1 Our regular Patent and Pharma update aims to keep you informed of recent developments in United Kingdom and European law relating to patents and the pharmaceutical industry. 1. CJEU sets out new test in Teva v Gilead Art 3(a) SPC reference Teva v Gilead CJEU Case C-121/17 (25 July 2018) In our last Patent and Pharma update, we reported on the opinion of Advocate General Wathelet (the “AG”) on the interpretation of Article 3(a) of the SPC Regulation in C121/17 (Teva v Gilead). Since that update, there have been significant developments in that case with the Court of Justice of the European Union ("CJEU") providing their guidance as to the interpretation of Article 3(a) (reported on our IP blog here) and the application of that guidance by the English referring court. In its decision of 25 July 2018, the CJEU did not adopt the test proposed by the AG but instead formulated its own test for Article 3(a). It ruled that: "Article 3(a) of [the SPC Regulation] must be interpreted as meaning that a product composed of several active ingredients with a combined effect is ‘protected by a basic patent in force’ within the meaning of that provision where, even if the combination of active ingredients of which that product is composed is not expressly mentioned in the claims of the basic patent, those claims relate necessarily and specifically to that combination. For that purpose, from the point of view of a person skilled in the art and on the basis of the prior art at the filing date or priority date of the basic patent: the combination of those active ingredients must necessarily, in the light of the description and drawings of that patent, fall under the invention covered by that patent, and each of those active ingredients must be specifically identifiable, in the light of all the information disclosed by that patent." Following the CJEU's decision in July, the case of Teva v Gilead returned to the English court that had made the referral to the CJEU in the first place, for Mr Justice Arnold to apply the CJEU's guidance. The generics in that case considered that it was clear from the CJEU's guidance that the SPC in question was invalid, and asked the judge to rule in their favour. In contrast, Gilead considered that the CJEU had articulated a new test that depended on expert evidence as to the prior art and common general knowledge of the skilled person, and as a result, the English court should permit it to submit expert evidence on these issues before coming to a decision. PATENT AND PHARMA UPDATE OCTOBER 2018 London Table of contents 1. CJEU sets out new test in Teva v Gilead Art 3(a) SPC reference 1 2. CJEU clarifies law applicable to parallel trade of medicinal products from "new" EU Member States 2 3. Are prior art references the blueprint to your claim construction? 3 4. Other issues relevant to patent litigation 4 5. Bulgaria ratifies the UPCA Provisional Application Protocol but delays still in store for the UPC 5 6. Brexit developments 6 7. Personalised Healthcare and the Future of Pharma 8 8. Table of patents decisions 9 9. Table of other UK decisions relevant to the pharmaceutical sector 15 10. Contacts 17 Related links Previous Patent and Pharma update (July 2018) Our dedicated UPC and UP hub Personalised Health and the Future of Pharma Hub Our IP blog Our Brexit Hub PATENT AND PHARMA UPDATE 2 Ultimately, Mr Justice Arnold rejected Gilead's request for new evidence and agreed with the generics that the SPC was invalid (Teva v Gilead  EWHC 2416 (Pat)). In his view, in order to fulfil the first limb of the CJEU's test: "…the combination must be one that the skilled person would understand, on the basis of the description and drawings and their common general knowledge, to embody the technical contribution made by the patent." In relation to the second limb of the CJEU's test, Mr Justice Arnold stated: "…the product must be specifically identifiable by the person skilled in the art in the light of the description and drawings and the prior art, which must mean their common general knowledge, as at the filing date or priority date of the patent, and not merely in the light of information which becomes available later." If Gilead appeal Mr Justice Arnold's decision, it will be interesting to see whether the Court of Appeal will agree with the judge's interpretation of the CJEU's guidance. It will also be interesting to see how the courts in other European jurisdictions interpret the CJEU's guidance and whether they come to the same view as the English court. The CJEU guidance and the English court's application of such guidance are likely to impact not just SPCs based on claims to combination products where one combination partner is claimed in functional terms, but also any SPCs that are based on claims in which the active ingredient of a medicinal product is claimed in functional terms, e.g. claims to antibodies or claims to Markush formulae. We have previously reported that there are two further references on the interpretation of Article 3(a) pending at the CJEU: one from the English Court of Appeal in the case of Sandoz v Searle regarding the SPC for darunavir, and one from the German Federal Patent Court regarding the SPC for sitagliptin. We will continue to follow these cases and report on further developments in future updates. Alex Freelove, Senior Associate London 2. CJEU clarifies law applicable to parallel trade of medicinal products from "new" EU Member States Pfizer Ireland Pharmaceuticals v Orifarm GmbH CJEU Case C-681/16 (21 June 2018) On 21 June 2018, the CJEU in Pfizer v Orifarm issued an interesting decision clarifying the Specific Mechanism that applied to prevent parallel importation of medicinal products from "new" EU member states by relying on patent and SPC protection granted in the importing Member State. This is the first time that the CJEU has decided on the precise date for comparing the level of protection in importing Member States and in exporting "new" Member States in order to determine the limits to the exhaustion of intellectual property rights. The decision will also impact the scope of application of the Specific Mechanism in relation to SPC extensions. The Specific Mechanism The Specific Mechanism is an exception to the principles of exhaustion of intellectual property rights and the free movement of goods for medicinal products imported in EU from "new" Member States (the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovenia, Slovakia, Bulgaria, Romania and Croatia). Its legal basis is found in the Acts of Accession of 2003, 2005 and 2012, according to which the holder of a patent or SPC for a pharmaceutical product filed in a Member State at a time when such protection could not be obtained in one of the abovementioned new Member States for that product, may prevent the import and marketing of that product in the States where the product in question enjoys patent or SPC protection, even if the product was put on the market in that new Member State for the first time by the patent/SPC holder or with their consent. Case background The main proceedings concerned Pfizer's German SPC for Etanercept, the active ingredient of the drug Enbrel® for the treatment of arthritis in adults and in children. The basic European patent for Pfizer's SPC was filed in 1990 when legislation in the new member States did not provide for equivalent patent protection, although when Pfizer subsequently applied for its German SPC, such laws did exist in those countries. In 2015, when Pfizer's SPC remained in force due to a paediatric extension, Pfizer discovered that Orifarm imported packages of Enbrel® in Germany, which had been manufactured in Poland, Slovenia, Lithuania and Croatia. On the basis of the Specific Mechanism, Pfizer sued Orifarm before the Court of Düsseldorf (Germany) for the infringement of its SPC. The German court referred two main questions to the CJEU: • Can the holder of an SPC rely on the Specific Mechanism if the SPC was applied for at a time when the laws for obtaining it already existed in the new Member States but could not be applied for because the basic patent did not exist in those Member States? PATENT AND PHARMA UPDATE 3 • Can the holder of an SPC rely on the Specific Mechanism if the products are imported from the new Member States after the expiry of the SPC but before that of the extension granted under Regulation (EC) 1901/2006 (ie, the paediatric extension)? The CJEU's Decision The reply from the CJEU to both questions was affirmative and, incidentally, confirmed the AG's opinion provided earlier. Since an SPC effectively re-establishes the period of exclusivity enjoyed pursuant to a basic patent and is granted conditional to the existence of a basic patent protecting the medicinal product, the CJEU held that there is an "unbreakable connection" between an SPC and its basic patent. Even though the laws of the exporting "new" Member States provided for SPC protection at the time when Pfizer applied for its SPC, this was hypothetical because Pfizer could not have obtained those SPC rights without the ability to obtain an equivalent basic patent in those "new" Member States. Therefore, the exact date when the level of protection in the importing Member State and in the exporting States has to be compared is the date when the application for patent protection was filed. Similarly, given the ancillary nature of a paediatric extension to an SPC, this should also be included in the scope of the Specific Mechanism. Although the CJEU answered the questions before it, its decision does not address how the Specific Mechanism should apply in a situation where, although equivalent patent protection was available in the new Member States, equivalent SPC protection was not. Sara Balice, Senior Associate Milan 3. Are prior art references the blueprint to your claim construction? OCV Intellectual Capital LLC v Jushi Group Co, Ltd  EWCA Civ 1416 (19 June 2018) Chugai Pharmaceutical Co, Ltd v UCB Pharma  EWHC 2264 (Pat) (24 August 2018) Liqwd Inc v L'Oréal UK  EWHC 1394 (Pat) (11 June 2018) Recent decisions in the area of claim construction have helpfully confirmed and clarified existing construction principles. The impact of prior art references on claim construction is reinforced by the Court of Appeal in OCV v Jushi, and can be compared with the US approach considered by the Patents Court in Chugai v UCB. An update on claim construction would be incomplete without a reference to the UK Supreme Court decision in Actavis v Lilly  UKSC 48; Birss J's comments in Liqwd v L'Oréal discuss the impact of this decision on the traditional purposive approach. In OCV v Jushi, the Court of Appeal considered how prior art referenced in a patent influences claim construction. Jushi brought an action to revoke OCV's patent for a glass fibre which is used as reinforcement in other materials such as glass-reinforced plastic. At first instance, the judge held the patent was valid. Jushi appealed, arguing that the judge ought to have found the patent invalid for lack of novelty and obviousness. The claimed glass fibre invention comprises a number of listed constituents, each of which is required to be present in a specific range or ratio. For example, the patent claimed a CaO/MgO ratio not exceeding 2, but preferably greater than 1.3. The patent compares this ratio with a specific example from prior art, a US patent ('Neely'), and points out that Neely's CaO/MgO ratio in this instance is 2.14—outside the range claimed by the patent, if it is construed strictly. Jushi contended that OCV's claim used the "whole number convention" whereby the limits of <2 would be taken to including anything from 1.5 to 2.5. On this basis, the patent would lack novelty over Neely's example. The unanimous judgment of the Court of Appeal delivered by Floyd LJ followed the court's earlier decision in Smith & Nephew v Convatec  EWCA Civ 607 and held that the obvious conclusion the skilled person would draw is that the patentee's ranges were exact, and not meant to be broadened by whole number rounding. The main reason given to support this finding was that the patent not only recognises the existence of Neely as prior art, but it "goes considerably further": the patent specifically refers to and reproduces an example from Neely to use as a comparison. The purpose of the comparative example was to identify something outside the claimed invention for the purposes of comparing it with something within the claims. In addition, the court noted that a skilled person would have known, as part of the common general knowledge, that changes in glass composition (even small ones) could lead to significant changes in key properties of the glass. By way of comparison, the Patents Court took a different approach in Chugai v UCB, where the claims were construed under US law. The issue in this case was whether the court is permitted to review the actual disclosures in the prior art, or whether it is limited to the references or statements in the patent specification and/or prosecution file. Birss J found that under US law, prior art references in a patent could only impact claim construction if construction remains ambiguous after considering all other intrinsic and extrinsic evidence (i.e. at the "tie-break" stage). It was also noted that prior art is capable of being used as a form of extrinsic evidence of how terms are used. PATENT AND PHARMA UPDATE 4 In Liqwd v L'Oréal, Birss J's obiter dicta discussed the role of equivalents in the process of claim construction. He noted that all Patents Court judges who have considered the point had unanimously held that the "normal interpretation stage" required by Actavis v Lilly is the same as purposive construction (see our previous issue for a discussion on some of these first instance decisions post-Actavis). However, purposive construction as prescribed by Kirin-Amgen v Hoechst Marion Roussel  UKHL 46 actually included taking equivalents into account. Accordingly, Birss J acknowledged an argument that post-Actavis, normal construction (as the step before considering equivalents) may not be "precisely the same as every nuance of the process of the determination of claim scope [purposively] which was mandated by Kirin-Amgen prior to Actavis.” We expect to see more English court decisions grappling with the doctrine of equivalents in the near future and it may well be some time before the law settles in this respect. Emma Sherratt, Associate (New Zealand) London 4. Other issues relevant to patent litigation TQ Delta LLC v Zyxel Communications  EWHC 1515 (Ch) (13 June 2018) PSJC Tafneft v Gennadiy Bogolyubov  EWHC 2022 (Comm) (22 June 2018) Clearswift v Glasswall  EWHC 1946 (Pat) (10 July 2018) Technetix v Teleste  EWHC 1941 (IPEC) (17 July 2018) Liqwd v L'Oréal  EWHC 1845 (Pat) (19 July 2018) There have been a few recent decisions on issues relevant to patent litigation. Confidentiality clubs In TQ Delta v Zyxel Communications, the parties had entered into a confidentiality club agreement in a patent action to restrict access of confidential documents to certain named individuals from the parties within the "confidentiality club". TQ Delta asserted that some information that was highly confidential should be limited to "external eyes only", ie, external solicitors, counsel and independent experts, but not any client representatives from Zyxel Communications. The latter objected and argued that the club needed to include two of their named representatives. Although "confidentiality clubs" are now commonplace in patent litigation and parties could indeed agree to an "external eyes only" tier, Carr J did not make the order for an "external eyes only" tier because a party could then unilaterally decide to place any document under such restricted access without justification. Moreover, it would require the party seeking access to key documents to justify its position (when it is prima facie entitled to disclosure) rather than onus being upon the party requiring the restriction of access, which Carr J observed is "wrong in principle". Such a tier would also preclude the counterparty from fully participating at trial and providing instructions to its lawyers based on the restricted documents, thereby becoming incompatible with the right to a fair hearing under Article 6 of the European Convention of Human Rights and the principles of natural justice. According to Carr J, an "external eyes only" tier is nevertheless possible for (1) documents of peripheral relevance but whose disclosure would be damaging to the party asserting confidentiality over them, and for (2) specific documents of greater relevance under exceptional circumstances, at least at an interim stage. TQ Delta then sought to restrict access specifically to certain third party licence agreements that it had granted. Rejecting TQ Delta's request on the facts, Carr J ordered disclosure of these documents under the agreed confidentiality club but stayed the order for 14 days to allow the affected third parties to approach the court to set aside or vary the order. This suggests that the Patents Court performs a balancing exercise between the interest of one party in maintaining confidentiality and the interest of the other in seeking relevant information to support its position. In line with the Patents Court's views on the membership of confidentiality clubs, in a recent Commercial Court decision (PSJC Tafneft v Gennadiy Bogolyubov), the court assessed the real risk of disclosure of confidential information by including certain individuals within a confidentiality club, but was cautious to ensure that the club was no more restrictive than appropriate. Delay in raising new arguments In three recent cases, English courts have heard applications to admit further evidence and reached different outcomes, largely guided by when the application was made, whether the new evidence would be determinative of the issue in question or would assist the parties in any way, and the overriding objective. The Patents Court in Clearswift v Glasswall allowed the applicant to adduce an additional expert report after two rounds of expert evidence had already been exchanged, as directed by the court in the CMC Order. In view of the overriding objective, the court noted that the brief additional evidence would not impact the length of trial or the costs incurred, but made it clear that this was not to be seen as a "carte blanche" for parties to submit late evidence. PATENT AND PHARMA UPDATE 5 The application in Clearswift was made much earlier than in Technetix where the party applied to have further evidence (and new statements of case) adduced on the first day of trial. In Technetix v Teleste (a case before the Intellectual Property Enterprise Court), Hacon HHJ had refused the claimants permission to rely on an argument that had been signalled, but not pleaded in sufficient detail in their skeleton arguments a day before trial was due to commence. The claimants therefore sought an adjournment on the first day of the trial and permission to serve a re-re-amended Reply and Defence to Counterclaim, as well as further expert evidence in relation to their new argument. If their application was denied, they submitted that they would have to concede that their patent was not novel. The defendant resisted the claimants' application, but stopped short of stating that it would suffer any significant detriment (such as loss of sales) owing to the adjournment, if granted. On balance, Hacon HHJ observed that refusing the adjournment would seriously prejudice the claimants in defending the validity of the patent where they may have a sound argument to do so. Therefore, under these unusual circumstances, Hacon HHJ allowed the adjournment even though this is unique in an IPEC trial. The Patents Court reached the opposite conclusion on a slightly different set of facts. In Liqwd v L'Oréal, L'Oréal put forth a new argument attacking the novelty of claim 11 of the patent in issue for the first time in its opening skeleton arguments at trial. However, instead of seeking permission to adduce further evidence or a trial adjournment (as was the party's approach in Technetix, discussed above), L'Oréal fully deployed the argument while cross-examining the other side's expert witness. The court refused to consider the new argument under its general case management powers under Civil Procedure Rules Part 3.1(2)(k), since L'Oréal had not brought it to the other side's attention soon enough. More importantly, the court found that in the absence of further evidence, such as repeat experiments, the argument would have failed in any case, based on an assessment of the information available at the time. Claim 11 was the only claim in the patent that was held valid and infringed at trial. After the judgment was handed down but before it was sealed, L'Oréal asked the court to reconsider its decision upholding the validity of claim 11 on the basis of new experimental evidence it sought to have admitted. At this stage, Birss J refused permission to admit the new evidence because the overriding objective required the court to deal with matters fairly, expeditiously and at proportionate cost. Admitting the new evidence would have invariably resulted in a fresh 2-3 day trial thereby requiring further court time and resources. It did not help that even on the merits, the new evidence would have made out a case that was, at best, arguable by both sides. These decisions suggest that a court's discretion to admit further evidence is intricately linked to the particular circumstances in a case and will be directed according to the overriding objective. It goes without saying that parties should be minded to plead their cases not just as clearly and sufficiently as possible, but also as soon as possible, especially when new and potentially strong arguments need to be deployed. Krishna Kakkaiyadi, Associate and L Gopika Murthy, Graduate Solicitor (India) London 5. Bulgaria ratifies the UPCA Provisional Application Protocol but delays still in store for the UPC On 24 July, Bulgaria ratified the Protocol on Provisional Application of the UPC Agreement ("Protocol"). The Protocol allows the provisional application of the institutional, financial and administrative provisions of the UPC Agreement ("UPCA") to enable the necessary legal and practical arrangements to be made in contemplation of the establishment of the Unified Patent Court ("UPC"), including the appointment of judges. The EPO has commented that the Protocol “should ensure that the Court is fully operational and ready to hear cases on the very day the [UPC] Agreement formally enters into force by the contracting states”. However, for the Protocol to come into effect, 13 signatory states (which must include France, UK and Germany) which have ratified the UPCA or informed the depositary that they have received parliamentary approval to ratify the UPCA, must have signed and also either ratified, accepted or approved the Protocol or declared that they consider themselves bound by the provisional application of the articles of the UPCA mentioned in Article 1 of the Protocol. These Articles cover, inter alia, the establishment of the UPC, the Registry, the Mediation and Arbitration Centre, the training and appointment of judges, and the provisions allowing for the UPC Statute and Rules, legal aid, remuneration of judges, the setting up of local or regional divisions, and the establishment of the pool of judges. Whilst Bulgaria’s ratification brings the total Protocol ratifying/declaring states to eight, five more ratifications/declarations (including Germany) are needed for the Protocol to come into effect and allow the practical workings of the UPC to be established in preparation for the court coming into operation, which will happen once the UPCA itself has been sufficiently ratified. In both cases, ratification by Germany is a prerequisite. Chances of the UPC being established before Brexit The Protocol must be fully ratified before judges can be employed and local divisions etc fully established; basically all the ground work that needs to be in place before the actual UPC court can get started and it cannot start without the Protocol’s full ratification. However, as set out above, signatory states cannot ratify the Protocol unless they have already ratified the UPCA or declared themselves ready to do so. PATENT AND PHARMA UPDATE 6 In a recently reported comment, the Chairman of the UPC Preparatory Committee claimed that there would need to be 6 - 8 months of preparation time from full ratification of the Protocol, before the UPC could be fully functional. This suggests that were Germany to declare itself ready to ratify the UPCA and thus was then able to ratify the Protocol, there would need to be a delay between it ratifying the Protocol and actually ratifying the UPCA. This delay would be needed as once fully ratified the UPCA will come into force and the UPC will be established (and unitary patents will be available also since the Unitary Patent Regulation would also come into force), on the first day of the fourth month after the month in which the German ratification of the UPCA occurs. The implication of the Preparatory Committee Chair’s comment is that without a delay in ratifying the UPCA this would not allow sufficient time for the court to be ready. In summary, the UPC is still some way off; in fact at least 6-8 months away, even once Germany announces its readiness to ratify the UPCA. The timings suggest that the UPC may be unlikely to be operational before the UK leaves the EU unless German ratification of the Protocol (along with four more ratifications/declarations) occurs shortly. However, if the implementation/transition period within the Withdrawal Agreement ("WA") is agreed (as prior negotiations suggested it would be if and when the whole WA is agreed) then the UK will be treated as being part of the EU under any legislation until the end of 2020, despite having actually left the EU. Thus the effective "pre-Brexit" time period may be a little longer. In the most recent round of "no deal" technical notices released on 24 September 2018, the UK Government declared its intention to stay in the UPC and unitary patent system post-Brexit (see the Brexit developments section below). For more on the UPC Agreement including the other states which have ratified already, see the UPC Agreement section of our UPC hub. See also the UPC content on our IP blog, to which you can subscribe. Rachel Montagnon, Professional Support Consultant London 6. Brexit developments Technical Notices The latest tranche of “no deal” technical notices was released on 24 September 2018 by the UK Government. Amongst them are several notices that highlight the Brexit issues faced by intellectual property right owners and, in some cases, confirm the Government’s approach to resolving them. See our blog post on these latest notices here which includes links to the notices themselves. The Government also released a news story the next day, which commented on the guidance given in these technical notices and the Government’s longer term aims for IP protection. For the Life Sciences sector there were also several relevant notices issued in August (see our blog post on the relevant notices and links to them). Key announcements (in the context of no deal) of most relevance to patents and pharma businesses are: • The SPC, compulsory licensing, pharmaceutical product testing exception and patenting of biotechnological inventions regimes will remain unchanged at least initially. As we had mentioned in our previous issue, even in a nodeal scenario, UK designated European patents ("EPs") will continue to apply in the UK and will still be able to be applied for at the European Patent Office. UK entities will be able to apply for EPs as normal for any designations. Nationally granted UK patents will also be available. See here for further details. • If the UPC comes into force before the UK leaves the EU, then if the UK needs to withdraw once it has left the EU the UK will replace unitary patent rights with equivalent rights in the UK from the new system, although the UK “will explore whether it is possible to remain within it“. The Government’s news story states that “The UK intends to stay in the Unified Patent Court and unitary patent system after we leave the EU.” • The UK will continue to accept the exhaustion of IP rights in products put on the market in the EEA by, or with the consent of, the rights holder. However, the EU will likely not consider that goods placed on the UK market are exhausted in the EEA, and thus permission may need to be sought from the rights holder to transfer goods to the EEA that have legitimately been put on the market in the UK. The Government news story says that “The UK looks forward to exploring arrangements on IP cooperation that will provide mutual benefits to UK and EU rights holders and we are ready to discuss issues the EU wishes to raise in the negotiations on our future relationship, including exhaustion of IP rights”. See the technical notice on exhaustion of IP rights here for further details. Below, we provide brief summaries of the guidance from the notices, which we go into much more specific detail on our IP Blog here. Any company wishing to sell medicines or medical devices in the UK, or run clinical trials, after the UK leaves the EU needs to consider each of these notices very carefully. UK's participation in the European Medicines Agency ("EMA"): The UK's participation in the EMA will cease at Brexit if there is no deal and in that scenario the UK's Medicines and Healthcare products Regulatory Agency ("MHRA") would take on the functions currently performed by the EMA in relation to medicines on the UK market (there will be a consultation on necessary PATENT AND PHARMA UPDATE 7 changes to the law to allow this, in early Autumn 2018). Notably, the UK Government’s July 2018 White Paper set out the Government’s proposal to explore the terms on which the UK could remain part of the EMA. Marketing authorisations ("MAs") for new medicines: New medicines which are already centrally authorized in the EU will automatically get a UK MA on 29 March 2019, unless the MA holder opts out. Unless and until the UK rejoins the EMA system, an MA application will have to be submitted to the MHRA for national assessment in order to market a new medicinal product in the UK after the UK leaves the EU. MA applications which are pending in the EU system on 29 March 2019 will have to be restarted by way of a separate application to the MHRA for a UK MA. As the MHRA will not have access to data provided by MA holders in support of EU approved products, the notice indicates that new generic applications after Brexit will have to be based on reference products that have been authorized in the UK. Medical devices and clinical trials: The UK will recognize EU-approved devices in the first instance, with a consultation on longer term arrangements to follow. The UK will comply with “all key elements” of the EU Medical Devices Regulation and In Vitro Diagnostic Regulations when they come into force. The notice also indicates that the UK will seek to “align where possible” with the EU Clinical Trials Regulation when it comes into force. The general message is that arrangements will be made with the aim of minimising the disruption to clinical trials. See here for the technical notice on the regulation of medicines, medical devices and clinical trials. Batch-testing medicines: The UK Government has indicated that it hopes to ensure that products only need undergo one approval process for their sale in the EU and the UK after Brexit, however as discussed above, if there is no deal then the UK would not be part of the EMA. In this notice the UK Government has said that in the event of ‘no deal’ it would continue to accept batch testing of human medicines carried out in certain countries (yet to be named by the MHRA but to include at least initially EU and EEA countries and third countries with which the EU has a mutual recognition agreement). The UK will also continue to accept batch testing of substances in medical trials ("IMPs") manufactured in the EU and EEA states. For human medicines and IMPs, those manufactured in the UK (or a third country and imported direct into the UK) would still require a UK-based qualified person ("QP") to certify batches and ensure compliance with MAs and good manufacturing practice ("GMP") guidance. Where manufacture occurs in a third country, but importation is from certain countries (yet to be identified by the MHRA, but to include initially EU and EEA countries), certification, release and assurance of compliance with MA and GMP guidelines will be recognised, if conducted by a QP based in that listed country, without the need for further certification. There would be at least 2 years notice for any changes to this arrangement. See here for the technical notice on batch testing. Regulatory information for medicinal products: If there is no deal, then the UK will cease to be part of the EU medicines and medical devices regulatory networks. Sharing of common systems and the data associated with them would end. New IT systems are being developed for March 2019 to allow the UK to manage regulatory activities around human medicines and devices. Under this system regulatory information would have to be submitted directly to the MHRA which would set up a new national portal for this purpose. The aim is to minimise the impact on stakeholders eg, by accepting EU application forms and standards and following existing processes. The new systems will be put out for testing before March 2019 and training will be provided if necessary. See here for the technical notice. Horizon 2020 funding: If there is ‘no deal’, the Government says it has taken steps to provide continued support for research and innovation currently being funded through this EU project fund. The Government will guarantee funding in most cases relating to successful bids submitted by UK participants before the UK exits the EU, for the full duration of the project. Funding will only be for UK participants however. UK Research & Innovation will be developing systems to ensure payments to beneficiaries of Horizon 2020 funding can continue. Current UK recipients of Horizon 2020 funding will soon be invited to provide initial data about project(s) on a portal hosted on GOV.UK. See here for the technical notice. Additionally, the Government has released an overview of the UK's relationship with the EU's Horizon 2020 science and innovation funding programme including a link to the portal where those with current funding can submit data which will be used to guarantee funding post-Brexit. In August 2018, the Secretary of State for Health and Social Care (Matt Hancock MP) wrote to pharmaceutical companies asking them to ensure that by 29 March 2019 they had stockpiled supplies in the UK for an extra six weeks over their usual stock levels. The Government has asked pharmaceutical companies to confirm their plans on a product-by-product basis and to draw up additional contingency plans for medicines meeting certain requirements. A similar letter was also sent to suppliers of medical devices and clinical consumables, and the Government published more detailed guidance for MA holders to consult regarding contingency planning. UK Government launches consultation on role of MHRA post-Brexit The UK Government on 4 October 2018 has launched a consultation on the role of the MHRA post-Brexit "seeking views on how the MHRA legislation and regulatory processes would have to be modified in the event of the UK not securing a deal with the EU after the UK’s exit, with no Implementation Period". As the consultation closes at 11.45 pm on 1 November 2018, time is short for making a response. Read more in our post here on our IP blog. PATENT AND PHARMA UPDATE 8 For more on Brexit and IP see the Intellectual Property section of the Herbert Smith Freehills' Brexit Legal Guide 2018. Rachel Montagnon, Professional Support Consultant and Andrew Wells, Senior Associate London 7. Personalised Healthcare and the Future of Pharma How will the pharmaceutical sector look in the next 10-15 years? We explore these themes in our new Personalised Healthcare and Future of Pharma Hub, where we have brought together our legal practitioners from across countries and practices to provide valuable insight into an era of transformation that we are currently witnessing in the pharmaceutical sector. Pharma companies are changing the way they do business to address unmet medical need, deliver differentiated products and capitalise on the unprecedented technological advances impacting the world we live in. Our latest article on how Artificial intelligence (AI) is being used in the pharmaceutical sector to improve business processes and drive efficiencies (first published by SCRIP Pharma Intelligence on 5 September 2018) is available here. To stay up-to-date with our latest thinking on Personalised Healthcare and the Future of Pharma, subscribe to our content here. PATENT AND PHARMA UPDATE 9 8. Table of patents decisions Patentee / Patent no. Other party/ies Subject matter / product (active ingredient) Court Judge/s Legal issue Outcome Pfizer Ireland Pharmaceuticals (Applicant) German SPC rights based on EP 0 939 121 Orifarm GmbH (Respondent) Pfizer's medicinal product etanercept (ENBREL) used in the treatment of arthritis. CJEU (Second Chamber) Judges M Ilešič, A Rosas (Rapporteur), A Prechal and E Jarašiūnas Advocate General E Tanchev Request for a preliminary ruling from the German Regional Court, Düsseldorf on the application of the Specific Mechanism, ie, exceptions to the rules of exhaustion of IP rights in case of import of medicinal products from "new" EU member states where equivalent patent protection did not exist before accession to the EU, when patent protection was originally sought in the EU. There is an "unbreakable connection" between an SPC and its basic patent and that the exact date when the level of protection in the importing Member State and in the exporting States has to be compared is the date when the application for patent protection was filed. Case C-681/16 (21 June 2018) Gilead Sciences Inc. UK SPC rights based on EP 0 915 894 Teva UK Ltd Accord Healthcare Ltd Lupin Ltd Lupin (Europe) Ltd Generics (UK) Ltd, trading as ‘Mylan’ Pharmaceutical composition containing a combination of tenofovir disoproxil and emtricitabine CJEU (Grand Chamber) Judges K Lenaerts, A Tizzano, R Silva de Lapuerta, M Ilešič, J L da Cruz Vilaça, C G Fernlund, C Vajda, JC Bonichot, A Arabadjiev, C Toader, M Safjan, S Rodin, and K Jürimäe (Rapporteur), Advocate General M Wathelet Request for a preliminary ruling from the English High Court on criteria to be taken into account for deciding whether the 'product is protected by a basic patent in force’ in Article 3(a) of the SPC Regulation (where the medicinal product is a combination of active ingredients). A product containing a combination of active ingredients is 'protected by a basic patent' even if the combination of active ingredients is not expressly mentioned in the claims of the basic patent, but those claims relate necessarily and specifically to that combination. For that purpose, from the point of view of a person skilled in the art and on the basis of the prior art at the filing date or priority date of the basic patent: the combination of those active ingredients must necessarily, in the light of the description and drawings of that patent, fall under the invention covered by PATENT AND PHARMA UPDATE 10 Patentee / Patent no. Other party/ies Subject matter / product (active ingredient) Court Judge/s Legal issue Outcome that patent, and each of those active ingredients must be specifically identifiable, in the light of all the information disclosed by that patent. Case C-121/17 (25 July 2018) OCV Intellectual Capital, LLC (Respondent) EP 1 831 118 Jushi Group Co, Ltd (Appellant) A glass fibre or "strand" for inclusion as reinforcement in other materials such as glassreinforced plastic. Court of Appeal (Civil Division) Kitchin, Floyd and Henderson LJJ Appeal from HHJ Hacon's decision upholding patent validity. Whether the judge was correct in construing the numerical limits in the claim features so as to exclude acknowledged prior art, and in holding that the patent was novel and inventive. Appeal dismissed. Since the patent specifically referred to an example of the prior art for comparison, the skilled person would consider the numerical limits disclosed as exact and as excluding the prior art values. A broad generic disclosure in the prior art would not anticipate the patent and there was insufficient evidence adduced that the skilled person would use the claimed combination of components in the invention.  EWCA Civ 1416 (19 June 2018) A P Racing Limited (Appellant) GB 2 451 690 Alcon Components Ltd (Respondent) Disc brake calipers for motor vehicles. Court of Appeal (Civil Division) Lewison, Lindblom and Flaux LJJ Appeal from HHJ Hacon's decision as to whether two of Alcon's calipers infringed the patent. Appeal dismissed. The trial judge was entitled to make value judgments on an imprecise term in the patent and the appellate court could only review the decision of the trial judge (not re-try the case again).  EWCA Civ 1420 (21 June 2018) Vectura Limited (Respondent) Glaxo Group Limited and group companies Products and processes related to respiratory drugs for inhalation using Court of Appeal (Civil Floyd LJ and Birss J Appeal from HHJ Hacon's decision in the patent trial to strike out a claim for an Arrow Appeal allowed. The trial judge had erred in PATENT AND PHARMA UPDATE 11 Patentee / Patent no. Other party/ies Subject matter / product (active ingredient) Court Judge/s Legal issue Outcome Five patents relating to the delivery of asthma/COPD drugs by inhalation. (Appellants) a stearate formulation. (GSK's ELLIPTA products) Division) declaration on the basis that there was no prospect of success. Issue in Respondent's Notice whether the sought declaration was clear enough to realistically proceed to trial. determining whether the pleaded facts and arguments gave rise to a realistic claim for Arrow relief which could go to trial. The Court also rejected Vectura's arguments that the sought Arrow declaration was so unclear so as to merit a strike out at this stage.  EWCA Civ 1496 (28 June 2018) Fameccanica.Data SpA (Appellant) EP (UK) No 1 355 604 Curt G. Joa, Inc (Respondent) Disposable, absorbent pull-on garments (diapers) Court of Appeal (Civil Division) Floyd, Kitchin and Patten LJJ Appeal from HHJ Hacon's decision refusing a claim amendment because it "added matter" to the application as filed. Appeal dismissed. There was no clear and unambiguous disclosure (whether express or implied) of the claim amendment sought in the patent application as filed.  EWCA Civ 1786 (30 July 2018) TQ Delta LLC (Patentee) Two patents from an alleged SEP portfolio Zyxel Communications UK Limited Zyxel Communications A/S (Alleged infringers) SEPs related to digital subscriber line (DSL) technologies English High Court (Patents Court) Carr J Whether TQ Delta could exclude access to parties’ representatives entirely in a Confidentiality Club Agreement by using an "external eyes only" tier. Application denied. A blanket "external eyes only" restriction would be incompatible with Art 6 ECHR (right to a fair hearing) and would impact Zyxel’s ability to understand the case against it, instruct its lawyers appropriately and participate at trial.  EWHC 1515 (Ch) (13 June 2018) Koninklijke Philips NV (Patentee) EP (UK) 1 685 659 EP (UK) 1 440 525 Asustek Computer Inc. Asustek (UK) Limited Asus Technology Pte. Ltd Bundle of patents relating to High Speed Packet Access (HSPA) in mobile telecommunications English High Court (Patents Court) Arnold J Whether EP'659 (as amended) was obvious in light of cited prior art. Patent held invalid over prior art, reinforced by helpful secondary evidence. Omitting pilot bits in order to reduce code usage and increase the number PATENT AND PHARMA UPDATE 12 Patentee / Patent no. Other party/ies Subject matter / product (active ingredient) Court Judge/s Legal issue Outcome EP (UK) 1 623 511 HTC Corporation HTC Europe Co. Ltd (Alleged infringers) of users would have been an obvious choice to make from the prior art in spite of the marginal disadvantages in doing so. Moreover, discussions and contemporaneous documents from debates in harmonisation groups helped reinforce the obviousness of the choice.  EWHC 1732 (Pat) (10 July 2018) Whether EP'511 (as amended) was valid and infringed. Patent held valid and infringed. The Court accepted the patentee's construction of the claim and held that the patent was valid and infringed. The defendants' case on obviousness failed because the prior art document (based on an old Release of cdma2000 Physical Layer Standard) would not direct the skilled person as to how and when the power could be controlled in a UMTS context at the priority date. The judge acknowledged that his decision differed from the Dutch court's decision but put this down to an amended claim and differing arguments not considered by the Dutch court.  EWHC 1826 (19 July 2018) Glasswall (IP) Limited (Respondent) EP 1 891 571 B1 Clearswift Limited (Applicant) Anti-malware software English High Court (Patents Mr David Stone (Sitting as a Deputy High Application for the admission of additional expert evidence beyond what the CMC order provided for. Application admitted. A decision to admit late evidence was a matter of the court's discretion in light of the overriding objective. The PATENT AND PHARMA UPDATE 13 Patentee / Patent no. Other party/ies Subject matter / product (active ingredient) Court Judge/s Legal issue Outcome Court) Court Judge) brief evidence sought to be adduced would not affect the length or costs of the trial and having the evidence before trial would assist the parties in understanding each other's cases.  EWHC 1946 (Pat) (10 July 2018) Liqwd Inc (Patentee) Olaplex LLC (Exclusive licensee) GB 2 525 793 L'ORÉAL (UK) Limited L'ORÉAL SA (Alleged infringers) Hair care products containing maleic acid salts English High Court (Patents Court) Birss J Whether the Court should admit further experimental evidence and re-consider its decision after the judgment was handed down at trial but before it was sealed Application dismissed. Admitting the evidence (and reconsidering its decision) would have required the court to spend further time and resources which is inconsistent with the overriding objective. In any case, the evidence to be admitted was not determinative of the issue in question and would, at best, give both sides an arguable case.  EWHC 1845 (Pat) (19 July 2018) Ronald Peter Binstead Binstead Designs Limited (Applicant) Zytronic Displays Limited (Respondent) Touch screen technology English High Court (Patents Court) Mr David Stone (Sitting as a Deputy High Court Judge) Whether a separate trial on preliminary issues should be ordered. Application dismissed for the following reasons: first, the absence of a succinct, knockout point to dispose of the case; second, the determination of the preliminary issues would not cut down on the overall hearing time or costs; third, the preliminary issues were a mixed question of fact and law which need to be determined; fourth, the preliminary issue trial causes a real risk of significant delay to the final determination of the matter.  EWHC 2182 (Ch) (27 July PATENT AND PHARMA UPDATE 14 Patentee / Patent no. Other party/ies Subject matter / product (active ingredient) Court Judge/s Legal issue Outcome 2018) UCB Pharma SA (patentee) United States patent US7,566,771 Chugai Pharmaceutical Co Ltd (licensee) Celltech R&D Limited UCB Biopharma SPRL Humanised Antibodies (Chugai's product tocilizumab/ACTEMRA) English High Court (Patents Court) Birss J Whether Chugai's product fell within the scope of the patent claims for payment of royalties. The licence was governed by English law, while the claim was construed under US patent law. Chugai's claim construction preferred, taking into account the relevant intrinsic and extrinsic evidence. No royalties were payable.  EWHC 2264 (Pat) (24 August 2018) Gilead Sciences Inc Supplementary protection certificate SPC/GB05/041 based on EP 0 915 894 Teva UK Limited Accord Health Limited Lupin Limited Lupin Europe Limited Generics (UK) Limited t/a Mylan Tenofovir disoproxil in a composition with Emtricitabine (Gilead's product TRUVADA) English High Court (Patents Court) Arnold J Judgment on the validity of Gilead's SPC following a preliminary ruling from the CJEU on Art 3(a) SPC Regulation. See above for our note on the CJEU guidance. The judge held that the SPC was invalid and rejected Gilead's request to allow for additional evidence to be submitted.  EWHC 2416 (Pat) (18 September 2018) Technetix BV Technetix Limited Technetix Group Limited (Claimants/Patentees) Teleste Limited (Alleged infringer) Broadband technology IPEC HHJ Hacon Whether adjournment on the first day of trial was allowable in order for the claimants to serve new statements of case and adduce further evidence. Application allowed. The claimants would otherwise suffer serious prejudice since they would have to concede the validity of the patent and the defendant did not make out any substantive prejudice/harm that would be suffered if the adjournment was allowed.  EWHC 1941 (IPEC) (17 July 2018) PATENT AND PHARMA UPDATE 15 9. Table of other UK decisions relevant to the pharmaceutical sector Claimant / Appellant Defendant / Respondent Subject matter / product Court Judge/s Legal issue Outcome The Pharmaceutical Services Negotiating Committee National Pharmacy Association Secretary of State for Health n/a Court of Appeal (Civil Division) Irwin, Hickinbottom LJJ and Sir Jack Beatson Whether the first instance judge had erred in finding that the Secretary of State was entitled, under the Wednesbury irrationality standard, to decide to implement the funding cuts to pharmacies in 2016 on the basis of the material considered. Appeal dismissed. The Secretary of State's decision complied with the relevant statutory provisions. Any court considering compliance with a duty would review the process undertaken by the Government (in accordance with the Wednesbury principles) and not the merits of the decision.  EWCA Civ 1925 (23 August 2018) PSJC Tatneft Gennadiy Bogolyubov and others n/a English High Court (Commer cial Court) Cockerill J Whether a confidentiality club could exclude certain individuals in order to minimise risk of leakage of confidential information. Application to exclude individuals denied. Nevertheless, in order to minimise risk of leakage, the Court ruled in favour of limiting the membership of confidentiality clubs prima facie to qualified persons and for such persons to be named and for those names to be provided.  EWHC 2022 (Comm) (22 June 2018) Pfizer Inc Pfizer Limited Flynn Pharma Limited Flynn Pharma (Holdings) Limited Competition and Markets Authority Phenytoin sodium capsules Competiti on Appeal Tribunal Peter Freeman CBE QC (Hon) Paul Lomas Prof Michael Waterson Whether to grant both Pfizer and Flynn permission to appeal from an earlier CAT decision and whether to remit certain issues to the CMA as directed by the CAT decision. . All applications refused and decision to remit confirmed. The CAT refused both parties permission to appeal from the relevant portions of its decision as there was no real prospect of success or any other compelling reason for the appeal to be heard. The CAT refused to stay the remittal pending any appeal (for which PATENT AND PHARMA UPDATE 16 Claimant / Appellant Defendant / Respondent Subject matter / product Court Judge/s Legal issue Outcome permission could still be sought from the Court of Appeal), as the public interest was best served by the CMA swiftly proceeding to reconsider the remitted issues.  CAT 12 (25 July 2018) 17 10. 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