effects in respect of and in the UK as those which is produces within the EU and its Member States and shall be interpreted and applied in accordance with the same methods and general principles, and that during the transition period, any reference to Member States in EU law shall be understood as including the UK.

Other IP related measures include provision for dealing with: exhaustion of rights, pending applications, international registrations designating the EU and the effect of invalidity proceedings that are “on foot” at the end of the transition period, (see Articles 50-57).  Certain provisions (highlighted in green) are now listed as agreed between negotiators, whilst others are still just proposals from the Commission (those un-highlighted) including those on GIs, SPCs and who pays the administration costs involved.

There are still unresolved issues for those who hold IP rights in the EU and those who license (in or out) EU-wide IP rights or have agreements linked to the “EU” as territory, which we discuss below.

Despite the areas of current agreement, there remains the possibility of a “no deal” scenario in relation to the whole agreement, in which case none of the areas agreed would stand (although the UK Government could make separate arrangements to create equivalent rights at the moment of Brexit). Anything agreed between the Commission and the UK under the Withdrawal Agreement needs European Council approval and then European Parliament approval. Thus, although a good start has been made on agreeing the post-Brexit fate of EU-wide IP rights currently having effect in the UK, the final arrangements are still far from certain. Indeed, if the Withdrawal Agreement is not accepted then there will be no transition period at all and a “hard” Brexit will come into effect on 30 March 2019, with all that implies for IP rights (see our comments from January 2017 here).

In summary, the proposals in the revised Withdrawal Agreement, and problems associated with them, are:

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Filed under Agribio, Agribusiness, Brexit, Consumer products, Copyright, Counterfeiting, Databases, Designs, EU, GIs, Licensing, Patents, PDOs, Pharma, SPCs, The Unified Patent Court and the Unitary Patent, Trade marks & Passing-off, Transactions, UK

Innovation Disruption and Technology – the legal and commercial issues for your business

Drawing on our practitioners’ experience and understanding of the intellectual property and technology issues facing our clients in the fast changing world in which we all now do business, we made innovation and disruptive technology the key themes at our 2018 IP Update Conference.

Described by one attendee as “The perfect mixture of commercial and legal content”, the event was held in our London offices in February 2018. We were joined by over 140 clients from the Technology, Banking, Consumer, Energy, Manufacturing, Media, Pharmaceutical & Healthcare, and Telecommunications sectors.

Click here for a briefing summarising the legal and commercial issues raised by the Herbert Smith Freehills presenters and our keynote speaker Kevin Mathers, Country Director at Google UK.

Our keynote speaker, Kevin Mathers, set the scene by discussing the current technological landscape for innovation and how Google looks at the future. Taking examples of how artificial intelligence, augmented reality and virtual reality are already being used by Google and looking at the major trends which will dictate our digital future. Kevin’s presentation was a great success, with attendees describing it as “really insightful and inspirational”; “engaging and interesting” and “stimulating and thought-provoking”.

The conference continued with sessions on

  • tackling the impact of AI on your business,
  • on-line risk,
  • open innovation,
  • interoperability and product standards, and
  • targeted advertising and the GDPR.

There was also a panel session at the end of the conference to discuss the issues facing businesses in relation to disruptive technology with contributions from partners and of counsel across the IP and IT practice areas and from several of our European offices.

Clients were impressed by the range of issues presented by the speakers and the practical approaches offered.

 

Joel Smith
Joel Smith
Head of IP - UK
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+44 20 7466 2331
Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, London
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+44 20 7466 2217

 

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Filed under 3D printing, Advertising, Agribio, Agribusiness, AI, Augmented reality (AR), Consumer products, Copyright, Counterfeiting, Databases, Designs, Energy, EU, Format rights, GIs, Licensing, Media, Passing Off, Patents, PDOs, Pharma, SPCs, Technology, media & telecommunications, Threats, Trade marks & Passing-off, Trade secrets, Transactions, UK, Uncategorized, Virtual reality (VR)