Patents: Glaxo Group Ltd v (1) Genentech Inc (2) Biogen Idec Inc 15 June 2007
This decision of Lewison J. helpfully summarises the current UK position on the question: should UK revocation proceedings be stayed pending the outcome of a concurrent EPO opposition?
In summary, where a stay of UK patent revocation proceedings is sought to allow parallel EPO proceedings to be concluded, the court will take a number of factors into account. There is a presumption, although it is not a strong one, in favour of a stay. The absence of infringement proceedings is one of the relevant considerations, but it is not decisive
The patentees (and co-defendants) were Genentech Inc and Biogen Inc, the patent in issue was a second medical indication European Patent, granted on 30 November 2005. The Claimant, GSK, claimed that the patent as granted was invalid and ought to be revoked. There was no infringement claim at issue.
Oppositions to the grant of the patent were filed by the Claimant and seven other parties in the EPO on 30 August 2006. On 19 February 2007 the Claimant also began proceedings in England, seeking revocation of the designation of the UK patent. The Claimant raised a number of grounds of invalidity in both the English proceedings and the EPO opposition proceedings, although a smaller number of items of prior art were relied upon in the UK.
The Defendants applied to stay the English proceedings, pending the decision of the EPO.
The Correct Approach
In considering whether to grant a stay or not, Lewison J. held there is a presumption, although not a strong one, in favour of a stay. It is for the party resisting the stay to overcome the presumption. In the end, this is a decision on where the balance of justice lies and the length of any stay and any prejudice that would flow from it is highly material.
One of the key arguments of the Defendants was that claims involving infringement proceedings contain different considerations to cases (such as this one) which only involve parallel claims for revocation of the patent. However, Lewison J. held that, in a case where infringement proceedings are not involved, there is no requirement that the court should grant a stay in the absence of exceptional circumstances. Such a decision would be setting the bar too high, and is not consistent with the way in which the patent cases have developed. If this approach is to be changed, then it must be done by a higher court.
He also took a number of other factors into consideration in making this decision, namely:
Avoidance of Duplication
The Claimants argued that, if the patent was upheld by the EPO, then the English proceedings would have been entirely pointless, a waste of time and money and a waste of the English courts' judicial resources, to the detriment of other litigants. Lewison J. recognised this argument but held it to be too theoretical, because a finding of the English court was likely to be of relevance to the EPO. Furthermore, a finding of validity by the EPO would not preclude a challenge by GSK in the national courts.
The costs of reaching trial in the English courts, although large, were in proportion to the size of the potential market (also large). Also, costs are in the discretion of the court and the trial judge may take the view that any decision about costs should be deferred until after the outcome of the proceedings in the EPO is known.
Amendment of Claims
Although the possibility of amendment of the patent in the EPO is a "juridical advantage" to the patentee, it was not one on which weight could be placed in these proceedings.
The giving of undertakings can heavily influence whether to grant a stay, see GlaxoSmithKline Biologicals SA v Sanofi Pasteur SA  EWHC 2333 (Pat). In this instance, however, the undertakings had no influence because they did not remove the risk of taking the competitor off the market.
The Effect of Delay
Any stay was likely to result in a delay of 18 months to 3 years. There was therefore a real risk that proceedings in the EPO would not be concluded before the actual launch date of the Claimant's product. Furthermore, spending decisions have to be made before a product is launched and the final year before launch would require a commitment from the Claimant of around US$80 million. Lewison J. held the potential loss of US$80 million to be the most important of the factors that he had to consider and accepted the Claimant's evidence that:
"A pharmaceutical development of the magnitude in question requires as much certainty as possible. It would be commercially highly damaging to GSK for there to be a delay (or a risk of delay) to launch".
Spin off Value
Lewison J. placed some weight on the value of a decision of the English Courts. He referred to the judgement of Laddie J. in Unilever v Frisa  FSR 708 in which he said that:
"Furthermore, there is an advantage of proceedings being conducted here in accordance with the fairly tight timetables which are now imposed, namely that judgments obtained from this court, or obtained from this court and then from the Court of Appeal on issues of infringement and validity have in the past, at least on occasions, helped to inform the parties so as to enable them to resolve their disputes of a worldwide basis earlier rather than later."
Laddie J.'s point is not solely about precedential value, it is rather that a reasoned judgement of the Patents Court (and a fortiori of the Court of Appeal) may help the parties to settle their disputes without further recourse to the courts.
This decision provides useful examples of factors that the court will consider when deciding whether the, weak, presumption to stay in favour of the EPO, is overcome. Of these, the presence of infringement proceedings is a relevant, but not a decisive, factor. Relevant factors will include the length of EPO proceedings and the effect of the delay. In this instance the most important factor was the potential cost to the Claimant if a stay was granted.
This decision has also highlighted the fact that, in patent cases involving parallel proceedings in the UK courts and the EPO, a more flexible approach has developed than that taken in normal commercial litigation. It was accepted by both parties as a general principle that, in a domestic court, it is well established that it is vexatious and an abuse of process for a claimant to bring two claims against the same defendant in respect of the same cause of action and in such a case one claim will ordinarily be stayed or struck out. Lewison J. commented (obiter) that this twin track approach on patent revocation which has stemmed largely from obiter observations of Aldous L.J. in Beloit Technologies Inc v. Valmet Paper Machinery Inc  RPC 489, is out of line with the approach of the commercial courts, and it might be time for the Court of Appeal to re-examine whether this practice is justified.
Even the Court of Appeal's learned Lord Justice Jacob couldn't re-write the European Patent Convention and the 1977 Patents Act. But he could provide further guidance at Appellate level as to when and why stays of this nature will be granted. Watch this space.