Res judicata, invalidity and prima facie validity: a curious Belgian concoction

"Invalidated SPC retains prima facie validity in preliminary injunction proceedings" is the grand title of a note by Kathleen Mercelis and Philippe de Jong (Altius) which was recently published on International Law Office.  The note deals with a Belgian Supreme Court ruling on the end-game in a battle between generics manufacturer Eurogenerics and Lundbeck, whose SPC for escitalopram had been invalidated.  The facts are a little unusual, as appears from the text:

Background 

Pharmaceutical company Lundbeck held a European patent for escitalopram, the active substance of an antidepressant commercialised in Belgium under the trademark SIPRALEXA. The patent expired in 2009, but Lundbeck obtained a supplementary protection certificate (SPC) extending protection for escitalopram until June 1 2014. However, the SPC was invalidated by the Brussels Commercial Court following a nullity suit brought by several generic manufacturers. Lundbeck appealed that decision. 

Pending the outcome of the appeal, another generic company, Eurogenerics, brought its generic version of escitalopram to market. Lundbeck started preliminary injunction proceedings against Eurogenerics based on the invalidated SPC. At first instance, Lundbeck's claim was rejected, but its appeal was successful and the Brussels Court of Appeal issued an injunction against Eurogenerics. According to this court, the Supreme Court decision of January 5 2012(1) – which held that the revocation of a patent by the European Patent Office's opposition division, against which an appeal had been lodged pursuant to Article 106(1) of the European Patent Convention, did not affect the prima facie validity of the Belgian counterpart of the revoked patent – was equally applicable to the present circumstances. The court held that the appeal of a nullity decision of a Belgian court has suspensive effect as well. Lundbeck's SPC was therefore found to retain its prima facie validity pending the outcome of the appeal against the first instance invalidation decision (in which the SPC was eventually upheld).(2) 

Supreme Court decision 

Eurogenerics appealed to the Supreme Court, claiming that the annulment of the SPC by the first instance court had the authority of res judicata (ie, the fact that a case has already been decided) and should therefore have been respected by the court that issued the preliminary injunction. 

The Supreme Court rejected Eurogenerics's reasoning and upheld the decision of the Brussels Court of Appeal on the following grounds: 

• There is a difference between the authority of res judicata, which is attributed to every final court decision that has not been overruled, and the force of res judicata (ie, an unappealable decision). As long as the decision has no force of res judicata, the authority of res judicata is only conditional.

• According to the Belgian Patent Act, a decision by which a patent is invalidated normally has the authority of res judicata. However, such decisions are not recorded in the patent register before obtaining the force of res judicata.

• The Patent Act also states that an appeal to the Supreme Court has suspensive effect with respect to an invalidated patent.

• Finally, the Belgian Judicial Code states that an appeal normally suspends the enforceability of a decision. 

The Supreme Court consequently held that a patent that was invalidated by a first instance decision can still be the basis for a subsequent preliminary injunction action. 

Comment 

In its January 5 2012 decision the Supreme Court held that the fact that a patent was revoked by the opposition division of the European Patent Office did not affect the prima facie validity of the revoked patent, as long as no final decision has been taken in the opposition proceedings, because according to Article 106(1) of the European Patent Office, an appeal against decisions of the opposition division has suspensive effect. 

In the present case, the Supreme Court took this reasoning one step further and found that the prima facie validity of a patent (or SPC) is also not affected by an invalidity decision of a national court, notwithstanding the fact that this decision has the authority of res judicata. Consequently, a patent holder requesting a preliminary injunction against an alleged infringer can rely on the prima facie validity of its patent or SPC until the decision by which the patent was invalidated has obtained the force of res judicata – that is, once an appeal to the Supreme Court has been rejected or the limitation period for bringing the appeal has expired.

Endnotes

(1) For further details please see "Prima facie validity of granted European patents in summary proceedings".

(2) Brussels Court of Appeal, September 17 2012, IRDI 2013, p 40.

"One SPC per patent" again -- this time in the Netherlands

From our friend Martijn de Lange comes news of a fascinating Dutch development. Explains Martijn:

"The Court of Appeal has decided in a case concerning the product irbesartan + HCTZ that the CJEU rulings in Medeva and Georgetown should be read as "one SPC per patent", not "one SPC per product per patent" (see (i) this summary on the IE-Forum blog, and (ii) the full judgment which is reasonably readable with Google Translate). 

The Court notes that, even if this restriction set by the CJEU would not be in agreement with the SPC Regulation, this does not automatically imply that the restriction does not apply. 

The Court points out that the CJEU has on other occasions imposed restrictions on IP rights which cannot (directly) be found in the applicable guidelines or regulations. 

The Court then explains that this restriction may be in agreement with the Regulation if the term 'product' is interpreted narrowly as the ' invented basic substance'.

This all came in on the eve of the oral hearing last week in Luxembourg in the Georgetown, Eli Lilly and Actavis cases.

Most of the parties involved (like most if not all national patent offices in the past) have have rejected the "one SPC per patent" interpretation, but I do agree with the Court of Appeal that this is what the CJEU meant in Medeva and Georgetown and, in my opinion, the Court of Appeal does a most admirable job under the circumstances in explaining how this could be in agreement with the Regulation since the CJEU does not provide any argumentation in their own judgements, hence the mess we're in".

Note that this was a case for injunctive relief, adds Martijn, not a decision on the merits.

Thanks so much, Martijn, for keeping us up to date!

the news you've been expecting: nothing in the NZ Act on SPCs

New Zealand's Patents Act, which seems to have been in the pipeline for longer than most of us can remember -- or care to remember -- has now become a reality. With this reality comes the unsurprising news that our Antipodean brethren have made no specific provision for patent term extension for pharmaceutical or agrochemicals. According to New Zealand-based law firm Simpson Grierson

"The new Act does not introduce patent term extension for pharmaceuticals, meaning New Zealand remains out of step with most of its major trading partners. This may not be the end of the story, however. With the Trans-Pacific Partnership negotiations far from complete, this is one area that will continue to receive focus, possibly leading to the new Act's amendment to provide for patent term extensions".

This blogger wonders whether this is a prophetic statement or a little bit of wishful thinking, given the recent willingness of New Zealand's near-but-distant neighbours Australia to take a long, hard look at the entire primciple of patent terme extension.

Forthcoming attractions in Luxembourg

Not everything in the Grand Duchy is so quite and sedate:
have you tried the Luxembourg Grand Prix ...?

The Curia diary for the coming term has now published the first couple of weeks of impending cases before the Court of Justice of the European Union.  The SPC Blog has been tipped off by one of his anonymous but greatly respected regulars (thanks!) that, if anyone were thinking of taking a holiday in Luxembourg next month, he could do no better than to arrange to be there on Thursday 12 September, in time to enjoy the following fare:

Thursday 12/09/2013 09:30	Hearing C-443/12	Approximation of laws Actavis Group and Actavis Court of Justice - Third Chamber	EN
Thursday 12/09/2013 09:30	Hearing C-484/12	Approximation of laws Georgetown University Court of Justice - Third Chamber	NL
Thursday 12/09/2013 09:30	Hearing C-493/12	Approximation of laws Eli Lilly and Company Court of Justice - Third Chamber	EN

If any SPC Blog devotees happen to be there and feel tempted to let us have a report on how these hearings go, we'd be thrilled to share it with our readers.

Just for the record: details of Croatia's new SPC law

From AG-IP News ("The Only Specialized Global Intellectual Property News Agency") comes a short item by Anamarija Stancic Petrovic which confirms that the Croatian Parliament passed a new Patent Act and Act on Amending the Patent Act (Official Gazette No. 76/2013) on an urgent basis, even ahead of Croatia’s EU accession on 1 July 2013, on 29 June 2013. As the piece explains:

The amendments were made with respect to the provisions on supplementary protection certificates and compulsory licensing. The amending Act establishes a competent body and its tasks relating to the implementation of:

Regulation (EC) No. 469/09 of the European Parliament and of the Council of 6 May 2009, concerning the supplementary protection certificate for medicinal products intended for humans or animals, as amended (Official Journal of the EU (OJ) L 152, 16.6.2009, containing all the amendments);

Regulation (EC) No. 1610/96 of the European Parliament and of the Council of 23 July 1996, concerning the creation of a supplementary protection certificate for plant protection products, as amended (OJ L 198, 8.8.1996, containing all the amendments); and

Regulation (EC) No. 816/2006 of the European Parliament and of the Council of 17 May 2006, on compulsory licensing of patents relating to the manufacture of pharmaceutical products for export to countries with public health problems, as amended (OJ L 157, 9.6.2006, containing all the amendments).

The new law came into force in Croatia on 4 July 2013.

Vaccines and SPCs: a fork in the road - now you can read it

Yesterday The SPC Blog mentioned the recent publication of a piece by Simon Cohen and Paul England and expressed the hope that we would be able to host it for the edification of our readers. Well, not only have Lawtext Publishing kindly sent us a pdf, which you can read here, but we received a comment from Anonymous Steve, who wrote:

"I believe that the full text of this article is available from Taylor Wessing using the following link: https://www.taylorwessing.com/fileadmin/files/docs/Vaccines_and_spcs_law_review.pdf".

He's quite right, it is! Thanks, Steve.

Vaccines and SPCs: a fork in the road

The latest issue of the Bio-Science Law Review, published every so often by Lawtext Publishing Ltd, "Vaccines and SPCs: The CJEU Reaches a fork in the Road". The authors are Simon Cohen and Paul England, from the London office of international law and IP practice Taylor Wessing LLP, London. According to the abstract:

"The use of vaccines in the prevention of disease is nothing new and they are often protected by patents and supplementary protection certificates ("SPCs"). However, in more recent times, two developments have taken place: 

(i) guidance has come from regulators that treatment of populations with vaccine combinations is preferred to single vaccines, and  

(ii) there has been an increased need to use adjuvants with vaccines to improve their efficacy. 

Both of these developments have placed strain on the legislative regime governing SPC protection (the "SPC Regulation"), which whilst intended to supplement patents for the protection of investment in medicinal products, was not drafted with such combinations in mind. 

Deciding whether certain classes of medicinal products should be protected by SPCs and, at the same time, maintaining a clear and consistent application of the SPC Regulation has been difficult for the courts. One UK Court of Appeal judge was forced to state that the SPC regime risks failing large areas of pharmaceutical research, making it 'not fit for purpose'. In addition, a UK High Court judge has said that it is "dysfunctonal'. However, until very recently, the interpretation of the SPC Regulation on the subject of SPC protection for combination, including vaccines, had achieved a measure of clarity for makers of combination products. However, an apprent attempt by the Court of Justice of the European Union in Nurim to respond to the commercial argument for wider protection by SPCs expressed by the Court of Appeal judge, has now caused disarray. In that case the court used a so-called teleological approach to theinterpretation of the SPC Regulation that appears to contradict earlier case that were thought to have settled on a strict approach. It is this disarray that caused the frustration expressed by the latter High Court judge and a further reference the the CJEU. 

The case referred, GlaxoSmithKline Biologicals v Comptroller-General of Patents, is where these issues have now come to a head. It concerns vaccines again - adjuvant and vaccine combinations - and takes the SPC regime to a fork in the road: the CJEU can choose to go the new teleological route, or stick to the strict approach. Whichever way the CJEU chooses to go it is likely to have far-reaching commercial consequences for certain medicinal products, such as vaccines, and the pharmaceutical industry in general".

This blog will use its good services to see if it can persuade the publisher -- who has been kind to us in the past -- to let us host the entire text of this piece.

Resolution not barred from challenge to escitalopram SPC by earlier Arrow action

Resolution Chemicals Ltd v H. Lundbeck A/S [2013] EWCA Civ 924 is not so much about SPCs themselves as about who may challenge their validity. In this Court of Appeal decision, the ruling of the Patents Court, England and Wales, was upheld. That was a decision by Mr Justice Arnold that Resolution was entitled to attack the validity of the patent upon which Lundbeck's escitalopram SPC was based -- even though Resolution was part of the same group of companies as Arrow Generics Ltd, which unsuccessfully challenged the same patent back in 2005. Resolution had not taken an active part in the 2005 litigation and, at that time, had given up its attempts to develop its own generic version of the drug at the time those proceedings took place. Accordingly, Resolution was not estopped by the doctrine of privity of interest from bringing a challenge to the same patent several years later.

Our 2013 Seminar: at last, the PowerPoints!

At last, The SPC Blog is delighted to announce that the PowerPoints from this month's seminar are now available for all to enjoy. They may be accessed as a PDF document here or in PowerPoint format here. We hope that you will find them useful and instructive and take this opportunity to thank all of the seminar participants once again for their time and effort.

Several people who attended the seminar have emailed to ask about CPD points. The seminar accrues 2 CPD hours and its SRA Reference is 096/SOLS.

Too late, Tulane: appeal dismissed

Tulane Education Fund v Comptroller General of Patents [2013] EWCA Civ 890 is a ruling delivered yesterday by the Court of Appeal for England and Wales. The court had a somewhat unfamiliar line-up, featuring one specialist IP judge in Lord Justice Kitchin, plus Sir Terence Etherton -- Chancellor of the High Court -- and Lord Justice Underhill. The name Underhill is better associated with hobbits and with a football stadium with a notoriously sloping pitch from which North London team Barnet FC was ignominiously driven, than with anything to do with patent-related appeals.

This was an appeal against the decision of Roger Wyand QC (sitting as a Deputy High Court judge) in July 2011 (noted on The SPC Blog here) to uphold the rejection by the Intellectual Property Office (IPO) hearing officer of Tulane's application to reinstate its supplementary protection certificate (SPC), following its failure to pay the prescribed fees in time.

In short, the basic patent upon which the SPC application relied expired on 10 July 2008, the SPC being due to come into effect the next day. Tulane instructed Dennemeyer & Co to pay the SPC fees within the period for making payment which was prescribed under the Patents Act 1977, but this did not happen. Dennemeyer did try to pay the fee immediately following the prescribed period, using the electronic renewal system for patents, at the same time as it made payments for over 3,000 other patent renewals. Unfortunately, the system attempted to read the SPC number as if it was a patent number; since the number was not recognised as a valid patent number, the payment was rejected. Dennemeyer was confused by the reference in the rejection report to a patent number which it did not recognise, and took no further action. The error was only realised after the period for late payment of the prescribed fee had expired, which meant that the SPC lapsed on the date of expiry of the basic patent.

At this point, Tulane then applied to the IPO for (i) a correction of an irregularity under the Patents Rules 2007 r.107 or (ii) reinstatement of the SPC under s.20A of the Patents Act or (iii) restoration of the SPC under s.28 of the same Act. However, both the hearing officer and Roger Wyand QC concluded that Tulane had failed to pay the prescribed fee in due time and that accordingly the SPC, although properly applied for and granted, never came into effect.

On appeal, Tulane submitted that the judge fell into error in failing to find that the fee regime in sch.4A para.5 of the Patents (Compulsory Licensing and Supplementary Protection Certificates) Regulations 2007 (SI 2007 No 3293) was ultra vires, since Regulation 1768/92 art.13 contained a mandatory requirement that the SPC would take effect at the end of the lawful term of the basic patent, which was not contingent on any fee being paid. Tulane further argued that the judge should not have found that the reference to the 1992 Regulation in s.128B could be construed as a reference to Regulation 469/2009.

The Court of Appeal dismissed Tulane's appeal.  According to the Court:

• An SPC could be granted quite some time before it was due to take effect and the maximum term of each SPC would vary, subject to the requirement that the duration of the certificate could not exceed five years from the date on which it took effect. The Patents (Fees) Rules 2007 r.6 provided that the fee increased as the number of years for which the SPC was to have effect increased, and that an applicant was not required to take an SPC for the whole permitted period, but could do so for a shorter time and then only pay a fee in respect of those years for which he had elected.
• The requirement imposed by r.116 of the 2007 Rules, that the fee had to be paid before the SPC could take effect, did not mean that the fee ceased to be an annual fee. Nor did the fee cease to be an annual fee because the Rules imposed an obligation to pay it all at once. The Rules were not in conflict with art.13. So long as the fee was paid within the prescribed period, the SPC would automatically take effect on the day after the expiry of the basic patent.
• Section 128B explicitly defined the SPCs to which it applied as including certificates issued under the 1992 Regulation. It was thus beyond doubt that Tulane's SPC was granted under the 1992 Regulation and was therefore an SPC to which s.128B applied. Section 128B had not been repealed or amended.
• Tulane's SPC remained an SPC granted under the 1992 Regulation; the mere fact that the 1992 Regulation had been repealed could not change its status as an SPC granted under the 1992 Regulation. For that reason, the only provisions of the 1977 Act which applied to it were those set out in sch.4A (para.61).