Arrow declarations can be granted: Fujifilm v AbbVie

The Court of Appeal decided yesterday that the High Court can, as a point of principle, properly grant declarations that a product lacked novelty or an inventive step at a particular date, see Fujifim Kyowa Kirin Biologics Co., Ltd v AbbVie Biotechnology Limited and Others [2017] EWCA Civ 1. This issue will now be considered at trial - the first of which is due to commence on Monday 16 January 2017.  A declaration in these terms is described as an Arrow declaration, due to the form of relief sought in Arrow Generics Limited v Merck & Co. Inc. [2007] EWHC 1900 (Pat), which settled before trial.

Context

This decision is the latest instalment in the epic battle concerning AbbVie's blockbuster Humira product, and Fujifilm Kyowa Kirin Biologics (FKB's) attempts to clear the way for its biosimilar launch (see last week's post here).  The first appeal concerned a decision of Carr J where he refused to strike out a claim for an Arrow declaration (as previously reported on the IPKat by Annsley here).  The second appeal was from decision of Arnold J and concerned the availability of an injunction to support an Arrow declaration (see previous IPKat post here).  The background to the dispute can be found in the posts referred to above. 

The precise form of the declarations of invalidity sought by FKB are set out at paragraph 43 and 46 of the Court of Appeal judgment.  The aim of the relief sought is to protect FKB from any subsequent infringement action brought by AbbVie based on divisional applications once they proceed to grant, in respect of FKB's biosimilar product.

AbbVie's challenge to the relief sought by FKB and s74 Patents Act

AbbVie contended that Arrow was wrongly decided, and that actions for Arrow declarations are precluded by s74 of the Patents Act 1977 because they put the validity of a patent in issue.  Floyd LJ summarised AbbVie's complaint concerning the relief sought by FKB as follows:  by asserting that the dosing regimen is old or obvious, the Arrow declarations (if obtained) would be making it clear that a future patent claim to that regimen would be invalid. Accordingly, if AbbVie were to obtain the grant of claims in that form, the resulting patent would have been pre-emptively adjudged invalid. There is therefore implicit in the Arrow declaration, an inter partes declaration of invalidity of a putative patent, not yet granted, having those claims.

Section 74 of the Patents Act is entitled "Proceedings in which validity of patent may be put in issue", and section 74(1) provides a list of proceedings where the validity of a patent may be put in issue. Section 74(2) then provides that:

"The validity of a patent may not be put in issue in any other proceedings and, in particular, no proceedings may be instituted (whether under this Act or otherwise) seeking only a declaration as to the validity or invalidity of a patent."

Court of Appeal decision

The Court observed that the primary purpose of section 74 is to ensure that proceedings in which the validity of a patent is put in issue will always be before a court or tribunal which has jurisdiction under the Act to revoke the patent if the grounds of invalidity are made out.  Section 74 is also concerned with putting in issue the validity of granted patents.  The Court of Appeal accepted that the Patents Act is a complete statutory code for challenging the validity of a granted patent, but noted that the Arrow declarations sought do not declare any patent invalid.  On the facts, there are now no longer any granted patents in the background in relation to which they could have that effect. The Court of Appeal concluded that there is nothing in the scheme of the EPC and the Patents Act to prevent an Arrow declaration where there is real justification for their grant. 

The Court of Appeal's summarised the legal position as follows:

i) A declaration that a product, process or use was old or obvious at a particular date does not necessarily offend against section 74 of the Act.

ii) Such a declaration may offend against the Act where it is a disguised attack on the validity of a granted patent.

iii) Such declarations do not offend against the scheme of the EPC or the Act simply because the declaration is sought against the background of pending divisional applications by the counter-party.

iv) On the other hand the existence of pending applications cannot itself be a sufficient justification for granting a declaration.

v) Whether such a declaration is justified depends on whether a sufficient case can be made for the exercise of the court's discretion in accordance with established principles.

An Arrow declaration is a discretionary remedy

The granting of an Arrow declaration is a matter of the Court's discretion.  The Court of Appeal was careful to note that "A claimant cannot seek an Arrow declaration simply because it would like to know whether a patent application in the course of prosecution will result in a valid patent. The course envisaged by the statute is that he should wait and see what, if any, patent is granted. The statutory remedy does not constitute a bar in principle to the granting of declaratory relief in appropriate cases, however. Where, for example, it appears that the statutory remedy is being frustrated by shielding subject matter from scrutiny in the national court, it should be open to the court to intervene."

The Court of Appeal was more hesitant about the justification for granting an injunction in the terms sought.  However, it was not minded to strike out the claim for an injunction at this stage, and noted that "an appropriately framed injunction may be an alternative to the declaration".

The appeals from these strike out applications were therefore dismissed.