Irides: Weekly patent litigation update

Our latest edition - 15 September 2023 - is below:

EPO

Transfer of priority rights: timing of assignment to a successor in title

The key question regarding the right to priority in this case (T 1946/21) was whether the assignment of the right to priority was effective before the filing of the subsequent application or before the filing date of the subsequent application.  The Board of Appeal found that it was sufficient for the applicant or patent proprietor to demonstrate that the assignment was effective before the subsequent application was filed.

A priority application was filed on 5 September 2013 and published on 7 May 2014. On 5 September 2014, the right to claim priority from the priority application was assigned at 20:17 CET. The PCT application claiming priority from the priority application was then filed later that day by the assignee. The opponent argued that the priority claim was not valid as the right to priority was not assigned before the filing date of the subsequent application, in which case the priority application (having been published) would have been prior art under art. 54(2) EPC for the patent and as such, citeable for both novelty and inventive step attacks.  The patentee argued that assigning the right to priority before the filing date is not a requirement for a valid priority claim.

Under art. 87(1) EPC, the applicant of the priority-claiming subsequent application must either be the person who filed the priority application or their successor in title.  If the right to priority was assigned after the priority-claiming application was filed, there will be no right to priority; the succession in title must have taken place by the time the priority-claiming application was filed (T 577/11). However, there was no case law confirming whether or not the assignment must have been effective before the filing date of the subsequent application, or whether it is sufficient for the assignment to be effective on the same day but before the actual filing.  The Board considered that under art. 87(1) EPC, once the applicant  is the “successor in title”, they can enjoy the right to priority immediately and no further limitation is set forth in the law, nor is there any reason to read such a requirement into law.  The Board also considered the consequences of a successor in title having to wait for the next day after obtaining the right to priority to file the subsequent application.  In this situation, the successor in title would be entitled to the right to priority but not able to benefit from that right on that day.

The appellant argued that in patent law and in particular under the EPC, the smallest time unit is a day and therefore an assignment on the day of filing was insufficient.  However, although for calculating time periods the smallest unit of time is a day, the Board considered that there is no general rule of the smallest time unit being a day that would be applicable in other situations, in particular for the determination of the requirement of “successor in title”.

Therefore, to meet the requirement of “successor in title” within the meaning of art. 87(1) EPC, it is sufficient for the assignment of the right of priority to be effective before the actual filing of the subsequent application.

SPAIN

Appeal Court of Madrid hands down decision on damages relating to the launch of generic raloxifene

On 23 June 2023, the new, specialist Section 32 division of the Madrid Appeal Court (Court) published its decision in a damages claim filed by Eli Lilly and Company (Eli Lilly) and Daiichi Sankyo Europe GmbH (Daiichi) relating to the launch of generic raloxifene. Eli Lilly is the proprietor of ES 2,102,602 (ES 602) (the Spanish designation of EP 952), which covers the preparation of a medicine useful in the treatment and prevention of osteoporosis. Eli Lilly was granted an SPC, extending protection until 5 August 2013.

In May 2011, the first generic raloxifene product was launched in Spain by Gx X. Consequently, the Spanish Agency for Medicines and Health Products created a "homogeneous grouping" for the raloxifene authorised in Spain. This imposed an obligation on pharmacists to substitute the prescription of branded raloxifene for the lowest priced medicine in this group. Daiichi (the exclusive licensee of ES 602) lowered its price in October 2011 by 40% in order to compete with generic raloxifene. In January 2012 (after the formation of the “homogenous group”), a second generic, Gx Y launched a generic raloxifene product.

In its claim, Daiichi argued that damages should be assessed in accordance with the criterion of loss of profits suffered as a consequence of the marketing of the infringing generic raloxifene products. Gx X argued in response that Daiichi had reduced the price of its original product voluntarily.
However, the Court rejected Gx X’s assertion, holding it liable for the loss of profits resulting from the 40% reduction in the price of Daiichi’s original product. According to the Court, whilst subsequent generics companies could be held liable for their own infringing behaviour, the Court did not consider them responsible for causing the downfall in price. The reason for this conclusion is that the “homogenous group”, is created upon entry of the first generic product to the market. The Court considered that the successive generic manufacturers merely joined a situation that had already been created by the generic that was the first to launch.

The Court indicated that it will not be possible for an ordinary appeal to be filed against this decision. It is unclear whether the decision will be heard in due course by the Supreme Court.