Patent Litigation 2021

The new Patent Litigation 2021 guide features 23 jurisdictions. The guide provides the latest information on intellectual property (IP) rights and granting procedures, initiating a patent infringement lawsuit, patent revocation/cancellation, patent remedies, litigation costs, alternative dispute resolution (ADR), and assignment and licensing of IP rights.

Last Updated: February 15, 2021

Compare law and practice by selecting locations and topic(s)

Select Locations

Select Topic(s)

{{topic.Title}}

Please select at least one location and one topic to use the compare functionality.

Compare

Author



Hogan Lovells International LLP offers clients a full range of legal services. In a fast-changing and interconnected world, the firm provides fresh thinking combined with proven experience. Located in the world’s key hubs, Hogan Lovells advises on a range of intellectual property matters as well as litigation, M&A, corporate, and capital markets transactions. Its experience in cross-border and emerging economies gives the firm the necessary market perspective to be a global partner to its clients. With more than 45 offices worldwide, the firm's practice groups co-operate closely with each other, providing clients the full resources of a global firm from a single, local point of contact. The author would like to thank Daniel Brook from the London office, Dr Frederick Ch'en from the Tokyo office, Ana Castedo and Inmaculada Lorenzo from the Madrid office, Simon Roberts from the New York office, Stanislas Roux-Vaillard from the Paris office, Klaas Bisschop from the Amsterdam office, Luigi Mansani from the Milan office, Katie Feng and Julia Peng from the Shanghai office, Eugene Low and Andrew Cobden from the Hong Kong office, and Natalia Gulyaeva from the Moscow office.


The year 2021 promises to be another exciting one in patent litigation.

Patent courts across the world have generally stayed busy despite the pandemic and continue to find creative solutions regarding the conduct of hearings. Often this involves hearings being conducted by video, or hybrid hearings where attendance in the court room is limited but attendance is opened to video participants.

At the same time, there is an expectation that litigation around patent-related aspects of the pandemic is going to emerge in 2021. Now that actual products are available, or at least in sight – whether diagnostic kits, treatments or vaccines – patent-based disputes between innovators are predictable. Equally, it remains to be seen whether the much-discussed provisions on compulsory licensing will be used to allow third parties to make and sell otherwise patented products and processes in the COVID space.

The present overview seeks to identify the themes that will be keeping litigants particularly busy during the next 12 months and casts an eye on upcoming important decisions as well as political developments.

Europe

The UK

The UK Supreme Court provided two patent judgments in 2020. One endorsing the current practice developed in the lower courts of fair, reasonable and non-discriminatory (FRAND) rate-setting in the context of the terms on offer to the patent infringer if she wants to avoid an injunction in the UK on standard essential patents (SEPs) found valid and infringed (Unwired Planet, [2020] UKSC 37). The decision confirms the UK as an attractive option for SEP patentees. The increased willingness of other courts to set FRAND rates may well mean that the cases remain distributed. The second case casts some light on the interplay between insufficiency and “a principle of general application” (Regeneron, [2020] UKSC 27) – the take home being that the standard is the same for all patents.

The lower courts have also remained busy, including operating remotely for a large part of the year. One of the cases to raise wider interest was the decision not to grant a preliminary injunction in the context of a generic pharmaceutical launch at risk (Neurim, [2020] EWCA Civ 793) and it remains to be seen whether that marks the start of preliminary injunctions in such cases now being harder to obtain or ends up being regarded as a case on its own facts. Cases to watch in 2021 include the UK version of the DABUS cases which traverse questions about AI inventorship – the UK version will reach the Court of Appeal in 2021 (Thaler v The Comptroller-General of Patents, Designs and Trade Marks).

The Netherlands

In the Netherlands, the Pemetrexed saga continued in 2020. The focus this time was on infringement. Lilly’s patent has second medical use claims to the treatment of cancer with Pemetrexed and vitamin B12, and the claims literally state one specific salt, pemetrexed disodium. Fresenius Kabi’s generic pemetrexed product was made of a different salt and the question was whether that product infringed Lilly’s patent under the doctrine of equivalents (DoE). At the start of the year, there were fundamentally differing views from the Court of Appeal and the District Court, both in The Hague. The Court of Appeal, in the context of preliminary injunction (PI) proceedings, had found that the generic product infringed the patent under the DoE and confirmed the PI granted by the Provisions Judge in The Hague. The District Court, deciding in the case on the merits, disagreed with the Court of Appeal and held that the generic product did not infringe the patent. Both judgments were appealed. In the PI case, the Dutch Supreme Court confirmed the judgment of the Court of Appeal in June 2020. In the case on the merits, the Court of Appeal, in a division made up of different judges than the ones deciding the PI case, vacated the District Court’s judgment and held that the generic product infringed the patent under the DoE. The judgment dated 27 October 2020 contains a learned overview of the doctrine of equivalents under Dutch law.

On 14 October 2020 the District Court of The Hague handed down judgment in a case between healthcare insurer Menzis and AstraZeneca (AZ). In this case, AZ had obtained and enforced a PI against a generic version of its Seroquel® product. AZ’s patent, which was the basis for the PI, was subsequently revoked. Under established Dutch case law, this resulted in AZ having to compensate the damages suffered by the generic company against whom the PI was enforced. Menzis, as a healthcare insurer, argued that it also had suffered damages as a result of the enforcement of the PI, as during the PI it had to reimburse the higher price of the AZ product instead of the much lower price of the generic product. The District Court sided with Menzis and held that AZ was liable for Menzis’ damages under the doctrine of undue enrichment. The judgment has been appealed and it remains to be seen whether the Court of Appeal will agree with the District Court.

Finally, the cross-border injunction seems to be back on track in the Netherlands. In the 1990s and 2000s, the Dutch Courts were willing to grant injunctions in patent cases, that covered not only the Netherlands but also other European countries. As a result of case law of the European Court of Justice, interest in the cross-border injunction slowed down for several years but now seems to be returning. On 29 September 2020, the Provisions Judge in The Hague granted Novartis a cross-border injunction against certain companies of the Mylan group. French company Mylan SAS is the holder of the marketing authorisation of a generic version of Novartis’ Exjade® product. Dutch company Mylan NV is the mother company of the Mylan group and controls Mylan SAS. Mylan SAS was co-ordinating plans to bring its generic product on the market in various European countries during the lifetime of Novartis’ supplementary protection certificate (SPC) to Exjade®. The judge held that this behaviour qualifies as the facilitation of patent (SPC) infringement in the relevant European countries and that such behaviour is unlawful. Mylan SAS and Mylan NV were injuncted from facilitating any infringement in the relevant European countries.

Looking ahead to 2021 we may see further guidance from the Dutch courts on FRAND issues, most likely taking into account recent developments in other parts of Europe and the rest of the world.

Spain

In Spain, 2020 has seen significant court activity in regard to patent matters. One of the topics Spanish courts have dealt with, which is sure to receive attention in 2021, is the possibility for the patentee to enforce its amended European patent (further to EPO opposition proceedings) in national infringement and validity proceedings initiated with the patent as granted. The Barcelona Court of Appeal addressed this question in a landmark decision handed down on 16 October 2020 where appeal proceedings were allowed to continue on the basis of the European patent as amended by the Board of Appeals of the European Patent Office. This decision constitutes a fundamental change in the traditional position of the courts in this matter, including the Barcelona Courts of Appeal, which, upon the defendant's request, would terminate infringement proceedings for lack of subject-matter if the enforced European patent was amended during opposition proceedings. 

New case law on protective actions (including protective briefs and subsequent preliminary injunction proceedings) is expected this year, particularly if COVID-19 does not stop the Mobile World Congress from taking place in early summer. Case law on this, relating to both procedural and substantive issues, has not always been unanimous among the courts, in particular, the Barcelona Patent Courts. For instance, apparently conflicting decisions have been handed down by them regarding the admissibility of protective briefs when validation of the European patent is still pending. Whether or not the applicant shall serve upon the patentee a copy of the protective brief and supporting evidence is also not clear. Courts have also softened some formalities regarding service requirements in 2020.

Moving on to more substantive topics, contributory infringement is also expected to be a subject of discussion in the coming months, after the Barcelona Court of Appeal dealt with this issue in a decisions of 13 November 2020. The court reversed the first instance judgment, which had found contributory infringement, focusing its analysis on the additional requirement of incitement to infringe, which would need to be met for a positive conclusion on infringement when staple products are involved.

On the pharmaceutical patent side, SPCs have been one of the hot topics of 2020 – and are likely to so remain in 2021. Relevant decisions on the grant and validity of SPCs issued last year include the Barcelona Court of Appeal's judgment of 23 April 2020 declaring the invalidity of Gilead’s SPC for the combination of tenofovir disoproxil and emtricitabine (Truvada®), for which the CJEU's double-step test was applied; and the Superior Court of Justice of Madrid’s ruling of 31 July 2020 rejecting the grant of Ferring’s SPC for alprostadil cream (Virirec®), declaring that new pharmaceutical forms and methods of administration did not qualify as a different application of the same product that would allow the grant of the SPC. More decisions are likely to come this year in view of the CJEU’s continued production of SPC-related case law.

France

In France, the Paris Judiciary Court ruled that it had jurisdiction to hear claims from an SEP implementer against both the SEP holder and the European Telecommunications Standards Institute (ETSI) in order to have them set a FRAND rate for a worldwide FRAND offer. In its decision of February 2020, the Court held that ETSI is domiciled in France and that the claims against the SEP holder were so closely connected to those against ETSI that they had to be heard together.

In the pharmaceutical sector, the Paris Judiciary Court had the chance to consider the Pemetrexed and vitamin B12 case, and awarded a record high EUR28 million in provisional compensatory damages for patent infringement, a record in Europe. This decision of 11 September 2020 also found that a generic product was literally infringing even though the active principle was commercialised in a different pharmaceutical form than the one literally mentioned in the patent claims.

In 2020, the legal provisions creating an after-grant opposition procedure against French patents granted by the French National Institute of Industrial Property (INPI) entered into force, allowing third parties to request the revocation or modification of a patent through administrative proceedings. This applies to all French patents where the grant was published as from 1 April 2020.

Germany

In Germany, in a long awaited decision in May 2020, the Federal Supreme Court’s Cartel Senate (under the former presiding Judge of the Patent Senate) ruled in a case between Sisvel and Haier on FRAND obligations between the patentee and an implementer (KZR 36/17). The court’s key finding was that an implementer has to behave at any time like a willing licensee. This requires an immediate and serious unconditional declaration of its willingness to actually conclude a licence agreement. Behaviour that does not allow such a conclusion will stand in the way of a successful FRAND defence.

Only a few months later in July, in a case between Eli Lilly and various generic challengers, the Supreme Court’s patent senate reinstated Lilly’s patent on Pemetrexed and vitamin B12. Following the decisions in “Fulvestrant” and “Tadalafil”, the decision contained some important considerations for the assessment of inventive step in pharmaceutical patent matters.

The proposed reform of German patent law, to make the granting of injunctive relief in patent infringement matters subject to a proportionality test, is currently stuck in the Federal Council (Bundesrat) and it appears that substantial amendments are yet to be made. It is unlikely that 2021 will see the enactment of that legislative change.

Equally, although the German Federal Parliament rushed to approve the Unified Patent Court (UPC) Act, which would have ratified the UPC and allowed the coming into force of the UPC in 2021, at least two constitutional complaints were then filed and the legislative process has now been brought to a halt pending a review by the Constitutional Court. This review is expected to last at least until 2022 and potentially longer.

Finally, 2020 also saw injunctions in the Nokia and Daimler disputes where FRAND questions are heavily disputed. This did not stop the courts in Mannheim and Munich from issuing injunctions against Daimler while the Dusseldorf District Court (4c O 17/19) referred a number of questions to the European Court of Justice.

Italy

As far as Italy is concerned, the Supreme Court issued an important decision in early 2020 (7 February 2020, No 2977) on infringement by equivalents, rejecting the so-called “prosecution history estoppel” doctrine at times referred to by lower courts. The Italian Supreme Court clarified that, per se, the declarations that applicants submit to the patent office during examination cannot limit the scope of protection of the patent, thereby waiving an infringement by equivalents. Indeed, according to the Court, the Protocol on the interpretation of Article 69 of the European Patent Convention (EPC) and Article 52 of the Italian IP Code do not consider the “subjective intentions” of the applicant when interpreting a patent. This further aligns the Italian approach to infringement by equivalents with other EPC states, and the position of patent holders is generally strengthened.

However, the discussion of the file history’s relevance in patent infringement cases is not over yet, since lower courts in Italy are not bound by Supreme Court decisions. For instance, a recent judgment of the Court of Turin (4 December 2020, Docket No 33627/2016) referred once again to the “prosecution history estoppel” doctrine to limit the scope of protection of the asserted patent and reject the claims of infringement by equivalents. On the other hand, in deciding the Italian Pemetrexed and vitamin B12 case, the Court of Milan (15 October 2018, Docket No 45209/2017) stated that, irrespective of the file history, judges shall assess only on the merits of the case if a specific solution is included (or not) in the scope of protection of the patent.

Another noteworthy decision in the field of patent law was issued by the Court of Appeal of Milan (14 May 2020, Docket No 2667/2018). In this case, the patentee was bound by an exclusivity agreement for the supply of the patented machine to a customer. Therefore, the patentee could not claim to have suffered any damages (eg, lost profits) when the defendant sold its infringing machines to third parties. Nevertheless, the patentee was able to obtain the full disgorgement of profits made by the infringer for the sale of that specific machine. In doing so, the Court of Appeal apparently moved past the traditional understanding of damages as a means of compensating only for those losses actually suffered by the patentee. This decision shows that Italian Courts are increasingly adopting a new approach to damages assessment, with a view to preventing the unjustified enrichment of the infringer and also to deter patent infringement.

Russia

In Russia, the IP Court continues to take an important role in pharmaceutical patent litigation. In 2020, the IP Court operated efficiently despite the pandemic. Where necessary, the parties were given the opportunity to attend the hearing online, while in on-site hearings the number of representatives was limited. The pharmaceutical patent cases dealt with by the IP Court included appeals against the rulings of the Russian patent and trade mark office (Rospatent) in patent opposition proceedings and second appeals against the rulings of lower courts in patent infringement cases. The complexity of cases brought to the IP Court increased and, therefore, specialists with technical backgrounds from the IP Court’s administration were involved in proceedings more frequently. The IP Court dealt equally efficiently with more straightforward compound patent disputes and with less trivial use patent cases. While the quality of pharmaceutical patent dispute resolution before the lower courts and the Chamber for Patent Disputes under Rospatent is inconsistent, the IP Court, as a forum, has the trust of patent holders.

Generic companies have continued to develop new defensive strategies. First, there were more cases where the generic companies opted to challenge Russian or Eurasian patent term extensions (PTEs) rather than attacking the patent itself. Second, compulsory licence claims by generic companies remain alive. On 31 December 2020, the Russian government confirmed the grant of a compulsory licence for remdesivir for one year to a Russian generic producer which has already triggered an enormous controversy. Third, Rospatent has failed to demonstrate consistency in its approach to invalidating patents (eg, patents for crystalline forms of known compounds) obtained by generic companies for defensive purposes alone, despite incompliance with patentability criteria. Positively for patentees, permanent injunctions based on the mere threat of patent infringement and patent infringement claims were granted by Russian courts in 2020. On top of this, the Russian courts imposed sanctions for non-compliance with the court's effective ruling in a patent infringement case against a major Russian generic producer in a progressive amount per each week of non-compliance. The outcome is precedential as it is the first case where sanctions were granted in patent infringement case and in a progressive manner.

Asia

Japan

In Japan, the 2019 revision to the Patent Act was enacted to provide a new discovery (disclosure) process allowing plaintiffs to request the inspection of defendants' facilities by a neutral expert to be designated by the court. Unlike the USA, and some European jurisdictions, Japan does not currently have an extensive discovery or disclosure system. In order to assist less well-resourced companies in obtaining potentially relevant evidence of patent infringement, the courts will now permit certain specialists to conduct inspections of facilities based in Japan, not dissimilar to the continental European systems for search and seizure (with some modifications to alleviate concerns regarding the disclosure of trade secrets). The evidence-gathering provisions of the 2019 revision to the Patent Act entered into force on 1 April 2020, although the impact of COVID-19 on court proceedings has meant that more time will be needed before the effectiveness and popularity of the process becomes clear. In principle, this may become a powerful tool for some patentees bringing patent infringement actions.

A more direct impact of COVID-19 has been the “Open COVID Pledge”, signatories to which grant a worldwide, non-exclusive, royalty-free licence to their patents for the purpose of ending the pandemic. In this context, several major Japanese companies took the initiative to found an Open COVID Pledge coalition that, as of January 2021, covers around 930,000 declared patents.

Other developments in 2020 include Japanese companies arguably becoming more assertive and initiating patent litigation, particularly in the technology field. More disputes may arise in this sector in the coming year or so, potentially in respect of 5G and other standards, the internet of things and connected devices.

Another area of ongoing change is in respect of the "patent linkage" in the field of life sciences. Historically, while a patent was valid and in force, the Japanese regulator would typically refrain from granting a marketing authorisation in respect of a generic product falling within the scope of relevant patents, including while a decision of invalidity by the Japan Patent Office (ie, first instance) was being appealed to the IP High Court (ie, second instance) and beyond; now, however, it is becoming much less clear to what extent the regulator will wait for a final and binding invalidation decision (ie, after all avenues of appeal are exhausted) in respect of relevant patents, especially given the Japanese government's emphasis on, and promotion of, generic drugs in light of the increasing cost of medicine and the aging population.

Arbitration in the International Arbitration Centre in Tokyo (IACT) and elsewhere has yet to challenge the popularity of the convenient Japanese system of court litigation and settlement. This year, the IACT introduced a number of new processes and resources to address issues related to COVID-19, including specific resources, expedited proceedings, and hosting online hearings. It remains to be seen if arbitration of patent disputes will become more prevalent.

Finally, a number of biologics and biosimilar patent cases continue to be the subject of dispute resolution in Japan, somewhat mirroring cases in the USA and Europe. It is still unclear whether the Japanese courts will take similar positions in respect of issues already litigated elsewhere, but we expect the number of such biologics patent cases to increase, and it will be important to monitor Japan-specific developments in due course.

China

In the course of 2020, China amended its Patent Law, along with overhauling and “modernising” almost all of its other IP laws. As expected, the amended Patent Law strengthened patent protection with provisions such as punitive damages of up to five times the amount of actual damages for "serious wilful infringement", an extension of the design patent term from 10 to 15 years, an expansion of the coverage of design patents to partial designs, an increase in statutory damages from a CNY1 million (approximately USD155,000) cap to a CNY5 million (approximately USD775,000) cap, and circumstances for shifting the burden of proof to the infringer when providing evidence of damages.

The new Patent Law formally adopted the "patent linkage" system for pharmaceuticals, with the concrete implementation left to further clarification by the regulatory watchdog for the pharmaceutical industry and the Supreme People’s Court. The implementing rules are anticipated to be issued in the first half of 2021. According to the draft implementing measures, it is likely that a “waiting period” will be available for chemical drugs through which a patent owner can postpone the market approval of a generic drug for nine months by filing an infringement complaint. Such complaints can either be brought before a Chinese court or via a procedure "with Chinese characteristics", also before the administrative enforcement authority, that will likely be the China National Intellectual Property Administration (CNIPA). Good news for pharmaceutical patent owners also includes the right to apply for extended patent protection to compensate time spent on pharmaceutical market approvals. Such a right also exists for patentees of invention patents in general, if the grant of their patent was considerably delayed for reasons not attributable to that patentee. With the new Patent Law bringing domestic procedure in line with international practices, and with China's comparatively swift courts and dispute resolution system as well as its huge market, we can expect to see China becoming one of the most coveted fora for patent litigation in Asia, or even globally.

With respect to SEP cases, the assessment of legal issues such as violation of FRAND obligations, entitlement to injunctions and methods to set royalty rates has come closer to the manner in which these issues are determined in the EU or USA. Chinese courts (including, notably, the Wuhan Intermediate Court) have issued anti-suit or anti-anti-suit injunctions. It will remain interesting to see how Chinese courts handle SEP cases between foreign patentees and Chinese implementers, and how to set royalty rates in the pending cases. Chinese courts have said they can have jurisdiction to determine global SEP rates in cases filed in China. This is not unexpected given the UK Supreme Court’s decision on global rate setting in the Unwired Planet SEP case.

In addition, as anti-monopoly investigations are on the rise in China, particularly in the TMT sector, it is foreseeable that anti-monopoly issues may start to play a bigger role in licensing negotiations or in the defence of infringement law suits.

Hong Kong

Hong Kong introduced a new system to allow Original Grant Patents (OGPs) on 19 December 2019. In its first year around 250 applications for OGPs have been filed and will undergo substantive examination at the Hong Kong Intellectual Property Department (IPD). Under the previous system for obtaining a 20-year invention patent, the only option available for a patentee requiring a Hong Kong patent was first to obtain a UK or Chinese patent ("designated patents"), and then re-register the designated patent at the IPD. This re-registration route, which requires no local substantive examination and involves a small extra cost for the holder of a designated patent, has continued so patent applicants can choose between using the OGP system or the re-registration route to obtain a Hong Kong invention patent. The IPD hopes there will be advantages in terms of speed in using the OGP route. A pilot scheme has been introduced to enable patent applicants to confirm they will not request any amendment, which will shorten the application process. Using this scheme, if applicants also request early publication of the application and if the application progresses smoothly, it is hoped that the entire process to grant can be completed in only 12–18 months.

The Hong Kong High Court IP specialist list was set up in 2019, with a small number of designated judges who can hear patent and other IP cases. The intention of having an IP specialist list is to speed up IP litigation by having greater and more efficient judge-led case management and to improve the level of judicial expertise for dealing with IP cases. New court rules for dealing with IP cases are expected to be implemented soon. These rules have been influenced by the rules currently used for intellectual property cases in England. It is expected that a fast-track system will be implemented to deal with smaller IP cases, with simpler procedures, faster litigation times and, hopefully, reduced costs for litigants.

The Hong Kong government is fully committed to increasing Hong Kong’s role as a regional IP dispute resolution hub. This involves leveraging the advantages of Hong Kong in international legal and dispute resolution services within China’s Greater Bay Area (GBA), which covers Hong Kong and Macao, as well as nine major cities in mainland China including Guangzhou and Shenzhen, the home of many Chinese technology companies. These initiatives, and others related to improving Hong Kong’s position as a favourable place for IP trading and financing hi-tech industries, will continue in 2021.

The USA

Notable decisions

The year 2020 has proven to be another eventful one for US patent litigation. As in 2019, front and centre were a number of notable decisions from the courts and the Patent Trial and Appeal Board (PTAB) on instituting patent reviews and the US Supreme Court’s limiting the appealability of certain PTAB determinations.

The Supreme Court, in Thryv v Click-to-Call, held that decisions involving the timeliness of filing inter partes review (IPR) petitions are not appealable. The Federal Circuit has since interpreted the Thryv decision to mean that PTAB decisions on whether all interested parties are named in a petition or whether a patent qualifies for covered business method review are also not appealable.

The PTAB issued a precedential order in Apple v Fintiv outlining six factors the PTAB considers when deciding to deny IPR petitions based on the stage of parallel district court litigation(s). It is now less likely that the PTAB will institute an IPR where a fair adjudication in a parallel district court litigation is likely before the PTAB would rule on patentability. This move has been unpopular with the big tech companies who are striving to find a way to overturn this precedent.

Rounding out the notable 2020 PTAB related cases are a couple of apparently contrary Federal Circuit decisions: Nike v Adidas and Hunting Titan v DynaEnergetics. The Federal Circuit, in April, ruled that the PTAB is able to devise its own reasons for rejecting claim amendments proposed during an IPR action. Then only a few months later, in sharp contrast, the Court found that the PTAB should only “in rare circumstances” craft its own reasons for rejecting proposed claim amendments. Time will tell what “rare circumstances” will permit the PTAB to decline claim amendments.

Venue

Venue continued to be a point of developing case law during 2020. In November, the Federal Circuit clarified that branded pharmaceutical drug makers may only file Hatch-Waxman Act suits in locations where the generic abbreviated new drug application (ANDA) filer is incorporated or where it performed actions related to its application to market the generic drug. The ruling means that the district court in Delaware will continue to handle a majority of the ANDA cases because Delaware is a favoured state for the incorporation of many generic companies. It also means a greater possibility that multiple suits against different generics companies involving the same drug may have to be brought in separate district courts. This will likely result in the greater use of Multidistrict Litigation (MDL) proceedings in multi-district Hatch-Waxman litigations.

Pharmaceuticals and biotech

Another Federal Circuit ruling will have potentially far reaching implications to the pharmaceutical industry. In GlaxoSmithKline v Teva, the Court found that the use of a so called “skinny label,” which lets generic-drug makers carve out patented uses of a drug that has unpatented approved indications, does not necessarily protect the drug maker from patent infringement of the patented use. Even though the generic label had carved out the patented indication, the Court found that Teva’s actions amounted to an inducement to infringe GSK’s patent claims and so reinstated a USD235 million jury verdict for patent infringement. It is clear that generics are no longer free to completely ignore the patent rights of the brand drug company where the generic’s actions induce the infringement of patented uses of the active pharmaceutical in the generic drug product. The decision does not rule out the use of skinny labels to avoid such patent infringement, but the generic may need to be prepared to show that’s its actions do not amount to induced infringement.

The Federal Circuit, in March, provided hope to those in the biotech industry that diagnostic methods may be patentable even though they harness aspects of natural phenomena. In Illumina v Ariosa, the Court made it clear that if the invention being patented is not limited to the natural phenomenon itself, the claims to a diagnostic method may still be patent eligible under Section 101 of the Patent Act.

The constitutional status of administrative patent judges

Looking ahead to 2021, one of the most anticipated cases will be the Supreme Court’s review of a case that will likely affect the viability of the PTAB as well as countless past, present and future PTAB decisions. In 2019, in the much anticipated Arthrex Inc. v Smith & Nephew, Inc. case, the Federal Circuit held that the PTAB’s administrative patent judges (APJs) were principal officers whose appointments were unconstitutional. The Court remedied the violation by severing the portion of the Patent Act that restricted the removal of APJs, making them inferior officers whose appointments do not require the Senate’s advice and consent. Despite the remedy, the effect of the Arthrex was significant. During 2020, the Federal Circuit remanded more than 100 such “unconstitutional” PTAB decisions to newly designated APJ panels. The number grew high enough that the PTAB’s chief administrative patent judge issued an order that all such cases being remanded by the Federal Circuit were to be suspended and held in administrative abeyance “until the Supreme Court acts on a petition for certiorari or the time for filing such petitions expires.”

On 13 October 2020, the US Supreme Court granted certiorari in Arthrex on two key issues. The Supreme Court has agreed to consider whether APJs, as established by the statute, are principal officers who must be appointed by the president and confirmed by the Senate, or inferior officers whose appointment has been properly vested in a department head. The Supreme Court will also decide whether the Federal Circuit properly cured the constitutional violation by severing the removal protections provided to APJs. Until the Supreme Court has an opportunity to decide these issues, uncertainty continues although the Federal Circuit has made it clear that the Supreme Court’s decision will only affect “those cases where final written decisions were issued and where litigants present an Appointments Clause challenge on appeal.”

To the extent the Supreme Court determines that the Federal Circuit’s remedy was insufficient, the ramifications will be far reaching, affecting even the decisions of those reformed APJ panels, as well as bringing doubt to countless ongoing IPRs. Even if the Supreme Court finds the APJ’s appointments constitutional, some litigants have raised still more constitutional questions concerning the PTAB, including Due Process and Takings Clause arguments. Undoubtedly, issues surrounding the constitutionality of the PTAB will be hotly debated by the courts during 2021 and beyond.

Author



Hogan Lovells International LLP offers clients a full range of legal services. In a fast-changing and interconnected world, the firm provides fresh thinking combined with proven experience. Located in the world’s key hubs, Hogan Lovells advises on a range of intellectual property matters as well as litigation, M&A, corporate, and capital markets transactions. Its experience in cross-border and emerging economies gives the firm the necessary market perspective to be a global partner to its clients. With more than 45 offices worldwide, the firm's practice groups co-operate closely with each other, providing clients the full resources of a global firm from a single, local point of contact. The author would like to thank Daniel Brook from the London office, Dr Frederick Ch'en from the Tokyo office, Ana Castedo and Inmaculada Lorenzo from the Madrid office, Simon Roberts from the New York office, Stanislas Roux-Vaillard from the Paris office, Klaas Bisschop from the Amsterdam office, Luigi Mansani from the Milan office, Katie Feng and Julia Peng from the Shanghai office, Eugene Low and Andrew Cobden from the Hong Kong office, and Natalia Gulyaeva from the Moscow office.