The Irish Commercial Court has departed from a long standing precedent and refused to suspend national patent revocation proceedings whilst parallel opposition proceedings are ongoing in the European Patents Office (the “EPO”). This has the potential to result in an increase in litigating national patents devolved from European patents in Ireland. In this article, IP litigator Michael Finn highlights some of the key aspects of the decision.
Some background facts - the basis for the application to stay the proceedings
Eisai are the holders of an Irish Patent, derived from a European Patent under the European Patent Convention, which includes compounds that may be used to treat Alzheimer’s disease. Opposition proceedings in the EPO are currently under appeal to the Technical Bureau of Appeal (“TBA”).
Eli Lilly also initiated national patent revocation proceedings in Ireland’s Commercial Court, which is an internationally recognised forum for fast-tracking commercial disputes. IP disputes have an automatic right of entry to the Commercial Court provided certain conditions are met.
Eisai asked the Court to suspend the entire Irish proceedings pending the determination by the TBA. It relied on the leading Irish precedent of Merck & Co Inc. v GD Searle & Co, in which the High Court suspended Irish revocation proceedings pending the decision in opposition proceedings in the EPO. Eisai emphasised the potential waste of resources that would result from simultaneous proceedings before two separate bodies. It also opposed the argument by Eli Lilly that there was an urgent need to conclude the Irish proceedings, and highlighted the lack of urgency which it alleged Eli Lilly had demonstrated in practice, including their failure to apply for an expedited hearing before the TBA.
On 31 July 2018, the Court refused to suspend the entire proceedings. The Court suspended the trial until late 2019. However, in a departure from previous Irish case law, the Court directed that all pre-trial steps in the proceedings should go ahead.
The Court concluded that under Merck the starting point was that a suspension should be granted. The Court should then consider whether any prejudice overrides this starting point. The Court recognised that the approach of the English courts has changed since Merck, in particular in IPCom v HTC and Virgin Atlantic v Zodiac as well as other leading cases. The Court determined that the key factors to be applied were whether Eli Lilly had provided sufficient reasons as to why the proceedings should not be suspended, and where the balance of justice lies.
In deciding to suspend the trial until November 2019, the Court was influenced by the prospect that the EPO proceedings could potentially be resolved completely within 12 months, and the potential waste of court resources would outweigh other considerations. (Eli Lilly had also conceded at hearing that it would not seek a trial in Ireland in 2019.)
However, the Court was not equally convinced it should suspend the other steps in the proceedings.
In ruling that the pre-trial steps should carry on, the Court considered the reasons Eli Lilly gave to oppose the suspension, which demonstrate the types of issues that may sway the Court:
- The Court was influenced by the importance of Eli Lilly’s need to make long-term, essential commercial decisions in relation to capital investments, sourcing raw materials, technology transfer and obtaining regulatory clearance to expand its manufacturing facility.
- The Court was mindful that, if the pre-trial steps in the Irish proceedings did not proceed, there could be a further delay of at least one year to the Irish revocation proceedings if the EPO decides to uphold the validity of the patent.
- It was of “very great importance” that the patent concerns the potential treatment of Alzheimer’s disease. The Court emphasised the strong public interest in ensuring that the risk of any delay to a potential treatment to this devastating disease should be minimised.
- Unlike in Merck, Eisai had not provided Eli Lilly with an undertaking that they would not institute infringement proceedings pending the determination of proceedings before the EPO.
- The Court was not fazed by the fact that its ruling could be appealed to the Court of Appeal, and pointed out the fact that significant certainty could be obtained from its ruling because the Court of Appeal cannot typically overturn findings of primary fact.
- Finally, the Court did not lose sight of the fact that the clinical trials may fail. The Court recognised that the treatment may not be a success but acknowledged “there is at least a chance it will” and that “tilts the scales significantly against a stay of all steps in the proceedings.”
It remains to be seen whether the decision will be appealed. As a next step, discovery and all pre-trial steps will proceed and the suspension of the trial will be revisited in late 2019.
There is no ‘one size fits all’ approach to applying for or opposing applications to suspend revocation proceedings of national patents devolved from European patents. Both patentees and challengers litigating in Ireland should be aware of this decision, and the arguments that swayed the Court to depart from precedent.