Following last Friday’s (7 July 2017) unusual move of advance publication of the outcome of the case, the UK Supreme Court now published the reasons for its decision in the long-running Actavis v Eli Lilly case. The reasons show that the UKSC found for Lilly under every point being considered. The result is that Actavis’ products infringe Lilly’s patents in the UK, France, Italy and Spain.

The ruling takes a fresh look at how far a competitor needs to go to work around a patent and avoid infringement. Emma Fulton, one of the Hogan Lovells lawyers leading the case said:

Today’s decision puts more emphasis on considering the invention in the patent when assessing whether a competitor infringes. It also brings UK law more closely in to line with the law in other key European countries.”

Although the case arose in the context of pharmaceutical technology, it applies across the range of patented technologies“, said Stephen Bennett, another of the Hogan Lovells partners leading the case. “This is good news for patent owners who want to catch infringers that make small changes to their products to try to avoid infringement.

In updating the test for equivalent infringement, the Supreme Court has reformulated the Improver questions to make it clear that the informed/skilled person knows that the variant works (to the extent that it actually does work) when they are considering whether it would be obvious that the variant achieves the same result in the same way.

The questions are now:

(i) Does the variant achieve substantially the same result in substantially the same way as the invention, ie the inventive concept revealed by the patent?

(ii) Would it be obvious to an informed reader, 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?

Importantly, the decision makes it clear that assessing the scope of protection of a patent is a two stage process: first work out what the patent claim means; and then consider whether any variant infringes by equivalence” said partner Dan Brook of Hogan Lovells, also co-leading the case.

Background to the case

Lilly’s patent concerns the safe and effective use of a cancer drug, pemetrexed, in co-therapy with vitamin B12. Actavis’ proposed products differed only in relation to the salt form of the pemetrexed. Actavis sought declarations of non-infringement in relation to the UK, French, German, Italian and Spanish patents in the UK courts.

Actavis removed the German patent from the UK litigation in 2014 after the Düsseldorf Court found that it would be infringed by Actavis. In the UK High Court, Mr Justice Arnold held that the remaining patents were not infringed and granted declarations of non-infringement to Actavis.

On appeal, the Court of Appeal refused to grant the declarations sought by Actavis on the grounds that Actavis’ proposed products would indirectly infringe Lilly’s patent. However, the Court of Appeal found that the patent would not be directly infringed.

As well as overturning the Court of Appeal’s decision on direct infringement, the Supreme Court has upheld the Court of Appeal’s decision on indirect infringement – that is Actavis’ appeal was unsuccessful.