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Sponsored briefing: Business as usual in the UK courts

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    • Pinsent Masons discusses exciting times for UK patent litigation in 2020 and beyond

    For the past four years, Brexit has dominated the legal headlines as well as the popular press. It would be remiss in 2020, the year in which the UK leaves the EU, to fail to acknowledge its significance. However, despite the political and economic uncertainty, we patent lawyers are confident that 2020 will see business as usual in the UK courts.

    Pinsent Masons has been at the forefront of many recent high-profile decisions. We have seen trends emerging that are refocusing the attention of the courts and patent strategy. As technology advances and disputes become more nuanced and commercially valuable, the courts are responding to parties’ attempts to push the boundaries of UK patent law. Notably, we have seen the Supreme Court take a renewed interest in patent law, including looking at tests developed in our case law and their fitness for purpose as the subject matter of patents evolves.

    Here we look at the changing landscape of patent litigation and how this may frame developments in patent law in the coming months.

    The importance of the UK courts for FRAND licences

    The past five years has seen an increase in high-tech patent cases including FRAND proceedings. Traditionally, life sciences cases were much of the bread and butter of the patent courts, but their perceived flexibility and commerciality in granting global FRAND licences is a major attraction in these complex and highly valuable disputes. It is this flexibility that is expected to be addressed in the pending decision in Unwired Planet v Huawei. The Supreme Court must decide whether to uphold the Court of Appeal’s¹ ruling that the UK court may order a global FRAND licence on the basis of infringement of a single patent in the UK. This could be an attractive result for standard essential patent (SEP) holders as the prospect of a judgment setting a royalty rate globally, or an injunction if those terms are not accepted, is likely to provide greater leverage in commercial negotiations with prospective licensees. Then, the UK courts may become the most important global courts for FRAND licence disputes.

    Such a ruling could also open the door to more FRAND litigation in the UK. We have already seen an upturn in the number of cases issued seeking declarations of FRAND licence terms in response to the Court of Appeal’s ruling. In 2019, for example, InterDigital filed patent infringement actions against Lenovo and Huawei. These seek, among other things, determination of FRAND terms for licences to InterDigital’s portfolio of SEPs, the first claims InterDigital had initiated in more than six years.

    However, the Court of Appeal’s decision in Unwired Planet does not suggest that a patentee has an independent right to ask the court for a declaration regarding the extent or scope of a licence required to be offered to an implementer, when the implementer has no interest in taking the licence. In TQ Delta v ZyXEL² (in which Pinsent Masons’ senior associate Mark Marfé and partner Deborah Bould acted for ZyXEL), the Court of Appeal confirmed that businesses using technology protected by SEPs can elect at any stage not to take global licensing terms offered by patent holders. Mark Marfé commented: ‘TQ Delta argued that it was necessary for the trial to determine FRAND terms to proceed, despite ZyXEL’s waiver. Its main argument, dismissed by the Court of Appeal, was that the outcome of the trial would assist it in future foreign litigation concerning the enforcement of its patent rights. The Court also gave weight to the cost arguments against proceeding to trial and said that it was entirely open to ZyXEL to walk away from a licensing agreement with TQ Delta.’

    The TQ Delta decision is a reminder of the importance of responding to developing jurisprudence and having a flexible litigation strategy. Recently, in Philips v ASUS³, the court distinguished TQ Delta on the grounds that the amount of past damages was not in dispute in that case, in contrast to in Philips, and ASUS must participate in the FRAND trial. Clearly, this area of law is developing at a pace.

    Of course, Unwired Planet is likely to impact all the pending FRAND cases, and 2020 will see further developments in this field.

    Changes in the life sciences industry

    The life sciences sector has remained active. Certainly, with advances in technology and biological medicines, there is less focus on traditional-innovator-versus-generics litigation. We are seeing more complex patent portfolios and issues, requiring more nuanced litigation strategies. These trends are refining the general principles of patent law in the UK.

    ‘We have seen trends emerging which are refocusing the attention of the courts and patent strategy. As technology advances, the courts are responding to parties’ attempts to push the boundaries of UK patent law.’

    In Actavis v ICOS4, the Supreme Court addressed the issue of obviousness of dosage regime patents. The fact that the concept of obviousness was addressed at Supreme Court level raised some eyebrows, but the outcome in the Court of Appeal was suggested by some to have implications for the wider pharmaceutical industry. The concern was that the courts would support a general proposition that the outcome of all routine enquiries cannot be inventive. It did not: the court confirmed that the decision was, and is always, based on the specific facts of the case and involves the weighing up of several factors, as does any case in which obviousness is raised.

    Pinsent Masons’ partner Charlotte Weekes, who, supported by Tamsin Cornwell (senior associate), was instructed by Teva and Actavis PTC, commented: ‘The Supreme Court judgment is perhaps more accurately described as a clarification of the test on obviousness and confirmation of ten relevant factors for consideration.’ The decision was applied by Arnold J (as he then was) for the first time in another of our cases, Allergan Inc v Aspire Pharma Ltd and Accord Healthcare Ltd v Allergan Inc5. Partner Christopher Sharp, who, with David Lancaster (legal director), Kirsteen McEwen (associate) and Sarah Parkin (solicitor), acted for Accord, commented: ‘The trial judge noted five key points from Lord Hodge’s decision in the Supreme Court, and applied those to a formulation scenario. The judge also made it clear that the cost of carrying out a clinical trial to assess the utility of a proposed invention was not a relevant factor when determining the question of obviousness.’

    Clearly, the UK courts remain an attractive forum for life sciences disputes, and 2020 will be no different. After the hearing in Regeneron v Kymab in February 2020, the Supreme Court will deliver another patents judgment, this time on sufficiency and enablement of an invention across the scope of its claims, another major area of patent law which has evolved from our case law.

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    Brexit – what about the CJEU?

    While the UK began the process to leave the EU on 31 January 2020 (at the time of writing it is in the transition period until 31 December 2020), Brexit will, at least initially, have no direct impact on UK patent law. The UK will remain a member state of the European Patent Organisation and domestic legislation (Patents Act 1977) will continue to apply.

    With the UK’s participation in the Unified Patent Court regime remaining uncertain, practically speaking the most obvious impact will be on the law surrounding supplementary protection certificates (SPCs), including the SPC manufacturing waiver6. The law that has developed around the interpretation of SPC legislation7 has been piecemeal and complex, leading to multiple referrals to the CJEU over the past ten years. After the transition period, however, it will no longer be possible for UK courts to make references for guidance on interpretation. After the transition period, other than pending referrals made prior to the end of that period, UK courts will not be required to follow CJEU judgments. They may be taken into account, but it will be for the court to determine the extent to which post-transition case law applies.

    In one of our recent cases, Teva v Gilead8, the CJEU clarified the legal test for determining whether or not a combination of active ingredients falls under the invention covered by the basic patent, and is therefore entitled to an SPC. The Court of Appeal9 applied the guidance, holding that to protect the combination product, the claim must require the presence of the two components, not just one. Gilead’s product was not entitled to an SPC. It will be interesting to see how the jurisprudence in this field develops: will the UK courts take inspiration from the CJEU or will they carve their own path? Charlotte Weekes, who, with Samantha Carter (associate), acted for Teva, says: ‘Either way, we are likely to see many more UK cases involving SPCs. In due course, the SPC manufacturing waiver legislation is also likely to lead to questions of interpretation with the UK currently intending to import it into our legislation in near identical form.’ It is, of course, far too early to tell, but the law applying to SPCs may become clearer in the UK than elsewhere, with its ability to independently develop and change the legislation where appropriate.

    About the authors

    Pinsent Masons (London – HQ) has one of the busiest UK patent practices. It has acted on high-profile, business-critical patent litigation in the life sciences and high-tech sectors, as well as competition and regulatory litigation and investigations and market-shifting transactions. It has advised on market-access strategies for more than 100 life sciences products in the last ten years. There are 30 individuals engaged in the firm’s patent practice, many of whom are listed as leading individuals in Chambers, The Legal 500 and Who’s Who International, in key offices across the UK and Europe. Key patent litigation clients include Teva, Accord, JUUL Labs, Magnesium Elektron, Archos and ZyXEL.

    Clare Tunstall (clare.tunstall@pinsentmasons.com) is head of IP and life sciences, and has more than 25 years’ experience of acting for clients on high-value, multi-jurisdictional patent actions. Many of her cases have been precedent-setting, reflecting her approach of challenging legal boundaries where necessary to achieve clients’ commercial goals. She is one of the few lawyers to have had multiple patent cases before the CJEU, the Supreme Court and the Court of Appeal, and has an unrivalled track record of success. She is listed as a leading individual in IP Stars’ Global Top 250 women and Managing Intellectual Property’s Top 250 Women.

    Charlotte Weekes (charlotte.weekes@pinsentmasons.com) has over 15 years’ experience working with businesses in the life sciences sector and has been involved in many of the precedent-setting patent cases in the UK. She handles pan-EU, business critical patent litigation, acting on ground-breaking patent litigation before the High Court and the Court of Appeal, and has represented clients in the Supreme Court and the CJEU.

    Nicole Jadeja (nicole.jadeja@pinsentmasons.com) is a life sciences lawyer who enjoys resolving IP disputes and providing strategic IP advice, as well as working at the interface between IP, commercial and regulatory law. With a science degree and first-hand experience of the life sciences industry (including working in clinical trials before qualifying as a lawyer), she is particularly well placed to understand and advise on issues relevant to that sector.

    Catherine Drew (catherine.drew@pinsentmasons.com) is a patent and medicines regulatory specialist with a degree in pathology. She has advised on pan-European patent and administrative litigation concerning regulatory exclusivity attaching to pharmaceutical products. She advises on the regulation of medicinal products, medical devices, cosmetics and other borderline products, including providing strategic advice to clients seeking to bring products to market. She has assisted clients in litigation before the High Court, the Court of Appeal and the Supreme Court, in addition to the European General Court and the CJEU.

    Christopher Sharp (christopher.sharp@pinsentmasons.com) has a strong background in patent litigation in relation to pharmaceuticals, medical devices and high-tech products, and co-ordinating pan-European patent matters. He has represented clients in the Patents Court, the Intellectual Property Enterprise Court, the Court of Appeal, the Supreme Court and the European Patent Office. With a chemistry background, he has considerable experience of acting for pharmaceutical companies, both in relation to small molecule and biologic drugs.

    David Lancaster (david.lancaster@pinsentmasons.com) has extensive experience of patent litigation, particularly in the life sciences and telecommunications sectors, including proceedings for determination of FRAND licence terms. He regularly represents clients in proceedings before the UK courts and is often involved in the co-ordination of multi-jurisdictional patent actions before European national courts and the European Patent Office.

    Mark Marfé (mark.marfe@pinsentmasons.com) is a patent litigator whose clients praise his technical understanding and handling of complex cases, including pan-European litigation. He has successfully represented clients before the UK courts at all levels. He advises on data commercialisation as well as having extensive experience of disputes involving wireless and other standards-based technologies, including FRAND disputes.

    1. [2018] EWCA Civ 2344
    2. [2019] EWCA Civ 1277
    3. [2020] EWHC 29 (Ch)
    4. [2019] UKSC 15
    5. [2019] EWHC 1085 (Pat)
    6. Regulation (EC) No. 2019/933
    7. Council Regulation (EEC) No 1768/92, now Regulation 469/2009/EC
    8. Case C 121/17
    9. [2019] EWCA Civ 2272

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