Intellectual Property
Consultant

This article appeared in GenericsWeb Newsletter March 2005.


This is the first of a series of articles for GenericsWeb, in which I will be considering legal developments affecting the UK, and their impact on generic pharma companies.

Recent Actions

This month, we had a Court of Appeal judgment in the case of Mayne Pharma v Pharmacia1 concerning epirubicin hydrochloride ('Ellence'), and the infringement action brought by Servier against Niche Generics2 relating to perindopril ('Coversyl') came to trial, and was almost immediately settled by the parties. Few details of the Niche/Servier action have been made public : the short hearing was partly in camera, since it related to confidential formulation processes. Both cases raise interesting issues in relation to applications for non-infringement and infringement actions..


Application for Declaration of non- Infringement

S 71 of the UK Patents Act 1977 allows the Court or Comptroller to grant a Declaration of non-Infringement of a patent if it is shown

  • that the applicant has applied in writing to the proprietor for a written acknowledgement for a declaration of non-infringement and has furnished full particulars in writing of the act in question and

  • the proprietor has refused to give such acknowledgement.
Since the judgment of Jacob J in SmithKline Beecham v Generics3;, generic pharmaceutical companies have found themselves in the position of having to 'clear obstacles' in the way of their marketing of generic products wherever they know 'perfectly well [that] the issue of infringement is likely to arise'. In such circumstances, if they are to avoid the risk of injunction, they must apply for revocation of the patent, apply for a declaration of non-infringement, or invite action for infringement by the patentee. There are many difficulties with the last course of action : patentees can delay, may not take action for infringement and may claim that they do not have sufficient information on which to make a decision, so that they are still entitled to an injunction when the generic product is launched. And in many cases, an action for revocation may not be appropriate or desirable.

Mayne Pharma v Pharmacia

The Mayne/Pharmacia case illustrates the speed with which the English courts can act. In May 2004 Mayne began an action for a declaration of non-infringement of Pharmacia's UK patent no 2,178,311. Pharmacia counterclaimed for infringement. In November the Patents Court (Roger Wyand, QC, sitting as Deputy Judge) decided that there was no infringement, and in February the Court of Appeal overturned that decision.

Both Pharmacia and Mayne manufactured ready to use anthracycline glycoside solutions. Pharmacias's patent claimed solutions 'which [have] not been reconstituted from a lyophilizate'(freeze dried preparation). Mayne's product was manufactured from a lyophilizate which they bought and then dissolved in water. In other words, the lyophilizate was an upstream product. The question was whether the final product was nevertheless covered by the patent, and it was decided that it was, because the 'man in the art'(by whose standards the patent should be evaluated) would have understood that the heart of the invention was an injectable ready to use solution, and the form of the starting material was irrelevant. Prior to the invention, anthracycline glycoside had been sold in the form of vials containing lyophilized cakes of active ingredient and excipients which had to be reconstituted, and the man in the art would read the patent in that context. The decision seems to me correct, and it illustrates the importance of reading patents from the point of view of the 'man in the art': the fictional person or team working within the relevant area and having the knowledge that a person in his field would normally have. A different person, not familiar with the field, might well have construed the words of Pharmacia's patent otherwise: indeed, it seems to me that the construction which would be put on them by the man in the art differs from ordinary meaning.

So much for the fact of the case. It is also interesting for what it demonstrates in relation to procedure, given the obligation on generic companies to 'clear obstacles'. Mayne began by applying for a declaration of non-infringement. In such a case, the obligation to show non-infringement (burden of proof) lies with the applicant. The applicant has to give full details of its process (or that part of the process for which it seeks a declaration) and must therefore have good information and a good relationship with its upstream supplier. It is no good applying for a declaration of non-infringement and then finding that one's supplier has cold feet when asked to disclose the minutiae of the process.

Scope of application for a declaration of non-infringement

An application for a declaration of non-infringement relates to the product or process for which the declaration is sought, and no other. There is no warranty that the applicant will manufacture according to the process disclosed, no indemnity for the applicant based on the assertion of the manner of production. The purpose of such an action is to clear out of the way issues of construction ands substantive law so that the only future issue between the parties is the process used for manufacture. That was made very clear in the Niche v Lundbeck citalopram ('Celexa'/'Cipramil') case4, when, having given the requisite declaration of non-infringement at trial, Lundbeck was refused samples of product : any product made in future and considered to infringe would have to be the subject of new separate proceedings by the patentee.

Inspections

In an infringement action the burden of proof in showing infringement lies with the patentee. This may have an effect on whether or not an inspection is required. Inspections are expensive, particularly if the relevant part of the process occurs far away and is lengthy. In the Niche v Lundbeck citalopram case the relevant part of the process took place in India, over 15 days, and several experts and lawyers attended around the clock. The judge, Pumphrey J, found that the purpose of the inspection was to test the question of infringement. Had it revealed matters which assisted the patentee's case these could have been put in evidence and used to attack the adequacy of the description provided. The judge required the patentee to pay Niche's costs of the inspection as well as the other costs of the case. The relevance of an inspection will depend on the product and process for which a declaration is sought, and it may be easier for a generic company to resist an inspection in an infringement action (such as the Servier/Niche action) where burden of proof is on the patentee than on an Application for a Declaration.

Costs

Patent litigation is expensive. The court process can be used quite effectively to reduce costs and cut back on unnecessary work, but still, it is inevitable that parties to litigation will incur substantial costs, and that the successful party will recover part of its costs and be left with unrecovered expense. Patentees who delay the grant of an appropriate declaration, or insist on an unnecessary inspection, are likely to have to reimburse large amounts. Is it really worthwhile their delaying the grant of a declaration until trial? Generic companies may want to share costs with their commercial competitors. Of course, there is much to commend this, and they should be aware that they may be awarded only one set of costs between them5.

Conclusion

It may be a wise move for a generic company to invite litigation if it cannot obtain confirmation of non-infringement, but if it cannot persuade the patentee to initiate proceedings, with the law as it is in the UK, it must consider applying for a declaration or risk injunction. It is likely that patentees will object wherever possible to the marketing of generic versions of successful products even if they ultimately concede (as in Niche/Lundbeck) or settle (Servier/Niche), but they may not do so with the timing that best suits the interests of their generic competitor.

  • 1 - [2005]EWCA Civ 137 Mayne Pharma Pty Ltd and Pharmacia Italia SPA
  • 2 - Les Laboratoires Servier v Niche Generics Ltd case no HC04C902097 unreported
  • 3 - SmithKline Beecham v Generics UK Ltd (2002) IPD January 25005.
  • 4 - [2003]EWHC 2590 (1) Niche Generics (2) Wessex Fine Chemicals and Lundbeck A/S
  • 5 - See Multi-party Actions - who pays the costs?

Anna McKay/March 2005

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