West Law Report

When Court of Appeal can overrule itself

Posted in legal process, Patent, Times Law Report by mrkooenglish on June 9, 2008

From The TimesJune 5, 2008

When Court of Appeal can overrule itself
Court of Appeal
Published June 5, 2008
Actavis UK Ltd v Merck and Co Inc
Before Lord Justice Ward, Lord Justice Jacob and Lord Justice Rimer
Judgment May 21, 2008

Unlike human rights law, where the Court of Appeal had to refer to the House of Lords a case involving a decision of the European Court of Human Rights which conflicted with an earlier Court of Appeal decision, since patent law was much more specialist than human rights law, the Court of Appeal was free to depart from its own previous decision where it was satisfied that the European Patent Office Boards of Appeal had formed a settled view of European patent law which was inconsistent with that earlier decision.

The Court of Appeal so held, inter alia, when in a reserved judgment allowing the appeal of the defendant, Merck and Co Inc, and dismissing the cross-appeal of the claimant, Actavis UK Ltd, from a decision of Mr Justice Warren ([2007] EWHC 1311 (Ch)) that Merck’s patent EP(UK) 0 724 444, concerning the treatment of androgenic alopecia, was invalid.

The judge had found the claim not novel under article 54 of the European Patent Convention (Munich 1973 (Cmnd 7090)), enacted as section 2 of the Patents Act 1977, and not patentable under article 54(5) of that Convention, enacted as section 2(6) of the 1977 Act. He would not have found the claim obvious.

The defendant appealed from the findings as to novelty and nonpatentability, and the claimant cross-appealed as to the question of obviousness.

Mr Simon Thorley, QC and Mr Piers Acland for Actavis; Mr Peter Prescott, QC and Mr Ian Karet, solicitor, for Merck on the novelty and unpatentability points; Mr Antony Watson, QC and Mr Thomas Hinchcliffe for Merck on the obviousness point.

LORD JUSTICE JACOB, giving the judgment of the court, said that the case concerned “Swiss forms”, being patent claims reliant upon the identification of a second medical use of an existing pharmaceutical substance. Their novelty depended on a new treatment by a different dosage regime or method of administration.

It was noted that such claims were treated as novel in the European Patent Office, Germany and New Zealand and the domestic courts would normally follow such settled jurisprudence.

Furthermore, the decision of a European Patent Office Board of Appeal in Genentech/Method of Administration of IFG-1, T1020/03 ([2006] EPOR 9) appeared determinative of the issue as to novelty, finding that it followed from Eisai G5/83 ([1985] 0J EPO 64), a decision of the Enlarged Board of the European Patent Office, that a novel dosage regime could confer novelty on a Swiss form claim.

However, that authority was determinative only if the Court of Appeal was not bound to follow its earlier decision in Bris-tol-Myers Squibb v Baker Norton ([2001] RPC 1), the BMS case.

In the instant case, there were two principal reasons why the court would be guided by the Genentechcase and would not follow the BMS case.

First: in BMS there was no ratio decendi, or no ratio of sufficient clarity, to preclude patentability in the instant case; and in the absence of such ratio the court was entitled, having considered, inter alia, Great Western Railway v Mostyn (Owners) ([1928] AC 57, 73) and Midland Silicones Ltd v Scruttons Ltd ([1962] AC 446, 476) to follow Genen-tech.

The BMS case did not decide either that a novel nonobvious dosage regime specified in a Swiss form claim could not make it novel, or that such a claim was a method of treatment; it was not held by way of clear ratio that a Swiss form claim lacked novelty if the only difference between it and the prior art was a new dosage regime for a known medical condition.

The judge in the instant case held that the claim lacked novelty and was for a method of treatment and in both cases he had relied upon the BMS case.

However, as to novelty, the instant court would hold that the judge was wrong for the above reason and, as to method of treatment, BMS was in any event distinguishable, so that even if the authority were held to be correct it could not be extended to cover every case where novelty depended on a specified dosage regime.

Second: it was submitted that even if the above reasoning were wrong, and there had been clear ratio in BMS, nevertheless in the special case of questions of law about patentability the Court of Appeal should follow clear European Patent Office authority where it was contrary to such ratio in a previous Court of Appeal decision.

The court had regard, inter alia, to Young v Bristol Aeroplane Company ([1944] KB 718), a six-judge Court of Appeal establishing certain rules of precedent, and Kay v Lambeth London Borough Council ([2006] 2 AC 465, paragraph 43).

The House of Lords in Kay had held that where there was a conflict between a decision of the Court of Appeal deciding a point under the European Convention on Human Rights and a later decision of the European Court of Human Rights at Stras-bourg, the matter should be dealt with only by an appeal to the House of Lords and not by the Court of Appeal departing from its previous decision.

However, that case was not analogous to the instant case applying to decisions of the European Patent Office: decisions as to patent law were in their nature very specialist, were decided by only a few specialist judges at first instance, and to some extent in the Court of Appeal, and came up only very infrequently in the House of Lords.

In contrast, decisions about the Human Rights Convention were likely to be numerous and arose in all sorts of courts. They were apt to be about less precise legal questions than those in patent law with the result that there was much more room for argument as to whether a subsequent Stras-bourg decision was actually in conflict with an earlier decision of the Court of Appeal. Accordingly, the procedure outlined in Kay did not apply here.

Further, the rule in Young was a rule imposed by the Court of Appeal on itself; it was for that court, exercising its powers in favour of legal certainty, to rule on whether there could and should be further exceptions to the rule.

The court was thus free to hold, and did hold, that a specialist and very limited exception to the rule in Young applied, namely that the Court of Appeal was free but not bound to depart from the ratio deci-dendi of its own earlier decision if it was satisfied that the European Patent Office Boards of Appeal had formed a settled view of European patent law which was inconsistent with that earlier decision.

In the instant case the court would therefore follow the Genentech, holding that a new dosage regime was enough to confer novelty on a Swiss form claim.

Accordingly, where the judge had made no error in his finding as to the obviousness attack, so that the cross-appeal would be dismissed, the appeal would be allowed and the judge’s findings as to novelty and method of treatment would be reversed. The order for revocation of the patent should be rescinded.

Solicitors: Bird & Bird; Linklaters.

Patent of an obvious auto pedal system

Posted in Harvard Law Review (case), Patent, Supreme Court leading cases 2007 by mrkooenglish on May 18, 2008

A leading case summery of Harvard: KSR International Co. v. Teleflex Inc (2007) (11 pages)

Patent – Obviousness

One of the most vexing and important questions in patent law has long been how to determine if an invention is “obvious” without using hindsight in making the assessment.1 Under § 103 of the Patent Act, a patent may not issue when the patented design would have been obvious to a person having ordinary skill in the art. In 1966, the Supreme Court set forth a four-part framework for applying § 103 in Graham v. John Deere Co. In interpreting the Graham
factors, the Federal Circuit created a test requiring evidence of some teaching, suggestion, or motivation to combine elements of prior art (the TSM test) in order to find combinations obvious. This test, designed largely to combat hindsight bias and to create predictability in patent decisions, led to questions about patent overissuance.

Last Term, in KSR International Co. v. Teleflex Inc., the Court rejected a rigid application of the TSM test to the extent that it precluded approaching the obviousness inquiry with flexibility and common sense. However, neither the flexibility required by the Court’s ruling in KSR nor the Federal Circuit’s TSM test adequately confronts hindsight bias or deals with the problem of patent overissuance. While both of these courts attempt to address the two issues, courts in general remain ill-equipped to shape rules dealing with them. Instead of looking to the courts, reforms should take place at the level of the Patent and Trademark Office (PTO), where examiners are likely to be slightly less influenced by hindsight bias and where reforms could target both overissuance and hindsight bias simultaneously.