Leading lawyers from one of the most prestigious IP boutique firms in the UK, Powell Gilbert LLP, provide their expertise on recent developments in the Life Sciences sector.
The life sciences sector continued to attract headlines in 2010, despite the difficult prevailing economic conditions. M&A activity continued in the sector including the completion of Teva’s acquisition of ratiopharm and Sanofi-Aventis’ US$18.5 billion hostile bid for Genzyme last August. Further consolidation is to be expected in 2011. Acquisition of generic capabilities seems likely to continue, particularly for developing markets, and further focus on the acquisition of biotech products is anticipated as big Pharma seeks to fill its pipeline. Increasing activity in relation to biosimilar products in Europe has brought post-patent expiry competition to the biotech sector. While Europe has already established specific regulatory approval processes for biosimilars, the US is moving closer to doing so, leading a number of large innovator companies such as Merck to declare an interest in entering the biogeneric market.
Patent battles between innovator and generic continued throughout 2010, and more biotech cases emerged, consistent with the increasing maturity of the sector. The UK and other national courts across Europe, struggled to apply harmonised patent law under the provisions of the European Patent Convention (EPC) and various EC regulations, including those governing patent term extension by grant of SPCs (Supplementary Protection Certificates). In particular, although decisions of the European Patent Office Technical Boards of Appeal (TBAs) are not precedential, they continued to play an important role in the development of UK case law and we are now seeing the European Court of Justice (ECJ) make decisions relating to patents.
Second Medical Use Claims And Dosage Regimes
The law on the patentability of second medical uses and dosage regimes was examined in 2010. Following the introduction of the EPC 2000 and the decisions in G2/08 Kos Life Sciences (Enlarged Board of Appeal of the EPO) and Actavis v Merck (UK Court of Appeal), the previously used Swiss formulation of claims should no longer be used. The new formulation (substance X for use in the treatment of disease Y) should be used instead. Indeed, the UK Intellectual Property Office has indicated that UK-filed patent applications with Swiss-type claims will now be objected to, as lacking clarity.
In addition, the patentability of novel dosage regimes has been confirmed. The European patent application filed by Kos Life Sciences (now Abbott Respiratory LLC) claimed a second, new, dosage regime for the treatment of hyperlipidaemia with nicotinic acid. The relevant claim was constructed in the Swiss form approved in Eisai (G5/83), ie, the use of nicotinic acid in the manufacture of a medicament for “... use in the treatment by oral administration once per day prior to sleep, of hyperlipidaemia...” In light of the new rules brought in by EPC 2000, the EPO Examining Division referred the question of the patentability of new dosage regimes to the Enlarged Board of Appeal.
The Enlarged Board held that the direct formulation provided by EPC 2000 meant the Swiss form of claim construction was no longer required to prevent a second medical use being found either (i) to constitute excluded subject matter (a method of treatment) or (ii) to be anticipated by the known first medical use. The practice had arisen because EPC 1973 only made express provision for the first medical use of a known substance or composition. Importantly, the Enlarged Board further found that the relevant “use” could be a new dosage regime to treat the same disease as in the known first medical use.
Eli Lilly and Company v Human Genome Sciences is the first case where the UK courts have considered whether an entire invention in the field of biotechnology is capable of industrial application (IA). It has provided an interesting example of the interaction between EPO and national court proceedings. HGS’ patent, which discloses a novel member of a pharmaceutically-relevant protein family, was found to be invalid by Kitchin J for, inter alia, lack of industrial applicability. HGS appealed and in order to streamline the UK appeal proceedings with the ongoing EPO opposition, the TBA proceedings were accelerated (and UK appeal delayed) further to a co-operative effort between the TBA and the Court of Appeal. The TBA upheld HGS’ patent and shortly after publication of their decision the UK appeal was heard. Despite the recent willingness of the UK courts to follow TBA jurisprudence, the Court of Appeal dismissed HGS’ appeal and found the invention not to be susceptible of IA.
In the lead judgment, Jacob LJ spent some time addressing basic procedural differences between the UK courts and the EPO and attributed the diverging decisions in this case to the consideration by the TBA of different evidence and the use of a different procedure. Though Jacob LJ recognised the well settled approach that the UK courts follow any principle of law clearly laid down by the TBA (unless the commodore is steering the fleet onto the rocks) he distinguished the application of a legal principle (a question of law) with the application of a legal standard (a question of fact and degree) and observed that the UK courts owed no deference to the TBAs when applying a legal standard.
HGS has been given leave to appeal that decision further and the case is due to be heard by the Supreme Court this summer. This will be the Supreme Court’s first patent case and, as well as addressing the IA issue, the case will provide an opportunity to review the status of EPO jurisprudence with respect to the decision making of the UK courts.
Further to the UK courts opining upon the full scope of product claims in relation to a chemical patent in Generics (UK) Limited v H Lundbeck A/S, the ECJ (in case C-428/08) considered the scope of protection of product claims containing or consisting of genetic information in a referral concerning the correct interpretation of Article 9 of the Biotech Directive 98/44/EC. The referral came from the Dutch court in a case concerning Monsanto’s “Roundup ready” soybean patent. Though it is well established under the EPC that a claim to a product is to that product in any context (see for example G2/88 Mobil), with respect to product claims containing or consisting of genetic information, the ECJ has imported a functional limitation such that protection under Article 9 extends only to material in which the genetic information is presently performing its function.
The scope of protection of product claims concerning genetic information and the corresponding impact of the ECJ’s decision for the biotechnology industry is unlikely to be resolved until the meaning of “performing its function” has been considered by individual national courts.
In the meantime, 2011 will see the ECJ rule on questions referred by a German court relating to the patentability of human embryonic stem cells under the Biotech Directive. The definition of human embryo and what amounts to industrial and commercial use will be considered (C-34/10 Oliver Brüstle v Greenpeace).
Further issues that may have a significant impact on the biotechnology industry are due to be heard this year by the US Court of Appeal for the Federal Circuit in the Myriad Genetics case relating to the BRCA1 and 2 genes. Myriad’s appeal challenges the ruling of the United States District Court for the Southern District of New York that (contrary to long-standing practice of the Patent and Trademark Office) patent claims directed to isolated DNA molecules and diagnostic methods using those isolated molecules do not comprise patentable subject matter.
The ECJ is also having a significant impact on another area of life sciences that is governed by an EC Regulation: SPC protection. Many provisions of the SPC Regulation (EC 469/2009) are interpreted inconsistently across EU member states, leading in some cases to SPCs for the same product being granted in some countries but rejected in others. Given the economic value of SPC protection, the practices of national patent offices are increasingly being challenged in the courts, and a number of referrals were made in 2009 and 2010 to the ECJ to clarify the correct interpretation of the SPC Regulation. Two of the key issues awaiting clarification from the ECJ are the eligibility of combination products for SPC protection and the permissibility of zero-term SPCs.
Combination products (containing more than one active ingredient) are the subject of a number of pending references from the UK courts, including Medeva (case C-322/10), Georgetown University (case C-422/10) and Yeda (case C-518/10). For an SPC to be granted, at the date of the application the product must be protected by a basic patent in force and a valid marketing authorisation to place the product on the market must have been granted. National courts have taken different approaches to determining whether a combination product is protected by a basic patent. In many countries, including the UK, the courts have held that the patent must claim and disclose the combination itself, rather than only one of the components. In other countries, SPCs have been granted where the patent claims only one component, as the combination product would infringe such a claim. The former approach can produce seemingly harsh results in some cases, such as the multi-disease vaccines in issue in the Medeva and Georgetown University cases. In order to avoid the need for multiple injections, vaccines are often only authorised as components in a combined shot. However, the underlying patents often only relate to one of the vaccines. Following the UK’s current approach, in these circumstances SPCs cannot be obtained for either the individual vaccines (as the marketing authorisations are for multi-disease vaccines only) or the combination products (as the basic patents only disclose the individual vaccines).
Under the Paediatric Regulation (EC 1901/2006), a six month SPC extension can be obtained when certain requirements are complied with. As even a short period of additional market protection can be extremely valuable, some patentees are applying for SPCs in circumstances where the term of the SPC would be less than or equal to zero (zero-term SPCs) solely so they can take advantage of the additional protection afforded by the paediatric extension. The permissibility of zero-term SPCs has become the subject of divergent practice in Europe, but in 2010 a German Court sought clarity from the ECJ on whether such SPCs can be granted (case C-125/10) and a decision is awaited.
Settlement Of Pharma Patent Litigation
In 2009 the European Commission reported on its pharmaceutical sectoral inquiry, concluding, somewhat controversially, that pharmaceutical patent owners were engaging in patent litigation and settlement practices which inhibited the commercialisation of cheaper generic drugs. The Commission has subsequently carried out targeted investigations into a number of specific companies and the start of 2011 saw the Commission requesting a second round of disclosure of patent litigation settlement agreements from a number of major Pharma companies, looking for potentially problematic agreements. Although monitoring exercises are only taking place in Europe, the US is again examining the legality of so-called “pay for delay” patent settlements and so this is anticipated to remain a hot topic.
2011 promises to be an interesting year for IP lawyers in the life sciences sector. As discussed, we can expect further guidance from national European courts, and from the ECJ, on the patentability of biotech inventions and on the conditions for grant of SPCs. We await further revelations from the European Commission’s continued monitoring of the Pharma sector as it pays careful attention to the terms of patent settlement agreements in particular.
Finally, we wait to see how our court system for resolving patent disputes will evolve. The ECJ’s decision on the Commission’s proposal for a unified patent litigation system, with a centralised patents court for Europe, is expected soon. In July 2010, the attorney general is reported to have concluded that, as it stands at present, the envisaged agreement creating a unified patent litigation system is incompatible with the treaties. Whether or not the ECJ eventually agrees with this conclusion there are already moves from a number of EU member states to go it alone and work towards a unified patent system under the EU’s enhanced co-operation procedure, leaving behind the opposing member states. In the meantime, the UK’s rejuvenated Patents County Court looks set for a flurry of activity, offering a streamlined procedure better suited for the needs of SMEs, providing a forum for litigation of less complex and lower value claims.