Patent decisions

The UK patent court case reports are prepared by John Hull, Anna Hatt, Nick Bebbington, Deborah Hart, Matthew Ng and Sarah-Jane Crawford of Beck Greener.

All the court decisions listed in this section are available on the free-to-use website www.bailii.org.

Strike out of appeal

Regen Lab SA v (1) Estar Medical Limited, (2) Estar Technologies Limited, (3) Medira Limited, (4) Lavender Medical Limited and (5) Antoine Turzi [2020] EWCA Civ 451 24 March 2020 • Floyd LJ

This decision relates to a telephone hearing to determine a number of applications made by both sides in the appeal against the first instance judgment of HHJ Hacon – [EWHC 63 (Pat), reported April [2019] CIPA 45. The judgment was discussed on the IPKat blog (http://ipkitten.blogspot.co.uk) on 23 April 2020. The appeal hearing was listed to commence on 1 April 2020.

At first instance, HHJ Hacon had dismissed a patent infringement action brought by Regen against Estar in respect of EP(UK) No. 2073862. The judge had also revoked the patent based on a finding of lack of novelty by reason of prior use.

The European Patent was found invalid in opposition proceedings at the European Patent Office. This decision had been appealed, but an expedited appeal had not been requested.

Regen was granted permission to appeal the decision of HHJ Hacon by Floyd LJ, with Estar being given permission to cross-appeal by HHJ Hacon in the event that Regen obtained permission to appeal.

Estar made an application in October seeking an order that, unless Regen paid the sums owed pursuant to orders for costs made in the court below, the appeal should be struck out. Estar also sought an order that, in the event that the appeal was to proceed, Regen should provide security for costs by payment into court.

Regen made two applications sealed on 5 March 2020. The first was for a stay of appeal proceedings pending the final outcome of the EPO appeal and/or the final outcome of criminal proceedings in Switzerland against Estar. Regen also applied for an adjournment of the appeal hearing in the same application. In the second application, Regen requested seven heads of relief including a stay of execution in respect of all costs awarded to Estar, an order denying the relief sought on Estar’s applications, relief from the sanctions for failing to pay any costs to Estar, a refund to Regen for its costs in the present application, security for Regen’s costs of the appeal, an order striking out the cross-appeal unless Estar paid the costs of the application within 14 days and if the sum for costs was paid, security for costs.

At the time of the telephone hearing, Regen had failed to pay any costs relating to the hearing before HHJ Hacon despite a number of orders made by the judge. In addition, Regen had failed to provide any evidence to support its request to delay payment. Estar had provided evidence demonstrating that Regen had, following the judgment of HHJ Hacon, spent significant amounts of money on other litigation and product marketing. In addition, Regen had failed to respond to Estar’s applications for strike out and security of October 2019 until the applications of March 2020. Regen had also failed to file any appeal bundles that were due to be filed at court by 19 February, with no request for extension or explanation of the breach.

Floyd LJ decided to refuse Regen’s application for a stay of proceedings. He considered that there were no grounds for a stay of the appeal pending the decision of the EPO or any other proceedings. He noted that there were stays in France and Germany, but pointed out that national procedural law is different in those jurisdictions and that the French stay was by consent.

He also noted that Regen had delayed in bringing its stay application, when it could reasonably have been requested in the Notice of Appeal. Third, he noted that Regen’s conduct was highly inconsistent as it had sought to pursue Estar in the UK rather than awaiting the decision of proceedings before the EPO, but now it sought to delay the UK proceedings. Finally, he identified that Regen had been prepared to launch litigation in multiple jurisdictions with little regard for costs. The relatively small cost of staying the appeal therefore carried little or no weight.

The judge also rejected the argument that a stay could be based on the allegation of criminal conduct of a Regen employee in Switzerland. He therefore concluded that when deciding whether a stay should be granted, the scales came down very heavily against Regen and refused the stay.

He also reached the conclusion that the request for adjournment of the appeal could not be justified, as any difficulties that Regen was suffering were of its own making.

Floyd LJ then turned to consider whether the appeal should

be struck out for failure by Regen to lodge the appeal bundles. He noted:

“On such an application one would expect the party in default to come forward with an explanation for its noncompliance with the court’s direction. In the present case this was particularly important as Regen had a history of procedural wrongdoing, one is tempted to say procedural vandalism. To recapitulate, it had breached the March and July costs orders. It had launched an application for relief from sanctions in respect of those costs orders which it then failed to support either with evidence or with attendance or representation at the hearing. It had ignored successive directions in the appeal as to the service of its response to Estar’s strike out and security applications. Against that background there was an obvious inference that continued breaches would be treated as intentional, and not warrant any further indulgence being offered by the court.

In addition to an explanation for past failure, one would also expect an appellant in such circumstances to come forward with some precise and concrete proposal as to when and how the failure was to be rectified. Such a proposal was particularly necessary in the present case given the imminence of the hearing of the appeal, and the prejudice and inconvenience to Estar, the court and other litigants if the court time reserved for the hearing of the appeal was not utilised…

Ultimately, I believe that Regen has taken a deliberate decision not to pay any outstanding sums to Estar, or expend further money on this appeal by instructing solicitors and putting them in funds, because of their belief that their commercial interests are better served by pursuing Estar in other tribunals, such as the EPO and the ITC.”

Accordingly, he reached the conclusion that the appeal was to be struck out.

Cost cap | Scale costs | VAT

Response Clothing Limited v Edinburgh Woollen Mill Limited [2020] EWHC 721 (IPEC) 23 March 2020 • Hacon HHJ

This decision relates to an unsuccessful application by the claimant to recover VAT on top of the capped costs in an IPEC action. The claimant was successful in the action – [2020] EWHC 148 (IPEC) – and its costs, taking the IPEC stage caps into account, were in excess of £50,000. It was not registered for VAT and therefore argued that it was entitled to £50,000 plus VAT. The defendant argued that the costs entitled may not exceed £50,000 including VAT. The question before the judge was whether the £50,000 cost cap under CPR 45.31(1)(a) is inclusive of VAT.

The defendant argued that the CPR was entirely clear that although VAT may be recovered in addition to the amount of the scale costs, the overall cap is £50,000. The claimant argued that if the defendant’s interpretation of the rules were correct, small businesses whose turnover falls below the threshold for registration for VAT would be unfairly disadvantaged because their net recovery of costs would be lower than £50,000, whereas larger businesses registered for VAT would be able to claim the full £50000 in costs and recover VAT as input tax.

The judge noted that:

“I agree that on [the defendant’s] argument the rules contain an unfortunate anomaly. However, rule 45.30(4) creates a definition which seems to me to be too strong to allow for any alternative interpretation of ‘scale costs’. That, combined with the unambiguous wording of rule 45.31(a) leads me to the conclusion that a party claiming VAT on its costs can only recover a total of £50000, including VAT…”

The judge therefore concluded that the defendant was entitled to an award of £50,000.

Validity | Obviousness | Insufficiency | Plausibility | Infringement | Doctrine of equivalents | Medical use claims | Contributory infringement | Quia timet infringement claim | Amendment | Technical experts

(1) Akebia Therapeutics Inc (2) Otsuka Pharmaceutical Company Limited v FibroGen, Inc and Astellas Pharma Inc [2020] EWHC 866 (Pat) 20 April 2020 • Arnold LJ

This was a very long, first instance judgment of Arnold LJ relating to infringement and validity. The decision was discussed on the IPKat blog (http://ipkitten.blogspot.co.uk) on 25 April 2020. The blog post includes a list of key paragraphs and the topics discussed in them.

Akebia and Otsuka applied to revoke six patents of FibroGen (grouped into Family A derived from WO 03/053997 and Family B derived from WO 2004/108121) to clear the way for their product vadadustat. The exclusive licensee Astellas brought a cross-claim for threatened infringement. The patents related to HIF-PHI enzyme inhibitors for treating anaemia.

Technical experts The judge noted that technical experts should be called in logical order, and emphasised again the responsibility of lawyers to instruct technical experts properly and to cross-examine them fairly. The judge also noted that a technical primer should have been provided.

Family A – Construction The judge held that the skilled person cannot be assumed to have read all the documents cited in a prior art document.

He construed Formula (I) in the Family A claims to determine what substituents were covered. He made detailed reference to semi-colons and line breaks, commenting that “this claim forces the skilled person to wrap a cold towel round their head when trying to understand it”. He preferred the broader interpretation of FibroGen and Astellas. He also construed the term “structural mimetic of 2-OG”, holding that the skilled person would be uncertain what was meant.

Family A – Validity The judge held on the facts that the key amended claims in the Family A patents was not obvious over a prior art document Epstein. It would not have been obvious to try the compounds of the claims with a reasonable expectation of success. Claim 17A of EP 531 was held valid, as obviousness was the only validity attack on this claim, and the amendment to this claim was held admissible.

Insufficiency was argued by Akebia and Otsuka on the basis of Biogen insufficiency (excessive claim breadth) and uncertainty, but not classical insufficiency. The judge noted that the law on Biogen insufficiency should now be settled. He held that various claims were Biogen insufficient for lack of plausibility:

“the actual technical contribution to the art is no more than the identification of Compounds C, E, F, J and K as being ones that have therapeutic efficacy for anaemia associated with CKD. That might well justify a claim to a wider group of compounds that could plausibly be predicted to have similar efficacy for given structure-activity reasons. It does not begin to justify the claims in issue.”

and that, if they had met the plausibility test, they would have still been Biogen insufficient for failing the undue burden test. He noted that as a result the claims were also invalid for AgrEvo obviousness (excessive claim breadth). He also held that the claims were insufficient for uncertainty because of the unclear term “structural mimetic of 2-OG”.

Family A – Infringement The judge held that vadadustat would have infringed claims requiring Formula (I) had they been valid, but not the valid narrower Claim 17A requiring Compound C on a normal interpretation.

FibroGen and Astellas argued that the narrower claim was nonetheless infringed under the doctrine of equivalents (relying on the test under Actavis v Lilly [2017] UKSC 48). The judge held that there was no such infringement, because it would not have been obvious that vadadustat worked in the same way as Compound C (Actavis question 1) and the skilled person would have understood strict compliance with the claim language to be intended (Actavis question 3). He gave eight reasons for his answer to question 3, various of which reasons related to the fact that the claims had been limited during prosecution to deal with prior art. The judge noted that this case was:

“one of those cases referred to by Lord Neuberger in Actavis v Lilly at [88] where it would be contrary to the public interest for the contents of the prosecution file to be ignored.”

Family B – Validity The validity analysis for Family B was briefer, relying on the Family A analysis. Various claims in the Family B patents were held to be obvious over WO 977, a document in Family A. Various further claims in the Family B patents were held to be insufficient for the same reason as the Family A patents.

Family B – Infringement The marketing authorisation application for vadadustat did not cover the medical indications of the Family B patent claims. This infringement claim was therefore on the basis of (1) quia timet (i.e., that there was a threat of infringement in future) and (2) contributory infringement in relation to off label use of vadadustat. The judge held that there was no such infringement as Akebia and Otsuka were not threatening to market vadadustat in circumstances where they would know, or it would be obvious to a reasonable person in the circumstances, that vadadustat was suitable for putting and intended to put the claimed inventions into effect in the United Kingdom.

Conclusion There were valid claims and infringed claims in Family A, but no claims of Family A were both valid and infringed. In Family B all claims were invalid and were not infringed.