Preparations for the UPC continue despite an “unpredictable environment”

The UPC Preparatory Committee has issued a “Status of the Unified Patent Court Project” statement and review of 2018, confirming that there are now 16 states which have ratified the UPC, and that German ratification is still awaited (dependent on the outcome of the complaint pending before the Constitutional Court in Germany) before the project can move into provisional application phase. This latter phase is allows the courts to be prepared and judges to be appointed.

 

Despite the current, somewhat unpredictable environment, the technical and operational preparations are continuing allowing for the project to move at pace in the event of a positive outcome from the German Constitutional Court“.

The press release says nothing more than was already known, but it does confirm that the status of the project is constantly being reviewed, stating that the Chairman of the UPC Preparatory Committee “continues to meet with the Executive Group and the operational team on a monthly basis” and noting that those that have applied for judicial positions in the Unified Patent Court are being contacted separately.

Author

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

Advocate General proposes literal interpretation of Article 3(d) SPC Regulation in Abraxis (C-443/17)

The Advocate General of the CJEU proposed a narrow interpretation of Article    3(d) in the Opinion given yesterday in Abraxis Bioscience LLC v Comptroller General of Patents 13 December 2018, one that would marginalise the effect of the CJEU’s decision in Neurim (C-130/11). If followed by the CJEU, this position would be met with disappointment by the pharmaceutical industry, which continues to make significant investments in researching and developing formulations that improve efficacy and new uses of known products.

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Draft Withdrawal Agreement Approved by UK Cabinet – IP and Marketing Authorisation Provisions Summarised

As was widely reported yesterday evening, the Draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (the Draft Withdrawal Agreement (14 November 2018)), detailing the arrangements for the UK to leave the EU has now been agreed by the UK Cabinet. The draft is as agreed between the UK and the EU’s negotiators. As stated in HSF’s Brexit Withdrawal Agreement webinar invitation here, a special European Council, anticipated to be held on 25 November 2018, will be asked to approve the Draft Withdrawal Agreement and the full text of the political declaration. The deal will also have to pass through the European Parliament. However, the main challenge to a deal being ratified is the requirement for approval by the UK Parliament. The first vote by the UK Parliament is expected within two weeks of the European Council.

We set out below a summary of the Draft Withdrawal Agreement’s provisions on intellectual property. The situation is not much changed from the previous draft issued in March 2018 although the provision for geographical indications has now been agreed: EU-wide rights will be replaced or recognised in the UK and provision has been made for pending applications, including for supplementary protection certificates (SPCs). The sharing of information for assessment of marketing authorisations between the MHRA and the EMA and vice versa is also provided for.

The Draft Withdrawal Agreement provides for an implementation/transition period from the date the UK leaves the EU (29 March 2019) to end of 31 December 2020. If the Draft Withdrawal Agreement is agreed, this transition period will mean that effectively the UK will continue to be treated as part of the EU from a legislative point of view. As the Commission’s press release puts it,”During this period, the entire Union acquis will continue to apply to and in the UK as if it were a Member State”. IP registrations and enforcement will carry on as normal during this period. Until the end of the transition period you will still be able to acquire/register and maintain EU-wide IP rights that will have effect in the UK. See the detail in our summary section below.  However, “as of the withdrawal date (i.e. including during the transition period), the UK, having left the EU, will no longer be part of EU decision-making. It will no longer be represented in the EU institutions, agencies and bodies, and persons appointed, nominated, or representing the UK, and persons elected in the UK, will no longer take part in the EU institutions, agencies, and bodies“.

The accompanying political agreement document “Outline of the political declaration setting out the framework for the future relationship between the European Union and the United Kingdom” (currently a summary version, with a fuller version to follow) looks to the future relationship between the UK and the EU post-transition. There is mention of IP in the section on Economic Partnership, but all that is said is: “Protection and enforcement of intellectual property rights beyond multilateral treaties to stimulate innovation, creativity and economic activity”.  Under ‘Basis for cooperation’, the political agreement states that “Terms for the United Kingdom’s participation in Union programmes, subject to the conditions set out in the corresponding Union instruments, such as in science and innovation, culture and education, development, defence capabilities, civil protection and space”. There is also mention of “Cooperation in matters of health security”.  For more on the impact of no deal on the pharma industry see our post on the UK Government’s “no deal technical notices” published on 23 August 2018.

Summary of the Draft Withdrawal Agreement’s provision for IP and marketing authorisations:

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Brexit “no deal” technical notices published on Patents, Trade marks, Designs, Copyright, GIs, and Exhaustion of rights

The latest tranche of “no deal” technical notices was released yesterday afternoon by the UK Government. Amongst them are several notices that highlight the Brexit issues faced by intellectual property right owners and, in some cases, confirm the Government’s approach to resolving them. The Government also released this news story today which comments on the guidance given in the technical notices and comments on the Government’s longer term aims for IP protection.

Key announcements, in the context of no deal, are:

  • Provision of a new right to replace unregistered Community design rights, to be known as “the supplementary unregistered design right“.
  • Existing EUTMs and Community registered designs will be replaced with new, equivalent rights in the UK at the end of the implementation/transition period, “with minimal administrative burden“.
  • The SPC, compulsory licensing, pharmaceutical product testing exception and patenting of biotechnological inventions regimes will remain unchanged at least initially.
  • If the UPC comes into force the UK will replace unitary patent rights with equivalent rights if the UK needs to withdraw from the new system, although the UK “will explore whether it is possible to remain within it“. The Government’s news story states that “The UK intends to stay in the Unified Patent Court and unitary patent system after we leave the EU.”
  • UK originating sui generis database rights will no longer be enforceable in the EEA; “UK owners may want to consider relying on other forms of protection (e.g. restrictive licensing agreements or copyright where applicable) for their databases
  • The UK will set up its own GI schemewhich will be WTO TRIPS compliant“. The new rights “will broadly mirror the EU regime and be no more burdensome to producers“.  Since the UK would no longer be required to recognise EU GI status, EU producers would be able to apply for UK GI status. Those wishing to protect UK GIs in the EU will need to submit applications on a third country basis.
  • The UK will continue to accept the exhaustion of IP rights in products put on the market in the EEA by, or with the consent of, the rights holder. However, the EU will likely not consider that goods placed on the UK market are exhausted in the EEA, and thus permission may need to be sought from the rights holder to transfer goods to the EEA that have legitimately been put on the market in the UK. The Government news story says that “The UK looks forward to exploring arrangements on IP cooperation that will provide mutual benefits to UK and EU rights holders and we are ready to discuss issues the EU wishes to raise in the negotiations on our future relationship, including exhaustion of IP rights”.

Links to the notices:

  1. Patents
  2. Trade marks and designs
  3. Copyright
  4. Geographical Indications
  5. Exhaustion of IP rights

More detail on each of these is provided below. For those with an interest in Life Sciences please also see our blog post on the notices related to that sector that were released last month.

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CJEU SETS OUT TEST ON THE INTERPRETATION OF ARTICLE 3(a) SPC REGULATION

The Court of Justice of the European Union (CJEU) has today delivered its decision on the interpretation of Article 3(a) SPC Regulation in Case C-121/17 Teva v Gilead.

The CJEU has said that in the case of an SPC for a combination product, Article 3(a) will be satisfied if, from the point of view of a person skilled in the art and on the basis of the prior art at the filing date or priority date of the basic patent:

  • the combination of active ingredients necessarily, in the light of the description and drawings of that patent, falls under the invention covered by that patent, and
  • each of those active ingredients is specifically identifiable, in the light of all the information disclosed by that patent.

The CJEU has made it clear that these are matters for national courts to decide.

Business Impact

This is a very important decision for all stakeholders in the pharmaceutical industry. It relates to the ability of patentees to obtain SPCs, a sui generis right, which effectively extends the duration of patent protection for products (i.e. active ingredients or combinations of active ingredients) of medicinal products covered by marketing authorisations (MAs).

It is the first time that the Grand Chamber of the CJEU (sitting as 15 judges) has provided guidance for national courts to interpret Article 3(a) of the SPC Regulation, although other Chambers of the CJEU have also tackled this issue in the past. Continue reading

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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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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PATENT AND PHARMA UPDATE – November 2017

Key recent developments in the United Kingdom and Europe relating to the patents and pharmaceutical sector. One of the most significant developments in the patent law arena in recent years has been the decision of the Supreme Court in Actavis v Eli Lilly, which has changed the approach to patent infringement in the UK. The update starts by commenting on the new rules of infringement and looks at how subsequent decisions may apply this new test. The case will impact most pharmaceutical sector players, whether they are originators or generics, and may impact the strategy that patentees adopt when litigating in the UK. The update further reports on other significant developments in UK and European law, including a recent TBA decision which elevates the threshold for plausibility and recent references to the CJEU on the SPC Regulation.

1. A new UK approach to infringement: equivalents infringe a patent, but do not anticipate it?

The UK Supreme Court has redefined the UK approach to patent infringement, holding that the scope of protection of a patent extends to “equivalents” of the claimed invention. However, the Patents Court has since held that such equivalents, even if they pre-date the patent, do not anticipate it Read more


2. Plausibility before the EPO and reliance on post-published evidence

BMS has filed a petition for review to the Enlarged Board of Appeal regarding the TBA’s decision to revoke BMS’s patent for the anti-cancer drug dasatinib. The Board’s decision to revoke the patent suggests that the threshold for plausibility has been elevated, at least in the context of an inventive step Read more


3. Further References to the CJEU on Supplementary Protection Certificates (“SPCs”)

The German Federal Patent Court has referred two further issues to the CJEU regarding the interpretation of Article 2 and 3(a) of the SPC Regulation. In relation to Article 2 the Court has asked whether an SPC can be obtained for drug device combination products and, if so, in what circumstances. With regards to Article 3(a) the Court has added further detail to the questions asked by Arnold J in Teva v Gilead Read more


4. New Unjustified Threats Regime in force from 1 October 2017 – encompassing unitary patents and European patents under UPC jurisdiction

The new Unjustified Threats Regime has recently come into force. This Regime is an attempt to encourage more pre-action communication by providing greater clarity on what amounts to an actionable threat Read more


5. Further information ordered to be provided in an enquiry as to damages under a cross-undertaking

Birss J has provided guidance on pleadings for damages under a cross-undertaking. The High Court found the Points of Claim were fundamentally lacking critical information and Sandoz was ordered to provide further information on their substantial £100 million claim for damages, including profit margins on each type of product and profit flows between the relevant Sandoz group companies (under agreed confidentiality terms) Read more


6. UK court strikes out a claim for loss suffered as a result of the tort of unlawful deceit

The High Court has struck out the NHS’s claim for damages based on the tort of causing loss by unlawful means regarding misrepresentations on novelty/obviousness. Roth J’s interim decision represents the latest instalment in the fall-out from Servier’s actions concerning delayed entry of perindopril, and suggests that this tort should be confined within a narrow ambit Read more


7. Judicial consideration of a collaboration agreement in Astex Therapeutics Limited v AstraZeneca AB [2017] EWHC 1442 (Ch), (“Astex”)

Arnold J’s judgment in Astex provides insight into how the Courts will approach the interpretation of a research and collaboration agreement. Arnold J also commented on the amount of witness evidence that was put before him concerning events that had occurred between 10 to 15 years ago Read more


8. Developments in Europe

A brief overview of the developments in the European arena in the past months, including an EU Commission consultation on SPCs, the new approach adopted by EPO to patentability of products obtained by essentially biological processes and how HSF can help you to successfully navigate the new data protection laws Read more


9. UPC Update

This article provides an update on the progress of ratification of the UPCA in the UK and Germany Read more

 

See our previous Patent and Pharma Updates on our IP Blog here:

Patent and Pharma Update – June 2017

Patent and Pharma Update – January 2017

Patent and Pharma Update – May 2016

 

Authors

Sophie Rich
Sophie Rich
Partner
+44 20 7466 2294
Jonathan Turnbull
Jonathan Turnbull
Senior Associate
+44 20 7466 2174
Monika Klajn
Monika Klajn
Associate
+44 20 7466 7604

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

Commission paper on IPR post-Brexit highlights the importance of resolving key issues prior to withdrawal

The European Commission has published a “Position paper transmitted to EU27 on Intellectual property rights (including geographical indications)” (7 September 2017) which proposes that the (Brexit) Withdrawal Agreement should ensure that:

  • The protection enjoyed in the United Kingdom on the basis of Union law by both UK and EU27 (the remaining EU states) holders of intellectual property rights having unitary character within the Union before the withdrawal date is not undermined by the withdrawal of the United Kingdom from the European Union. The paper suggests there should be automatic recognition of an IP right in the UK on the basis of the existing, unitary character IP right i.e. that, for example, any EU trade mark rights applying in the UK prior to Brexit should be automatically replaced by UK rights post-Brexit. Further, the fact that use may not be in the UK should not be able to form a basis for revocation of the rights. The implementation should be not result in any financial cost for the IPR holders and any administrative burden should be kept to a minimum.  The paper also requires that the UK Government put in place a system to continue the protection of Geographical Indications (GIs) and protected designations of origin (PDOs) which are currently legislated for under EU law and for which there is no current domestic legislation in the UK. However there is no suggestion of a reciprocal recognition of UK-based PDOs or GIs post-Brexit.
  • Procedure-related rights (e.g. right of priority) in relation to an application for an intellectual property right having unitary character within the Union still pending on the withdrawal date are not lost when applying for an equivalent intellectual property right in the United Kingdom ie. that where an application is in progress at the point of the UK’s withdrawal from the EU, the applicant should be entitled to keep the benefit of any priority date when applying after the withdrawal date for an equivalent IPR in the UK.
  • Applications for supplementary protection certificates or for the extension of their duration in the United Kingdom on-going before the withdrawal date are completed in accordance with the conditions set out in Union law (and any certificate so granted or extended should provide for protection equivalent to that provided for by Union law.
  • Databases protected in the EU27 and the UK before the withdrawal date continue to enjoy protection after that date. This involves waiving the requirements of Article 11(1) and (2) in the EU27 Member States in respect of UK nationals and UK companies and firms; and the UK should not exclude EU27 nationals and EU27 companies and firms from legal protection of databases in the UK on nationality or establishment grounds. No provision for any continuing mutual recognition of database rights is referred to however.
  • Exhaustion before the withdrawal date within the Union of the rights conferred by intellectual property rights is not affected by the withdrawal of the United Kingdom from the European Union. The conditions for exhaustion of each IPR should be those defined by Union law.

These points highlight the key areas that have concerned IP stakeholders since the Brexit referendum and serve as a timely reminder to the UK Government that these issues need to be dealt with prior to Brexit, in one way or another.

Joel Smith, Head of IP at Herbert Smith Freehills, commented,Whilst it is reassuring that the Commission recognises that there are important issues for continuity of IP protection to be addressed upon Brexit, this paper only begins to scratch the surface for the number of issues that need examining by UK Government”.

Author

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

Patents Court finds SPC based on a Markush formula valid in Sandoz v Searle

The Patents Court has held that Searle's supplementary protection certificate ("SPC") based on a claim setting out a Markush formula is valid. Arnold J considered the interpretation of Article 3(a) of the SPC Regulation and its application to Markush formulae and concluded that Searle's SPC for the anti-HIV medicine, Prezista®, complied with Article 3(a). This was despite the fact that the claim was very broad, covering a huge number of compounds. In light of the CJEU's judgment in Lilly, Arnold J held that where a patent claim contained a Markush formula that covered a product, this was sufficient for the claim to specify that product for the purpose of Article 3(a) of the SPC Regulation. The judge also indicated that he considered the claimants' arguments better suited to an attack on the basic patent rather than the SPC, but because the claimants had not put the validity of the patent in issue, there was a presumption that the patent was valid.

Business Impact

  • This decision is the latest in a line of recent SPC decisions from the Patents Court in which the interpretation of Article 3(a) of the SPC Regulation has been discussed.
  • The decision is of interest in clarifying that in the UK an SPC can be validly based on a patent that claims a Markush formula covering a large number of compounds, even though the patent does not individually disclose the relevant compound, or provide any teaching pointing to it.
  • Notwithstanding a pending reference currently before the CJEU regarding the interpretation of Article 3(a) (arising from his earlier decision in the case of Teva v Gilead), Arnold J felt the law was sufficiently clear in this case to be able to uphold the SPC on the basis that it complied with Article 3(a).

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