Declarations to address divisional applications
03 February 2017
Divisional applications can pose a significant problem to a party that wishes to clear its path to market. This article looks at the case of Arrow Generic Limited V Merck & Co Inc as an example.
In Arrow Generics Limited v Merck & Co Inc ( EWHC 1900 (Pat)), Arrow found itself in a difficult situation. In that case, the principal patents that covered Arrow's product had either expired or been revoked. Arrow was aware that a number of divisional applications were pending but had apparently assumed that these would not be allowed following the earlier decisions of the UK courts, and the EPO, on the parent applications. After Arrow had launched its product however, one of these divisional applications was indeed granted and a number of others remained pending. Arrow sought to invalidate the granted divisional but as it could not challenge the validity of the applications before grant, it was exposed to years of potential uncertainty.
Arrow adopted a novel and imaginative approach to dealing with the problem. It recognised that the Courts of England & Wales have a very broad inherent jurisdiction to grant declaratory relief where it serves a useful commercial purpose. Arrow therefore decided to use that jurisdiction to obtain a declaration to the effect that, at the earliest priority date of any divisional application, its own product was "obvious". Arrow's purpose was to set up a Gillette defence to a potential infringement claim under any of the divisionals, including any unpublished (submarine) divisionals. A Gillette defence works through the argument that if the accused product is itself not novel or inventive yet falls within the claims of a patent, that patent cannot be infringed since it must be invalid.
Are such declarations available? The decision in Arrow
In Arrow, the Patents Court in London held in a first instance, preliminary decision that such declarations were available in principle. The court held that they neither offended the EPO's exclusive jurisdiction for European patent applications, nor were they impermissible challenges to validity under UK law, since they were not in fact validity challenges. In passing however, the judge in the Arrow case indicated that the basis for such declarations might disappear if the UK designation of the divisional applications were to be withdrawn. It is worth noting that the Court of Appeal never ruled on Arrow's approach at the time because Arrow eventually withdrew its claim for a declaration.
Fuji v Abbvie: Arrow declarations revisited
The recent case of Fujifilm Kyowa Kirin Biologics v Abbvie Biotechnology Limited has brought Arrow declarations back into the news, and we now have some additional helpful guidance from the UK Courts. The bottom line is that such declarations are very much available to deal with problems caused by divisional applications, and the UK Courts will adopt a flexible approach to them.
Court of Appeal confirms that "Arrow" declarations are available in principle
On 12 January 2017, the Court of Appeal handed down judgment on the question of whether Arrow declarations were available in principle, or whether they offended the provisions of the UK Patents Act which specify the kinds of action in which validity can be raised. In short, the Court of Appeal in Fuji held that such declarations are not prohibited by the UK Patents Act, unless they are indeed a disguised attack on validity. The Court went on to say that whether such a declaration is justified depends on whether the case for a declaration can be made, applying the established principles for declaratory relief generally. The Court of Appeal refused to strike out Fuji's case for declarations on this basis.
Withdrawal of UK designations may not remove the basis for a declaration after all
Shortly before the Court of Appeal decision, and of equal significance perhaps, on 29 December 2016 Mr Justice Carr in the Patents Court refused a second attempt by AbbVie to strike out Fuji's case for declarations. This time, AbbVie had been arguing the point hinted at by the Patents Court in the Arrow case such that, because the patents or applications on which the declarations were based had now either been revoked (by consent in this case, not judgment) or the UK designation withdrawn, the basis for the relief sought by Fuji had disappeared: AbbVie argued that the declarations could serve no useful purpose if there could be no rights in the UK which AbbVie could enforce.
In response, Fuji relied heavily on the fact that the steps taken by AbbVie to consent to revocation and/or remove the UK designation, had occurred after the commencement of proceedings in the UK but before any judgment by the UK courts. Fuji argued that this had been done with the purpose of frustrating Fuji's attempt to have the UK courts both decide on the validity of the granted patents and/or grant declaratory relief, all of which could have been useful for Fuji's position in the UK and other countries in Europe.
Mr Justice Carr refused to strike out Fuji's claim for Arrow declarations, finding that they could indeed serve a useful purpose regardless of the revocations and/or withdrawal of UK designations. He noted that this was implied by the fact that AbbVie refused to submit to judgment on the declarations, which suggested that they would indeed serve some useful purpose if granted. Further, he held that in any event a judgment in the UK granting the declarations could be influential in other parts of Europe, including on the attitude of suppliers and distributors outside the UK. He also said they would provide clarity, in particular in circumstances where there were further pending, but unpublished, divisional applications.
At the time of writing, the substantive case is now being heard by the Patents Court in London and it will be very interesting to see whether the court does indeed grant the declarations sought by Fuji. In any case, the approach of both the Patents Court and the Court of Appeal so far indicates that the UK courts will apply a flexible and open minded approach. Relief that is intended to help clarify the position for a party seeking to clear the path to market, where that path is or may be affected by divisional applications, would seem to be available in the UK.
Arrow Generics Ltd & Anor v Merck & Co, Inc  EWHC 1900 (Pat) (31 July 2007): http://dycip.com/arrow2007
Fujifilm Kyowa Kirin Biologics Company Ltd v Abbvie Biotechnology Ltd & Anor  EWHC 2204 (Pat) (08 September 2016): http://dycip.com/fujifilm2016