I OVERVIEW

Although the number of cases concerning patent validity and infringement that get to full trial in the UK, at around 20 or so each year, and constituting some 10 to 20 per cent of the actions that are commenced, is not in itself that large, the speed with which patent actions can be taken to trial to provide decisions as to both infringement and validity, and the well-reasoned nature of such judgments, means that the English courts play a significant role in most major patent disputes in Europe. This, coupled with the preparedness of the English courts to adjudicate on validity of the UK designations of European patents even though these may be under opposition at the European Patent Office (EPO), and the relative ease of establishing standing to seek declarations of non-infringement, means that English courts are often the first in Europe to provide a decision in such disputes.

There are two significant first-instance courts in the UK for patent matters – the Patents Court and the Intellectual Property Enterprise Court. Although certain courts in Scotland and Northern Ireland also have jurisdiction over UK patents, very few patent cases are brought in these jurisdictions.

II TYPES OF PATENT

UK national patents (prosecuted via the UK Intellectual Property Office (UKIPO)) and European Patents that designate the UK (prosecuted via the EPO) both have effect in the UK. The same substantive law applies to each, and once granted both are subject to the same patent litigation procedure, except that European patents are also subject to central revocation at the EPO instituted within nine months of grant. The UK has no utility model or similar protection, but there is no need for any, as the grant of UK national patents can be secured relatively quickly and, unlike some other European national patents, provides the benefit of pre-grant examination.

III PROCEDURE IN PATENT ENFORCEMENT AND INVALIDITY ACTIONS

Patent actions in the UK are usually brought in either the Patents Court or the Intellectual Property Enterprise Court, both of which are specialist courts and part of the High Court of England and Wales. Both have jurisdiction in relation to both infringement and validity, and it is common in infringement proceedings for the defendant to counterclaim seeking to revoke the patent in suit. Certain types of patent dispute may also be brought in the UK IPO, but in most cases these will be transferred to a suitable specialist court if one or other party so requests. Although their procedures differ somewhat, the jurisdiction of the two English courts is the same, and both can grant injunctions, but the Intellectual Property Enterprise Court (which is intended for smaller intellectual property disputes and for small and medium size enterprises and limits the degree of cost shifting) can only award financial relief of up to £500,000. Transfer between the two courts is possible but is rare, a major consideration being the protection that the cap on costs-shifting regime in the Intellectual Property Enterprise Court provides to small and medium-sized enterprises, although the Court has also heard smaller disputes between large enterprises. In each court, only a single judge will hear matters, but in the Patents Court this judge will be chosen from one of three specialist judges, or in less demanding cases one of several other designated judges of the Chancery Division. Deputy judges, who will typically be barristers drawn from the Patent Bar, also sit in both courts.

In infringement actions it is usual to bifurcate the issues of liability and financial relief, so there is no evidence directed to financial relief in the initial liability phase of the proceedings.

In the Patents Court,2 actions proceed by the service of a claim form and the subsequent exchange of statements of case, which are relatively brief as they should identify the issues between the parties (and the areas of agreement between them) rather than set out any argument. At a case management conference (CMC), the schedule through to trial and the date for trial will be set – typically about a year after the action has been started, although in suitable cases this can be much less if the court orders an expedited trial. An order will be made as to the number of expert witnesses that the parties can call (it is rare for this to exceed two on each side), and whether or not either party should provide further information to the other or respond to requests for admissions as to any matters in issue in advance of the exchange of evidence. An order will also be made as to whether or not there is to be any disclosure of documents relating to the matters in issue, and if so its scope. And although the default position in the Patents Court is for disclosure as to validity to cover a four-year period centred on the earliest priority date, in recent years the Patents Court has become increasingly prepared not to order this. As an alternative to disclosure as to infringement (where this is in issue), the defendant may provide a product or process description. Either party may make applications to the court at any time for further such procedural orders, such as applications for further disclosure or to amend a statement of case.

Expert reports, (as well as any statements of any witnesses of fact and Civil Evidence Act notices) are exchanged on the date fixed at the CMC, typically several weeks before trial, and usually attract expert reports in reply that are also exchanged on the date fixed at the CMC. However, such evidence cannot be relied on unless the other side has had an opportunity to cross-examine those who have given it at trial. Detailed briefs (misleadingly called 'skeleton arguments') setting out the respective parties' arguments are then exchanged shortly before trial. At the trial itself, which can take up to several days, it is usual for the patentee to 'open' by explaining its view of the case by reference to its skeleton argument, and then to offer its experts and any witnesses of fact up for cross-examination. The defendant will then offer its experts and any witnesses of fact up for cross-examination. It will then explain its view of the case by reference to its own skeleton argument, supplemented by reference to the cross-examination, and the patentee will then respond in like manner.

A written judgment is then delivered, usually within a few weeks of the end of trial, which is first shared in confidence with the parties for corrections to be suggested, before it is made public. A further short hearing then takes place to make orders consequential on the judgment, such as to whether to discount the award of its legal costs made in favour of the winning party to take account of any specific issues on which it did not win, whether or not to grant the losing party leave to appeal and, where the validity of the patent has been upheld in amended form, as to its amendment. Where the patentee succeeds in an infringement action, the Court will usually also order an injunction, and whether or not to stay this pending the outcome of any appeal. It will also order an enquiry as to damages or the taking of an account of the defendant's profits, and as to any preliminary financial disclosure directed to providing the patentee with sufficient information to make an informed election between the two. If a patent is held to be invalid, the Court will make an order for its revocation, suspended pending the outcome of any appeal.

Procedure in the Intellectual Property Enterprise Court3 differs from that in the Patents Court in that the statements of case should be more detailed and set out the arguments of the parties, and the default position, unless otherwise ordered at the CMC, is for no disclosure and for no oral testimony or cross-examination at trial, which should usually take no more than one day and at most no more than two.

In each court, the winner will recover a large proportion of its legal and court costs, subject to reduction to take account of those issues on which it failed. In the Patents Court this will have the effect of exposing the loser to paying the other side costs of the order of several hundred thousand pounds, and in heavy cases even more, in addition to having to meet its own costs. In the Intellectual Property Enterprise Court, costs recovery is capped at £50,000 for the liability phase and £25,000 for the damages phase, unless the behaviour of the losing party is such as to amount to an abuse of process.

In either court, a patentee is able to seek an interim injunction against infringement pending full trial on the merits. However, to succeed in such an application it must show that damages until trial would not be an adequate remedy and that it would suffer more damage pending trial if no interim injunction is granted than would the defendant were one to be granted. In extreme situations, injunctions may be sought without notice to the defendant.4 Evidence directed to the respective strengths of the parties' cases on the merits is not relevant as long as the action is not so weak that it can be struck out summarily. Because of the speed to trial on the merits (and the power of the court to order an expedited trial), it is rare for interim injunctions to be sought or granted in patent infringement cases except those concerning the entry into the market of generic pharmaceuticals, as the damage caused by the precipitate and irreversible price drop associated with such market entry is not generally regarded as capable of ready compensation in damages. A condition of the grant of an interim injunction is that the patentee must provide a cross-undertaking in damages in the event that it loses at the trial on the merits.5

A defendant may, and usually will, challenge validity by way of counterclaim in infringement proceedings, but may also initiate revocation proceedings at any time. Standing is not required, so anyone can seek to revoke a granted patent. Those who, although they are not threatened with infringement proceedings, wish to seek a declaration of non-infringement can provide to the owner of a patent of concern details of what it is they propose to do, which suffices to establish standing in the event that the patentee does not respond confirming that such activity does not infringe. A patentee may counterclaim for infringement in proceedings for revocation, always assuming that the party bringing the revocation proceedings is actually doing something that can be regarded as infringement and is not simply 'clearing the path' in advance of doing so.

An opposition at the EPO to a patent the subject of English litigation is not usually regarded as providing a basis for staying English revocation proceedings, as these can be brought to a conclusion much more quickly than an EPO opposition and its subsequent appeal, unless the EPO proceedings are already far advanced at the time.6

A party that fails to pursue a matter that could have been raised at trial on the merits will in general not be able to pursue it subsequently. Thus, a patentee should apply to make any amendments to its patent before the trial on the merits, so that the court can hear such application at the same time and determine the allowability of the amendments and whether these suffice to meet the validity attack. In general, the court will not allow such amendments to be made after trial, treating such an attempt as an abuse of process.7

Certain types of threat of patent infringement proceedings expose those who so threaten to liability in an action that can only be countered by a successful counterclaim for patent infringement. The old law as to what threats gave rise to such potential liability was recognised to be unsatisfactory, and new provisions entered into force on 1 October 2017.8

IV SUBSTANTIVE LAW

i Infringement

Infringement may be either direct (e.g., making, selling or importing an infringing product, using an infringing process or importing into the UK the direct product of such a process) or indirect (e.g., supplying or offering to supply in the UK means relating to an essential element of the invention, for putting the invention into effect knowing, or it being obvious to a reasonable person in the circumstances, that those means are suitable for putting, and are intended to put, the invention into effect in the UK). Moreover, a party that does not itself infringe may be liable for infringement as a joint tortfeasor with another party that has undertaken infringing acts, where such acts were done pursuant to a common design and the party that did not itself undertake such acts has made them its own.

In practice most controversies as to infringement concern whether or not the activity in issue falls within the scope of the claim. In Eli Lilly v. Actavis UK Ltd & Ors [2017] UKSC 48, the UK Supreme Court reinterpreted Article 69 of the European Patent Convention and the Protocol on its interpretation, and in so doing established a more liberal test for infringement in the UK than was previously the case, widening the scope for infringement by equivalence but permitting some reliance on patent prosecution history in litigation. Under the new approach, it is first necessary to establish whether the activity in issue infringes the claim as a matter of 'normal' interpretation. If not, then the scope of protection in relation to a variant over what is literally required by the claim is summarised as follows:

i) Notwithstanding that it is not within the literal [i.e. contextual] meaning of the relevant claim(s) of the patent, does the variant achieve substantially the same result in substantially the same way as the invention, i.e. the inventive concept revealed by the patent?

ii) Would it be obvious to the person skilled in the art, reading the patent at the priority date, but knowing that the variant achieves substantially the same result as the invention, that it does so in substantially the same way as the invention?

iii) Would such a reader of the patent have concluded that the patentee nonetheless intended that strict compliance with the literal meaning of the relevant claim(s) of the patent was an essential requirement of the invention?

These three questions are a reformulated version of those first set out in Improver Corporation v. Remington Consumer Products Ltd [1990] FSR 181 at [189], and subsequently regularly applied by the English courts until they fell out of favour in the light of certain observations made by the House of Lords in Kirin-Amgen Inc & Ors v. Hoechst Marion Roussel Ltd & Ors [2004] UKHL 46, the previous leading UK authority on infringement. The reformulation, in particular as to the second question,9 is such as to favour a finding of infringement. We have yet to see how it will be applied by the courts as in all but one case decided since in which it was in issue infringement was found without having to apply the doctrine of equivalents and in the one in which the finding was one of non-infringement the patentee did not seek to argue that the doctrine applied.

Patent prosecution history is not generally an admissible aid to construction in the UK, although in Eli Lilly the UK Supreme Court, while discouraging its use, accepts that it is:

[A]ppropriate where (i) the point at issue is truly unclear if one confines oneself to the specification and claims of the patent, and the contents of the file unambiguously resolve the point, or (ii) it would be contrary to the public interest for the contents of the file to be ignored [an example of which would be] a case where the patentee had made it clear to the [Patent Office] that he was not seeking to contend that his patent, if granted, would extend its scope to the sort of variant which he now claims infringes.

ii Invalidity and other defences

Although questions of patent validity arise during prosecution, it is in the context of challenges to the validity of granted patents that such issues are most fully and authoritatively developed. The only grounds on which the validity of a granted patent having effect in the UK can be challenged are excluded subject matter (e.g., a computer program), lack of industrial applicability,10 anticipation (lack of novelty),11 obviousness (lack of inventive step), insufficiency, added matter (i.e., subject matter has been added in the course of prosecution)12 or that the protection has been extended by post-grant amendment. In all these areas, with the exception of excluded subject matter and obviousness, courts in the UK do not regard their case law as being materially different from that of the EPO Technical Boards of Appeal, and will refer to such case law, where appropriate, in addition to their own. Where, as is typical, the patent in suit claims priority from an earlier application and there is prior art that becomes relevant if validity is lost, such claim is often challenged, either on technical grounds or, as has become increasingly common, on the basis that those who claimed priority lacked the right so to do when the filing that claimed priority was made.

As to excluded subject matter, in Aerotel Ltd v. Telco Holdings Ltd; Macrossan's Patent Application [2006] EWCA Civ 1371, the English court criticised the EPO approach in this area, in particular as to computer programs, and instead recommended that courts adopt the following four-step approach:

    1. properly construe the claim;
    2. identify the actual contribution;
    3. ask whether it falls solely within the excluded subject matter; and
    4. check whether the actual or alleged contribution is actually technical in nature.

This remains the law in the UK,13 and although the English courts, if asked, would probably disagree, the view of most practitioners is that the effect in practice of this approach has been to make it more difficult to secure protection in the UK for computer-implemented inventions than in the EPO.

The approach of the English courts to obviousness is the 'structured approach', as set out in Pozzoli Spa v. BDMO SA & Anor [2007] EWCA Civ 588:

(1) (a) Identify the notional 'person skilled in the art' and (b) Identify the relevant common general knowledge of that person;

(2) Identify the inventive concept of the claim in question or if that cannot readily be done, construe it;

(3) Identify what, if any, differences exist between the matter cited as forming part of the 'state of the art' and the inventive concept of the claim or the claim as construed;

(4) Viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps which would have been obvious to the person skilled in the art or do they require any degree of invention?

This differs from the 'problem and solution' approach of the EPO, but neither provides an answer to the ultimate question of whether or not the claimed invention is obvious. Both are instead intended to put the court or tribunal in the correct frame of mind in which to answer such question. On those occasions on which they have considered the matter, the English Patents Court has not concluded that the two different approaches should result in any difference in outcome.14

Although English courts do not regard their approach to insufficiency as inconsistent with that of the EPO Boards of Appeal, on much of whose case law the English courts base their approach, this has tended in practice, although this may now be changing, to be a more popular basis for attacking the validity of patents in the UK than in the EPO or in other European jurisdictions. As observed in Warner-Lambert Company LLC v. Generics (UK) Ltd (t/a Mylan) & Ors [2016] EWCA Civ 1006 at [29]:

[I]nsufficiency may be deployed as an attack on validity not only where the directions in the specification are inadequate to enable the skilled person to perform the invention at all (i.e., to produce something falling within a claim), but also where a claim is excessively broad having regard to the patentee's contribution to the art.

In this case, those claims to uses of a pharmaceutical for the treatment of certain types of pain that were broad enough to cover central neuropathic pain were held to be invalid in the light of a finding that there was no basis in the specification or the common general knowledge for saying that it was plausible that the pharmaceutical would be effective for such pain. This judgment is, however, under challenge in the UK Supreme Court.

It is rare in practice for UK patent litigation to involve one of the specific defences to infringement that are available – for example, as to private and non-commercial use, use for experimental purposes relating to the subject matter of the invention, and personal prior use. However, certain such defences, when pleaded by a defendant, may be a suitable subject of a preliminary hearing, for example, as to the existence and scope of an express or implied licence (which may be determinative in favour of the defendant), or as to whether or not a defence based on competition law can be struck out as unarguable (as otherwise leaving it to be determined at trial would massively expand the scope of such hearing and the nature of the discovery to be given and evidence adduced). Lack of knowledge on the part of the defendant is not a defence to an allegation of direct infringement, although it may be to one of indirect infringement, and can also provide a basis for seeking to limit damages in the case of direct infringement.

V FINAL REMEDIES FOR INFRINGEMENT

A patentee that succeeds in establishing that its patent is valid and has been infringed will be able to secure damages,15 or at its option an account of the profits made by the defendants by reason of such infringement. It will also almost always be able to secure a permanent injunction against further infringement, although this will typically be stayed, on the same principles as apply to the grant of interim injunctions, as discussed above, until there is no further prospect of appeal.16

In the case of patents that have been declared to be essential to a technical standard, an injunction can also be avoided by entering into a licence on terms established by the court. However, absent doing so, an injunction will be granted notwithstanding that the patent in issue is essential to a standard.17

VI OTHER TYPES OF PATENT PROCEEDING

English courts show considerable flexibility in terms of the types of proceeding that may be brought in them, as demonstrated by their preparedness to grant declarations of non-essentiality in relation to patents declared to a standards setting organisation as essential to a technical standard,18 and more recently by making declarations that certain activities were anticipated or obvious as at certain dates, notwithstanding that there were no longer any patents in existence in the UK that claimed such activities.19

More traditionally, the Patents Act 1977 expressly provides for proceedings for declarations of non-infringement to be brought when a patentee has failed to acknowledge that an adequately described product or process does not infringe. Proceedings may also be initiated to challenge title to a patent, or by employee or ex-employee inventors seeking compensation for inventions that have proven to be of outstanding benefit to the employer.

VII APPEAL

Appeal from the UK Intellectual Property Office lies to the Patents Court. Appeals from the Patents Court and, in patent matters, the Intellectual Property Enterprise Court lie to the English Court of Appeal, but only with the leave of either the lower court or the Court of Appeal.20 The Court of Appeal will typically hear appeals some 18 months after the decision at first instance, although in urgent cases this period can be truncated considerably. The panel in the Court of Appeal consists of three judges – at least one, but possibly two, of whom will have had experience of patent proceedings as specialist judges at first instance. Further appeal lies to the UK Supreme Court, but only with its leave, which is only rarely given, with the result that in some years the UK Supreme Court, which has no judges with specialist experience of them, may hear no patent actions. The panel in the Supreme Court consists of at least five judges and now has, for the first time, as a member of its panel a judge with experience of patent proceedings as a specialist judge at first instance.

Appeals are conducted on the basis of the papers that were before the court at first instance and the transcripts of any cross-examination of witnesses and experts in such court. There is no real scope to introduce new evidence on appeal, as it is hardly ever the case that such evidence could not have been secured before the hearing at first instance. Neither, as the appeal should be limited to matters of law, is there any real scope to challenge on appeal findings of fact at first instance unless these are obviously wrong. It is also extremely hard to challenge assessments at first instance of the evidence and findings based on these. Issues of patent claim construction do, however, provide a relatively fertile basis for appeal, as these rarely turn on the evidence.

VIII THE YEAR IN REVIEW

The most significant patent decision of the English courts in the past 18 months was that of the UK Supreme Court in Eli Lilly v. Actavis UK Ltd & Ors [2017] UKSC 48, which is discussed above, and in which the court extended the test for infringement in the UK, widening the scope for infringement by equivalence.

From an international point of view, the most significant recent decision was that in Unwired Planet International Ltd v. Huawei Technologies Co Ltd & Anor [2017] EWHC 711 (Pat), in which the English Patents Court determined a fair, reasonable and non-discriminatory (FRAND) royalty on a global basis for the use of a patent that had been declared to be, and was found to be, essential to a mobile telephony standard, thereby adding a further data point to the very limited number of FRAND determinations made by courts anywhere in the world. An appeal against the decision has been already heard and its outcome is eagerly awaited.

The most significant pending decision is that of the UK Supreme Court in the appeal against the decision of the English Court of Appeal in Warner-Lambert Company LLC v. Generics (UK) Limited t/a Mylan v. Warner-Lambert Company LLC [2016] EWCA Civ 1006, mentioned above. The decisions here of the lower courts concerning the validity and infringement of 'Swiss form' claims to new medical uses addressed primarily the difficulties of construction that such claims present when they are asserted, either on a direct or indirect infringement theory, against medicinal products that do not have a marketing authorisation for the patented use, but where it can be envisaged that some degree of patented use of such products will take place in practice. However, the decision of the Supreme Court will focus on one aspect of the decision of the lower courts, namely the threshold of 'plausibility' that such a claim must meet if it is not be regarded as insufficient.

IX OUTLOOK

The hottest current topic for UK patent litigation is Brexit, by which the UK will leave the EU as from 30 March 2019, and its effect on the Unified Patent Court Agreement (UPCA), which would confer jurisdiction on a new Unified Patent Court, concurrent with that of national courts of countries party to the UPCA, over any European patent designating such country, unless such patent had been opted out before an action was brought in the Unified Patent Court in respect of it. Although the UK has now ratified the UPCA, its entry into force remains contingent on the resolution of an ongoing constitutional challenge in Germany to its adherence to the UPCA. Unless the challenge is rejected before Brexit occurs it is hard to envisage how the UPCA could enter into force as to the UK, absent its amendment, which would raise issues as to the consistency of any amended such agreement with the EU acquis.


Footnotes

1 Trevor Cook is a partner at Wilmer Cutler Pickering Hale and Dorr LLP.

4 See, for example, Warner-Lambert Company Llc v. Teva UK Ltd & Ors [2011] EWHC 1691 (Pat).

5 For an example of an assessment of damages payable under a cross-undertaking in damages given on the grant of an interim injunction, after the patentee had lost on the merits, see AstraZeneca AB & Anor v. KRKA dd Novo Mesto & Anor [2014] EWHC 84 (Ch); [2015] EWCA Civ 484.

6 IPCom GmbH v. HTC Europe Co Ltd [2013] EWCA Civ 1496.

7 Warner-Lambert Company LLC v. Generics (UK) Ltd (t/a Mylan) & Ors [2016] EWCA Civ 1006 at [135] to [183].

8 Section 70 Patents Act 1977 as replaced by new Sections 70, 70A, 70B, 70C and 70D by the Intellectual Property (Unjustified Threats) Act 2017. See https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/633353/unjustified-threats-act-guidance-for-business.pdf.

9 The reformulated second question differs especially from its earlier version in providing for a variant to infringe even if the skilled addressee did not know in advance, and it was not obvious, that it would work, as the test is applied on the assumption that the skilled addressee knows that the variant works to the extent that it actually does so, making it hard to envisage when the second question would now ever be answered in the negative.

10 See Human Genome Sciences Inc v. Eli Lilly and Company [2011] UKSC 51 for an authoritative statement of the law.

11 See Synthon BV v. Smithkline Beecham plc [2005] UKHL 59 for an authoritative statement of the law.

12 For a relatively recent appellate decision holding a patent to be invalid on this basis see Novartis AG & Ors v. Focus Pharmaceuticals UK Ltd & Ors [2016] EWCA Civ 1295 at [52] to [76].

13 See also, at an appellate level, Symbian Ltd v. Comptroller-General of Patents [2008] EWCA Civ 1066; HTC Europe Co Ltd v. Apple Inc [2013] EWCA Civ 451 and Lantana Ltd v. The Comptroller General of Patents, Design and Trade Marks [2014] EWCA Civ 1463.

14 For a critique of the Problem and Solution Approach see Actavis UK Ltd v. Novartis AG [2010] EWCA Civ 82 at [25] to [41].

15 For a summary of the principles applicable to such an assessment see Ultraframe (UK) Ltd v. Eurocell Building Plastics Ltd & Anor [2006] EWHC 1344 (Pat).

16 The Court will in certain special cases exercise its discretion to qualify an injunction, for example, so as not to apply to supplies of an infringing medical device for implanting in patients for whom this is the only such device that is suitable, as in Edwards Lifesciences LLC v Boston Scientific Scimed Inc [2018] EWHC 1256 (Pat).

17 Unwired Planet International Ltd v. Huawei Technologies Co Ltd & Anor [2017] EWHC 711 (Pat), [2017] EWHC 1304 (Pat).

18 Nokia Corporation v. Interdigital Technology Corporation [2005] EWCA Civ 614.

19 Fujifilm Kyowa Kirin Biologics Company Ltd v. AbbVie Biotechnology Ltd [2017] EWHC 395 (Pat).

20 The considerations to be taken account of in determining whether or not to grant such leave were reviewed in Teva UK Ltd v. Boehringer Ingelheim Pharma GmbH & Co KG [2016] EWCA Civ 1296.