In FKB v AbbVie (II) the UK Patents Court has confirmed a welcome addition to the steps that can be taken to “clear the path” for a competing drug in a complicated patent landscape. FKB (Fujifilm Kyowa Kirin Biologics) could continue with their applications for a declaration that their proposed new product could not be covered by a valid, competitor, patent (freeing them to get on with developing and marketing such a product), and also for an injunction restraining the competitor from threatening their customers in respect of the launch of such a product.
At this stage, the judge (Arnold J) refused to strike out or give summary judgement against FKB’s applications. The case is still of course at a very preliminary stage; and a parallel case is being appealed. So it is early days yet. But it shows that the UK courts are open to innovative solutions to obtain clarity where the patent landscape is complicated. This is especially so where the incumbent supplier makes the patent landscape complicated – for example:
- By delaying grant of applications and filing numerous subsidiary patent applications.
- By widescale “evergreening” (the strategy of filing further patents on specific aspects, such as different dosage regimens).
- By developing large portfolios of closely related patents.
“Clearing the path”
It is now well established that a new market entrant wishing to compete in the pharma market may be required to “clear the path” for its proposed product, by confirming in advance that it does not infringe the market incumbent’s patents. This creates particular difficulties where the patent landscape is complicated and particularly where some of the relevant patent rights are still only patent applications, which, like chameleons, may be morphed to be a better weapon against a known target product.
Arrows for generics: Arrow Generics v Merck
This was raised as an issue in Arrow Generics v Merck in 2007. Arrow asked the court to look at granting a declaration that certain patent applications could not validly cover their proposed product. Merck had a relevant patent application which was about to be granted and could have been effective in the UK. However, just before grant, Merck withdrew the "GB" designation, meaning that the granted patent would not take effect in the UK.
One might say that surely that should make life easier for an intending competitor. The problem was that it still left pending applications (“divisional” applications which are like children of the original application), with the further possibility that these might be further split into more pending divisional applications. Arrow asked for a declaration effectively of non-infringement in relation to the remaining divisionals. Their basis was that their own product was obvious at the priority date, and therefore could not validly be covered by any patent.
The court allowed that request to go forward, essentially because there was a useful purpose to be served by the declaration. In making this decision, the judge, Kitchin J (as he then was) highlighted that the circumstances in which the application was made are “most unusual”.
More arrows and a shield: FKB (I)
The same approach was followed earlier this year in FKB v AbbVie (I), in which FKB sought a declaration in relation to another group of applications. Where there was a need to achieve commercial certainty, the court could grant a declaration that FKB’s own product was obvious or anticipated at the priority date. Carr J again stressed that the circumstances were unusual. Among other things, AbbVie held a series of pending divisionals and had made public statements about taking vigorous enforcement action.
That case is currently subject of an appeal, due to be heard in November. The appeal will decide whether a request for the form of declaration (that no valid patent could be granted covering a particular product) is contrary to the provisions of the Patents Act 1977, which say that no action for infringement or which puts in issue the validity of a patent may be brought before grant of the patent in question. To do so, it is said, would encroach on the role of the patent office. The counter-argument is that this is not an issue of the scope of the patent or patent application, or whether it could be valid, but an examination of what prior art existed at the relevant time, and what conclusions could be drawn in the light of that prior art.
But that could be an oversimplification, because it may still be relevant what the patent application says: is there content within the patent application which would enable the applicant to distinguish it from any relevant prior art. And also, because the specific nature of the declaration sought at this early stage is directed to a particular product, it is also possible to see considerable court resources being expended on answering a narrow question about one product when, if the question were asked after grant, the court would be invited to answer a broader question on validity of the patent. And this would be of assistance in opening up competition more broadly.
One can see therefore, in any event, justification for the remedy being available only in unusual circumstances. We will have to wait and see what the Court of Appeal says.
A different arrow too: FKB v AbbVie (II)
In this case FKB asked not just for a declaration (in relation to different patent applications), but also an injunction to restrain the AbbVie from threatening others in FKB’s supply chain in relation to any of these patent applications.
The parties accepted that they were bound in relation to the first type of arrows (Arrow v Generics), but AbbVie argued that there were no unusual circumstances. This was roundly rejected by the judge, Arnold J, who considered, among other things, that a number of actions before the European Patent Office, including withdrawing their agreement to the proposed text for grant just before grant, suggested that there was a real prospect of showing that AbbVie’s conduct in relation to its patent prosecution was for the purpose of shielding the patent from timely scrutiny, or at least to prolong uncertainty.
At the same time he accepted that there was a justifiable basis for thinking that an injunction might be awarded, adding to the potential armoury for new market entrants, albeit on demonstrating “unusual circumstances”. We wait to see what the Court of Appeal has to say on this score.
And a European focus? Patent attorneys pay attention?
It is not just the Court of Appeal who may be taking an interest in this area – either providing or denying competitors a tool which will assist competition, or providing guidance on the discretionary elements to make its use most effective.
The European Commission might also be interested in it, especially in the light of the judge’s comments about patent prosecution and perhaps other elements of the patent applicant’s conduct. There was a clear implication that there is a reasonable prospect of showing that such conduct was for an implicitly anti-competitive purpose – increasing or maintaining uncertainty in relation to patent rights.
It is perhaps ironic that the Commission have just had a competition law success against the generic companies in the EU General Court in Lundbeck (cases T-472/13, T-460/13, T-467/13, T-469/13, T-470/13, T-471/13). Those involved “pay-for-delay” agreements: agreements settling disputes between the pharma incumbent and a generic supplier in the pharma industry, on the basis that the generic company would not enter the market yet. The generics companies were required to pay a fine equal to the “delay” payment. The decision confirms that the Commission is right to have an interest in this field, but it also means that just such disputes as FKB v AbbVie will be more difficult to resolve without fighting them all the way.
Is there also a need for the conduct of the patent application process by incumbent pharma companies to be kept under close objective internal scrutiny (or scrutiny by external advisors) to ensure that there is no possibility that it could be characterised as for an implicitly anticompetitive purpose – increasing or maintaining uncertainty in relation to patent rights – which could significantly weaken the incumbent’s bargaining position? On the one hand the options on settlement are narrowed by the Lundbeck decision; on the other the party will not want adverse views being taken on their approach in prosecuting these type of applications.