Out-Law News 5 min. read
16 Apr 2020, 11:23 am
Tracey Roberts of Pinsent Masons, the law firm behind Out-Law, was commenting after the Court of Appeal in London refused to strike out a case for an Arrow declaration which a company requested without reference to a specific product or process.
"This indicates that Arrow declarations need not be linked to a specific product, but could be tied to a component part and deployed as a defence to infringement in more complex, combination inventions," Roberts said.
An Arrow declaration is a discretionary remedy that can be granted by the UK courts. It sets out that a particular product or process was not new or was obvious at a specific point in time. This can be of use to companies who manufacture a product or process that may otherwise be said to infringe a patent with a priority date after the date of the Arrow declaration. The Arrow declaration acts as a so-called Gillette defence against claims of patent infringement, that being a defence that the company is only practising something that was known or obvious before the patent.
Arrow declarations are of particular utility where a company has pending patent applications that, if granted, would read onto another company’s product or process. An Arrow declaration gives commercial certainty that the company can proceed to launch a product without the risk of a later infringement action in the UK.
This ruling will undoubtedly have a ripple effect on the use of Arrow declarations by biosimilar and generic companies looking for commercial certainty before the launch of their products
The case before the Court of Appeal concerned a patent owner's bid to have a rival's application for an Arrow declaration struck out prior to a forthcoming trial involving the two companies. Roberts said it is the first case outside of the life sciences field in which Arrow declarations have been looked at. She said this indicates the UK courts' "willingness to deploy this tool across different sectors".
"So far there have only been four cases determined by the UK courts on Arrow declarations, all of which involved life sciences products, in particular biosimilars or generics. The latest judgment therefore stands apart," said Roberts.
"The central consideration in these types of cases is the extent to which the declaration has utility. That may be as a defence to infringement or more widely, to provide commercial certainty, to protect supply chains, to promote settlement and to influence other European courts, although the Court of Appeal has said this is not enough on its own to show a useful purpose. All of these may be beneficial to a biosimilar or generic company looking to launch a product on to the market. Now, it seems, it may be of benefit to a broader range of companies in many different industries," she said.
"This ruling will undoubtedly have a ripple effect on the use of Arrow declarations by biosimilar and generic companies looking for commercial certainty before the launch of their products, and for originators who will be concerned about how decisions in other fields may impact the utility of Arrow declarations being used against their portfolios," Roberts said.
In the present case before the Court of Appeal, Mexichem UK, which manufactures industrial gases, had applied for an Arrow declaration in relation to two compounds – R-1234ze (ze) and R-1234yf (yf) – that it is seeking to market in respect of refrigerants for mobile air-conditioning (MAC) systems used in cars. The Arrow declaration would, if granted, prevent Honeywell International from relying on six patents it owns and at least four other divisional patent applications, which concern compounds useful in refrigeration systems, to prevent Mexichem from launching its products.
Honeywell's bid to have Mexichem's Arrow declaration application struck out was rejected by the High Court. The Court of Appeal has now upheld the High Court's decision. The litigation in relation to the Arrow declaration is part of a broader patent dispute between the companies that is set to go to trial.
"In this case, the Court of Appeal considered two core issues; whether an Arrow declaration should identify all the features of the product or process and/or the applicant must be manufacturing a product; and whether it could provide a 'platform' for inventive step arguments that goes against the well-established view that obviousness should not be assessed on a step-by-step basis," Roberts said.
On the first issue, the Court of Appeal confirmed that there is no requirement that the declaration should identify all the features of the product or process and that there is no threshold requirement for those seeking an Arrow declaration to fully formulate a product description or have a product in actual production. The applicant, it said, must establish that it would be useful for specified features of a product, which the party wishes to sell, to be declared obvious.
"This would broaden the utility of Arrow declarations beyond a single product to multiple products using the component part or process under the declaration," Roberts said. "The Court of Appeal acknowledged, however, that the utility of such declarations may be an issue and that would be a matter to be determined by the trial judge. This may be the case if the declaration is not sufficiently clear or would require further judgments to determine if combination products would or would not be obvious."
"However, if granted, this form of declaration would be an interesting development for pharmaceutical companies developing different formulations, for instance, or components of medical devices," she said. "The fact that this case involves air conditioning refrigerants demonstrates that Arrow declarations may be about to be available and used in a number of different industries beyond life sciences, although life sciences companies will no doubt be interested to see the impact of further decisions in this developing area."
On the second point, the Court of Appeal thought there was some force in Honeywell's argument that a stepwise approach to obviousness had been firmly rejected in previous cases, and that instead the approach should involve judging the inventive gap between the prior art and the invention. Roberts said that this means that an Arrow declaration that is sought for just a single step could ultimately be rejected by the trial judge.
However, the Court of Appeal did envisage instances where such a declaration could be of use, according to Roberts.
"First, in cases where a research programme of several steps can clearly be foreseen, it may be legitimate to take a step-by-step analysis," Roberts said.
"Second, if the patent rights holder is seeking to protect a broad inventive concept, such as, in this case, that the use of ze or yf in a MAC system is inventive through the portfolio of patents it owned, then the declaration could be useful in countering that concept," she said.
"Arrow declarations could therefore have a new utility, to limit patentees who seek protection broader than their inventive contributions. Having this declaration in hand could be a useful squeeze for biosimilars and generics to prohibit patent rights holders from arguing a broad scope in order to catch infringements," Roberts said.