Out-Law News | 21 Feb 2020 | 9:05 am | 4 min. read
Christopher Sharp of Pinsent Masons, the law firm behind Out-Law, was commenting after the High Court in London ruled that Genentech was 'estopped' from arguing that certain claims in one of its patents are valid. The court reached that view after it considered the similarity between the claims in a divisional patent and the claims in the parent patent, which the court had previously ruled were invalid.
A patent application may contain multiple inventions and be considered to lack unity. It may therefore be divided into divisional patents, which carve out the individual inventions from the earlier – parent – patent. A divisional patent is a separate and distinct right, but retains the filing, priority and expiry dates of the parent.
Estoppel is a legal principle that applies to prevent litigants from having a 'second bite of the cherry'. In this case, the court found that a particular limb of this principle, 'issue based' estoppel, applied as Genentech were essentially trying to re-litigate a cause of action that had already been decided in a previous dispute between the same parties.
Sharp said that the judge in this case appeared to give weight to the cost and length of the previous trial concerning Genentech's parent patent in reaching his decision.
In his ruling, deputy High Court judge Mr Roger Wyand QC described the trial as "one of the most complicated and expensive patent actions with the costs between the parties amounting to over £11 million".
"The judge identified a clear public interest argument against effectively sanctioning a rerun of such an expensive trial and use of the court’s resources," Sharp said.
Another consideration was the value of the product to Eli Lilly and the attempts that Genentech had made to keep the product off the market, despite having no competing product of their own.
Genentech has alleged that Eli Lilly's antibody product ixekizumab, marketed under the name Taltz, has infringed its divisional patent before both the UK and German courts. In Germany, patent cases are bifurcated, meaning that the questions of whether there has been patent infringement and whether the patent is valid are considered separately by different courts.
While Eli Lilly has asked the High Court in London to revoke Genentech's patent, and also opposed the patent before the European Patent Office (EPO), German court procedure in patent cases means that the company cannot initiate invalidity proceedings in Germany until the EPO opposition proceedings have been completed. This raises the possibility that Eli Lilly may be held to have infringed Genentech's divisional patent in Germany several years before the issue of validity of the patent in that jurisdiction is considered.
Sharp said: "It can take a number of years for EPO opposition proceedings to be completed. The court noted that a UK judgment may be taken into consideration by the German court in the pending infringement proceedings. This is important because the product in question, Taltz, is of huge commercial importance to Eli Lilly and Germany is the biggest European market. If Genentech obtained a positive infringement decision in Germany in respect of the divisional patent before invalidity proceedings could even be commenced there, it might be able to keep Taltz off the market for some years. This would cause significant harm to Eli Lilly."
The High Court also reflected on whether Genentech should have obtained the grant of its divisional patent in time for it to have been included within the earlier parent patent proceedings.
"The court considered Genentech’s approach to prosecution of the divisional patent but found that it was within the EPO rules and that there was not enough to establish an intention to deliberately prolong the life of the divisional patent enough to disrupt Eli Lilly's attempts to enter the market with their product," Sharp said.
Eli Lilly was granted summary judgment in respect of claims in the divisional patent that were essentially the same as those that had previously been found to be invalid in the parent patent. This decision will be of interest to those seeking to challenge large patent estates where there is pending uncertainty in relation to divisional patent applications.
However, summary judgment was refused in relation to two new claims that Genentech sought to introduce in the present action. In the previous action, the court had found that the equivalent claims – which differed only immaterially – lacked plausibility at the parent patent's priority date – the date at which its validity is assessed. In the parent patent proceedings, Genentech had sought to amend the defence to argue that the claims were plausible at the later filing date as a result of a change in the common general knowledge at the time. This was refused on case management grounds as it was submitted too late, but was allowed as a point of appeal.
In the present proceedings, Eli Lilly submitted that Genentech should be estopped from arguing that plausibility should be assessed at the filing date because they should have raised it in the parent patent proceedings and to do so in respect of the divisional patent would be an abuse of process. However, the court found that Genentech had an arguable case that the claims were plausible, and therefore valid, at the filing date on the basis that the common general knowledge had developed sufficiently between the priority date and the date the patent was filed. These issues will therefore be heard at a trial in due course.
"The issues discussed in this case will be familiar to pharmaceutical companies. Carving out divisional patents is one way innovators seek to prolong the life of their intellectual property rights in a product and delay rivals' entry to the market," Sharp said. "It will be interesting to see the impact of this decision on this classic strategy."
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