AIPPI UK Event Report: Roundup of 2020’s Patent Cases

The AmeriKat has her mittens on
in time for the cold, winter
tradition of the AIPPI patent
roundup

A couple of weeks ago, instead of descending upon the hospitality of Hogan Lovells' London offices to devour patent law and mince pies, AIPPI UK members instead virtually attended the annual tradition that is the AIPPI UK Patent Cases Roundup. This UK roundup adds the final chapter in the IPKat's 4-part series of round-ups from the Netherlands, Germany and France earlier this year. With the AmeriKat in virtual hearing prep, Josh Stickland (Hogan Lovells) was on hand to summarize the evening's proceedings for our furry friends in the UK and beyond. 

Over to Josh: 

"Introduction 

On Thursday 10 December 2020, patents’ practitioners were invited to gather round their virtual fireplaces to attend AIPPI’s annual patent round-up event, (Zoom) hosted by Hogan Lovells International LLP. Andrew Lykiardopoulous QC and Henry Edwards of 8 New Square presented the highlights of the 2020 patent cases in the form of a Christmas banquet, featuring culinary delights ranging from transgenic mice to public interest soup.

Appetisers were served in the form of some statistics from 2020. It seems this year was the year of the patentee (or at least more so than 2019): of the nine judgments following trial in 2020, there was only one case in which the patent was held to be invalid and in any event not infringed; in 2019, of thirteen trial judgments, there was only one case where the patent was held to be valid.

The starters

(1) Interim injunction surprise

In Neurim v Mylan [2020] EWHC 1362 (Pat), Marcus Smith J ruled on the claimants’ application for a prohibitory injunction. On the face of it, the facts appeared quite normal for a PI application: Neurim sought to protect its patent (relating to long release melatonin for restorative sleep) by preventing Mylan from launching a generic version and causing irretrievable harm to its market position.

Marcus Smith J, however, wielding his “new broom” (as Andrew put it), held that the key question (as per the American Cyanamid guidelines) was not whether a patentee would suffer irreparable harm to its market position, but whether that irreparable harm could be compensated for in damages. In this instance, perhaps because the patent expired in 2022 and therefore the harm was for a relatively short period, Marcus Smith J held that the harm could be quantified in damages. An interim injunction was thus not granted, bucking the trend of PIs being granted in generics cases.

(2) Public Interest soup 

In Evalve v Edwards Lifesciences [2020] EHWC 513 (Pat), Birss J ruled on a final injunction, in a dispute that concerned medical devices used for heart treatments. His judgment set out much of the case law on final injunctions. He held that the power to refuse an injunction on public interest grounds should be used very sparingly, as it is in the public interest to protect a patent monopoly in order to promote investment in R&D. In a clinical setting, an injunction could only be refused on public interest grounds in order to protect the lives of patients for whom a defendant’s product was the only suitable treatment. Even then, it is not sufficient to point to the freedom of clinical judgment - just because the embodiment of a defendant’s invention is preferred by doctors is not enough to avoid an injunction. To refuse an injunction in such circumstances would be too much of an in-road into a patentee’s rights, which Birss J felt was a matter for Parliament and not the courts.

A final injunction was thus granted, with a limited carve out.

(3) Global damages pâte

In Philips v Asustek [2020] EWHC 29 (Ch), which arose from Asus’ application to be removed as defendants having sought to take advantage of the TQ Delta ([2019] EWCA Civ 1277) waiver, Marcus Smith J ruled on whether the quantum of damages for Asustek’s past acts of infringement was still in dispute.

Asus sought to pay Philips’ FRAND rate but only on UK past sales rather than global past sales. Philips sought to keep a FRAND trial in play and argued that damages could be based on its global FRAND licence and on all global sales. Marcus Smith J ruled there was no automatic linkage between the global licence and the counterfactual position. He held that either measure espoused by the parties might be appropriate depending on the facts, and therefore the assessment of damages was not appropriate for summary determination. It was appropriate for Asus to remain as defendants.

In IPCom v HTC [2020] EWHC 2941 (Pat), IPCom sought to plead a similar point but Birss J took a harder line. He took a different view to Marcus Smith J, in that even if IPCom proved everything it wished to prove at trial, the claim would still fail on a point of law and principle. Birss J ruled that damages could not be awarded in respect of foreign infringement, but only on the basis of infringement in the UK. IPCom’s damages claim was thus struck out insofar as it was based on anything other than a claim for royalties attributable to sales of or other dealings in 2G, 3G or 4G phones in the UK.

Birss J did not strike out the claim in relation to non-infringing UK ‘workaround’ phones. This was on the basis that in Unwired Planet, he had approached the damages for UK patent infringement on a UK portfolio basis, rather than on the basis only of the individual patents found to be valid and infringed. Birss J did suggest that, free from authority, he would hold the portfolio approach would only be appropriate by agreement or concession.

(4) Confidentiality rings

In Anan Kasei v Neo Chemicals [2020] EWHC 2503 (Pat), Marcus Smith J ruled on whether the defendants’ employees could be admitted to a confidentiality ring. He rejected as irrelevant the claimant’s argument that there weren’t very many confidential documents at issue. He also rejected the notion that a document might be relevant to be seen by a party’s employees at some stage, but not yet, as “peculiar and difficult to comprehend justification”. He concluded that the burden for seeking attorney eyes only (AEO) lies with the party seeking it, and had not been met in this instance.

In OnePlus v Mitsubishi, Sisvel [2020] EWCA Civ 1562, the Court of Appeal approved Sir Alastair Norris’ judgment at first instance ([2020] EWHC 2641 (Pat)) regarding AEO designations and membership of confidentiality clubs. Floyd LJ held that parties should not abuse the confidential label, and should have “solid grounds” for designating material as AEO in order to protect their confidential information. He also provided that an “arrangement under which an officer or employee of the receiving party gains no access at all to documents of importance at trial will be exceptionally rare, if indeed it can happen at all.” 

In Conversant v Huawei & ZTE [2020] EWHC 256 (Pat), the question arose as to whether third party licences relating to a different portfolio from the one being assessed in the FRAND case could ever be relevant to the portfolio at issue. As in Unwired Planet, Birss J held that the licences were not required to be disclosed. However, he made clear that third party licences are not in principle restricted from being disclosed in a FRAND case, and are capable of having evidential value.

(5) Equivalence and infringement

In ViiV Healthcare v Gilead [2020] EWHC 615 (Pat), the defendants sought to strike out the part of the claimants’ pleading that related to the intention of the infringing products’ inventors. Birss J ruled that although the test for infringement under the doctrine of equivalence is objective, it is “at least reasonably arguable” that intention is relevant, as it goes to whether the inventors were looking to solve the same problem as the patent and whether the infringing products work in the same way. Birrs J therefore refused the strikeout application.

In Teva v Chiesi [2020] EWHC 1311 (Pat), the defendants sought to strike out an infringement claim on that basis that a market authorisation was a prerequisite for a quia timet infringement action. Birss J did not accept that there was such a prerequisite, and therefore rejected the application.

(6) Technical Success side salad

In Evalve v Edwards [2020] EWHC 514 (Pat), Edwards argued that the claimants were seeking to rely on an unpleaded commercial success argument. The claimants contented that their argument was one of technical success rather than commercial success. In his judgment, Birss J provided that the requirements to plead commercial success are well known (i.e. CPR PD63 para 4.6 and 6.3). He ruled that he could not see why this information ought not to be provided in a technical success case at the pleadings stage, as the right place to find out should not be in the skeleton arguments for trial.

The main course – Supreme Court cases

(7) Modified Mouse Surprise

In Regeneron Pharmaceuticals v Kymab [2020] UKSC 27, the UK Supreme Court reviewed the principle of general application in relation to Regeneron’s patents for the creation of a range of types of transgenic mice that produce chimeric antibodies. The question at issue was whether a product patent passes the sufficiency test if its teaching enables the skilled person only to make some, but not all of the types of product within the scope of the claims.

The starting point of the Supreme Court’s majority judgment was the essential patent bargain. It rejected the Court of Appeal’s summary of this bargain, and held that “patents are about products and process, not pure ideas”. Thus, in a product claim, the contribution to the art is the product which is enabled to be made by the disclosure, not the invention itself. The Supreme Court therefore upheld the orthodoxy that if a patent claims a range of products, it will only pass the sufficiency test if its disclosure, coupled with CGK at the priority date, is enough to allow the skilled person to make all the products in the claimed range. It held the claimant’s patent did not do this, and was thus invalid for insufficiency.

(8) Yet more FRAND cakes

In Unwired Planet v Huawei [2020] UKSC 37, the Supreme Court once again invoked the patent bargain as the basis for its judgment and rationale for a decision that was much more favourable to patentees and owners of SEPs.

On the five key issues raised, the Supreme Court ruled as follows:

1. The English court does have the power to grant a worldwide FRAND portfolio injunction. Birss J’s injunction at first instance struck a good balance between patentees and implementers, and was consistent with IPR policy.
2. The English court was the forum conveniens, as the only alternative forum suggested was China. Since a FRAND worldwide injunction was not available in China, it was not a more suitable forum than the UK. The trickier issue of how you characterise these FRAND disputes for conflict of law purposes was not explored.
3. The meaning of ‘non-discriminatory’ in FRAND should be read together with ‘fair’ and ‘reasonable’. The terms and conditions on offer should be such as were generally available as a fair market price for any market participant, to reflect the true value of the SEPs to which the licence related.
4. The lower courts had been correct with regard to the impact of competition law – sufficient notice had been given to the infringer prior to a prohibitory injunction being sought.
5. A worldwide injunction was a proportionate remedy in the circumstances and damages would not be an adequate alternative, due to the risk of hold out by infringers.

The Supreme Court thus approved Birss J’s judgment at first instance whereby Unwired Planet was permitted to sue on one or more their SEPs in the English courts, and granted Unwired Planet a worldwide FRAND portfolio injunction. It dismissed the risk of future jurisdictional complexity, providing that national courts have to step in to provide international solutions until there are international courts that exist to do so.

A few mince pies 

To finish, Andrew served up a few mince pies – decisions of lesser importance but worthy of note:

(9) In Merck Sharp & Dohme v Wyeth [2020] EWHC 2636 (Pat), Mead J re-emphasised that an allegation based on literature search results requires concrete evidence of the search to be done, its goals and what would be found by the search; otherwise any published material could be elevated to CGK.

(10) In Nicoventures v Philip Morris, BAT [2020] EWHC 1594 (Pat), Birss J ruled that it is not enough for expedition simply to point to a parallel infringement proceeding you wish to leapfrog; there needs to be additional factors.

(11) Birss J’s judgment in Optis v Apple [2020] EWHC 2425 (Pat) pointed to the next potential extension of FRAND: penalties flowing from being judged an unwilling licensee before a FRAND determination has even been conudcted by the Court.

(12) As part of his judgment in Neurim v Mylan [2020] EWHC 3270 (Pat), Smith J ruled on exclusive licences and the right of an exclusive licensee to bring a claim separately from the patentee.

(13) Fittingly for 2020, the final mince pie had a filling of hybrid trials. Birss J in Edwards v Meril [2020] EWHC 2562 (Pat) that what had taken place in July during the Evalve hybrid trial had been appropriate: i.e. nobody should be provided with a video link to the trial without the court’s permission, therefore maintaining the court’s control of proceedings. It has also become clear that permission from the appropriate foreign court(s) must be obtained if witnesses from continental Europe are required to give evidence at trial."