Irides: Weekly patent litigation update

The Irides Weekly Update is our round-up of patent litigation news highlights from around the world. Taking its name from the plural of “iris” - a nod to the ability of Irides to see what’s happening around the world.

Our latest edition - 22 December 2023 - is below:

UK

High Court considers appeal from UK IPO on Art. 3(d) of SPC Regulation

On 19 December 2023 Michael Tappin KC (sitting as a Deputy Judge of the High Court) handed down his judgment on an appeal brought by Merck Serono S.A. (Merck) against a decision made by the UK IPO to refuse a Supplementary Protection Certificate (SPC) for its cladribine product. The basic patent, EP 1 827 461 B1 (the Patent) concerns a dosing regimen for the treatment of multiple sclerosis and expires on 19 December 2025. The UK IPO had held that Merck’s SPC application did not meet the requirements of Art. 3(d) of Regulation (EC) 469/2009 (the SPC Regulation) as amended by the Patents (Amendment) (EU Exit) Regulations 2019 (SI 2019/801, the Regulations) and as interpreted in Case C-673/18 (Santen), since there had been earlier Marketing Authorisations (MAs) for products containing cladribine as the active ingredient, hence Merck’s appeal. Decision here.

In Santen, it was held that Art. 3(d) of the SPC Regulation “must be interpreted as meaning that a marketing authorisation cannot be considered to be the first marketing authorisation, for the purpose of that provision, where it covers a new therapeutic application of an active ingredient, or of a combination of active ingredients, and that active ingredient or combination has already been the subject of a marketing authorisation for a different therapeutic application.”.

Merck appealed the UK IPO’s decision on several grounds:

1. Its main argument was that the Santen case should be considered as having an ex nunc (from now on) effect, rather than ex tunc (from the outset) – this was based on the fact that following the decision in Neurim, (C-130/11, wherein the Court of Appeal took the view in making the reference to the CJEU that an SPC was deserved by the applicant and that if it had not been obtained, then the SPC Regulation would not be fit for purpose), industry expected continued application of the case law as stated in Neurim. It also argued that its own circumstances meant that the law should be applied as it was in Neurim, namely that it had complied with specific requests made by the EMA in order to obtain an MA for its Mavenclad product;
2. In any event, Santen should not apply given the different facts (Santen involved a different dosage form of a known active ingredient whereas this case was for a new indication); and/or
3. Santen was wrongly decided. Merck said that the SPC Regulation should allow for SPCs in respect of second medical use inventions and cited the English Court of Appeal in Neurim and Arnold J in Abraxis, as well as the opinions of the CJEU Advocate General in MIT and Neurim, plus passages in the explanatory memorandum to the SPC Regulation. Merck acknowledged that the High Court could not overrule Santen and only the higher courts in the UK could do so under the UK’s European Union (Withdrawal) Act 2018, and therefore reserved this ground of appeal to a higher court.

Taking these in reverse order, the judge did not rule on ground 3, as Merck had accepted that only the appellate courts had the power to rule in their favour on this ground.  Ground 2 was dismissed on the basis that there was nothing to suggest that Santen would only be applicable on its own facts, or on facts that are related to its facts to some degree.

The bulk of the judgment concerns ground 1. Here the judge held that the Santen case should be considered as having an ex tunc affect, agreeing with the UK IPO Hearing Officer. The court would only decide that cases may have an ex nunc effect in exceptional circumstances, and a legitimate expectation could not override this. He said that the language the CJEU used in Santen was unremarkable and, in any event, given that the decision would have reversed its previous decision in Neurim, it would have made this clear if it had intended for Neurim to continue to apply to SPC applications made before its later judgment in Santen.  

The judge noted that Merck could not identify a UK case to support the proposition that a party could avoid the effects of a change in the interpretation of substantive law which is not expressed to be ex nunc by showing that it acted on the basis of the previous interpretation of the law. The CJEU cases relating to tax law did not have a relationship to the present case, as there was no representation by an authority for Merck to rely on regarding that an authority’s interpretation of the law would not change. There had been no representation by the UK IPO that could have reasonably led Merck to believe that the SPC would be granted.

Merck also referred to a Swiss Supreme Court decision where the Swiss court had decided that a retrospective application of a change in SPC case law from the CJEU (in relation to Art. 3(a) of the SPC Regulation) was not justified in Switzerland. However, the judge held that this did not assist Merck as the Swiss courts were not bound to follow CJEU decisions, in contrast to the UK courts in relation to decisions made by the CJEU before UK EU Exit day, i.e. 31 January 2020 as in the case of Santen. Accordingly, only the CJEU could decide on whether to apply a temporal limitation to a change in its case law in the present case. Similarly, citing an Enlarged Board of Appeal decision at the EPO (G 9/93) did not assist Merck, as this decision related to a different tribunal and was a decision relating to procedural matters (rather than substantive law).

Summarising, the judge held that Merck's expectation that it would be granted an SPC based on Neurim, and its reliance on that judgment when deciding to revive its development program, could not give rise to a right to be granted an SPC if the decision in Santen operates ex tunc (as he had decided). He said that it could not be correct that  under Merck’s approach, the validity of the SPC would turn on a battle of legitimate expectations between Merck and a third party challenger, rather than on the interpretation of the SPC Regulation by the courts, as it should be. Accordingly, the appeal was dismissed.

UK

Supreme Court rejects AI inventor in patent application 

On 20 December 2023, the Supreme Court handed down its highly anticipated decision in Thaler v The Comptroller of Patents. The core issues examined the interpretation of "inventor" under the Patents Act 1977 and the ‘rights’ of AI in the context of patent law – the appeal was not concerned with the broader question whether technical advances generated by machines acting autonomously and powered by AI should be patentable. Decision here.

By way of background, in 2018, Dr Stephen Thaler had filed a number of patent applications in various jurisdictions as part of The Artificial Inventor Project seeking to establish that artificial systems can make inventions. The inventions described in the patent applications were entirely made by DABUS, an artificial neural system owned by Dr Thaler. The patent had been granted in South Africa and Australia, but the UK Court of Appeal decision took the opposing view by a majority decision. Dr Thaler appealed to the Supreme Court.

Dr Thaler filed two patent applications in the UK. Section 13(2) of the Patents Act 1977 (the “Act”) requires a patent applicant to file a statement (a) identifying the person or persons whom he/she believes to be the inventor or inventors; and (b) where the applicant is not the sole inventor, indicating the derivation of his/her right to be granted the patent. Failure to comply with this requirement results in the application being deemed withdrawn.

In Dr Thaler’s applications, DABUS was named as the inventor and Dr Thaler indicated that his right to be granted the patents arose by virtue of him being the proprietor of DABUS. On 4 December 2019, Mr Huw Jones (the Deputy Director acting for the Comptroller) decided that, because DABUS was not a person as envisaged by the relevant provision in the Act relating to inventors (section 7), the applications were therefore deemed withdrawn. Dr Thaler appealed to the High Court and on 15 July 2020 Marcus Smith J upheld the Comptroller’s decision.

On appeal, the Court of Appeal agreed that the Act required that an inventor must be a person (i.e., a human being). The question then arose as to whether Dr Thaler had complied with s. 13 of the Act.  Birss LJ concluded that applicants are no longer required to name the inventor, but to simply state who they believe the inventor to be.  Dr Thaler had complied with his legal obligations by stating in good faith that he believed DABUS was the inventor, and had given an indication of the derivation of his right to be granted the patent. Therefore, there was no basis for the Comptroller to deem the patent withdrawn under s. 13.  Arnold LJ (with whom the third judge, Elisabeth Laing LJ, agreed on this point) disagreed with Birss LJ as Dr Thaler did not identify the “person” who he believed to be the inventor; instead he had deliberately identified a non-person.

In its analysis of the case, the Supreme Court Justices' interpretation of the Act focused on s. 7 and 13.  In relation to s. 7, this confers the right to apply for and obtain a patent and it provides a complete code for that purpose. The section requires there to be an inventor and an inventor must be a person. DABUS was not a person. Further, the applicant, if not the inventor, must be a person falling within one of the limbs of s. 7(2)(b) or alternatively, within s. 7(2)(c). Dr Thaler argued that the Act acknowledges property rights in an invention at the time it is created and that, as the owner of DABUS, he should have the right to apply for patents for inventions generated by the machine. However, these arguments were rejected because they assumed incorrectly that DABUS could be considered an inventor and wrongly characterised inventions as tangible property that could be transferred to the machine's owner. The doctrine of accession, which Dr Thaler referred to, was also deemed inapplicable in this context, and the Court of Appeal had correctly ruled that Dr Thaler does not have legal rights to patents for inventions autonomously created by DABUS.

In examining the requirements under s. 13(2), the Supreme Court held that the Hearing Officer had been justified in ruling that Dr Thaler failed to meet the requirements outlined in s. 13(2) of the Act. Specifically, he did not identify any individuals he believed to be the inventor(s) of the inventions described in the applications, and his ownership of DABUS was not a valid basis to claim entitlement to the patent grants he had applied for.

As a result, the Comptroller correctly determined that the applications would be considered withdrawn after the sixteen-month period specified by rule 10(3) of the Rules. The judge and the Court of Appeal also acted correctly in upholding this decision, concluding that the applications are now deemed to have been withdrawn. Dr Thaler, owning DABUS, does not automatically grant him the right to the inventions made by DABUS.

The Supreme Court's decision reaffirms the current legal stance that inventors must be natural persons, thereby not recognising AI systems as capable of inventing in the context of patent law. This case serves as a landmark in determining the role and recognition of AI in the realm of IP.

TAIWAN

Patent information for new dosages of existing drugs cannot be listed in Taiwan FDA’s patent linkage Orange Book

On 23 November 2023, the Taiwan Supreme Administrative Court (TSAC) held that under Article 7 of the Taiwan Pharmaceutical Affairs Act (the Act), a different dose of an existing drug would not be considered as a new drug and consequently could not be the subject of the Taiwan Drug Patent Linkage Registration System (the System). 

The key provision in the Act in question (namely the Patent Linkage of Drugs) was introduced in 2019. Under a system administered by the Ministry of Health and Welfare (MHW), originator pharmaceutical companies can upload patent information in relation to their approved medicinal products following drug approval. This uploaded information is automatically scraped from filings in the system and published on the platform, with consequences for litigation under the patent linkage system. Upon manually examining a number of published entries, the MHW discovered that some filings related to new doses of previously approved products. According to the MHW, such entries were ineligible for inclusion in the database and the MHW removed these from the system. Some of the affected companies filed a petition against this decision. However, these were dismissed. Appeals were made to the Taipei High Administrative Court (THAC). In the cases brought by Merck and Allergan, the THAC dismissed the complaint, leading to the present appeal to the TSAC. ON 23 November 2023, The TSAC dismissed the appeals, ruling that if only the dose of the approved drug is changed then it cannot amount to a “new drug” as defined in the Act. Any change of approach here was one for legislature to make.

On the other hand, the THAC ruled for the pharmaceutical company in two of the petitions, those by Novartis and CIMA LABS. In those cases the THAC’s view was that the legislature had only intended to limit the availability of the patent linkage system to patentable inventions to a “substance”, “composition or formulation” and “medical use” (i.e. the nature of the patents that could be registered), but had not intended to limit the scope of the underlying marketing authorisation to just those to a new “substance”, “composition or formulation” or “medical use”, i.e. allowing use of the patent linkage system for new doses of existing products. Those decisions have been appealed by the MHW, with the decision of the TSAC outstanding. Whether the TSAC will follow its decision in the Merck and Allergan cases or approves the approach of the THAC in the Novartis and CIMA LABS cases remains to be seen.