Amidst the tumultuous backdrop of the COVID-19 global pandemic, 2020 has been a standout year for patent litigation in the UK. This was driven by the much-anticipated delivery of two ground-breaking UK Supreme Court patent decisions, as well as a number of other noteworthy decisions and developments, some of which are highlighted below. On the tech side, the long-awaited UK Supreme Court judgment in the Unwired Planet v Huawei and Conversant v Huawei joint appeals reinforced the UK’s position as the go-to jurisdiction for holders of standard essential patents (SEPs) seeking a global fair, reasonable and non-discriminatory (FRAND) licence determination, continuing the busy stream of SEP cases seen in 2019 involving many of the world’s largest mobile phone manufacturers. On the life sciences side, the headline UK Supreme Court decision in Regeneron v Kymab provided further guidance on the law of sufficiency, and is likely to impact patent strategy in the R&D life cycle for years to come. Furthermore, a number of other decisions addressed important issues concerning the availability of injunctive relief, on both an interim and final basis.
We visit each of these topics below in further detail, before touching upon other important developments, such as new judicial appointments to the English Patents Court, the practical measures successfully implemented by the English court to minimise case disruptions caused by COVID-19, and the impacts of Brexit on UK patent litigation, which on the whole are expected to continue to be relatively minor. Finally, we look to 2021, which is set to be a busy year for patent litigation in the UK, and one which we hope will see a sense of normality return to readers’ lives around the world.
Tech Trends and Developments: English Courts Confirm Their Jurisdiction to Carry Out Global FRAND Determinations
The UK Supreme Court’s decision in Unwired Planet and Conversant
In August 2020, the UK Supreme Court handed down its long-awaited landmark judgment in the conjoined appeals of Unwired Planet v Huawei and Conversant v Huawei & ZTE following a four-day hearing in October 2019. Widely viewed as a significant victory for SEP holders, it provided decisive answers to a number of key questions impacting both SEP holders and implementers not just in the UK, but around the world, and cemented the UK’s position as a key jurisdiction for the enforcement of SEPs and determination of global FRAND licensing disputes. In particular, it confirmed that:
This decision set the stage for even more SEP/FRAND cases being brought in the UK by SEP holders in 2020 and into the future, with the English court now continuing to develop its FRAND jurisprudence and to grapple with outstanding issues in FRAND cases that were not answered by the Unwired Planet decision.
Post-Unwired Planet: FRAND jurisprudence develops in the English courts
Post-Unwired Planet, one of the key areas of dispute has been what constitutes the conduct of an "unwilling" licensee, with SEP holders arguing that they are only obliged to grant a FRAND licence under the European Telecommunications Standards Institute (ETSI) Intellectual Property Rights Policy to a "willing" licensee and if an implementer has not behaved as such, they can be injuncted following a finding of infringement without the need to proceed to a FRAND trial. SEP holders have argued that an implementer will not be "willing" if they refuse to give an unconditional undertaking to be bound by a FRAND determination of the English court. In July 2020, Mr Justice Birss ordered that the unwilling licensee issue should be heard at a separate trial in advance of the FRAND trial in the ongoing SEP litigation between Optis (a subsidiary of Unwired Planet) and Apple, introducing the risk of implementers facing an injunction prior to the FRAND trial. Apple attempted to challenge the court’s decision in this respect at a second hearing in December 2020, partly on the basis of a conditional undertaking given to the court following the finding of a valid and infringed patent in the first technical trial in October 2020. However, although Birss J adjourned this part of the hearing to allow the parties to further plead their case in writing, he went on to reject Apple’s attempt to overturn his initial order for a separate "unwilling licensee" trial in January 2021 on the basis that, in the context of the case’s particular trial timetable, it would provide a real incentive for early settlement and could therefore substantially reduce the time occupied by the case in the Court’s busy schedule. Onlookers will therefore eagerly await the outcome of this trial in the summer of 2021.
A second key area of dispute in UK SEP/FRAND litigation has been around the use of confidentiality rings in the disclosure process, particularly in relation to the disclosure of highly confidential comparable licences entered into between the litigants and third-parties. SEP holders have keenly sought to restrict access to their comparable licences – for example, limiting access to “external eyes only” (EEO) and not the parties’ in-house representatives. In November 2020, the appropriate scope of such confidentiality restrictions was the subject of a hotly contested appeal in Sisvel & Mitsubishi v Oppo/OnePlus & Xiaomi. Lord Justice Floyd (writing the leading judgment) upheld the decision of the first instance court, de-designating specific licence agreements from “EEO” to “Highly Confidential” on the condition that certain confidentiality obligations were met, which included the provision of a direct confidentiality undertaking to the counterparties to the de-designated licences that the receiving representatives would not be involved in any licensing negotiations with those counterparties (although without the term “licensing negotiations” extending to FRAND litigation or the settlement thereof). It is expected that the confidentiality of comparable licences will continue to remain a key contested issue for parties involved in SEP/FRAND litigation in 2021.
In addition to issues raised by SEP/FRAND disputes within the UK, 2020 also saw the rise of tension in such cases between jurisdictions, particularly in relation to the question of which court should be the one to determine a FRAND dispute involving a global SEP portfolio, with the English court showing a desire to “push ahead” with global FRAND cases where it considered it was seised of the global FRAND determination. Notably, in September 2020, Mr Justice Mann rejected Chinese technology company TCL’s application to stay UK FRAND proceedings in ongoing 3G/4G SEP proceedings brought by Philips, holding that the English court was first seised to determine a worldwide FRAND licence, despite the Paris High Court’s decision a few months earlier (in February 2020) that it possessed jurisdiction to hear TCL’s French FRAND claim under the ETSI contract.
In a further demonstration of their awareness of the potential for jurisdictional disputes in SEP/FRAND cases, the English court granted Philips an ex-parte pre-emptive anti-suit injunction (ASI) in November 2020 prior to the service of its SEP infringement claim against Xiaomi (Philips v Xiaomi). That ASI sought to prevent Xiaomi from pursuing a FRAND determination before any other court outside the European Union. This decision was particularly significant amidst an increasing use of ASIs by national courts around the world in 2020, who have shown an increased willingness to impose restrictions against parties seeking FRAND determinations in other foreign jurisdictions. In IPCom v Lenovo, courts in Spain, India and China were all amongst those ordering various forms of anti-suit injunction against related proceedings in other jurisdictions. Similarly, in Xiaomi v InterDigital, broad anti-suit injunctive relief was granted by the Chinese courts in favour of Xiaomi following its filing of a claim for a FRAND determination; with Indian and German courts subsequently granting anti-anti-suit injunctions in InterDigital’s favour. China has emerged as a key participant in the anti-suit injunction "war", with the Wuhan Court most recently granting Samsung a broad ex-parte anti-suit injunction against Ericsson (known as the Wuhan Submarine), which sought to prevent Ericsson from seeking injunctive relief on the basis of its 4G and 5G patents in any other jurisdiction. However, Ericsson ignored the Chinese ASI and filed proceedings in the Eastern District of Texas (EDTX) where, showing similarities with the jurisdictional tension exhibited between the French and English courts earlier in the year in Philips v TCL, Judge Gilstrap moved quickly to block Samsung from relying on the Wuhan Court’s ASI, stating the parallel cases to be sufficiently different for the EDTX proceedings to continue. It appears, therefore, that the tension between global courts on FRAND may have only just begun.
CJEU referral: Nokia v Daimler
Finally, in November 2020, the Regional Court of Düsseldorf took a significant step in the ongoing SEP dispute between Nokia and Daimler in Germany over connected cars when it referred ten questions to the CJEU on a number of key issues in SEP/FRAND licensing. In particular, the CJEU was asked to clarify whether it would be a breach of competition law for an SEP holder to refuse to offer a licence to suppliers in the relevant production chain (rather than just the end-product manufacturer itself), particularly where this would contradict customary practices in the industry (such as in the automotive industry). This was in addition to key questions over what renders an implementer an "unwilling licensee". Whilst, post-Brexit, any decision of the CJEU will no longer be legally binding in the UK, such guidance will likely be welcomed and considered by the English courts in their own FRAND assessments, and parties will likely look to it as they consider their own conduct in FRAND negotiations.
Looking ahead to 2021 in tech
The year 2020 has been a seismic one for SEP/FRAND cases in the UK, and this only looks set to continue in 2021 as many of the ongoing cases edge closer to a FRAND trial. Following the last-minute settlement of both Conversant and TCL in November 2020, eyes now turn to cases such as Sisvel & Mitsubishi v Oppo/OnePlus & Xiaomi in October 2021 (which raises novel issues relating to patent pools not yet addressed by the English courts) and InterDigital v Lenovo in January 2022. The industry also awaits the outcome of the additional unwilling licensee trial in Optis v Apple in the summer of 2021 (ahead of the final FRAND trial in June 2022). It is also yet to be seen whether anti-suit injunctions will become more commonplace in the English court, and whether pre-emptive anti-suit injunctions (see Philips v Xiaomi) will be sought by other parties in similar litigation.
Finally, it remains to be seen how cases before the English Courts will be impacted by the CJEU referral in Nokia v Daimler, especially now that the UK has left the EU. In any case, the upcoming year looks set to be another bumper year for tech cases in the UK patent litigation market, with SEP holders and implementers in all industries likely to be paying even closer attention to the movements of the English court as global FRAND determinations loom.
The year 2021 is also set to see AutoStore v Ocado, a blockbuster patent case brought by Norwegian robotics company AutoStore against online-grocer Ocado over infringement of its robotic warehousing technology, heat up in the English courts. In addition, the Court of Appeal will decide the appeal brought against the High Court’s decision in Thaler v Comptroller, where it was held that "DABUS" (an artificial intelligence system) cannot be named as the inventor of two patent applications under UK patent law (even though it allegedly “invented” the technology underlying these patent applications). No doubt we will also see similar challenges in the future as advances in technologies, such as blockchain and AI, continue to test the boundaries of intellectual property concepts as traditionally understood.
Life Sciences/Pharma Trends and Developments
Mice lead the way in the Supreme Court, and in UK patent law on sufficiency
In June 2020, the UK Supreme Court (UKSC) handed down its long-awaited judgment in Regeneron v Kymab, the blockbuster dispute over transgenic mice technology, following Kymab’s appeal of the Court of Appeal’s 2018 decision in favour of Regeneron. The Supreme Court allowed Kymab’s appeal by a four-to-one majority, invalidating one of Regeneron’s two patents-in-suit and key claims of the other patent-in-suit on a single ground of insufficiency. This decision is likely to have far reaching consequences for the life sciences industry in terms of both patent prosecution and litigation strategies.
Regeneron’s patents related to the replacement of segments of the mouse genome that code for the variable region of mouse antibodies with human antibody variable region gene segments, which creates a unique hybrid gene structure (known as a Reverse Chimeric Locus) that produces hybrid antibodies containing human variable regions and mouse constant regions, which prevents the mice becoming immunologically sick. In its appeal to the UKSC, Kymab contended that the patents-in-suit were invalid for insufficiency on the basis that their teachings enabled the skilled person to make only some of the products falling within the scope of the relevant claims, since only smaller genetic insertions could be made at the priority date. In contrast, Regeneron argued that the claim scope was commensurate with the patents’ technical contribution to the art by virtue of their disclosing a "principle of general application" in the form of the Reverse Chimeric Locus, which was present irrespective of the size of the human DNA insertion.
Whilst Lord Briggs (writing the lead judgment for the majority) noted that the Court of Appeal’s reasoning was a "sophisticated and internally logical process of reasoning", he held that sufficiency was not merely about disclosure, but the ability to work the invention after the expiry of the patent monopoly. This meant that it was necessary, in line with European Patent Office (EPO) practice, for substantially the whole range of products within the scope of the claim to be enabled by the patent’s disclosure to be made at the priority date. In contrast to the Court of Appeal, Lord Briggs noted that the Reverse Chimeric Locus could not be considered a "principle of general application" enabling the products to be made, rather it was the result of making the products themselves. While the majority reached this conclusion on the facts, it nevertheless held that a patentee may rely upon a principle of general application to satisfy the sufficiency requirement in circumstances where the patent disclosure would appear reasonably likely at the priority date to enable the whole range of products within the scope of the claim to be made. In her dissenting judgment, however, Lady Black indicated that she would not have interfered with the Court of Appeal’s decision.
In the early 2021 decision of Illumina v BGI, Birss J went on to apply the UKSC’s reasoning in Regeneron to process claims, where for the purposes of sufficiency of disclosure, he distinguished between (i) the claim range of a variable which does not significantly affect the value or utility of the claimed product or process in achieving its relevant purpose and (ii) one which does, ultimately holding that it is only in the latter case where the Regeneron principle of sufficiency is relevant.
The Regeneron judgment will likely have wide-ranging impacts on the prosecution and litigation strategies of patents claiming a range of products or which cover a platform technology, both in terms of the stage within the R&D process at which a patent is applied for and also the way in which an invention is characterised in the patent itself. Notably, patent applicants will need to closely consider whether all products falling within the scope of the claims can be made, and to tailor their claims accordingly. A broad claim which relies upon a principle of general application will face a greater risk of an insufficiency attack, unless sufficient evidence can be adduced to make it reasonably likely that the whole range of products within the scope of the claim can be made at the priority date. As a result, some patent applicants are now likely to be faced with the dilemma of either:
However, delayed filing risks the possibility that their inventions may be anticipated by intervening disclosures, and applicants may also face difficulties in commercialising their inventions if they are unable to obtain timely protection in the interim. In view of this decision, it is possible that inventors will increasingly look to trade secrets for legal protection in order to minimise the risk of disclosing inventions which may have broad applicability.
Developments in injunctive relief
The circumstances justifying the grant, or refusal, of injunctive relief were also a key issue addressed in 2020, particularly in the context of generic drug cases.
In Neurim v Mylan, the Court of Appeal, in June 2020, refused Neurim/Flynn Pharma’s appeal of Mr Justice Marcus Smith’s refusal to grant an interim injunction against Mylan, which would have restrained the market entry of their generic melatonin product before the expiry of Neurim’s patent. In rejecting the grant of an interim injunction, the Court held that the damages payable to Neurim/Flynn were in fact capable of being calculated on the facts, and damages would therefore have been an adequate remedy. Lord Justice Floyd noted that this particular case may be limited to its “extremely unusual” facts, and so the long-term impact of this decision on the availability of interim injunctions remains to be seen.
In Abbott v Edwards, the English court went on to consider whether to refuse or qualify the grant of an injunction specifically on "public interest" grounds. The decision followed the finding that Edwards’ transcatheter mitral valve repair devices infringed Abbot’s patents. In refusing Edwards’ request for the court to exercise its discretion on public interest grounds, Mr Justice Birss outlined the limited circumstances in which the court may be prepared to do so. In particular, he noted that the public interest in allowing doctors to exercise their clinical judgment in selecting one form of treatment over another cannot, on its own, be sufficient to invoke the public interest ground for refusing or carving out a patent injunction. Rather, the requisite public interest will be engaged where, for a given patient population, the infringing product is the only suitable treatment, as established by objective evidence. It was noted that no reliable clinical data, which identified a class of patients for whom Edwards’ infringing valve treatment was the only viable option, was provided; we will therefore likely see parties filing such evidence in similar future cases involving injunctive relief.
Looking ahead to 2021 in life sciences
English courts in the life sciences space may expect a busy 2021, with hearings set to take place not only in respect of small molecule (Royalty Pharma v Boehringer Ingelheim) and biologic products (Teva/Regeneron v Rinat), but also medical devices/technologies (Alcon v AMO Development LLC).
Although several key market players have applied for patent protection for their respective COVID-19 vaccines and therapies, it is not expected that there will be much – if any – patent litigation in relation to these (at least in the short term), given the early stage of the product life cycles, as well as the potential reputation consequences of seeking to impede the response to a public health crisis. Indeed, some of the key market players have announced that they have no intention to enforce such patents during the pandemic. When the pandemic finally subsides, however, it remains to be seen whether we will see a new rise of patent litigation in this field.
Brexit: A Done Deal with Little Change for Patents Generally but Changes Impacting the Life Sciences Industry
The UK left the EU on 31 January 2020 but entered into a transition period which expired on 31 December 2020. Therefore, as of 1 January 2021, EU law ceased to apply in the UK and is no longer binding on English courts. At the last minute, on 24 December 2020, the UK and the EU finally agreed a much sought-after Trade Deal for the UK’s future relationship with the EU; however, it has very little impact on UK patent strategy and litigation beyond what was already understood.
Patent applications, prosecution and litigation
As the agreement establishing the EPO, the European Patent Convention (EPC), is entirely separate from the EU, the UK’s position on patents remains largely unaffected by Brexit. Patents covering the UK will continue to be granted by either the UK IPO or the EPO and subsequently litigated in English courts, and patent applications will still be able to be made directly to either body (or through an international application). European patents granted by the EPO with UK designations will continue to have the same legal effect in the UK, and priority dates will remain cross-applicable across jurisdictions pursuant to the Paris Convention.
Exhaustion of IP rights
One area of change, however, is the UK’s position on the exhaustion of IP rights which will change following the end of the transition period. The new Intellectual Property (Exhaustion of Rights) (EU Exit) Regulations 2019 introduce a system of asymmetric regional exhaustion, whereby whilst IP rights in goods put on the market in the EEA will be exhausted in the UK, goods put on the market in the UK will not exhaust EEA IP rights. This lack of reciprocity means that owners of UK IP rights will not be able to prevent parallel imports from the EEA, despite owners of EEA rights being able to do so for imports from the UK. In order to avoid inadvertent infringement claims over patented goods, parallel importers must therefore keep in mind whether consent is required from EEA-based IP rights-holders before goods can be exported into the EEA.
Supplementary protection certificates (SPCs)
Following the end of the transition period, the UK’s SPC regime has substantively remained largely unchanged. UK SPCs granted before the transition period remain valid, with no change to their length, and all pending SPC applications filed in the UK before 31 December 2020 will continue to be examined under the same EU provisions. However, new UK legislation has introduced some significant procedural changes for new UK SPC applications, which must be paid close attention by prospective applicants.
One of the key changes lies in relation to Marketing Authorisations (MAs), and in particular, the introduction of a range of different MAs, each having unique territorial scope across the UK. These now include:
This means that a specific product could have two MAs which cover different parts of the UK with the consequence being that a holder may have to apply for multiple SPCs in order to cover the whole of the UK. The key risk-avoidance measure, therefore, will be to ensure that, where an application for an SPC is made for Northern Ireland based on an earlier EU MA, a subsequent "top-up" SPC application is made for GB within six months of the GB MA being granted to ensure protection is not lost for GB (or the inverse, with an additional application being made for Northern Ireland, if the GB MA is granted first).
Another key practical change is that the deadline for filing an SPC in the UK is now six months from the earliest authorisation granted anywhere in the UK, which will include EMA MAs applicable in Northern Ireland. This means that the first authorisation in the EEA (unless a GB MA is issued earlier) will continue to set the deadline for a UK SPC filing, meaning rights-holders must carefully monitor the grant of new EU and UK MAs to ensure that no opportunities for SPC protection are missed.
For paediatric extensions, six-month extensions will continue to be granted for medicinal products filed up to two years prior to their SPC expiry. Other minor procedural changes in the new UK Human Medicines Regulations 2021 include the fact that extension applications will no longer need to provide evidence of corresponding authorisations for the product across the EEA, and that the territorial scope of the SPC will be by default limited to the part(s) of the UK for which an associated paediatric investigation plan (PIP) has been completed (at least two years prior to SPC expiry, that being the deadline for filing a paediatric extension application).
Finally, the SPC manufacturing waiver, introduced as an update to the SPC Regulation via Regulation (EC) No 2019/933, will be retained in the UK post-Brexit, meaning that generic and biosimilar manufacturers can continue to manufacture SPC-protected medicines for export outside the UK and EU (the UK legislation expressly carves out exports into the EU) without the rights-holder’s consent, in addition to manufacturing medicines for stockpiling for day-one entry to the UK or EU markets during the last six months of the SPC’s term.
It ultimately remains to be seen whether and how the English courts will continue to apply CJEU decisions regarding the interpretation of the EU SPC Regulation to the equivalent UK legislation in 2021 and beyond. This is particularly relevant in light of the 2020 CJEU Royalty Pharma decision, which seemingly put the EU position at odds with the "core inventive advance" test proposed by the English court in relation to determining whether a product is protected by a basic patent under Article 3(a).
The English Patents Court
New specialist patents judges in the UK judiciary
The Patents Court’s very busy case schedule received some welcome relief in August 2020 with the appointment of Richard Meade QC as a High Court judge. Whilst Mr Justice Birss (who heard most of the Patent Cases in 2020) is set to relinquish his place on the Patents Court bench in January 2021 as he assumes his new role in the English Court of Appeal, an additional judge, Mr Justice Mellor, has also been appointed to join Mr Justice Meade in the Patents Court from 8 February 2021, ensuring that the English courts will remain strongly placed to hear and decide the most complex patent cases on a timely and expeditious basis.
English courts' world-leading response to the COVID-19 pandemic
Despite the unprecedented challenge presented by the COVID-19 pandemic to both national governments and judiciaries around the world, the English Patent Court’s highly adaptive and robust response to the pandemic has reinforced the UK as a go-to jurisdiction for companies’ most business-critical patent litigation. Following a rapid and largely seamless transition to either fully remote, or part in-person/part remote (so-called hybrid) hearing formats, many patent cases in the UK were able to continue during the pandemic through to judgment with relatively minimal disruption. It is therefore expected that the English courts will continue to be resilient and adaptable in 2021, operating on a “business as usual” basis with an aim to achieve limited disruption to case timelines while COVID-19 restrictions continue to be in place.
Round-Up and Looking Forward to 2021
In summary, 2020 was an incredibly busy year for patent litigation in the UK, despite some of the most significant headwinds in history. It is anticipated that 2021 will be no different, as parties – including some of the world’s largest companies – continue to litigate their most important technologies in the UK. Following the roll-out of COVID-19 vaccines, we hope that 2021 will ultimately see a gradual return to normality and be a brighter year for many, both in the UK and abroad.