What’s Trending in Patents? Illegality for cross-undertakings, Teva v Leo, Wearables, Generics Litigation, China and Innovation Statistics

1. The recent UK Supreme Court decision Servier v Apotex concerned whether patent infringement in another territory is an ‘illegality’ which would be relevant to payment of cross-undertakings. The decision can be found here. IPKat’s post can be found here. Wragge & Co’s post can be found here.

2. We’ve written for IPKat on Teva v Leo (see the decision here, see the post here). However we were interested in the observations of Wragge & Co (see here) which ask whether Birss departed from the Pozzoli test for inventive step, whether he had freedom to do so, and how this may have affected the result.

3. This is not strictly a patent topic, but we hear so much about ‘Wearables’ being an important sector for innovation, we thought we’d mention TechCrunch’s article critically assessing the technology (see here).

4. We liked the present edition of Patent Lawyer (see here), particularly the articles on US patent litigation, software patents and making amendments at the EPO. See our post on the Post-Alice Post-Myriad Post-Mayo World here.

5. A recent Pharmalot article (see here) discusses the fact that more generics are filing for litigation.

6. China continues to be topical. Xconomy wrote about its growth plans (see here). Iam wrote about Chinese R&D spending (see here). A post from Freshfields gives some insights into China’s policies on company acquisition (see here). See our post on China and the Patent system here.

7. PWC’s Strategy& have interesting stats on innovation on their website (see here). See our post 10 Points on Ernst & Young’s Biotechnology Industry Report 2014 ‘Unlocking Value’, here.

 

Reasons to go to Mediation in a Pharma Patent Dispute

Michael Fysh spoke at fieldfisher’s Pharma Seminar on 16 October 2014. The following points are based on the handout he gave at the event.

Advantages of Mediation in General and in Pharma Cases

  1. Cost savings in a field where litigation is normally very expensive.
  2. Avoiding uncertainty, anxiety and commercial ‘downtime’.
  3. There are no appeals to worry about.
  4. There is no ‘judge risk’. Litigation inevitably has uncertainties.
  5. It is possible to settle international disputes involving the same parties and IP.
  6. Resolution of collateral disputes is possible.
  7. A wider range of possible solutions is available, and a skilful mediator will be able to provide solutions beyond the power of a Court to provide.
  8. Mediation is faster than litigation.
  9. Mediation allows confidentiality of sensitive commercial information.
  10. Mediation allows for a ‘win-win’ situation, for example by the setting up of a new commercial relationship.
  11. There is no costly enquiry into damages.
  12. Psychological/cultural benefits. For example there is no ‘loss of face’ as the parties themselves choose what to accept.
  13. What happens in mediation is ‘without prejudice’ and is not binding if mediation fails. The parties can go on to litigate confident that the mediation discussions remain confidential.
  14. Even unsuccessful mediation can lead to a better mutual understanding of the parties’ positions.

Disadvantages of Mediation in Patent Cases

  1. It needs the agreement of the other party to set up mediation. That requires time and so mediation is not suitable where emergency action is needed, such as an interlocutory injunction.
  2. It is impractical where a party wishes to create a legal precedent, for example the construction of a patent claim or contractual clause, or the Court’s view on a legislative development.
  3. It is unattractive to parties seeking summary judgment.
  4. It is not of interest where publicity is actively sought by a party.
  5. It is irrelevant where revocation of IP is sought where a Court will need to be involved.

You may also wish to see related posts Top 10 Points on Arbitration in UK Patent Disputes and Top 8 Points On the Disadvantages of Having a Specialist Patent Court.

EU Pharma Patent Settlements

These points are from a talk given by John Cassels at fieldfisher’s Pharma Patents Seminar on 16 October 2014.

  1. Anticompetitive behaviour can arise either due to agreements between parties or from unilateral behaviour, and patent settlements are agreements that may be anticompetitive. Anticompetitive behaviour can be approached either through looking at the ‘object’ of the agreement or through the ‘effect’. The EU normally analyses the ‘object’ as this is easier to prove.
  2. Pay for delay (or ‘reverse settlement’) agreements are where a patent holder pays a competitor to not enter the market and not to challenge the validity of the patent. See TaylorWessing comments on pay for delay here.
  3. EU case law is still evolving in this area and decided cases so far focus on individual bad behaviour of the parties, rather than developing principles to guide which pay for delay settlements are anticompetitive. However in the recent Servier case it was relevant that the ‘product’ patent had expired and Servier was relying on a ‘process’ patent. Servier was also found guilty of abusing its dominant position over a particular ‘molecule’. See Law360’s report here.
  4. In the Lundbeck decision the internal documents of the parties were very damaging, referring to a ‘club’ being formed and ‘piles’ of cash being made.
  5. The EU fining guidelines can be found here. The fines increase for repeat offending and refusal to cooperate.

You may also wish to see related articles Evergreening in the Pharma Sector and Mazzucato’s ‘Innovation as Growth Policy’.

Injunctions in UK Pharma Cases

These points are from a talk given by Beatriz San Martin at fieldfisher’s Pharma Patents Seminar on 16 October 2014.

1. There are 4 types of injunction: pre-action (very rare in the UK), interim, final and cross-border.

2. The Enforcement Directive 2004/48/EC made interim and final injunctions available across Europe. They are discretionary and subject to national law, and are not harmonised.

3. Cross-border injunctions are only available if validity is not challenged (GAT v Luk [2006]). Though Solvay v Honeywell [2012] decided interim injunctions were available even if validity was challenged. See Bird & Bird’s comments on GAT v Honeywell here and comments on Solvay v Honeywell from CMS here.

4. In the UK an injunction is a discretionary remedy where no other form of remedy is adequate. It is contempt of court to not comply and the applicant has a duty of full and frank disclosure.

5. The American Cyanamid guidelines view the granting of injunctions as a ‘serious question’ in issue. The adequacy of damages, balance of convenience and special factors (e.g. the undertakings) must be considered.

6. Interim injunctions are more common in pharma cases and final injunctions are standard. When granting an injunction the Court may look at whether the alleged infringer acted to ‘clear the way’ of infringed patents (SmithKline Beecahm v Apotex [2002]). However in Cepahlon & Ors v Orchid & Anor [2010] failure to clear the way did not lead to an injunction being granted. Merck v Teva [2012] and Novartis v Hospira [2013] though seem to show a hardening of approach towards infringers. See Bird & Bird’s comments on Cepahlon & Ors v Orchid & Anor [2010] here.

7. In other EU countries:

In Germany different courts have different approaches. The Dusseldorf court is seen as a friendly court for interim injunctions in pharma cases. The focus is more on the merits of the case rather than economic arguments. It may grant ex-parte interim injunctions. The bifurcated system often results in injunctions before the outcome of the validity action.

In France an injunction will be granted based on the likelihood of patent infringement.

In Austria injunctions are common and this is considered a pro-patentee system.

8. The Unified Patent Court raises new issues. A pan-European injunction will be possible and forum shopping will probably happen when asking for injunctions.

You may also wish to see related articles 10 Points on What Patent Judgments Achieve and 10 Points on Open Innovation.

 

Biotech Roundup: Time Frame of Investments, Gap in Funding Proof of Concept, Personalised Medicine and Reverse Payments

Here are various items of biotech news that recently caught our eye. We’ve provided a summary of each trying to show how the news item relates to the bigger picture.

1. Time Frame of Biotech Investments

Advent Capital is setting up a fund to invest in early and midstage European biotechs (see here). The proviso is that they wish to see returns in 6 years. That illustrates the drawbacks of investing in biotech companies developing drugs. It usually takes 10 to 15 years to develop a drug, and that keeps a lot of investors away who want to see returns in around 5 years.

2. The Gap in Funding Proof Of Concept Work

UK non-profit organisations Cancer Research and Leukaemia & Lymphoma Research are funding proof of concept work in treating blood cancers (see here). This illustrates how infrastructure needs to be provided to do ‘basic’ research which won’t see any immediate returns. It remains for government to enter into these funding gaps to make sure research and innovation systems operate effectively.

3. Personalised Medicine

Personalised medicine is a difficult technology to develop as it is proving challenging to identify the appropriate markers. However it clearly has a lot of scope for improving patient care. ‘Incentives, Intellectual Property, and Black-Box Personalised Medicine’ (see here) examines changes needed to the innovation landscape to better develop this technology.

The US Supreme Court Akamai decision makes it harder to find induced infringement for multi-step method claims (see here) as it requires primary infringement by a single party. However for personal medicine the diagnostic part and the treatment parts of the invention could well be performed by different parties. This adds to the difficulties in obtaining patent protection beyond those caused by the Mayo and Myriad decisions.

4. What exits are happening in US biotech?

An article from the Life Sci VC blog (see here) discusses the proportion of IPO versus M&A exits that are happening in US biotech. The ratio is 40% IPO to 60% M&A. It’s therefore important to biotech to keep both options open.

5. Reverse Payments (Pay for Delay)

A recent PatentlyO article (see here) explained the economics of pay for delay settlements where it can be in a patentee’s interests to pay a generics company to stay out of the market, but this risks being anticompetitive.

A slightly old article on the European position can be found here.

 

Pharma Patents in India

These points are from a talk given by Pravin Anand at fieldfisher’s Pharma Patents Seminar on 16 October 2014.

1. There is an anti-patents environment in India where patent protection is provided due to the compulsion of TRIPS rather than to advance innovation. During the Novartis case the Additional Solicitor General called India the ‘Pharmacy of the World’ to justify its stance towards patents.

2. At present new guidelines are being discussed for pharmaceutical inventions at the Indian Patent Office. There have been allegations they show anti-pharm patent bias.

3. The Novartis Gleevec case concerned Section 3(d) of the Indian Patents Act which requires a new form of a therapeutic substance to have enhanced efficacy. Novartis lost because they could not demonstrate the required efficacy. This section is meant to prohibit evergreening.

4. India has used compulsory licencing provisions for pharma patents. There are 3 types of compulsory licensing. Under the normal Section 84 type a licence will be given three years after grant if reasonable requirements of the public are not met, or the product was not available at a reasonably affordable prices or if the invention was not worked in India.

5. India has Bolar provisions which allow making, using and selling of the patented invention in a way which is reasonably related to development and submission of information.

6. Since 2009 Indian practice has changed as to granting of ex parte injunctions. Since then 15 ex-parte injunctions have been granted at a pre-launch stage.

You may also wish to see related articles Top 10 Things You Need to Know about Biosimilars and Top 10 Points on the Trans-Pacific Partnership.

 

Bits and Pieces: Divided Patent System, Expectation of Success, Due Diligence, Access to Medicines

Here are recent articles we wrote or found interesting, as well as blog sites you may find interesting.

1. Lemley’s continuing analysis of US litigation stats now looks at outcomes of litigation in different technology sectors. ‘Our Divided Patent System?’ finds that pharmaceutical patent owners do much better than software or biotech.

2. Our most recent article on IPKat is ‘Obviousness, common general knowledge and expectations of success: Leo gets a mauling’ which reports the UK decision Teva v Leo and asks questions about what this recent case says about the way UK Courts look at inventive step on pharmaceutical cases.

3. Our most recent article on the IPCopy blog is ‘‘Expectation of Success’ as Part of Inventive Step Analysis’ which discusses the need to look at expectation of success when looking at inventive step of biotech inventions and wonders whether the UK Courts are doing this as they should.

4. We think fieldfisher’s IP blog is interesting, see here.

5. IPWatchdog’s article ‘Effectively Sourcing and Diligencing an IP Investment’ provides interesting perspectives on IP in a commercial situation.

6. A report from a South African summit on access to medicines provides a developing world perspective on the issue (see here).