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 - 24 May 2024 - is below:

EPO

Referral to EBA regarding correct approach to claim interpretation.

Yunnan Tobacco International Co. submitted an appeal to the Board of Appeal (TBA) against a decision of the EPO Opposition Division to maintain Philip Morris’ patent EP 3076804. The Opposition Division had previously found the subject matter of claim 1 novel over prior art identified as document D1.

The parties agreed that D1 discloses a heated aerosol-generating article comprising a number of features of claim 1 of the patent. However, there was disagreement as to whether the “spirally wound aerosol-forming substrate” of this article disclosed in D1, destroyed the novelty of the “gathered sheet of aerosol forming material” as recited in feature (c) of claim 1 of the patent, based on the use of “gathered sheet” elsewhere in the description of the patent at paragraph [0035]. This term is known within the industry, but the patent description used a wider definition of the term.

The appeal therefore concerned the description of a patent and whether it should be considered when interpreting words in the claim of the patent which would otherwise be clear to the skilled person.

Decision

The appeal hinged on whether the description of a patent is to be taken into consideration when interpreting a claim, even when the claim itself appears to have clear wording, in light of Articles 69 and 84 EPC. The TBA noted a divergence of previous TBA case law and other case law on this point:

• One previous line of case law indicates the broad definition of a term given in the description of the patent cannot be left unconsidered and would therefore need to be taken into account when assessing whether D1 discloses a “gathered sheet” – i.e. the same definition of “gathered” according to the patent must also be applied when assessing the prior art.
• However, other case law has adopted a more classical approach, instead finding that utilising a patent’s description to interpret the claim(s) should only be resorted to exceptionally, where the subject-matter of the invention and/or its technical context needs to be clarified and, in contrast, if the claim wording is clear for the skilled person, the description is not needed.

The interpretation of the claim in light of the relevant paragraph [0035] as opposed to a plain reading of the claim produced different outcomes here, and could impact whether D1 was novelty destroying.

The TBA therefore felt the question of how to interpret the claim needed to be answered before novelty or inventive step could be assessed. It consequently felt a decision of the Enlarged Board of Appeal (EBA) was required to ensure uniform application of the law according to Art.112(1) EPC. The TBA also felt a narrow interpretation of the claim language, ignoring the description, would conflict with any broader interpretation taken by national courts or the UPC when considering the granted claim later down the line, and so felt a point of law of fundamental importance had arisen, and therefore required EBA consideration.

Yunnan objected to the referral and a hearing to consider the objections and potential referral took place on 10 April 2024. The TBA held that it was necessary to refer the case to the EBA to allow conclusion of the decisive questions of the case.

An interlocutory decision will be released on 10 June 2024.

IN

High Court remands patent application back to Patent Office after disagreeing with finding of obviousness.

On 14 May 2024, the High Court of Delhi handed down its decision in an appeal against the Indian Patent Office’s decision to reject a patent application on the grounds of obviousness.

Alimentary Health Limited (Alimentary) submitted a patent application (No. 3989/DELNP/2012) claiming a probiotic formulation containing a specific strain of bacteria called Bifidobacterium longum NCIMB 41676 (AH1714). This formulation was proposed to be used in various forms like capsules, tablets, or food products. Alimentary claimed that the specific strain of Bifidobacterium claimed exhibits distinct immunomodulatory effects which represent a substantial benefit over the Bifidobacterium strains known in the prior art. The Indian Patent Office (IPO) rejected the application for lack of inventive step over several prior art studies and patents, which disclosed inter alia the strain of Bifidobacterium and its use as a probiotic. It held that the isolated strain of Bifidobacterium claimed and its subsequent formulation as a probiotic could be derived from the prior art. Alimentary appealed the decision to the High Court of Delhi.

The key question the Court considered was whether the formulation of the Bifidobacterium longum NCIMB 41676 (AH1714) strain represented a substantial improvement in therapeutic efficacy over the Bifidobacterium strains known in the prior art. This required an assessment of microbial genetics and the specific bioactive properties claimed, to determine whether they represent mere variations of known strains, or constitute innovative therapeutic advancements. In its judgment the Court sets out the correct approach to assessing inventive step and emphasises that the rationale behind adopting an objective analysis is to ensure that only those advancements that provide a substantial benefit to the technical field are protected by patents.

The Court moved on to assess whether the claimed invention represented a significant advancement beyond the ordinary capabilities of the skilled person and a substantial improvement in the existing knowledge. Assessing each piece of prior art in turn, the Court found that Bifidobacterium longum demonstrated a substantial improvement in clinical outcomes as it significantly reduced cytokine levels (by nearly 50% compared to the closest prior art) and thereby reduced inflammation, compared to known strains of Bifidobacterium in the prior art. It was also known that each strain of Bifidobacterium can exhibit widely divergent effects, which the Court found negated any reasonable expectation of success with the claimed strain. It was therefore reasonable to infer that the invention did not follow a predictable path but represented a significant and non-obvious leap in the application of probiotic science.

In light of the Court’s analysis on inventive step, it remanded the case back the IPO for fresh examination. In its judgment the Court criticised the IPO for not thoroughly analysing the prior art or recording its reasons for finding the patent application invalid in its decision. The Court also noted that the prosecution histories of the corresponding patent applications in the US and the EPO must be examined, and that this analysis is essential to ensure that specific issues which may have been overlooked or misinterpreted by the Controller, are thoroughly addressed.

UPC

Access to documents granted by Paris Central division.

NJOY Netherlands B.V. brought a revocation action against Juul Labs International, Inc. in the Paris Central Division of the UPC, in relation to patent EP 3 430 921 (the Main Action).

Nicoventures Trading Limited (the Applicant) is a party to EPO opposition proceedings regarding the same patent. It submitted a request under r. 262.1 of the UPC Rules of Procedure (RoP), for access to documents, such as pleadings and evidence, lodged on the UPC’s case management system (CMS) and also for further documents submitted to the UPC not yet visible on the CMS.

The Applicant provided the following reasons in support of the request:

• The patent is subject to EPO opposition proceedings, and any argument and evidence at the UPC may influence these proceedings;
• The Claimant’s and the Defendant’s arguments may affect the Applicant’s position in the parallel proceedings, such as regarding claim interpretation or extent of prior art disclosure, and may impact the understanding of the issues being considered by the EPO;
• The Main Action may affect the outcome and the scheduling of the opposition proceedings, as no first instance decision has yet been reached by the EPO; and
• It would be contrary to the principles of natural justice and the harmonisation and effectiveness of the European patent system to deny parties to EPO opposition proceedings access to relevant material in parallel UPC revocation actions without a compelling reason.

It also submitted a supplementary request for documents visible on the CMS which were generated by the court, on the grounds that there is no justification in the RoP that court-generated documents which are not decisions and orders, as covered in r. 262.1(a), should be restricted from wider circulation. It felt either the phrase “lodged at the court” should be taken to include documents generated by the court itself, or the court should use its discretion to make such documents available.

The Defendant to the Main Action objected to the main request as it felt the Applicant had not provided a reasoned request, with r. 262.1(b) only relating to pleadings and evidence that had been lodged and recorded, not those which may be in future. It objected to the supplementary request on the basis it covered documents “generated” by the court, however, as only decisions and orders of the court are included in r. 262.1(a), this indicated an intention not to give public access to other documents. It also asserted that the patent, prosecution history and prior art are already known to the Applicant, and the Applicant could gather information from other sources rather than from documents filed in the case.

The Claimant to the Main Action objected only in relation to future materials not yet on file / known yet, as it felt these should not be made public “by default”, which would be excessively broad, contradicting r. 262.1(b).

Decision

For there to be distribution of materials, the Applicant must make a reasoned request under r. 262.1(b). Then, a balancing of interests is undertaken by the Court as per Art. 45 UPCA, to determine if the materials can be distributed.

The Court felt there had been a reasoned request as the Applicant had stated its position as a party to EPO opposition proceedings, and it was evident that UPC arguments and evidence could influence the outcome of EPO proceedings, especially because as of yet there is no first instance decision by the EPO, so the outcome and the scheduling of such proceedings could be affected.

In relation to the balancing of interests assessment, the Court noted that a member of the public can have a specific and direct interest in pleadings and evidence, and proceedings, which can be immediately present and which does not only arise after the proceedings have ended.

It concluded:

• When weighing up the direct interests of the Applicant, due to its involvement in opposition proceedings, against the general interests of integrity of the proceedings, the balance here was in favour of granting access to the Applicant;
• The Applicant should be awarded immediate access in order to consider the arguments raised in the EPO proceedings in comparison with those in the main action. EPO opposition proceedings operate under a time regime, and whilst the interests of the general public usually arise after a decision Is rendered, this request is more specific as it is already present. If access is granted only after the decision, the information may not be available for use in the EPO due to timing issues;
• The application relates to a revocation action, which generally concerns public interest to a higher degree than infringement proceedings, as the subject matter is a patent that potentially does not meet statutory requirements for protection and therefore could constitute an objectively unjustified impediment to competition; and
• EPO files are public, and so it is reasonable that accessibility of documents in parallel proceedings are treated similarly by the EPO and UPC. As parallel arguments will likely be discussed in both proceedings, if there are discrepancies, it is in the public interest that these are considered.

The Applicant was therefore granted access to all written pleadings and evidence submitted by both parties as currently contained in the CMS.

However, the Court found there was no legal basis in the RoP that court-generated documents which are not decisions, orders, pleadings or evidence, should be made public. Only decisions and orders are referred to in r. 262.1(a), inferring there was an intention not to give access to the public to other court generated documents.

The Court also did not see any legal basis for granting access to future documents (as these are unknown, a balancing of interests is not possible and protecting personal data could not be guaranteed) or access to documents not yet published in the CMS (these would impose heavy burdens on the registry and it is reasonable that the Applicant can wait until the documents arrive on the CMS).

Further commentary on this decision can be found here on our dedicated UPC site.

UPC

Hamburg Local Division rules on security for costs and value of action.

On 15 May 2024, the Hamburg Local Division handed down its judgment awarding security for costs against the claimant to an infringement action and assessing the value of the action. The defendants (UEFA, Kinexon and Kinexon Sports & Media) applied for an order pursuant to Art. 69.4 UPCA and r. 158.1 of the Rules of Procedure (RoP), seeking security for costs from the claimant Ballinno. In deciding whether to award security, the Court noted the relevant factor to consider for a claimant domiciled within the EU is not the enforcement risk, since the UPC was deemed to be a court of member state for the purposes of the Brussels I regulation and therefore its decisions are enforceable in member states in accordance with Art 82 UPCA, but rather the insolvency risk of the claimant.

The evidence showed that Ballinno had no known assets except the patent in suit. The Court was also concerned that the patent was recently transferred to the claimant after the assignor entered into pre-trial correspondence with the Kinexon defendants about a possible infringement, raising the concern that the purpose of the transfer might be to facilitate litigation without financial risk to Ballinno.

Having determined that an award for security was appropriate, the Court then had to assess an appropriate sum. The Court valued the case at 500,000 EUR, based on the interests of Ballinno especially in a licence fee assessment. The ceiling for recoverable costs set by the Administrative Committee was up to 56,000 EUR. The Court noted that whilst there is no absolute rule that the amount of security awarded has to follow the ceiling for recoverable costs, with regards to the interest of Ballinno, the facts of the present dispute and the nature of the patent in suit, the Court considered 56,000 EUR to be adequate security for the expected costs of all three defendants.

The Court also rejected Ballinno’s contention that a technically qualified judge be allocated to the panel, stating whilst it is possible for technical judges to rule on provisional measures, it was not necessary in this instance.