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The Unitary Patent Plan Beta – Update on National Case Law in Europe

Leythem Wall

28 November 2013

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Declarations of Non-Infringement

• Article 15 of the Unified Patent Court (UPC) Agreement sets out the areas in which the UPC has "exclusive" competence

• These include actions for declarations of non-infringement (DNI)

• To be handled at the UPC Central Division (London, Munich or Paris)

• But… the UPC Agreement has not yet been fully ratified (minimum 13 EU states including UK, Germany and France required)

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English Court is ‘Appropriate’

• Actavis Group hf v Eli Lilly and Company [2012] EWHC 3316 (Pat)

• 27 November 2012 Arnold J ruled that a declaration of non-infringement in relation to both a UK and foreign designations of a European patent can be requested before the English Court

• This decision related not only to the UK designation of Eli Lilly’s European patent (EP 1313508), but also those of France, Germany, Italy and Spain

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England Not Brussels • Eli Lilly own the compound patent for the active pharmaceutical ingredient

pemetrexed (under SPC, set to expire 2015), and another patent (“the ‘508 Patent”, set to expire 2021) which protects the use of pemetrexed disodium in the treatment of cancer

• Actavis wanted to resolve whether its proposed sale of pemetrexed dipotassium relating to a cancer treatment would infringe Lilly’s rights, and wanted to enter the major pharmaceutical markets in Europe on SPC expiry

• Actavis commenced proceedings in the English Patents Court seeking declarations of non-infringement under section 71 of the UK Patents Act in relation to each of the English, French, German, Italian and Spanish national designations

• Importantly, Actavis did not challenge the validity of the patent. It irrevocably bound itself through undertakings to the Court not to challenge validity

• This meant that the exclusive jurisdiction given to countries in Europe under the Brussels Convention for challenges to the validity of registered rights was not used

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Questions

• The main questions before the Court were:

(i) had Lilly consented to accept service in respect of the claim (including the requests in respect of the non-UK patents)?

(ii) if not, had service been effected under Civil Procedure Rules (CPR) 6.9(2)? and

(iii) if service was effected only pursuant to (ii), should the proceedings be stayed under the doctrine of forum non conveniens?

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Answers

(i) had Lilly consented to accept service in respect of the claim (including the requests in respect of the non-UK patents)?

• A letter from Lilly’s English solicitors which stated that they “were instructed to accept service on behalf of their client” was held to amount to accepting service of the proceedings in respect of the non-UK designations

(ii) if not, had service been effected under CPR 6.9(2)? and

• Arnold J. held that even if there was no consent, service had been validly effected under CPR 6.9(2) because Lilly’s European Patent Operations Department constituted a place of business in the UK.

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Copyright is ‘no different’

(iii) should the proceedings be stayed under the doctrine of forum non conveniens (i.e. in favour of a more appropriate forum)?

• Arnold J. considered the Supreme Court’s decision in a copyright case Lucasfilm v Ainsworth [2012]

• If patents were no different to copyright for the purposes of justiciability ( - Lilly did not argue otherwise), then no reason why different for purposes of forum non conveniens when validity was not in issue.

• Arnold J preferred Actavis’ reasons why the claims should be determined in one court (e.g. cost savings and reduced risk of inconsistent decisions)

• Lilly’s argument based on difficulties of a court applying foreign law were not enough. Lilly had not shown that the courts of the other jurisdictions were clearly more appropriate than the English court.

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The Appeal

• Actavis Group hf v Eli Lilly and Company [2013] EWCA Civ 517

• 21 May 2013 Court of Appeal upheld Arnold J's first instance decision

• the willingness of the English court to entertain applications for cross-border declarations is limited to the following circumstances:

- the patentee must be either domiciled in the UK, or outside the EU

- the claim must be validly served; and

- validity will not be challenged in the proceedings

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Race to The Courts and German Proceedings

• 12 July 2012 Bird & Bird LLP representing Activis sent a letter to Lilly’s registered address for the EP patent indicating intention to seek DNI

• 27 July 2012 Bird & Bird LLP filed a request for the DNI at the UK Court

• 30 July 2012 Lilly issued proceedings against Actavis PTC and Actavis Deutschland in the Düsseldorf Landgericht (Düsseldorf Regional Court) for threatened infringement of the German designation of the Patent

• Since the UK court also held it had jurisdiction regarding the German non-infringement claim, under Article 27 of the Brussels Regulation the Düsseldorf court has had to suspend its proceedings

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The Opposition

• Lilly’s patent was in fact opposed by Teva in January 2008

• The opposition was rejected on 18 November 2010

• Teva appealed the decision on 3 March 2011 (T0542/11)

• Despite Actavis not contesting validity before the UK Court, on 30 October 2012 Actavis Deutschland filed a notice of intervention in the appeal relying upon the German proceedings as basis for Rule 89 (1) EPC

• In effect, therefore, the Actavis group has voluntarily bifurcated the infringement and validity aspects of its case with respect to the Patent

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DNI and Opposition – Best of Both Worlds

• Possible strategy is to file for a pan-European declaration of non-infringement at the UK Court (not contesting validity) and separately file/intervene in an opposition (handled by the EPO, not the UK Court) for pan-European revocation

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Italy and Declarations of Non-Infringement

• Italian torpedo was a popular defence in European patent litigation

• A company, under threat of infringement proceedings, applied in Italy for a DNI in respect of Italian and foreign parts of competitor’s European patent

• Italian court jurisidiction by virtue of Article 5.3 Brussels Convention “a person domiciled in a Contracting State may, in another Contracting State, be sued … in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred”

• In line with Article 21 of the Brussels Convention, foreign courts (e.g. German courts) stayed infringement proceedings if the alleged infringer had already launched a cross-border DNI action in Italy

• As a result, once the alleged infringer had filed a torpedo suit in Italy, the patentee was prevented from enforcing its patent in other jurisdictions

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End of the Torpedo?

• In 2003, the Italian Supreme Court ruled that Italian courts did not have jurisdiction (BL Macchine Automatiche v Windmoeller)

• The plaintiff in a DNI action could not rely upon Article 5.3 Brussels Convention because – by bringing a DNI action – the plaintiff had already denied that a harmful event had occurred

• Considered big step forward for effective protection of patents in Europe

• September 2010, German company (Asclepion) filed a torpedo DNI claim before the Court of Rome relating to Italian and German parts of EP 0 806 913 and EP 1 230 900 (owned by Massachusetts General Hospital) (MGH)

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The Torpedo is back • May 2011, MGH and exclusive licensee filed an application with the Italian

Supreme Court challenging the international jurisdiction of the Italian Courts for deciding infringement of the non-Italian parts of the EP’s

• 10 June 2013, the Supreme Court handed down its judgment that Court of Rome has jurisdiction for being the judge of the place where the harmful event may occur, in respect of both German and Italian parts

• Since wording of Article 5.3 of Council Regulation (EC) No 44/2001 now also refers to where harm may occur, IT courts have jurisidiction

• Based on this ruling it appears Italian courts will have to accept DNI claims also in respect of non-Italy EP designations

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Bolar Exemptions • Producers of generic medicines can use original manufacturer's approval if

can demonstrate that generic is bioequivalent to the approved medicine

• The 'Bolar’ exemption is an attempt to ensure that these necessary studies, tests and trials will not amount to patent infringement

• This exemption does not replace the experimental use defence, rather it supplements it

• Experiments designed to elicit new knowledge – that is, which can be considered to advance scientific knowledge – will generally be exempted under the ‘experimental use’ exemption

• Experiments and clinical trials using the patented drug and which are designed to obtain regulatory approval will generally be considered for exemption under the ‘Bolar’ provisions

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Bolar Exemptions – The First Final Decision

• A Polish manufacturer advertised and sold active pharmaceutical ingredients (API) to generics in Germany and Poland to carry out trials

• Patentee subsequently sues Polish manufacturer

• The Regional Court in Dusseldorf (O 282/10) and the Higher Regional Court in Gdansk (GC 76/11) ruled in June and July 2012 that the Bolar exemption only applies to the testing entity and that a third party’s manufacturing and selling to the testing entity is not exempted

• October 23, 2013, the Polish Supreme Court (CSK 92/13) upholds decision. Parallel proceedings are pending in Germany

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THANK YOU