United Kingdom
Recent developments in patent law
and practice
Pierre-André Dubois and Nicola Wiles
Kirkland & Ellis International LLP
In the last 18 months there have been substantial developments in patent law and practice in England and Wales. After nearly a decade of not entertaining an appeal in a patent case, the House of Lords, the highest court in England and Wales, issued its landmark decision in Kirin-Amgen v Hoechst Marion Roussel Limited, which focused on the applicable rules of interpretation of claims. In October 2006, implementing changes in EU law, the Patents Act 1977 was amended to entrench a statutory Bolean-type exception with respect to experimental use. Earlier in the year, the Patent Office adopted a new approach with respect to the test for patentability in the case of computer-implemented inventions, aligning English law with European Patent Office (EPO) practice on the issue. In the first case of this nature, the High Court issued interim damages in a patent infringement case. Finally, various amendments were made to the Patents Act 1977 and the Patents Rules 1995 dealing with a broad range of topics, including the introduction of a new procedure allowing a party to seek an opinion from the Patent Office on infringement or invalidity of a patent.
Claim construction
Until the decision in the Amgen case, the 1990 decision in Improver Corporation v Remington was the guiding light with respect to the construction of claims under English law. English law had moved away in the past from literal interpretation of claims with the seminal decision of the House of Lords in Catnick Components v Steel & Smith, which had looked at the issue under the Patent Act 1949 (the predecessor to the Patent Act 1977) and established that a purposive construction was to be given to claims. Improver set out three questions, often referred to as the protocol questions, with reference to the Protocol on the Interpretation of Article 69 of the European Patent Convention. These questions are as follows:
• Does a feature embodied in an alleged infringement that falls outside the primary, literal or contextual meaning of a descriptive word or phrase in a claim (a variant) have a material effect upon the way the invention works? If the answer is yes, the variant is outside the claim.
• If the answer is no, would this (ie, that the variant had no material effect) have been obvious at the date of publication of the patent to a reader skilled in the art? If the answer is no, the variant is outside the claim.
• If the answer is yes, would a reader skilled in the art nevertheless have understood from the language of the claim that the patentee intended that strict compliance with the primary meaning was an essential requirement of the invention? If the answer is yes, the variant is outside the claim. If the answer is no, this would lead to the conclusion that the patentee was intending the word or phrases in the claim to have a figurative meaning denoting a class of things that included the variant and the literal meaning, the latter being perhaps the most perfect, best-known or striking example of the class.
While Improver and the earlier Catnick decision allowed the courts to look outside the strict wording of the claims, English law was arguably still unclear as to how far a court could look and whether a doctrine of equivalents similar to that of the United States existed.
In Amgem, the House of Lords rejected once and for all any notion that English law should include a doctrine of equivalents similar to that of the United States. The court expressed the view that the doctrine of equivalents was arguably borne out of despair and that its use often leads to the grant of an extended ambit of protection outside the monopoly originally granted or intended to be granted. On the other hand, the House of Lords acknowledged that a literal interpretation will often not give fair protection to a patentee and, therefore, English law should stay away from literal interpretation.
The House of Lords considered that the protocol questions were useful as guidelines, but stated that the correct approach to claim construction should be based on the following: “How is this to be achieved? The claims must be construed in a way which attempts, so far as is possible in an imperfect world, not to disappoint the reasonable expectations of either side. What principle of interpretation would give fair protection to the patentee? Surely, a principle which would give him the full extent of the monopoly which the person skilled in the art would think he was intending to claim. And what principle would provide a reasonable degree of protection for third parties? Surely again, a principle which would not give the patentee more than the full extent of the monopoly which a person skilled in the art would think that he was intending to claim. Indeed, any other principle would also be unfair to the patentee, because it would unreasonably expose the patent to claims of invalidity on grounds of anticipation or insufficiency.”
The decision in Amgen means that, under English law, while the literal approach is a thing of the past, English courts are unlikely to depart too far from the natural meaning of the words in a claim and its context. Indeed, the question to answer is: “What would the person skilled in the art have understood the patentee to mean using the language of the claim?” Expert evidence on claim construction has always been key in patent infringement cases before the English courts. The ruling in Amgen will mean that expert evidence concerning the understanding of the claims by a skilled person will become even more significant than in the past.
Bolean exception
In the past, EU law has been uneven across the member states regarding the interpretation of the exception to infringement in the case of experimental use. The courts of the various member states arrived over the years at different results in the case of pharmaceutical products when experiments were conducted to pursue regulatory approval. In England, Section 60(5) of the Patents Act 1977 provided, before its recent amendment, that an act done for experimental purposes relating to subject matter of the invention did not constitute patent infringement. However, Section 60(5) did not say whether an experiment, the purpose of which was to satisfy regulatory approval, was exempted. In the leading English case on the issue, Monsanto Co v Stauffer Chemical Co (1987), the High Court held that trials conducted for experimental purposes (even for the purposes of submitting the results to a regulatory authority) would be protected under Section 60(5). In contrast, in other member states, when trials had been conducted in order to obtain regulatory approval, courts had found that such use was not an experimental use in itself as it had as its main goal a commercial purpose.
European Directive 2001/83/EC on the Community Code relating to medicinal products for human use (as amended by Directives 2002/98/EC, 2003/62/EC, 2004/24/EC and 2004/27/EC) now provides that clinical trials may be conducted for the preparation of a submission for regulatory approval of a generic medicinal product or a biological product equivalent to a medicinal or biological product that has previously been approved. As a result of this directive, Section 60(5) of the Patents Act 1977 has been amended by the Medicines (Marketing Authorisations etc) Amendment Regulations 2006, with effect from October 30 2006, to provide specifically that any studies, tests or trials conducted for such purposes will not be considered an infringing act under English law. This brings into English (and European) law the equivalent of a Bolean exception and will be a welcome development in this ambiguous area of law.
Test for patentability
The Patents Act 1977, which mirrors Article 52(2) of the European Patent Convention, contains a list of exclusions from what is to be regarded as patentable subject matter. Methods of doing business and computer programs are, in principle, excluded subject matters from patentability. As is well known, over the years, notwithstanding the wording of Article 52(2) of the convention, the EPO developed a test that allowed more than 40,000 computer-implemented and business method patents to be granted. The EPO test has been to focus on whether the alleged invention taken as a whole had a technical character or, in other words, whether the invention provides a new way of resolving a technical difficulty. The EPO’s approach can be said to be holistic, as it considers at the same time both the patentability of the subject matter and the issue of obviousness. In the United Kingdom, in the past, the Patent Office had examined whether the invention had a technical contribution on its own and rejected any claim immediately if it concluded that there was none.
In the matter of Patent Application GB0226884.3 and 0419317.3 by CFFH LL.C (decided in July 2006), the High Court ruled that the correct approach to be followed is that of the EPO. The court summarised the correct approach as follows:
• Identify the advance in the art that is said to be new and not obvious (and susceptible to industrial application); and
• Determine whether it is both new and not obvious (and susceptible of industrial application) under the description of an invention in the sense of Article 52 of the convention.
Following this decision, the Patent Office issued a policy statement with respect to examination for patentability confirming that, going forward, it would follow the guidance of the High Court and the EPO approach. The Patent Office’s statement also includes the following guidelines:
• In identifying the advance in the art that is said to be new and not obvious, examiners should look at the claim as a whole.
• Examiners should continue to look at the substance of the invention and not the guise in which it may happen to be presented.
• In the case of computer programs, the approach suggested is to answer the following question: “Would it still be new and not obvious in principle even if the same decisions and commands could somehow be taken and issued by a little man at a control panel, operating under the same rules?” If the answer to that question is yes, this suggests that the invention is not really about computer programming at all.
• Each case must be assessed on its own facts.
Interim damages
The usual practice in patent infringement cases in England, at least until now, was to postpone the damages inquiry until after liability (ie, the infringement) was finally determined.
In the first decision of this nature, in August 2006, the High Court issued an award for interim damages in Ultraframe (UK) Limited v Eurocell Building Plastics Ltd. The claimant in this case argued that there was an urgent need for payment of damages in view of its precarious financial situation. The court held that in special circumstances, such as where the claimant could establish an urgent need to access cash, an interim award of damages could be made, even in a complex case, provided that such an award was limited to heads of damages that are naturally recoverable (as opposed to secondary heads of loss such as price depreciation and loss of sales of ancillary items), and that a conservative view was adopted on the assessment of the amount to be paid. In that case, the award of damages was also combined with an undertaking by the claimant that, in the event that the defendant successfully defended its appeal on the finding of infringement, the award of damages would have to be repaid.
Patent Office opinions
Since October 2006, the Patents Act 1977 and the Patents Rules 1995 allow parties to obtain, upon written request, non-binding opinions from the Patent Office as to the validity of a patent or its infringement. The Patent Office cannot revoke a patent or issue a declaration of infringement based on this process. This is a new and unusual system, not found in other jurisdictions, adopted with the stated purpose of providing a low- cost service to help resolve patent disputes. The fee charged by the Patent Office is only £200. While the system is non-binding in nature, it is likely that most sophisticated litigants will not seek opinions from the Patent Office because of the potential risks that could result from the opinion. For example, the Patents Act 1977 does not state whether the opinion could be subject to disclosure and what weight should be afforded to it in future litigation. Most likely, it will be considered a document subject to disclosure, bearing in mind that the opinion will be a public document, and as such an opinion, while non-binding, could adversely impact on a future decision.
The procedure for obtaining opinions is as follows:
• A request must be made in writing to the Patent Office setting forth the questions upon which an opinion is sought, the views of the applicant on the questions and any other relevant facts, as well as stating whether any third party has an interest in the answers to the questions.
• Upon receipt of the request, the Patent Office will enter a notice on the Register of Patents against the relevant patent.
• The Patent Office has discretion to refuse any request that appears frivolous or vexatious, or if it feels that the question has been sufficiently considered in any other proceedings.
• Upon receipt of the request, the Patent Office will notify the patent holder and advertise the request.
• The Patent Office then receives observations from any interested parties, following which it issues an opinion.
• The opinion issued by the Patent Office may be the subject of a review if an application for a review is made by the patent holder (but not a third party) within three months of the decision.
• Any third party that filed observations in the opinion process will be notified and is entitled to file observations on the review. The decision on review can be appealed on limited grounds to the High Court.
This new procedure may prove of interest to smaller companies in view of its streamlined nature and low costs. Arguably, the opinion procedure could also be used to thwart a competitor before engaging in full-blown litigation as an attempt to damage a competitor’s patent position.
