The Court of Appeal has delivered its long-awaited judgment in the Actavis v Eli Lilly dispute, ruling that Actavis is not entitled to a declaration of non-infringement (DNI) of Eli Lilly's European patent.
The decision turned on the court's interpretation of section 60(2) of the Patents Act (indirect infringement by supply of means relating to an essential element of the invention), following its broader conclusion on the construction of the patent's claims than had been given at first instance. The Court of Appeal firmly discouraged consideration of a patent's prosecution history as a guide to its construction. It also confirmed the judge's conclusion that the conditions applying to a declaration of non-infringement in the English courts are a matter of English procedural law, even where the declaration sought concerns non-UK designations of a European patent.
The Court of Appeal's ruling (Actavis UK Ltd v Eli Lilly & Company  EWCA Civ 555 (25 June 2015)) overturns the decision of the Patents Court to award DNIs regarding the UK, French, Italian and Spanish designations of Eli Lilly's patent. It also conflicts, in part, with the conclusion of the Oberlandesgericht Düsseldorf (the Düsseldorf Court of Appeal) regarding the German designation of the same patent.
Actavis sought a DNI from the English Patents Court regarding European patent number 1 313 508 (the "patent"). Unusually, the DNI it sought was to cover not just the UK designation of the patent, but the French, Italian, Spanish and German designations too.
Following an early procedural spat, the Court of Appeal ruled that Eli Lilly had, in the course of correspondence, conceded jurisdiction regarding the non-UK designations of the patent ( EWCA Civ 517). However, despite the fact that the Court first seized was in England, the Landgericht Düsseldorf accepted infringement proceedings brought by Eli Lilly in that forum regarding the German designation of the patent, and Actavis discontinued that part of its claim in the English proceedings which related to the German designation of the patent.
On 27 November 2013, Mr Justice Arnold ruled that Actavis' proposed medicine did not infringe Eli Lilly's patent, as a matter of English law and pursuant to the laws of France, Spain and Italy. He awarded DNIs regarding each of the designations of the patent in issue. In reaching his decision, he referred to the prosecution history of the patent as an aid to its construction. Eli Lilly appealed.
In the Court of Appeal, Lord Justice Floyd gave the only reasoned judgment.
The patent contains two classes of claims:
- Claims 1-11 are in "Swiss" form (i.e. "Use of A in the manufacture of a medicament for the treatment of disease B"), in which pemetrexed disodium is to be administered in combination with vitamin B12 or a (specified) pharmaceutical derivative thereof.
- Claims 12-14 are in "purpose-limited product" form (i.e. "Product A for use in the treatment of Y"), in which the product contains pemetrexed disodium and vitamin B12 or a (specified) pharmaceutical derivative thereof.
Construction - the law
Floyd LJ reviewed in some depth the history of the law on construction in the UK. He noted that the English courts do not apply a general doctrine of equivalence to the construction of patent claims. However, this did not mean that the existence of equivalents which have no material effect on the way the invention works have no bearing on the proper (purposive) interpretation of a patent claim. On the contrary, "it has long been the law that such equivalents form part of the background of facts known to the skilled reader which would affect what he understands the claim to mean". In this way, English law ensures that due account is taken of any element which is equivalent to an element specified in the claims, as it is required to do pursuant to the European Patent Convention 2000 (EPC 2000).
In some cases, the 'Improver' or 'Protocol' questions are useful as an aid to construction. These are: (1) Does the variant have a material effect upon the way the invention works? If yes, the variant is outside the claim. If no? (2) Would this (i.e. that the variant has no material effect) have been obvious at the date of publication of the patent to a reader skilled in the art? If no, the variant is outside the claim. If yes? (3) Would the reader skilled in the art nevertheless have understood from the language of the claim that the patentee intended that strict literal compliance with the primary meaning was an essential element of the invention. If yes, the variant is outside of the claim.
In issue in the present appeal was whether, when considering the second Protocol question (ie would the variant have no material effect), the skilled person could use information which was not 'common general knowledge' but could very easily be obtained. The Court of Appeal ruled that such information could not be used and it was "axiomatic that one is concerned with what would be obvious, in the sense of immediately apparent, to the skilled reader from a reading of the specification informed by common general knowledge".
Construction - prosecution history as a guide to construction?
May the prosecution history be used as a guide to construction? In the present case, it was common ground between the parties that the prosecution history was "not inadmissible" in this context.
Floyd LJ was unimpressed with this position and expressed feeling "difficulty" endorsing the reasoning of Arnold J in turning to the prosecution history at first instance. Floyd LJ said that he saw little purpose in doing so. He noted that patent offices are in any event usually concerned with patentability, not the scope of protection conferred by the claims.
As the Court of Appeal was not asked to decide upon the admissibility of the prosecution history in the present case, it refrained from making a ruling. But litigants should heed the warning from Floyd LJ in this case that "a rule which merely discourages reference to material, as opposed to treating it as inadmissible, has obvious practical disadvantages, as in the absence of an exclusionary rule the cost and expense associated with its deployment will almost invariably be incurred".
It therefore seems that the Court of Appeal would be likely to rule the prosecution history inadmissible as a guide to the construction of the claims, should it be given the opportunity to do so.
Construction - the patent
It is interesting to note that in its analysis on construction the Court of Appeal did not distinguish between the Swiss form claims and the product claims of the patent in issue. There were two main issues.
1. Was the claim limited to the use of pemetrexed disodium, or did it extend to cover use of other pemetrexed salts?
Actavis contended that the active pharmaceutical ingredients in its medicine would not be pemetrexed disodium (as claimed in the patent) but one of (a) pemetrexed diacid, (b) pemetrexed ditromethamine or (c) pemetrexed dipotassium (the 'Actavis APIs'). Did the claim extend to these salts?
Floyd LJ agreed with the judge that whether it was the Swiss form claims or the purpose-limited product claims that were considered, the patentable invention involved the making of the medicament or the product. Once a claim includes the step of manufacturing a medicament for treating a disease, it necessarily includes a requirement that the manufactured medicament is to some extent effective for treating the disease.
It was common ground between the experts in the present case that one could not predict in advance (a) whether a particular salt form of a parent molecule could be made, (b) what its properties would be once it was made, or (c) whether it would affect the efficacy of the drug.
So although the parties did not dispute that in the variants (i.e. the different cations/salts in the Actavis APIs) had no material effect upon the way the invention worked, this would not have been obvious to the skilled team (which included a chemist) without resort to information which would not have been 'common general knowledge'. In other words, Eli Lilly failed at the second Improver question.
Further, the skilled person would have understood that the patent was clearly limited to the disodium salt. Several parts of the specification supported this inference, including the fact that it referred either to the very broad class of "anti-folates" or to pemetrexed disodium, but not to an intermediate category. So Eli Lilly failed at the third Improver question too and the claims did not extend to the Actavis APIs. But that was not an end to the case.
2. Was the claim limited to the use of pemetrexed disodium in solid form, or did it extend to a solution which contained pemetrexed ions and sodium ions?
On this point the Court of Appeal reached the opposite conclusion to Arnold J, ruling that the skilled reader would understand that claim 1, at least, included a solution containing pemetrexed ions and sodium ions (i.e. the dissociated salt in the form in which it exists in solution).
Floyd LJ explained that while one form of the medicament covered by the claims would be a solid dosage form, it was obvious that another form was an injectable solution, arrived at by dissolving pemetrexed disodium in water. The skilled person would consider that pemetrexed disodium was present in the medicament because it included a solution containing pemetrexed ions and sodium ions.
Further, the skilled reader would not be concerned with the history of the solution: an identical solution arrived at in a different way would also be considered to fall within the ambit of the language. Nor would the skilled person consider that an excess of the 2:1 ratio of sodium ions (i.e. disodium) to pemetrexed ions would take the solution outside the scope of the claim. (Background to this is that the instructions for reconstituting Eli Lilly's product included dissolution in saline solution, which increases the number of sodium ions present). Nor would the presence of other ions in the solution take it outside the scope of the claim.
Infringement - direct
As explained above, the claim did not extend to cover use of other pemetrexed salts. Eli Lilly's case on direct infringement therefore failed. This conclusion was consistent with that of the Oberlandesgericht Düsseldorf (the Court of Appeal in Düsseldorf) regarding the German designation of the patent. The Court of Appeal was not prepared to issue a DNI concerned solely with direct infringement (on which please see more below).
Infringement - indirect
In accordance with section 60(2) of the Patents Act it is an act of indirect infringement, in short, to supply or offer to supply in the UK the means relating to an essential element of the invention, for putting the invention into effect, where the requisite knowledge element is present.
In the present case, the facts gave rise to an indirect infringement argument because, in the ordinary course, each of Actavis' APIs would be dissolved and/or diluted in saline, which is a source of abundant sodium ions, before administration to the patient.
Arnold J ruled that this did not give rise to contributory infringement because [solid] pemetrexed disodium was not used in the manufacture of a medicament. But following its ruling on construction, the Court of Appeal disagreed with the judge on infringement. Floyd LJ said:
"A means for releasing pemetrexed ions into solution relates to an essential element of the invention where the invention calls for pemetrexed ions and sodium ions in solution, particularly as it is the presence of the pemetrexed ions in the manufactured medicament which is essential for its efficacy as a medicament. The invention is then put into effect when the pharmacist makes up the solution using pemetrexed dipotassium (or the other Actavis APIs), because there comes a stage in the course of that activity when pemetrexed disodium is present and used."
In Grimme Maschinenfabrik v Scott  EWCA Civ 1110, the Court of Appeal recognised that the 'essential means' of section 60(2) did not have to be something which could be used without alteration by the buyer. Following this reasoning, pemetrexed dipotassium was a means relating to an essential element of the invention.
The DNIs sought by Actavis were therefore refused as a matter of English law. It was common ground between the parties that there was no detectable difference in the laws of France, Italy and Spain on the approach to contributory infringement. Declarations were therefore refused with respect to those other countries also.
The Court of Appeal's conclusion on indirect infringement contradicted that of the Oberlandesgericht Düsseldorf. Floyd LJ had the following comment:
"Whilst the decision of the Oberlandesgricht is entitled to great respect, including as it does distinguished patent judges, I am not persuaded by its reasoning to change the view which I have formed on the issue of contributory infringement. Firstly, if by its requirement that "the means must be configured in such a way that a direct use of the invention is possible" it is indicating that pemetrexed dipotassium cannot be an essential means, then that result is inconsistent with Grimme and it is not open to us to follow it. Secondly, it seems to me that the Oberlandesgericht has failed to give sufficient recognition to the fact that, applying the teaching of the patent, it is sufficient if one finds in the medicament in question sodium ions and pemetrexed ions in solution in a ratio of at least 2:1. Rather, as I read the judgment, the court appears to understand "pemetrexed disodium" as describing only that substance in solid form. I have explained why I do not agree with that construction."
The conditions applying to a declaration of non-infringement in the English courts are a matter of English procedural law
A substantial portion of the Court of Appeal's judgment was dedicated to considering, under the Rome II regulation (864/2007/EC) ('Rome II'), which law/rules govern the grant of a DNI by the UK courts with regard to non-UK designations of European patent. In other words, did Actavis just have to satisfy the UK test for obtaining a DNI or did it have to satisfy the requirements of the law in the non-UK designated states? No ruling as such was made because one was not necessary in view of the conclusion that Actavis was not entitled to the DNIs sought. However, the Court of Appeal took the opportunity to issue guidance.
If the rules for the admissibility of a DNI fall under Rome II then the legal requirements of the foreign jurisdictions ("lex causae") are applicable. In arguing that it only had to comply with the UK requirements ("lex fori"), Actavis relied on Article 1(3) of Rome II which states that it "shall not apply to evidence and procedure". So the court considered whether the rules for the admissibility of a DNI are procedural.
The Court of Appeal opined that the rules for the admissibility of a DNI are procedural. Although Article 15 of Rome II applied the 'lex causae' to some matters which the English common law would have treated as procedural, it did not encompass the rules for the admissibility of a DNI. Those conditions were procedural and as such subject to the requirements of English law.
Scope of relief
In a post-script to the judgment, the Court of Appeal noted that after the judgment was circulated to the parties for suggested editorial corrections, and very shortly before it was due to be formally handed down, Actavis wrote to the court with a number of further requests. This led to delay in handing down of the judgment and (among others) the following rulings/directions:
- No DNI limited to direct infringement would be made. Actavis sought DNIs in order to clear the way as against the patent for the launch of specific products, in order to have protection from an action for infringement brought by Eli Lilly if they launched those products. The proposed declaration limited to direct infringement would not achieve this purpose. It was also phrased in a way which could be misleading to readers who were not alerted to the limited nature of the conclusion, which was undesirable.
- No declaration would be made containing a positive declaration that supplying or offering to supply the Actavis APIs would be an infringement under section 60(2) of the Patents Act "if and only if Actavis knows, or it is obvious to a reasonable person in the circumstances, that such Actavis A[P]I is suitable and intended for dilution or reconstitution in the United Kingdom so as to achieve a molar ratio of sodium to pemetrexed ions of 2:1 or more". Such wording failed to record what the court had actually decided, which was that the supply of Actavis' product for reconstitution in saline, in Actavis' admitted state of knowledge, would be an infringement of the patent.
- A further request for a DNI, in the context of the Actavis APIs with instructions for reconstitution in dextrose (instead of saline), would be remitted to the Patents Court. This was without prejudice to Eli Lilly's right to contend that the raising of the issue at the present stage of the proceedings was an abuse of process.
The Court of Appeal's willingness to issue much-awaited guidance on 'prosecution history estoppel' and the law governing the award of DNIs for non-UK designations of a European patent in this case is commended. Although, in view of its other rulings, no decision was needed in the present litigation on those issues, clarification was needed and the guidance will assist litigants and their advisors well beyond the present case.
The Court of Appeal's decision in this case also contributes to the ongoing development of the law of indirect infringement under section 60(2) of the Patents Act. Whereas Arnold J considered there not to be infringement because Actavis had not "used pemetrexed disodium in the manufacture of a medicament as required under claim 1", the Court of Appeal did not consider the provision to be limited so stringently by the language of the claim. Rather, what was critical was that means relating to an essential element of the claim were to be supplied and the pharmacist (a later party in the supply chain) would put the "invention" into effect when making up the solution containing Actavis API and saline.
It has long been apparent that for medications requiring some sort of making up by a pharmacist, there may be greater scope for a finding of infringement of a related Swiss form claim. However, the Court of Appeal's ruling in this case is more fundamental than this, concerning the scope of section 60(2) rather than the construction of the Swiss form claim in issue.
The scope of section 60(2), and the construction of a Swiss form claim, is presently in contention in the dispute between Warner-Lambert and Actavis. Our most recent commentary on that case is available here. The first instance trial in that case is being heard by Mr Justice Arnold in the Patents Court this week.