Life sciences round-up - UK Supreme Court rules in landmark case, patent linkage shelved in China, big CAFC decision and much more
Legal radar
UK Supreme Court hands down first judgment on second medical use plausibility and infringement standard – In November, the UK’s highest court delivered its long-awaited decision in Warner-Lambert v Generics - its first ruling on how the concepts of sufficiency and infringement apply to rights protecting new uses of known pharmaceutical compounds. Rejecting Warner-Lambert’s appeal against the cancellation of its patent for the use of pregabalin in the treatment of neuropathic pain – which was invalidated on grounds of insufficiency by the High Court in 2015 – it found that the patent application had not made plausible that pregabalin (originally an epilepsy treatment) would be effective in its new therapeutic use of alleviating central neuropathic pain. The judges also granted Actavis’ cross-appeal by 3-to-2, ruling that the application had also failed to make plausible the drug’s effectiveness in treating peripheral neuropathic pain; and they ruled unanimously that the patent would not have been infringed by the generic product, even if it were valid. The majority decision stated that a patent specification needs to provide scientific grounds (though not necessarily data) to make plausible an invention’s effectiveness. This constitutes a more demanding standard than that laid out by Justice Arnold previously in the case. Even more significant was the infringement test put forward in the ruling, which held that test for infringement of a second medical use patent should be limited to the outward appearance of the generic drug – whether its label states that it should be used for the protected new use or for older off-patent uses. Departing from Justice Arnold’s view that infringement depends on the subjective intention of the defendant, this standard could make it much more difficult for rights holder to enforce their new medical use patents.
US Supreme Court hears on-sale bar dispute – In early December, SCOTUS heard oral arguments in Helsinn Healthcare v Teva Pharmaceutical, a case concerning Section 102 questions about prior art and novelty that have been thrown into confusion by recent Federal Circuit decisions. It will rule on the nature of the “on-sale bar”, which makes claimed inventions unpatentable if they have been on-sale before patent filing. Since the America Invents Act (AIA), Section 102 has stated that a person is not entitled to a patent “if the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention”. Helsinn’s patents for Aloxi – applied for in 2013 following a 2003 preliminary filing – were invalidated by the Federal Circuit on the grounds that the inventions were included confidentially in a 2001 purchasing and supply deal with MGI Pharma (and were therefore on-sale). This departed from previous interpretations of the on-sale bar as applying only to sales which make an invention public, and not to private transactions/partnerships – an interpretation adopted by the USPTO since AIA. And if the Supreme Court upholds the judgment, it would have negative implications for innovative biopharma companies, many of which enter into early-stage licensing and collaboration agreements as an important part of their value creation model; and several of which may have had rights granted that will be more difficult to uphold or enforce under the more restrictive interpretation of the on-sale bar.
EPO announcement signals prohibited plant patents may be back on the cards – The EPO’s Technical Board of Appeal stated that a recently adopted rule of not granting rights for plants produced exclusively by an essentially biological process contradicts the European Patent Convention, suggesting that the office will now begin to grant patents for such inventions again. Following years of uncertainty about the patentability of the products of essentially biological processes under Article 53(b) of the EPC, the EPO Administrative Council provided clarification in 2017 by amending the Implementing Regulations to include Rule 28(2): “Under Article 53(b) European patents shall not be granted in respect of plants or animals exclusively obtained by means of an essentially biological process.” However, in early December the Technical Board of Appeal issued a notice saying that: “At the oral proceedings, which took place on 5 December 2018, Technical Board of Appeal 3304, in an enlarged composition consisting of three technically and two legally qualified members, held that Rule 28(2) EPC (see OJ 2017, A56) is in conflict with Article 53(b) EPC as interpreted by the Enlarged Board of Appeal in decisions G 2/12 and G 2/13. The Board referred to Article 164(2) EPC, according to which the provisions of the Convention prevail in case of conflict with the Implementing Regulations, and decided to set the decision under appeal aside and to remit the case to the examining division for further prosecution.”
Dosage patents come under scrutiny at UK Supreme Court – The UK’s highest court heard an appeal with the potential to significantly affect the availability of patent protection for drug dosage regimens in the UK, as Powell Gilbert’s Penny Gilbert and William Hillson reported for IAM. On 19th November it held the hearing in Actavis v ICOS, a dispute about the alleged obviousness of a claimed invention for a daily dosing regimen for the erectile dysfunction drug tadalafil. The Supreme Court is reviewing the decision of the Court of Appeal to overturn a Patent Court ruling that Actavis’ patent is valid. A piece of prior art (“Daugan”) is argued to have provided enough information to convince a person skilled in the art to conduct clinical trials that would inevitably have led to the regimen in question; the patentee counters that a skilled person would have found the results of such trials surprising and as such did not have a “reasonable expectation of success” of discovering the invention, which was therefore not obvious”. The Court of Appeals’ finding that the claimed invention was obvious was described by one commentator as the “death knell for dosage regime patents in the UK”; and, while Gilbert and Hillson view this as hyperbole, they argue that if the Supreme Court upholds the ruling patenting dosage regimens could become much harder in the UK, with generics and biosimilars getting correspondingly easier to bring to market.
CJEU Advocate General proposes restrictive interpretation of SPC marketing authorisation rules – The Advocate General of the Court of Justice of the European Union has issued an opinion on Abraxis Biosciences LLC v Comptroller General of Patents, a case concerning the proper interpretation of Article 3(d) of the 2009 European SPC Regulation. This states that the market authorisation required for a product to qualify for an SPC “is the first authorisation to place the product on the market as a medicinal product”. Read literally, Article 3(d) precludes from protection products – like Abraxis’s cancer treatment Abraxane – which are new formulations of products previously authorised for another therapeutic use. But, since the Neurim decision of 2011, there has been a tendency to interpret this as referring to the first marketing authorisation within the “scope of the protection” of the basic patent. Justice Arnold of the UK High Court asked Europe’s highest court to clarify whether: “Article 3(d) of the SPC regulation (is) to be interpreted as permitting the grant of an SPC where the marketing authorisation referred to in Article3(d) is the first authorisation within the scope of the basic patent to place the product on the market as a medicinal product and where the product is a new formulation of an old active ingredient?” The court has not yet handed down its opinion, but on 13th December the Advocate General recommended that it take a strict view of the article’s meaning, in which a product is not defined by its therapeutic use and a new formulation is not an active ingredient. Such an approach, if adopted by the CJEU, would be bad news for innovators seeking extended IP protection for re-purposed drugs – an increasing focus of innovation in the sector.
CAFC vacates preliminary injunction against Dr Reddy’s – The Federal Circuit vacated a preliminary injunction that prevented Dr Reddy’s Laboratories from selling its generic version of opioid dependency treatment Suboxone Film, paving the way for the re-launch of the copycat product and causing the originator Indivior’s share price to fall to an all-time low. The panel of judges hearing the case ruled by majority that the District Court for the District of New Jersey had erred in granting the injunction in July 2018, finding that it was wrong to conclude that the innovator would be likely to prevail on the merits of its ongoing infringement case against the generic. The judges held that the patent-in-suit disclaimed the type of drug delivery films used in Dr Reddy’s treatment, and that Indivior’s case was probably barred by claim preclusion (the doctrine precluding litigation where a judgment on the merits has already been handed down in a case involving the same parties and “the same cause of action”). As well as having commercial ramifications for both sides, the decision has legal significance as the first in which the SimpleAir standard on claim preclusion has been applied to the facts of a case. This states that claim preclusion in patent suits can be triggered not only if the same patent was involved in two cases but if different patents which are “patentably indistinct” are at issue. The Federal Circuit ruling signals that the court intends to enforce this standard vigorously, which means that continuation patents – such as that asserted by Indivior – could become much more difficult to assert in US litigation from now on.
Market radar
China announces IP reforms, but patent linkage is in doubt – Chinese state authorities revealed several IP reforms in December, but the omission of patent linkage from its announcements has added to fears that earlier proposals to link pharma patent litigation with regulatory approval processes have now been shelved. The State Council approved several patent law amendments for review by the National People’s Congress (NPC) Standing Committee. These include more severe penalties for infringers (especially wilful infringers) and make clearer the duty of defendants to provide certain kinds of evidence for litigation proceedings. Meanwhile a memorandum of understanding signed by 38 government agencies laid out a range of new social penalties to tackle serious infringers. But, while these developments are good news for rights holders, pharma innovators will be concerned by the omission of plans to implement a US-style patent linkage system, which would make it much easier to enforce biopharma rights in China. Linkage was proposed by the China Food and Drug Administration in several documents issued in 2017, and was included in draft drug administration law earlier this year. But it was subsequently left out of a State Council document on healthcare reforms in August 2018 and its exclusion from the most recent announcements has led some leading Chinese lawyers to believe the policy has now been ditched.
Biotech start-up acquires top Google patent dealmaker, further illustrating narrowing strategy gap between industry sectors – Top dealmaker John LaBarre left his position as senior counsel at Google to join biotech company Zymergen as senior director of IP strategy and commercial litigation, teaming up with former Google colleague Duane Valz, who serves as the start-up’s general counsel. This is the tech giant’s latest in a series of losses from its patent team and the move might also reflect a growing convergence between IP strategies in the life sciences and high-tech sectors, which have been traditionally highly distinct. Indeed, Kirkland & Ellis’ Daniel Lim argued in this November IAM article that technological developments are set to break down many of the traditional differences between the two industries. The emergence of key platform technologies and growing political sensitivities around healthcare exclusivities could have a transformative influence on life sciences IP strategies, he contended, leading the development of de facto SEPs and FRAND licences as well as an increased emphasis on monetisation rather than monopoly.
Boston Scientific makes multibillion-dollar acquisition of BTG – Boston Scientific purchased BTG for $4.24 billion dollars in the latest in of a series of acquisitions that also includes the 2017 buyout of Apama Medical Symetis. The move brings in IP assets that will strengthen the med-tech company’s presence in the key area of peripheral intervention. Exclusive IAM data analysis revealed that, while BTG’s patent will not substantially impact the size of the Massachusetts organisation’s portfolio, the two companies’ combined assets will amount to 18,336 published patent applications and grants with an above average level of quality. BTG’s assets include a total of 287 granted patents and 198 applications in peripheral interventional area. Its rights encompass coverage in the field of medicinal preparations, where Boston Scientific previously had little coverage; and also include quality technology rights to drug delivery devices, containers and closures and fittings.
US Farm Act has IP consequences for cannabis and asexually reproduced plants – The 2018 Farm Bill was passed by the US Congress, extending plant variety protection rights to asexually reproduced plants under the US Plant Patent statute and legalising the production of cannabis hemp (containing less than 0.3% of THC), which are also now eligible for plant variety rights and whose seeds can now be deposited at the ATCC as part of applications for utility patents.
European Parliament committee makes recommendations for SPC manufacturing waiver – The International Trade Committee of the EU Parliament has adopted an opinion recommending changes to a proposed regulatory amendment that would allow generic drug producers to manufacture and export medicines protected by SPCs in Europe. The amendment was put forward earlier in 2018 by the EU Commission, which argues that such a move would promote life sciences manufacturing and development in Europe and promote ‘day 1’ competition upon the expiry of a drug’s SPC protection. The European Parliament committee seems to want to go further, suggesting that the waiver apply retroactively so as to maximise the envisioned benefits for patients and copycat drug makers.
GSK buys into oncology, teams up with Pfizer in consumer health business – GlaxoSmithKline hit the headlines having agreed to split into two parts by establishing a new consumer health company in cooperation with Pfizer. The new £9.8 billion business will be 32% owned by Pfizer, which will transfer to it brands such as Centrum and Advil, with the British company owning the rest. The spin-off comes shortly after GlaxoSmithKline agreed to pay $5.1 billion for Tesaro in a bid to strengthen its position in the lucrative oncology space. Taken together, the two moves reflect a wider trend towards specialisation in the pharma industry, whereby several companies have sought to offload their consumer health units in order to focus on promising prescription medicine treatment areas.
Bernie Sanders puts forward plan to cancel pharma patents – Independent senator and failed presidential candidate Bernie Sanders and Representative Ro Khanna have proposed a plan to bring down the price of drugs in the US by cancelling patents for medicines if they are sold at a higher price than in other economically developed countries. The Prescription Drug Price Relief Act is the latest manifestation of growing political hostility to pharmaceutical patents in the country. Accusations that life sciences innovators have been “abusing” or “gaming” the patent system to unfairly extend their monopolies and force up the price of drugs have been widely made by major media outlets, legislators and members of the Trump administration. Other proposals to curtail the IP rights of branded pharma companies include Lloyd Doggett’s Medicare Negotiation and Competitive Licensing Act, which seeks to roll-out the use of compulsory licensing, and has gained over 100 co-sponsors so far.