Patent Litigation 2020 Comparisons

Last Updated February 10, 2020

Contributed By Pinsent Masons

Law and Practice

Authors



Pinsent Masons has one of the busiest patent practices in the UK, with experts located throughout England and Scotland. Clare Tunstall is the head of IP and life sciences, and is a partner with more than 20 years' experience of acting for clients on high-value, multi-jurisdictional patent and trade mark actions. Pinsent Masons advises on numerous cross-border transactions and litigations, guides patent procurement strategies, sets up joint ventures based on patent assets, advises on rights strategies, and gives pragmatic and commercial advice on licensing and fund-raisings backed by patent assets. The firm has acted on the most high-profile, business-critical patent, competition and regulatory litigations and investigations, as well as market-shifting transactions. It has also advised on market access strategies for more than 100 products in the last ten years. There are 30 individuals engaged in the firm's patent practice, in key offices across the UK and Europe. Key patent litigation clients include Teva, Accord, East Anglia One, Flynn Pharma, Magnesium Elektron and Zyxel. This chapter was authored with the assistance of Asawari Churi, Kirsteen McEwen, Anna Harley, Sarah Parkin, Huw Cookson, Samantha Carter and Niki Ruprai.

Inventions may be protected by the patent system, which has a statutory basis developed and refined by case law. Confidential information and/or trade secrets relating to inventions can be protected by statute – Directive (EU) 2016/943 (Trade Secrets Directive) was implemented in the United Kingdom (UK) by the Trade Secrets (Enforcement, etc) Regulations 2018 (Trade Secrets Regulation) – and/or the law of breach of confidence, a common-law right developed by the courts.

Applications for a “GB” patent providing protection in the UK are filed with the UK Intellectual Property Office (UKIPO). The legal framework for patents is provided by the UK Patents Act 1977 (Patents Act), certain sections of the Copyright, Designs and Patents Act 1988, related procedural rules and regulations set out in associated laws, the Patents Rules 2007 and the Manual of Patent Practice, together with various guides and guidance notes issued by the UKIPO.

The filed application must contain a request for the grant of a patent, a written description of the invention, including any relevant diagrams (called a specification), and (either immediately or within 12 months of filing) a list of claims and an abstract. If the procedural and substantive requirements are met and the relevant fees paid, the application will proceed to the preliminary examination-and-search phase. Assuming continued procedural compliance, the application will then be published and substantively examined.

A UK patent may also be obtained via the European Patent Office (EPO), either directly or via the UKIPO, in the form of a European patent application designating the UK (an EP(UK) patent). The EPO presently covers 38 Member States, including all 28 states of the European Union (EU), two extension states and other states with which the EPO has validation agreements. Accordingly, one single European patent application potentially provides protection in 44 states (as a collection of national designations). Granted European patents must, in most cases, be validated in each designated country within three months of grant, and each country has its own specific requirements for validation based on national law. After grant, the EP(UK) patent is subject to a nine-month opposition period.

Alternatively, UK and EP(UK) patents may be designated as part of a Patent Cooperation Treaty (PCT) application (an international application). The international application system is administered by the World Intellectual Property Office (WIPO), and provides a streamlined service for patent applications made globally. More than 140 countries are party to the PCT system, meaning that a single application designating all relevant states may be filed to preserve priority date, and national or regional applications may be filed subsequently. The international application does not itself become a granted patent. Applications filed through the PCT system are processed as UK or EP(UK) applications by the UKIPO or EPO respectively.

Under the Trade Secrets Regulation, a trade secret is information which is secret, has commercial value because it is secret and has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret. Information is only considered secret if it is "not … generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question."

Know-how and trade secrets may also be protected by an obligation of confidentiality under common law. Obligations of confidentiality may arise from both the circumstances in which information is disclosed and/or specific agreements or contractual terms. For example, employee agreements, collaboration agreements and confidentiality/non-disclosure agreements routinely include terms sufficient to impose an obligation of confidentiality.

Specifically, pursuant to the common law set out in Coco v A N Clark, Saltman v Campbell and later, related cases, it is a breach of confidence to use without authorisation information that has the necessary quality of confidence and has been imparted in circumstances imposing an obligation of confidence, where that use would cause detriment to the party who imparted that information.

On average, it takes three to four years for a patent to be granted by the UKIPO or EPO, although in some cases it can take considerably longer. It is also possible to fast-track a grant, provided certain conditions are met.

In the UK, it is not mandatory to appoint a patent attorney to initiate grant proceedings. However, due to the complexity of the grant procedure, particularly in relation to drafting the specification and responding to examination reports, taking the help of a qualified representative is advisable.

For applications filed at the EPO, applicants who have neither a residence nor principal place of business in an EPC contracting state must be represented by an authorised professional representative or by an authorised legal practitioner.

Official fees for processing an application through to grant are currently GBP325 at the UKIPO and are in the region of EUR4,000 at the EPO. In addition, an applicant is likely to incur costs for professional services required to support the application (including, for example, patent attorney fees, technical expert fees and translations).

If the relevant renewal fees are paid, the term of patent protection is 20 years from the date of filing the application. For patents relating to pharmaceutical and plant-protection products, an extension of up to five years may be available in the form of supplementary protection certificates (SPCs) (see 6 Remedies). Trade secrets last for as long as the information remains secret.

A granted patent confers a monopoly right in respect of the patented invention upon the proprietor, for the term of the patent. Annual renewal fees must be paid (see 1.9 Consequences of Failure to Pay Annual Fees).

The precise scope of the monopoly right conferred is stipulated by legislation, specifically the Patents Act. The proprietor is entitled to control certain acts constituting infringement under section 60, and to seek relief in respect of such acts carried out by unauthorised third parties.

Where the proprietor satisfies a court that under section 60 a third party’s acts infringe (or would infringe) the patent, the court will typically award relief such as an injunction and/or damages. Interim injunctive relief and other measures are available only by way of a court order (unless consented to or agreed contractually), following an application to the court and subsequent determination by the court that such relief should be awarded. See 6 Remedies.

SPCs confer a maximum five-year extension to the term of a patent in respect of authorised pharmaceutical or plant-protection products (see below). SPCs are intended to compensate for any delay in using a patent caused by the need to obtain regulatory approval to market a pharmaceutical product. SPCs are granted to the proprietor of a "basic" patent or its successor in title (see below).

Article 3 of both Regulation 469/2009 (medicinal products) and Regulation 1610/96 (plant protection) provide that an SPC certificate shall be granted if certain conditions are fulfilled in the Member State in which the application is submitted. Namely, at the date of that application:

  • the product is protected by a basic patent in force;
  • an appropriate and valid authorisation to place the product on the market has been granted;
  • the product has not already been the subject of a certificate; and
  • the authorisation referred to above is the first authorisation to place the product on the market as a medicinal/plant-protection product.

The holder of more than one patent for the same product will not be granted more than one SPC for that product.

When all requirements are met, the SPC will be granted. The SPC takes effect at the end of the term of the basic patent, provided that the basic patent has not previously lapsed or been revoked, and assuming that annual fees are paid. An SPC for a medicinal product may also be extended by way of a six-month paediatric extension if the requisite criteria are met.

At the UKIPO, following publication of the patent application but prior to its grant, third parties have the opportunity to lodge written observations regarding the patentability of the invention. Observations are lodged with the UKIPO’s Comptroller-General of Patents (Patents Act, section 21). The filing of an observation does not make the observer party to the proceedings. Observations can be made at any stage, but the UKIPO advises that they should be raised within three months of the publication date because, in practice, a patent can be granted within this timeframe. The UKIPO will provide copies of third party observations to the applicant, and will consider them during the examination process.

Similarly, at the EPO, third party observations can be lodged in respect of published European patent applications up until the decision to grant or refuse the patent is made. Such observations must be filed in writing in English, French or German, and must include a statement of the grounds on which they are based. Observations (which can be filed anonymously) are communicated to the applicant and made available to the public.

Within nine months of the grant of a European patent, third parties may file a written opposition to the grant of the patent at the EPO. This is a centralised procedure and the outcome is effective for all designated countries. Unlike third party observers, opponents will become a party to the opposition proceedings. Any opposition must set out specific grounds for objection (patentability, lack of sufficiency and/or added matter). The proprietor will have four months to respond, which may include filing amendments. The EPO evaluates the opposition and considers any submissions by the parties (which may include an oral hearing), following which the EPO’s opposition division will issue a final determination. The EPO may issue interim preliminary non-binding opinions to allow the parties to focus their submissions on the points the EPO considers relevant, and to assess the merits of their respective arguments.

Upon final determination, the outcome will affect all designations for which the patent was granted. Any amendments to specific national designations under the law and procedure of the relevant country will be supplanted by the EPO’s decision (if it results in amendments).

In the event of refusal by the UKIPO to grant a national patent (and certain other decisions of the Comptroller under the Patents Act), the applicant or aggrieved party may appeal to the Patents Court (a specialist intellectual property court within the Business and Property Courts of England & Wales) or, under certain circumstances or in respect of certain decisions, Scotland’s Court of Session (Patents Act, section 97).

In the event of refusal by the EPO, the applicant may appeal to the EPO’s Boards of Appeal, which include technical and legal boards of appeal. The boards act as a final procedural determiner of matters before the EPO.

Renewal fees for UK and EP (UK) patents are due annually. A patent will ordinarily lapse if the fee is not paid within the prescribed period. However, if the renewal fee and a late payment fee (currently GBP24 per each extra month) are paid within six months after the due date, the patent will be treated as if it had not lapsed. After six months following the due date, at which point the patent has ceased to have effect, the patent can only be restored upon a successful application to the UKIPO. If the UKIPO is satisfied that the failure to pay the renewal fee (and any late payment fee) was unintentional, the application will be allowed and the patent will be restored upon payment of the fees owing. Note that third party rights may accrue in the period between the lapse of the patent and its subsequent restoration.

In the case of SPCs, the annual fees are payable for each year of the effective period of the certificate, payable as a single cumulative amount. Late payments are possible up to six months after the due date, but attract an additional fee (one half the amount of the unpaid fees). If fees are not paid, the certificate will be treated as having lapsed on the date of expiry of the basic patent and so will not take effect.

The Patents Act governs both UK and EP(UK) patents once granted. A patent infringement claim can only be brought after a patent has been granted. Section 60 of the Patents Act sets out the acts that are considered to infringe a patent, if carried out without the patent proprietor’s consent. Patent infringement claims are governed by the Patents Act, section 61, which states that civil proceedings may be brought to court by the patent proprietor in respect of any act of infringement. In such proceedings, a claim can be brought seeking an injunction, an order for delivery-up or destruction of infringing goods, damages, an account of profits and/or a declaration that the patent is valid and has been infringed (see 6 Remedies). The limitation period for bringing patent infringement cases is six years (as with other torts). See 2.8 Protection for Potential Opponents. The claimant usually has the burden of proving infringement.

The parties to infringement proceedings may agree to refer the dispute to the Comptroller of the UKIPO. In such a referral, the patent owner can only seek an award of damages in respect of the infringing goods and/or a declaration regarding the validity or infringement of the patent. An injunction cannot be sought. If the Comptroller considers that the question referred would be more appropriate for determination by the court, the Comptroller can decline to deal with the matter and instead the court will have jurisdiction to determine the question.

The patent proprietor may also request a non-binding opinion from the Comptroller as to whether his or her patent is infringed (as well as any other prescribed matter in relation to the patent) (Patents Act, section 74A). Such an opinion can be sought after the patent has expired or been surrendered.

Opposition proceedings at the EPO may be brought within nine months of the grant of the patent, by any member of the public except for the proprietor himself. There are no national opposition proceedings before the UKIPO; therefore, action to remove the effects of a patent in the UK takes one of the following forms, and can be taken by any person:

  • a challenge to validity/revocation of a patent: see 4 Revocation/Cancellation; or
  • a declaration of non-infringement: a party may apply to the court or Comptroller for a declaration that an act does not, or a proposed act would not, constitute an infringement of a patent (Patents Act, section 71). This can be applied for irrespective of whether the patent owner has asserted otherwise. In order to qualify, the applicant must be able to demonstrate that he or she has applied in writing to the owner for a written acknowledgment to the effect of the declaration claimed, and has furnished them with full particulars in writing of the act in question, and that the patent owner has refused or failed to provide any such acknowledgement. During proceedings under section 71, issues of validity may be raised but revocation should be sought in addition to a declaration of non-infringement.

A declaration of non-infringement made by the Comptroller has the same effect as a declaration by the court, except that a decision by the former does not estop a party to civil proceedings where infringement is in issue from putting validity in issue even if these issues were involved in the decision.

Further to the statutory power to grant declarations under section 71, the court has an inherent power to grant declarations of non-infringement. This power is wider than the statutory power. For example, the court may consider it necessary and appropriate to grant a declaration in respect of non-UK designations of European patents where it considers that foreign designations are inescapably connected because they are all designations of the same patent and have identical wording. In these circumstances, the court may also consider claims for declarations about the interpretation and non-infringement of foreign designations (Actavis v Lilly).

The court may exercise its discretion and order relief to the effect that a product or process was known or obvious at a relevant date, referred to as an “Arrow declaration” (Fujifilm v Abbvie and Glaxo Group Ltd & Others v Vectura Ltd ). An Arrow declaration may assist a party in clearing the way of patent rights that have not yet been granted, and can be used as a “Gillette defence” to any later claim for infringement of a granted patent with a priority date on or after the relevant date (see 3.4 Defences Against Infringement).

Any disputes arising under the Patents Act (eg, concerning patent infringement or validity) can be brought before the court or, in some circumstances, the Comptroller.

The jurisdiction of the Comptroller to hear disputes concerning patent infringement and/or validity is discussed in 3 Infringement and 4 Revocation/Cancellation. Part 7 of the Patents Rules 2007 governs proceedings heard before the Comptroller.

The UK comprises three jurisdictions: England and Wales, Scotland, and Northern Ireland. Each jurisdiction has its own legal system, courts and procedures. The Civil Jurisdiction and Judgments Act 1982 governs allocation between the courts within the UK of certain civil proceedings. This section focuses predominantly on the courts of England and Wales.

Any claim under the Patents Act in Scotland is to be heard before the Court of Session, and before the High Court in Northern Ireland (section 130).

In England and Wales, where the vast majority of patent litigation in the UK is conducted, claims are heard in the High Court. Any claim under the Patents Act must be commenced in either the Patents Court or the Intellectual Property Enterprise Court (IPEC). Both courts are part of the Business and Property Courts of the High Court of Justice.

The IPEC is appropriate for smaller, shorter, less complex and lower-value actions, and the procedures are designed particularly for cases of that kind. The IPEC has a limit of GBP500,000 on the quantum of damages that can be awarded. Costs orders will be made, which are proportionate to the nature of the dispute and are subject to a cap of GBP50,000. Certain intellectual property disputes where the amount sought is GBP10,000 or less will be handled on the “small claims track”.

For more complex and valuable litigation, the Patents Court is the appropriate forum. Given the value of disputes in the Patents Court there is no cap on recoverable monetary relief or costs. If the amount of damages sought is under GBP500,000, the case can still be heard by the Patents Court.

Any defendant in proceedings in the IPEC can apply to have the proceedings transferred to the Patents Court. The court will consider a number of factors, including the size of the parties, the complexity of the claim, the nature of the evidence, whether there is conflicting factual evidence and the value of the claim when considering whether or not it is appropriate to transfer.

Any claims for breach of confidence can be brought in the High Court’s Chancery Division (within which the Patents Court sits), or in the IPEC.

Upon appeal from the Patents Court, matters would proceed (if permitted) to the Court of Appeal and in certain circumstances from there to the Supreme Court.

The Civil Procedure Rules (CPR) encourage parties to resolve disputes without commencing litigation and to consider alternative dispute resolution, such as mediation or arbitration.

In mediation, an independent neutral intermediary, selected by the parties, assists the parties to work towards settlement.

The UKIPO and the Centre for Effective Dispute Resolution (CEDR) provide mediation services geared towards the resolution of intellectual property disputes. Additionally, the UKIPO maintains a list of providers who are able to provide mediation services for different forms of intellectual property disputes.

Arbitration is an alternative to litigation, where either the parties have elected to resolve their dispute by arbitration or a contractual requirement provides for arbitration as the mechanism for dispute resolution. Depending on the circumstances, this can sometimes be faster and more cost-effective than formal litigation.

There are many organisations through which arbitration can proceed, including the WIPO, the International Dispute Resolution Centre, the London Court of International Arbitration, ICC UK and the Chartered Institute of Arbitrators.

Whilst there is no specific pre-action protocol for intellectual property disputes, claimants are expected to comply with the CPR and, in accordance with the "overriding objective", to engage in correspondence with a potential defendant before issuing a claim, with the aim of resolving the dispute. Failure to comply with the overriding objective can result in adverse cost consequences.

In circumstances where it is not practical for the claimant to engage in pre-action correspondence (for example, where there is a risk that the defendant could hide or destroy infringing articles), the claimant can apply to court for an injunction or the seizure of infringing goods before notifying the defendant.

Parties can choose to represent themselves or they can be represented by a solicitor, patent attorney (if they have an appropriate advocacy qualification), barrister or a combination of these representatives.

If a litigant is a corporate entity, it may be represented by an employee, provided that said employee is authorised by the company and the court gives permission (CPR 39.6).

An interim injunction can require a party to either perform or refrain from performing a specific act. An application for an interim injunction must be filed at court and served upon the respondent together with supporting evidence, after the claim form is served (although it is possible to serve both the application and claim form at the same time if copies are received), unless the applicant seeks an ex parte injunction. A hearing date is set, at which the merits of the application are considered.

The court first considers whether there is a serious question to be tried, or a real prospect of success so that the claim is not vexatious, and that there is a good arguable case that there either is or will be infringement (American Cyanamid v Ethicon).

Provided that the applicant succeeds in establishing that there is in fact a serious issue to be tried, the court will consider the adequacy of damages in place of an injunction. If damages would adequately compensate the applicant, the court will not award interim injunctive relief. The adequacy of damages from the respondent’s perspective is also considered.

If the court considers that damages would not be adequate, it will consider the “balance of convenience” test and will weigh up the relative harm that will be caused to either party by the grant or refusal of an interim injunction. The court will also consider the status quo and whether this should be disturbed. The court conducts its assessment on the basis of the facts and evidence before it. It will consider factors such as market conditions and the financial position of the parties, as well as their conduct.

If an interim injunction is awarded, the applicant must give a cross-undertaking as to any damages incurred by the respondent during the term of the injunction if it later turns out to have been wrongfully granted. Following this, if the respondent seeks recovery pursuant to the cross-undertaking, the award can be expected to be fair (AstraZeneca v Krka).

In Scotland, a potential opponent can lodge a caveat in the Court of Session. This is an instrument that gives the potential opponent prior warning of any attempt to obtain an interim interdict (an interim injunction in Scots law) against it, allowing them to oppose an interim order. There is no equivalent to a caveat in England and Wales.

A party to litigation can protect itself by reducing the prospects of an injunction being awarded against it by following the law and procedural code. Where a party is aware of the potential for a patent infringement claim, it can:

  • try to clear the way by invalidating the patent;
  • initiate correspondence with the patent owner;
  • provide undertakings with respect to its intended actions;
  • seek a declaration of non-infringement; or
  • pursue a combination of the above.

The courts expect litigants to behave responsibly, to ensure any dispute is resolved in an orderly manner.

Intellectual property claims are governed by the Limitation Act 1980. The limitation period for bringing patent infringement cases is six years (as with other torts) from the date on which the cause of action accrued. It is possible that the limitation acts as a stop on the recovery of damages rather than stopping the initiation of proceedings.

Part 31 of the CPR governs the provision of relevant information and evidence by way of disclosure and inspection. Part 31 is amended by Practice Direction 63 for intellectual property claims. Generally, a party to proceedings in the Patents Court must disclose any documents on which he or she relies, as well as those that adversely affect his or her own case, adversely affect another party’s case or support another party’s case, and the documents that he or she is required to disclose by a relevant practice direction. However, parties can provide a process and/or product description instead of standard disclosure relating to processes or products which are alleged to infringe. Disclosure typically takes place after the exchange of statements of case and before the exchange of expert reports.

A party can apply to court for specific disclosure if disclosure from the other party has been inadequate (CPR 31.12). Applications for disclosure can also be made before proceedings start, and also against persons who are not a party to the litigation, provided that the applicant has sufficient evidence in support (CPR 31.16 and 31.17 respectively).

The requirements for pleadings for intellectual property claims are set out in Practice Direction 63. In a claim for patent infringement, the initial pleading must show which of the patent claims are alleged to be infringed, and give at least one example of each type of infringement alleged.

Where the validity of a patent is challenged, "grounds of invalidity" must be filed specifying, for example, the details of the state of the art relied upon (in respect of a novelty or inventive step attack). A copy of the documents referred to in the pleadings must be served.

Generally, the initial pleadings do not include any written arguments or evidence.

Amendments to a statement of case can be made without permission before it has been served or after service following a successful application to court (CPR 17.1).

Class actions are possible. The CPR provide for the management of collective actions, and the supplementary Practice Directions provide details on their practical application. There are no limitations on the types of claims that can be filed as class actions.

When seeking to assert patent rights against others, patent proprietors must have regard to making any unjustified threats. If communications contain a threat of infringement proceedings, these could give rise to grounds for an unjustified threats claim against the proprietor and make the intended claimant (for infringement purposes) a defendant in threats proceedings.

Also, whilst it is established that the existence of a patent right per se cannot be an abuse of a dominant position under Article 102 of the Treaty on the Functioning of the European Union (TFEU), it has been held that the way in which a patent right is exercised could be considered abusive (see 3 Infringement).

A patent proprietor and/or exclusive licensee can bring an infringement action. The defendants to such an action are the party/parties accused of committing the infringing act.

Where a patent is co-owned by multiple proprietors, one proprietor can bring an infringement action without the consent of the others, provided that the other proprietors are joined as nominal defendants to the proceedings. If the co-proprietors are joined as defendants, they are not liable for costs or expenses, unless they enter an appearance and take part in the proceedings. A co-proprietor made a defendant is not obliged to serve a defence, but if they do not do so the court can prevent them from submitting evidence or calling witnesses later in the proceedings (Patents Act, section 66).

An exclusive licensee can also bring an infringement action. As with co-proprietors, the patent proprietor must be joined as a defendant, unless it has consented to be joined as a claimant. The same principles on costs apply as above (Patents Act, section 67).

If a patent licence has been granted by way of a licence of right (Patents Act, section 46) or a compulsory licence (section 49) then, unless the licence agreement expressly provides otherwise, the licensee can request that the patent proprietor commences infringement proceedings. If the proprietor refuses to do so or fails to do so within two months, the licensee can commence proceedings in their own name. The same rules apply in relation to joining the proprietor and costs.

Pursuant to section 60(1) of the Patents Act, a patent is "directly" infringed if any of the following acts are carried out in the UK without the consent of the proprietor:

  • where the invention is a product – a person (or company) makes, disposes of, offers to dispose of, uses or imports the product or keeps it, whether for disposal or otherwise;
  • where the invention is a process – a person (or company) uses the process or offers it for use in the UK when it is known, or it is obvious to a reasonable person in the circumstances, that its use there without the consent of the proprietor would be an infringement of the patent; or
  • where the invention is a process – a person (or company) disposes of, offers to dispose of, uses or imports any product obtained directly by means of that process or keeps any such product, whether for disposal or otherwise.

Section 60(2) defines acts that do not directly involve patented products or processes but would be considered infringing acts. Acts of “indirect” infringement occur when, without the consent of the proprietor, a person/company supplies or offers to supply in the UK a person/company other than a licensee or other person/company entitled to work the invention with any of the means, relating to an essential element of the invention, for putting the invention into effect when it is known, or it is obvious to a reasonable person in the circumstances, that those means are suitable for putting, and are intended to put, the invention into effect in the UK.

There are also two forms of contributory infringement under common law:

  • where it can be shown that a party assisted an act of direct or indirect infringement as part of a “common design” with the infringer; or
  • where a person can be found liable for inducing or procuring someone else to infringe a patent.

See also 3.3 Scope of Protection for an Intellectual Property Right and 6 Remedies.

The invention is specified in the claims of a patent, as interpreted by the description and any drawings contained in the specification (Patents Act, section 125). The courts will determine the scope of the claims, typically with the assistance of expert evidence; see 3.5 Role of Experts.

When assessing infringement, the courts will consider whether the claims are infringed as a matter of normal interpretation. The courts take a “purposive approach”, meaning that the central question is what a person skilled in the art would have understood the language of the claim to mean in the context of the patent as a whole, including its specification and any drawings.

If the claims are not infringed as a matter of normal interpretation, the court will then consider whether the variant infringes because it varies from the invention in an immaterial way (see guidance by the Supreme Court in Eli Lilly v Actavis).

The Supreme Court has also provided guidance in obiter comments on the issue of the scope of Swiss form second medical use claims (Warner-Lambert Company LLC v Generics (UK) Ltd t/a Mylan and Another). In this case, the defendant sold a product which excluded the patent-protected indication from its label. The majority of the Court considered that there was no direct infringement if the labelling, leaflet and other information did not present the pharmaceutical as suitable for the protected use. Intention (objective or subjective) was irrelevant. In respect of indirect infringement, the Court concluded that the protected invention is limited to the manufacture of the product for the designated use and does not extend to any subsequent steps taken in respect of the product, such as by doctors and pharmacists.

There is no principle of "file wrapper" estoppel. Reference to the prosecution history will be the exception and not the rule, and will generally only be appropriate where (i) the point at issue is truly unclear if only the specification and claims of the patent are considered, and the contents of the file unambiguously resolve the point, or (ii) it would be contrary to the public interest for the contents of the file to be ignored.

Only acts done without the consent of the proprietor can be considered infringements. The Patents Act sets out several defences to patent infringement (mainly in section 60(5)). An act that would otherwise infringe will not do so if it falls within one of the following exceptions:

  • private use – it is done privately and for non-commercial purposes;
  • experimental use – the act is done for experimental purposes relating to the subject matter of the invention. This includes experiments performed to further scientific knowledge and anything done in, or for the purposes of, a medicinal product assessment, including clinical trials and other studies required for obtaining or varying an authorisation to sell or supply, or offer to sell or supply, a medicinal product in the UK or elsewhere (section 60(6D) and (6E));
  • extemporaneous preparation of prescription – preparation of a medicament in a pharmacy for an individual in accordance with a prescription;
  • vessels and aircraft – the use of the product/process on a ship or aircraft that is temporarily in the airspace or waters of the UK;
  • agricultural – the use relates in specified circumstances to the use by a farmer of the product of their harvest for propagation or the use of breeding stock or other animal reproductive material constituting or containing the invention, for agricultural purposes following a sale from the proprietor to the farmer or with the proprietor's consent;
  • studies, tests or trials – the act is done in conducting a study, test or trial that is necessary for the application of Article 13, paras 1-5 of Directive 2001/82/EC or Article 10, paras 1-4 of Directive 2001/83/EC or any other act that is required for the purpose of the application of those paragraphs; or
  • prior use – if a person in the UK before the priority date of the patent did, in good faith, an act which would constitute infringement of the patent if it were in force, or makes serious preparations to do such an act, then that person has the right to continue to do that act, though they are not permitted to grant a licence to others to do so. If this was done in the course of business, then that person is entitled to authorise other members of his or her business to do the act and also to assign the right to do the act to anyone who acquires that element of his or her business.

Other potential defences include:

  • invalidity – a party cannot infringe an invalid patent. Often a party alleged to infringe a patent will counterclaim that the patent is invalid and should be revoked (see 4 Revocation/Cancellation);
  • exhaustion – once a patentee has dealt in or consented to dealings in goods within the European Economic Area (EEA) that otherwise would infringe their patent rights, those rights are said to be exhausted. The patentee cannot then prevent further circulation of those goods within the EEA, for example via importation into the UK which otherwise would be an infringing act. The position on exhaustion of rights post-Brexit is yet to be determined;
  • abuse of a dominant position – whilst it is established that the existence of a patent right per se is not considered an abuse of a dominant position under Article 102 of the TFEU, it has been held that the way in which a patent right is exercised could be. There could also be a defence to infringement where the enforcement of the right assists the patentee in conduct that would be considered abusive under Article 102; or
  • the “Gillette defence” – in Gillette Safety Razor Co v Anglo American Trading Co, the defendant successfully argued that the “infringing” act complained of was disclosed in the prior art. With no substantial difference between the prior art and the actions of the defendant, this was held to be a good defence.

A so-called "SPC manufacturing waiver" was introduced on 1 July 2019 (See Regulation (EU) 2019/933). If a product is protected by a qualifying SPC, the effect of the waiver is that the following will not be acts of infringement:

  • making the product for export to third countries (ie, countries outside the EU); or
  • making the product, no earlier than six months before the expiry of the SPC, for storing it in the Member State of making, in order to place that product on the EU market after the expiry of the SPC.

Compulsory licences are also provided for by the Patents Act (Section 48). At any time after the expiry of three years, or another prescribed period, from the date of the patent grant, any person can apply to the Comptroller for one or more of the following if the relevant grounds exist:

  • a patent licence;
  • a register entry to the effect that patent licences are to be available as of right; or
  • where the applicant is a government department, for the grant to any person specified in the application of a patent licence.

Relevant grounds include where demand for a product is not being met in the UK and the patentee has refused to grant licences on reasonable terms for the exploitation of an invention that is a technical advance of considerable economic significance.

Experts are independent; their duty is to the court rather than to either party, despite having been instructed and paid by a party. The expert plays a key role, educating the court on the technical field and what represented common general knowledge at the relevant date. The opinions of experts in the field as to how the person skilled in the art would read the prior art and how the patent claims would be understood can assist the judge to make findings of fact and to determine the issues of validity and infringement. Experts should be instructed carefully (Arnold J in Medimmune Ltd v Novartis Pharmaceuticals UK Ltd & Medical Research Council).

There is no separate procedure for construing the terms of a patent’s claims. Once placed in issue, the court will construe the claims.

However, the court has the power to:

  • direct that part of any proceedings (such as a counterclaim) be dealt with as separate proceedings;
  • direct a separate trial of any issue; and
  • dismiss or give judgment on a claim after a decision on a preliminary issue (CPR 3.1(2)).

Accordingly, it is possible to make an application for claim construction to be determined as a preliminary issue, as the defendants did (albeit unsuccessfully) in Napp Pharmaceutical Holdings Ltd v Dr Reddy's Laboratories (UK) Ltd and Sandoz Ltd.

See also 3.3 Scope of Protection for an Intellectual Property Right.

A claim for patent revocation can be brought in court or before the Comptroller. Usually the claimant seeks a declaration that the patent is invalid and an order for the unconditional revocation of the patent.

A patent can be revoked on the following grounds (Patents Act, section 72):

  • the invention is not a patentable invention. A patentable invention must be new (novel), involve an inventive step, be capable of industrial application and not be specifically excluded by the Patents Act;
  • the patent was granted to a person who was not entitled to be granted that patent;
  • the specification does not disclose the invention clearly and completely enough for it to be performed by a person skilled in the art;
  • the matter disclosed in the specification extends beyond that disclosed in the application for the patent as filed; or
  • the protection conferred by the patent has been extended by an amendment that should not have been allowed.

A patent lacks novelty (is anticipated) if the alleged invention was already part of the “state of the art” before the earliest claimed priority date. The state of the art comprises all matter (whether a product, a process, information about either or anything else) made available to the public before the priority date of the alleged invention. Subject to certain conditions, the “state of the art” for novelty purposes also includes matter contained in patent applications with an earlier priority date that was published on or after the priority date of the invention.

To anticipate a patent, the disclosure in the “state of the art” must disclose any subject matter which, if performed, would necessarily infringe the claim, and disclose it sufficiently to enable the skilled person to perform it.

A patent lacks inventive step if the alleged invention was obvious to the person skilled in the technical field of the invention as at the priority date of the patent, having regard to the “state of the art” and the skilled person’s common general knowledge.

Classical insufficiency requires that (as at the application date) the specification disclosed the invention clearly and completely enough for it to be performed by the skilled person without undue effort.

A claim may also be found insufficient if it extends beyond the technical contribution of the patent (“Biogen” insufficiency). A patent can be found invalid for lack of plausibility, as a threshold test of sufficiency.

A patent can be held invalid if it adds matter, on the basis that the matter disclosed in the specification extends beyond that disclosed in the application for the patent (as filed), as a result of amendments made during examination.

An EP(UK) patent may be revoked by the EPO in opposition proceedings if filed within the relevant period. This results in revocation for all designated countries.

See 6 Remedies.

A patent can be found partially invalid – ie, some claims are invalid, some valid. The court may revoke the patent, unless the specification is amended to the satisfaction of the court, within a specified time.

In patent revocation proceedings, the patent owner can apply to court (or the Comptroller) to amend the claims. An amendment can be sought on a conditional or unconditional basis. A person may oppose the proposed amendment and the court/Comptroller will notify the proprietor and consider it in deciding whether the amendment should be allowed. If allowed, the amendment is deemed to have had effect from the date of grant of the patent. CPR, Part 63.10, governs the amendment procedure.

Revocation and infringement proceedings are heard together.

In respect of patent disputes (and other intellectual property rights), the CPR, Part 63, supplements and alters the general procedural rules. The Patents Court and the IPEC have court guides that include procedural and practical requirements.

In England and Wales, the courts hear disputes in a single substantive oral trial, which in patent disputes includes hearing both infringement and validity issues. However, a trial is typically divided into separate liability and quantum stages, with the quantum trial only beginning after the relevant court has determined liability.

In the initial stages of proceedings on liability, and usually following a case-management conference at which both parties appear, a judge will issue case-management directions. These directions (many of which can be agreed between the parties) define pre-trial protocol and various deadlines for the parties.

Patent cases are heard by specialist, legally qualified, judges, many of whom also have technical backgrounds.

Judges are assigned by the court depending on a number of factors, including the technical difficulty rating of the case.

There are no formal mechanisms for settling a case. Parties can settle the dispute at any time and by any appropriate means (eg, negotiation or facilitated mediation). Parties typically settle on confidential terms but will need to consider compliance with relevant UK and EU competition laws.

National courts (including the Patents Court and IPEC) retain exclusive jurisdiction over matters relating to patent infringement. However, where there are concurrent proceedings relating to validity (eg, in the EPO and the UK courts), the court can, in the absence of any other factors, stay the UK proceedings.

It is incumbent upon the party opposing the grant of a stay to explain why it should not be granted. However, the court will always take into account where the balance of justice lies. For example, if allowing the UK court to proceed with an infringement action might allow the patentee to obtain monetary compensation that is not repayable if the patent is subsequently revoked, the interests of justice would tend to support the grant of a stay. However, a patentee might seek to mitigate the effect of this potential injustice by offering a suitable undertaking to repay potential damages that might be suffered by the defendant. Furthermore, if commercial certainty would be achieved in the UK courts earlier than in the EPO, the interests of justice would tend to support refusing a stay.

Decisions of courts in other jurisdictions as well as the Opposition Division of the EPO and the Technical Board of Appeal are not binding on UK judges, but can be persuasive.

A patent owner can seek an injunction to restrain infringement, an order for delivery-up or destruction, damages or an account of profits, a declaration that the patent is valid and has been infringed and/or an order for dissemination and publication of the judgment.

An injunction to stop a defendant from infringing a patent is the most common form of relief sought. It is an equitable remedy, at the discretion of the court to grant.

An interim injunction is temporary and stops the alleged infringement(s) until the dispute can be heard at trial. For an interim injunction to be granted, the applicant needs to satisfy various criteria (see 2.7 Interim Injunctions).

Generally, injunctive relief is granted following a finding at first instance that at least one valid claim of a patent has been infringed. This is a final injunction and is usually prohibitive, but mandatory injunctions are possible and, in particular, may be sought in cases involving second medical use claims (ie, for the alleged infringer positively to take steps to avoid infringement). Not only is the injunction discretionary but the conditions imposed are variable.

The court may consider it appropriate to grant an injunction that extends beyond patent expiry to restrain the sale of infringing articles manufactured during the life of the patent, or to prevent the defendant from creating a springboard into the market after patent expiry (Dyson v Hoover).

A patent owner can either seek damages in respect of losses caused by infringing activities or an account of profits obtained by the infringer, but not both. Following a finding of infringement, the court will order one or the other, at the claimant’s election. A claim for damages or an account of profits can be made in respect of infringements that take place after the publication of a patent application but before the grant of a patent.

An award of damages is intended to compensate the patentee for loss suffered and to put them in the same position they would have been in but for the infringing acts.

Exemplary damages may be available in a patent infringement action (per Lord Devlin in Rookes v Barnard). The Patents Act does not provide for exemplary damages.

Neither damages nor an account of profits can be awarded in respect of infringing activities undertaken by those who were not aware or had no reasonable grounds to suppose that the patent existed (Patents Act, section 62).

An account of profits is a discretionary remedy.

The court can make a declaration that the patent is valid and has been infringed. Where validity is contested and the patent found to be wholly or partially valid, the court or Comptroller may certify those findings in a certificate of contested validity. This has costs implications in any later proceedings challenging the validity of the same patent.

Generally, a successful party is awarded reimbursement of costs (including lawyer, expert and court fees), payable by the unsuccessful party (see 8.2 Calculation of Court Fees and 8.3 Responsibility for Paying Costs of Litigation).

Where appropriate, the court may make a declaration that an act committed does not constitute patent infringement, or order a declaration of invalidity and order for revocation. Such orders will usually be stayed pending any appeal.

The court may order relief to the effect that a product or process was obvious at a relevant date (Fujifilm v Abbvie).

If an injunction is granted against a party who later succeeds on the merits of the underlying claim, the court will discharge the injunction and order an inquiry into damages on the cross-undertaking.

See 6.1 Remedies for the Patentee and 6.2 Rights of Prevailing Defendants.

See 6.1 Remedies for the Patentee.

A decision of the Comptroller can be appealed to the Patents Court. A decision of the Patents Court can be appealed to the Court of Appeal (on points of law) and appealed further to the Supreme Court (on points of law of general public importance).

The first instance judge may grant or refuse permission to appeal to the Court of Appeal. If refused, it is possible to apply directly to the Court of Appeal for permission. Similarly, the Court of Appeal is entitled to refuse permission to appeal to the Supreme Court but a party can apply directly, within a specified timeframe.

IPEC proceedings are appealed directly to the Court of Appeal.

An appeal to the Court of Appeal is a review of the first instance decision, not a re-hearing. It is rare for any new evidence to be considered, and permission of the court would be needed for its introduction. However, further written and oral arguments can be made.

Similarly, an appeal to the Supreme Court is not a re-hearing.

Pre-action costs (including pre-action warning letters, formal letters of claim and related correspondence) are considered within costs management and budgeting; see 8.2 Calculation of Court Fees. “Costs” is a general term usually considered to include legal fees, court fees and related expenses (eg, expert fees) incurred in the preparation of or during litigation.

The court fee for commencing proceedings is related to the value of the claim and operates on an upwards scale. For claims worth less than GBP300, fees are GBP35. The scale goes up to a fee of GBP10,000 for claims worth more than GBP200,000.

Under the CPR, Part 44, the court retains broad discretion to manage costs, including interim decisions whether costs are payable by one party to another, the amount of those costs, and the time and manner in which they are to be paid. Following the substantive decision and either a hearing or agreement by the parties, the court will make an order on costs. The general position is that costs follow the event – the unsuccessful party is ordered to pay the costs of the successful party.

The court will have regard to all the circumstances of the case, including the outcome on each issue, claim or element, and allocate costs accordingly. Although issue- or element-specific payments from the overall winner to the overall loser are unusual, in exceptional circumstances they do occur. The court will consider the conduct of the parties before and throughout the proceedings, together with any admissible offer to settle made by a party and drawn to the court’s attention (provided it is not an offer to which costs consequences under Part 36 apply).

In general, costs assessed on the standard basis will result in the successful party recovering approximately 60-75% of its incurred legal costs.

The court has discretion to award indemnity costs, in which proportionality is not considered to be a relevant factor. Orders for indemnity costs are unusual and tend to be made only where the conduct of the party liable or some circumstance takes the case "out of the norm". This can result in costs awards exceeding costs awards made on the standard basis by 10-20%.

In the IPEC, recoverable costs are (with certain limited exceptions) capped for each phase of a claim (for example, pleadings, witness statements, expert reports and disclosure). The total recoverable costs to determine liability are capped at GBP50,000, and at GBP25,000 for an inquiry as to damages or an account of profits (quantum).

There is no requirement for cost budgets in IPEC but, generally, claims in the Patent Court are subject to management in the form of cost budgets.

Claims with a value of less than GBP10 million issued in the Patents Court (and the broader Intellectual Property List and Chancery Division) are subject to a CPR-mandated costs-management scheme to further the court’s overriding objective. Parties to claims above GBP10 million in value can mutually agree to submit to the budgeting rules.

A key component is the preparation, filing and exchange of detailed costs budgets that anticipate costs for the entire action. These can be amended during the proceedings to account for changes in circumstances.

Alternative dispute resolution is possible for patent disputes but is not commonly used, particularly in the life sciences sector. It is more suited to determining issues of infringement or non-infringement, in addition to issues of ownership and licensing. Validity may only be made an issue in certain kinds of proceedings (Patents Act, section 74). Therefore, while validity can be dealt with in arbitration or mediation, there is no obligation to make an amendment to the patent register following determination by an arbitration panel. As such, the parties would either have to agree that the invalid patent is surrendered or agree that the patent will not be enforced against the defendant. In the latter instance, the parties must consider whether it is anti-competitive if the right is genuinely invalid as opposed to not being infringed by the defendant’s product or process.

The UKIPO offers an alternative to court litigation via an opinion service on issues of validity or infringement. Such an opinion is non-binding but could be used as leverage in settlement negotiations or as a springboard to issue proceedings at court. Any material filed in relation to an opinion is also open to public inspection, including on the UKIPO website. Following a non-binding opinion from the UKIPO that a patent is invalid, the Comptroller has the ability to decide to revoke the patent for lack of novelty or inventive step without any third party involvement. However, it is a high bar for the Comptroller to take such action.

Patent rights can be transferred at any time from the making of the invention to the expiry of the patent. In any transfer, it is important to take account of any non-patented know-how related to the invention, which may be equally or more valuable.

An assignment of a UK or EP(UK) patent or patent application is void unless it is in writing and signed by the assignor. On 1 January 2005, the need for assignments to be signed by assignees was removed for UK assignments (Regulatory Reform (Patents) Order 2004 (SI 2004/2357). Assignments of EU patent applications do need to be signed by the assignee and assignor, and must be in writing.

There are specific provisions that may be implied in UK patent assignments, and they should include the right to bring proceedings for any previous infringements (Patents Act, section 30(7)).

The public have a right to inspect the patent register maintained by the Comptroller. There is no obligation to register the assignment or licence with the UKIPO but it is advisable to do so as soon as possible. Registration gives priority to registered rights, which may defeat earlier claims of unregistered rights. Additionally, if the patent owner fails to register the transaction within six months, its rights to claim costs for litigating an infringement that occurred before registration are diminished, unless the patent owner can prove to the court that it was not reasonable or practicable to register it in that period (Patents Act, section 68).

To register a patent assignment, a simple application is made to the UKIPO with a small fee. The application must include evidence establishing the transaction, but this does not need to be a copy of the assignment itself. A redacted copy of the assignment is sufficient.

To register an assignment in the EPO, the request must be in writing and accompanied by documents satisfying the EPO that the assignment has been granted. A statement signed by the assignor/licensor that the assignment or licence has been granted is also sufficient.

There is no requirement for a licence (exclusive or non-exclusive) to be in writing. However, to ensure certainty of terms, it is advisable to allow the parties to secure the benefits and rights of the registration and to designate the law and jurisdiction that govern the licence.

See 10.2 Procedure for Assigning an Intellectual Property Right.

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Law and Practice in UK

Authors



Pinsent Masons has one of the busiest patent practices in the UK, with experts located throughout England and Scotland. Clare Tunstall is the head of IP and life sciences, and is a partner with more than 20 years' experience of acting for clients on high-value, multi-jurisdictional patent and trade mark actions. Pinsent Masons advises on numerous cross-border transactions and litigations, guides patent procurement strategies, sets up joint ventures based on patent assets, advises on rights strategies, and gives pragmatic and commercial advice on licensing and fund-raisings backed by patent assets. The firm has acted on the most high-profile, business-critical patent, competition and regulatory litigations and investigations, as well as market-shifting transactions. It has also advised on market access strategies for more than 100 products in the last ten years. There are 30 individuals engaged in the firm's patent practice, in key offices across the UK and Europe. Key patent litigation clients include Teva, Accord, East Anglia One, Flynn Pharma, Magnesium Elektron and Zyxel. This chapter was authored with the assistance of Asawari Churi, Kirsteen McEwen, Anna Harley, Sarah Parkin, Huw Cookson, Samantha Carter and Niki Ruprai.