Entitlement to priority: Does Gilead confirm that it is a matter of substance over form?

It is so important, but this is generally
what happens when someone talks
about priority in front of the AmeriKat
outside of work....

Following from the Court of Appeal's decision in Gilead last week, the AmeriKat annoyed her officemate's concentrated work with a rant about CGK.  In response, her officemate stated that CGK and plausibility aside, it was the Court of Appeal's treatment of priority and entitlement issues that were as interesting to him.  Struck by this (and because her eyes glazed over that part of the decision), she asked Steven Willis (Bristows) to educate her and our readers about this aspect of the case.  Steven reports:  

"Kitchin J (as he was then)’s decision in Edwards v Cook [2009] FSR 27 established the proposition that in order to claim priority, a patentee must be the “person” who filed the application from which priority is claimed or that “person’s” successor in title at the date of filing of the later application, i.e. it is not possible to retrospectively correct the position. Furthermore, if the priority application was filed by multiple applicants, a patentee must demonstrate that he/she is successor in title to all of them. This was considered by many to be a significantly more formulaic approach than that adopted in other jurisdictions, such as the US. Thankfully, for the thousands of European Patent Attorneys carrying out panic-stricken searches through files hastily-retrieved from the archive, it appears with retrospect that Edwards v Cook represents the high-water mark of the English Courts adopting a strict formulaic approach to priority entitlement. 

In the aftermath of Edwards v Cook, a number of patentees have successfully deployed creative arguments to avoid falling foul of an “Edwards v Cook”-style attack. For example, in KCI v Smith & Nephew [2010] EWHC 1487 (Pat), Arnold J accepted that a confidentiality agreement between one of the priority applicants and the patentee containing a clause stating “I hereby assign and agree to assign…” was sufficient to transfer equitable title to the patentee and that this was sufficient to render the patentee the “successor in title” for the purposes of Article 4A of the Patent Convention (as transposed into the Patents Act 1977 by s5(2)). Arnold J made clear that the question was one of substance rather than form:

“When determining whether a person is a "successor in title" for the purposes of the provisions, it must be the substantive rights of that person, and not his compliance with legal formalities, that matter.” 

Birss J endorsed Arnold J’s approach in reaching a similar conclusion in HTC v Gemalto [2013] EWHC 1876 (Pat). Although both decisions were subject to appellate review, the question of whether or not the transfer of equitable title in the priority year was sufficient to render a patentee a “successor in title” (in the absence of evidence of a transfer of legal title) was not considered by the Court of Appeal.  

The point arises again in Idenix v Gilead and was the subject of some obiter comments by Kitchin LJ. As explained in the AmeriKat’s earlier post, Gilead alleged that the patent in suit was anticipated by its own PCT application. However, Gilead was only entitled to rely on this PCT application as potentially novelty-destroying prior art if it was entitled to claim priority from an earlier filed application. Idenix raised a number of points disputing entitlement to priority including the “transfer of equitable title” issue discussed above (or “Route 2, Issue 5”, as it is affectionately described at para 225 of the judgment).  

At first instance, Arnold J essentially followed his approach in KCI on the point. On appeal, Kitchin LJ appears to have also favoured the status quo stating that

“it is my provisional view that the decisions on this issue in KCI and HTC are correct, that the Paris Convention does not purport to identify the requirements for the effective transfer of title to an invention and that these matters are left to the relevant national law… in these circumstances the notion that it is the transfer of the substantive right and title to the invention which is important makes eminently good sense.”

However, this was not the end of the matter as he then went on to state, rather cryptically, that:

“nevertheless, it emerged during argument that there may be other materials and decisions which bear on this issue and to which our attention has not been drawn.  Accordingly… it seems to me that it is better left to be decided in another case.”

It seems therefore that an attack on entitlement to priority in circumstances where the patentee can demonstrate that it has acquired the equitable interest of the priority applicant(s) at the date of filing will continue to be a tall order, although the mystery “materials and decisions” could present a glimmer of hope and it would be interesting, to this author at least, to find out what they were."