Fujifilm Kyowa Biologics can use declaratory relief to clear the way for its Humira biosimilar in the UK, rules Mr Justice Carr

The AmeriKat has been known to sleep alongside things 
stranger than patent decisions  (imgur.com)

A decision has been rolling around at the bottom of the AmeriKat's bed for about a month. Yes, the AmeriKat sleeps with patent decisions by her side.  Finally, in the peace of a Friday off from work, she has been able to fully digest the decision of Mr Justice Carr in Fujifilm Kyowa Biologics v AbbVie Biotechnology [2016] EWHC 374.

What is this case about?

Whether the UK Patents Court could grant the declaratory relief sought by Fujifilm Kyowa Biologics (FKB) in respect of their biosimilar version of Humira.  In determining that the court has jurisdiction to grant the declaration sought, Mr Justice Carr conducted a thorough analysis of the leading case on declaratory relief in patent cases -  Arrow Generics Ltd v Merck & Co Inc [2007] EWHC 1900 - and provided helpful signposts as to when such relief would be appropriate.

What is the product? 

Abbvive's adalimumab, marketed under the trade mark Humira, which in 2014 attracted over $12.5 billion in net sales.  Humira is approved for the treatment of rheumatoid arthritis, psoriatic arthritis and psoriasis.   Adalimumab binds and neutralizes activity of the TNFα, a cytokine (i.e. a small signalling protein) that is important in the regulation of immune cells.  By binding to TNFα, adalimumab prevents TNFα from binding to its receptors leading to an inflammatory response in autoimmune diseases (such as rheumatoid arthritis).  Humira is administered by way of a single, 40 mg dose subcutaneous injunctions injections [amended 29/3 at 12.20pm - see comment] every other week.

What is the patent protection?

The basic patent for adalimumab is EP (UK) 0,929,578, with an UK SPC (GB/04/002) that will expire on 5 October 2018.  AbbVie has or has applied for several patents and divisionals which relate to the 40mg dosage regime for the treatment of various indications, including EP (UK) 1,406,656 and EP (UK) 1,944,322.  The other divisionals concerning this dosage regime are unlikely to grant for several years.

The '656 patent, which claims the 40 mg subcutaneous, every other week dosage regime, had a rough time of it during its EPO opposition (15 oppositions, 19 statements of fact and expert reports, a request of a divisional patent, etc).  AbbVie subsequently abandoned the '656 Patent and it was then revoked on 16 November 2015 (importantly after FKB launched the current proceedings). The divisional, which claimed essentially the same subject matter, was published on 4 November 2015.  The '322 patent covers the 40 mg subcutaneous, every other week dosage regime, for the treatment of psoriasis.  This patent is in force.

Why is there a case before the UK Patents Court?

FKB, a joint venture between FUJIFILM and Kyowa Hakko Kirin, intends to clear the path of AbbVie's follow-on patents in order to market its biosimilar adalimumab product after expiry of the UK SPC in October 2018.  FKB issued its claim on 29 October 2015, seeking to revoke the '656 and '322 Patents.  Of course, subsequently, the '656 Patent was revoked following AbbVie's abandonment of the patent.

FKB therefore want to amend their pleadings and, in particular, wish to point to the '656 Patent's fate as demonstrating AbbVie's intention to avoid adjudication by the English courts and the Opposition Division on the validity of '656 but nevertheless keep its subject matter alive by way of the divisional.  Such tactics, FKB argues, makes it impossible to clear the path in time for their intended launch as the ultimate decision on the validity of the divisional would take years to be resolved.

AbbVie said there was no connection between the fate of '656 Patent and FKB's claim and that the real reason was to avoid dealing with a feature of the '656 Patent (concerning an in vitro L929 assay) that was under attack for sufficiency and added-matter.  This feature is not present in the divisional.

At the heart of this case, is FKB's claim to for a declaration that biosimilar products containing a monoclonal antibody to the antibody adalimumab for the treatment of rheumatoid arthritis, psoriatic arthritis and/or psoriasis by the administration of 40mg every other week by subcutaneous injection would have been obvious at the priority dates of the '656 and '322 patents.  Such a declaration takes support from Arrow Generics Ltd v Merck & Co Inc .

FKB's declaration intends to establish that its products were anticipated or obvious at the priority dates of the two patents.  If the declaratory relief is granted, AbbVie would find it impossible to claim that FKB's products infringe its patents without putting the validity of its patents in jeopardy (i.e., an obvious FKB product cannot be protected by an inventive AbbVie patent at the same priority date).

The Law - Is there jurisdiction to grant the relief sought by KFB?

Yes, like in Arrow Generics, the court has jurisdiction to grant such declaratory relief at trial.  The granting of declaratory relief is pragmatic and discretionary and can assist in achieving justice between the parties (see Messier-Doughty v Sabena [2001] 1 All ER 275 and Financial Services Authority v Rourke [2002] CP Rep 14; see also Nokia Corp v Interdigital [2006] EWCH Civ 1618; [2007] FSR 23).

In Arrow Generics very similar issues arose.  In that case, Merck's 70mg once-weekly dosage regime patent for alendornate was revoked by the High Court (upheld on appeal) and the EPO in proceedings brought by Arrow.  Having cleared the path, Arrow launched its generic product.  However, subsequently, Merck's divisional which claimed the same dosage regime as the revoked patent was subsequently granted.  There were also other pending divisionals which included or could be amended to include the dosage regime at issue.  With no final decision from the Opposition Division expected for years, the uncertainty meant that Arrow was faced with a real and substantial threat to its European alendornate business.  Like FKB, Arrow sought declarations that were directed at the obviousness of its own product at the priority date of the divisional applications.

Merck argued that section 74 of the Patents Act 1988 was a complete bar to the relief sought by Arrow.  Section 74 (1) provides for a closed category of circumstances where the validity of a patent may be put in issue (declaratory relief is not included) and section 74(2) states that the validity of a patent may not be put in issue in any other proceedings.  Kitchin J rejected this interpretation stating that section 74 did not exclude the right of a person to seek a declaration in relation to his own product, particularly where the need to do so derives from a patent application yet to be granted.  This did not mean that the court could weigh in on the validity of a patent application that has yet to be granted - this would be inappropriate.  However, Arrow was not seeking such a declaration. Arrow only sought a declaration that their own product was obvious at the priority date of the divisional applications.  The Dutch court's reasoning in the parallel case was consistent with the English Court (save they actually granted the relief sought, whereas Kitchin J held that the case for the declaration was arguable) (see Merck Sharpe & Dohme Manufacturing v Ratiopharm Nederland BV and others - February 13 2008 case number/docket number 288241/ HA ZA 07-1689).

A new mantra for those clearing the path?

AbbVie argued that the Arrow judgment was wrongly decided on numerous grounds.  The thrust of their argument came down to the fact that because FKB's product was defined by reference to the integers of AbbVie's pending patent applications, the relief sought was a backdoor way of invalidating the claims of the divisionals.  This was contrary to section 74 of the Patents Act and the deliberate exclusion of pre-grant examinations under English law and at the EPO.  Further, in granting such relief the English court would be usurping the EPO's validity examination jurisdiction directly or indirectly contrary to Article 27 of the Recast Brussels Regulation and Lenzing Ag's European Patent [1997] RPC 245.  AbbVie also argued that since Arrow was decided nine years ago, the appellate courts have been more willing to permit EPO procedures to take their course without English judicial interference (see  Virgin Atlantic Airways Ltd v Premium Aircraft Interiors UK Ltd [2013] UK SC 46; [2014] A.C. 160, as summarised by Floyd LJ in IPcom GmbH & Co KG v HTC Europe Co Ltd & Ors [2013] EWCA Civ 1496; [2014] R.P.C. 12.)

Carr J rejected these arguments, holding that Arrow was correctly decided. The relief sought did not touch on the validity of the pending applications, only Arrow's product.  The English court will not  make a declaration that no valid patent could be granted on a divisional application that is pending before the EPO.  The UK Patents Court is therefore not usurping the role of the EPO.  However, it was incorrect to argue that the UK Patents Court was being more deferential to EPO procedure since Arrow.  In particular, Lord Justice Floyd in the IPCom case cited by AbbVie held that English judges should have the discretion to refuse a stay of national proceedings given that the EPO opposition procedure can take many years to resolve.  Mr Justice Carr concluded:

"If there was no jurisdiction to grant Arrow declarations, then it would be impossible for parties who wished to clear the way for the launch of a product to do so, without facing years of commercial uncertainty posed by cascading divisionals pending before the EPO. This would be so even where a patent had already been revoked or abandoned in the jurisdiction of intended launch, as the patentee could seek to re-monopolise essentially the same subject matter by filing further divisionals. Whilst the jurisdiction needs to be exercised with caution, both the UK and the Dutch courts have found that it exists. I agree with their conclusions and will proceed to consider whether there is a realistic prospect that the trial judge will exercise the discretion to grant the declaration in the present case."

Mr Justice Carr holds that Arrow was
correctly decided

The Application - Is there a realistic prospect of the court granting the relief?   

In order to determine whether there was a reasonable prospect of the court granting the relief sought (and thus whether AbbVie's strike out application would be successful), Mr Justice Carr helpfully listed the factors relevant to the exercise of court's discretion in granting such relief:

1.  Would the declaration sought by FKB serve a useful purpose?  Yes.  If FKB's product is launched there is a real concern that at some point in the future it will face patent infringement actions arising from Abbvie's pending divisionals.  FKB may be on the hook for very substantial damages.  If they did not launch, as a result of such a risk, FKB will have lost many millions of pounds in investment in obtaining regulatory approval for its biosimilar (a risky game as it is).  A declaration would dispel this real commercial uncertainty, especially in circumstances where AbbVie had made public statements about "vigorously" enforcing its IP and seeking injunctive relief to prevent "at risk" launches.  

2.  Is the underlying issue sufficiently clearly defined to make it properly justiciable?  Yes - the issue as to whether FKB's own product was obvious or anticipated at the priority date is clearly defined and susceptible of a determination by the UK Patents Court.  

3.  Are there special circumstances why the court should not grant the declaration sought?  The facts of the case are sufficiently unusual that there is a realistic prospect that the trial judge will exercise his/her discretion to grant the relief.  In particular, the judge pointed to the fact that AbbVie had applied for and vigorously defended the '656 Patent until it was abandoned in 2015.  FKB had devoted significant resources in seeking to revoke it at the EPO.  For the purposes of the hearing, AbbVie was assumed to have abandoned the '656 Patent in order to prolong commercial uncertainty.  Further, the amount of money at stake for FKB was significant.  FKB therefore had a real prospect of success in establishing that its own product was anticipated or obvious at the relevant priority date.  

Merpel waiting for the AmeriKat to get to the point.....

AmeriKat, this is a long post - what do I really need to know?  

Yeesh, okay, okay - this is what you need to know:

• Granting of declaratory relief is discretionary and it must serve a useful purpose, ie, achieving justice between the parties.  
• Where a party is unable to effectively clear the path and achieve commercial certainty (despite best efforts), because of the threat of pending divisionals being enforced upon grant (at some uncertain point in the future), justice may not be achieved.  
• Declaratory relief may be appropriate to achieve justice and provide commercial certainty. 
• However, the jurisdiction to grant declaratory relief must be exercised with caution.
• In particular, the type of relief sought in AbbVie and Arrow, will be appropriate in only unusual circumstances.
• Whether there are unusual circumstances depends on numerous factors (as outlined above), including the inability to achieve commercial certainty in a reasonable time frame, whether the party has sought to clear the path previously, the degree of the commercial uncertainty and the amount of investment at stake.   
• The relief must also not stray into pre-determining the validity of a pending European patent application, thus usurping the EPO's jurisdiction.
• Although it may be unusual circumstances where such declaratory relief may be appropriate, it is still a useful tool to have in your patent litigator's tool box should the time come.