Key decisions in European patent disputes from the EPO and UK

Part 1 – T1135/22 and T1820/22 - admissibility of auxiliary requests (ARs)

Relevance of these decisions

According to the European Patent Convention (EPC), an appeal can be filed against decisions of the department of first instance of the European Patent Office (EPO), for example the Examining Division, the Legal Division or the Opposition Division. The purpose of the appeal is to give a judicial decision on the correctness of the application of the law by the first instance department, rather than to revisit the facts and circumstances of the case. The scope of appeal proceedings is therefore heavily restricted, and admissibility of documents, arguments and requests (amended claim sets) during appeal proceedings is a recurrent problem as well as subjects of many case law at the EPO.

General Principles

The Rules of Procedure of the Boards of Appeal (RPBA) sets out how parties must present their case in appeal proceedings at the EPO. In particular, Article 12 of RPBA provides basis of appeal proceedings. It states, first and foremost, that the appeal case shall be directed to the requests, facts, objections, arguments and evidence on which the decision under appeal was based. Any part of a party’s appeal case which does not meet such requirements is to be regarded as an amendment that may only be admitted at the discretion of the Board, unless the party demonstrates that this part was admissibly raised and maintained in the proceedings leading to the decision under appeal.

Previous case law on the admissibility of auxiliary requests already filed in the opposition proceedings and pursued unchanged in the appeal proceedings (“carry-over” requests) seems non-convergent. For example, in T 42/20 (see Reasons 4.2) and T 221/20 (see Reasons 2.4), the Board considered that auxiliary requests filed but not considered during the opposition proceedings (because a higher ranking request was successful) automatically form part of basis of the appeal proceedings. However, in T 1800/20 (see Reasons 3.2), the Board decided that the carry-over requests were “amendments” as they were not convergent with higher ranking requests.

On the topic of the “admissibly raised and maintained” requirement of Article 12(4) of RPBA, the general understanding is that for a late filed auxiliary request to be considered admissible, it not only needs to be submitted, substantiated and maintained in the opposition proceedings, but also has to be substantiated in the appeal proceedings.

T 1135/22 and T 1820/22

T 1135/22 deals with carry-over requests. The patent concerns methods for transmitting data in a control system with a plurality of spatially distributed stations. Auxiliary Request 1 to 12 (AR1 to AR12) were filed in the opposition proceedings within the time limit for written submissions. Although AR1 to AR12 were not dealt with by the Opposition Division as the patent in suit was maintained as granted, the proprietor argued in the appeal proceedings that these ARs were automatically part of the appeal proceedings because the filing of these ARs was explicitly mentioned in the section “Facts and requests” of the decision of the opposition proceedings. The Board does not agree. The Board ruled that that the mere mention of the filing of ARs in the opposition decision cannot be taken to make them the basis of the opposition decision. The Board was also of the view that the proprietor failed to demonstrate that the ARs were actually “admissibly submitted” in the opposition proceedings. The ARs were thus regarded as “amendments”, whose admissibility is at the discretion of the Board. Fortunately for the proprietor, the Board referred the matter back to the Opposition Division on the basis of AR6, which was considered admissible.

T 1820/22 deals with admissibility of “amendments”. The patent concerns an egg injection apparatus. The Proprietor filed fifteen new auxiliary requests during the appeal proceedings, none of which had been submitted before. The auxiliary requests were filed to deal with the added-matter objections against the main request, upon which the opposition decision was based, and thus were amendments within the meaning of Article 12(4) RPBA. The proprietor argued that they only became aware of the possibility of amendments for the first time upon careful reading of the opposition decision. The Board ruled that nothing had changed in the underlying facts, and therefore there was no justification for the late submission of amendments only in appeal as a result of a belated realization (on the proprietor’s part). The auxiliary requests were therefore found not admissible because they should have been submitted during the opposition proceedings. As the Board agreed with the first instance on the (non)patentability of the main request, the appeal was dismissed.

Take Home Messages

The admissibility of carry-over requests cannot be automatically assumed. Rather, the proprietor needs to show that those auxiliary requests were admissibly submitted and maintained in the proceedings. Even though they were admitted during the opposition proceedings (which means the Opposition Division must have considered them timely filed and properly substantiated), they still need to be substantiated during the appeal proceedings. Although the RPBA does not explicitly set a deadline by which the substantiation must be filed, according to Article 12(3) RPBA the substantiation must be done in the statement of grounds of appeal or the reply. Failure to do so would risk them being deemed inadmissible in the appeal proceedings at the discretion of the Board.

Further, when the Board considers admissibility of a late filed request, late awareness does not justify late submission. The burden is on the proprietor to file auxiliary requests in response to all grounds of opposition as early as possible.

One interesting point to note is that in T 1135/22, the Board referred the case back to the Opposition Division on the basis of AR6. However, as the opposition decision was set aside, the opposition proceeding cannot be reasonably expected to be limited to AR6 only. In theory, the proprietor could file not only former auxiliary requests AR1 to AR5 and AR7 to AR12, but also further auxiliary requests. Would the Board, in case of a new appeal, consider all auxiliary requests admissibly raised and maintained if the proprietor properly substantiated them in the statement of grounds of appeal or the reply this time? If so, the requirements on substantiation in the statement of grounds of appeal or the reply seems rather formulaic.

Part 2 – UK preliminary injunction granted in pharma case

Relevance of decision

Preliminary injunctions (PIs) are always a hot topic in patent litigation, currently hitting headlines in the context of the approach in Europe’s new Unified Patent Court and as well as CJEU referrals about if and to what extent defendants may be compensated when a patent underlying an awarded PI is subsequently revoked. While it no longer directly impacts the UK, PIs might also be impacted by the recently raised prospect of an evaluation of Europe’s IP Rights Enforcement Directive (IPRED).

Compared to many EU jurisdictions and notwithstanding a degree of harmonisation under IPRED, the UK is an outlier with respect to its approach to granting preliminary injunctions (PIs). This is due to the UK’s (1) limited assessment of validity/infringement; (2) critical need to prove irreparable harm; and (3) significance of weighing the balance of convenience; a step-wise test applied in any event.

When it comes to generic drugs, and having passed step 1 (as nearly all patent cases do), pharma cases have established a history of surpassing the irreparable harm threshold (step 2)) on the basis of the impact of generic entry and price spiralling. This leaves the final balance of convenience test (step 3), which has been close fought, in particular depending on the generic having attempted to “clear the way” (i.e. revoke the patent beforehand). Indeed, bringing an early revocation action to “clear the way” and achieving a final decision on validity/infringement (successful or not) has proven largely determinative in avoiding a number of UK PI disputes (either as of right or due to settlement).

However, the number of failed attempts to achieve PI in pharma cases has started to build, raising questions of whether patentees are readily able to prove suitable irreparable harm and/or the suitable balance of convenience in their favour, especially near to patent expiry or with impending expedited trials. For example, this difficulty was highlighted in Neurim (see our commentary here).

But in the most recent PI pharma dispute – occurring in the hotly contested actions around Bayer’s Xarelto and multiple generics – the UK court has awarded a PI, if only for a short period. This is a significant outcome, in particular by proving that a pharma patentee can prove irreparable harm and a suitable balance of convenience in its favour so to justify the award of a PI, despite a very short time period in question.

Key issues

The following points summarise some of the key issues in this decision:
Background

• The expiry of underlying core protection - The central issue in terms of the timeline was that the core protection for Xarelto expired on 1 April 2024. This hearing occurred in relation to the imminence of that date versus the first instance decision following trial in the UK revocation actions brought by multiple generics against the dosage regime patent that survived that date. With trial in February 2024, the parties might have expected a decision by 1 April, but that timeframe was far from guaranteed.

• The need for spee - The Judge refers to having been aware of 1 April being significant, but not the degree of significance, in particular as to the scale and costs of the ensuing PI dispute. Indeed, while some generics settled (accepting a PI accompanied by the usual cross-undertakings), others fought on and what ensued was a significant hearing accompanied by substantial evidence (including expert opinion).  

• The short period in question - this application was about granting a PI for 8-9 days - i.e. up to the delivery of the Judgment (the application was heard on 25 March with the Judge assuring he would deliver judgment in the w/c 8 April; eventually doing so on Friday 12 April).

• The merits (step 1) – as predicted, it was agreed this threshold was passed and with trial having taken place on validity (infringement having been accepted), it made no sense for this to be re-assessed.

• Proving irreparable harm (step 2) – procedure

  • Adding a UK party – Bayer applied to add more parties to supplement the patentee, in particular a UK entity. This was disputed but was allowed by the Judge. This highlights a key preparatory issue for seeking PI in the UK – as the party to the action must prove it will suffer irreparable harm and so it is common to include a local entity that will suffer the greatest and most direct impact of the triggering event (here generic entry).
  • The admissibility of expert evidence – two of the generics (Teva and Stada) – on short notice - sought to introduce expert evidence to address the issue of the damage suffered by Bayer (if PI was not granted) versus the damage suffered by the generics (if PI was granted). Stada’s application was refused for being too late and unnecessary versus what their counsel could (and presumably did) submit. Teva’s application was allowed, albeit its lateness reduced its weight (as the Judge commented that he was wary of placing full reliance on it as Bayer did not have a sufficient opportunity to respond).

• Providing irreparable harm (step 2) – substantive

  • The relevant period – the generics’ position was that this application was about what harm each side would suffer over only 9-10 days, thereby straining the ability of Bayer (but presumably also the generics) to show a material degree of harm. Bayer argued that irreparable harm should be assessed over a longer period – until appeal – but this argument was rejected. Despite support for the generics’ position (from cases like Neurim), there was no indication of how the Court squared this versus authorities such as Hospira v Novartis, which say that the timeline for appeal should be taken into account in the need for generics to clear the way.

  • The impact of multiple generics – the decision refers to Neurim (where PI was refused) and highlights as a key distinguishing fact the lack of multiple generics versus the many here (23 generic authorisation holders being mentioned in respect of Xarelto). This factor appears to be critical basis for a later reference to there being “… no dispute that there is a potential for irreparable harm to one side or the other.” Therefore, even though the generics succeed in convincing the Judge that the degree of irreparable harm suffered by Bayer would be “modest”, the dispute centres on the balance of convenience.

• Balance of convenience (step 3) - despite the risk of only modest irreparable harm, this decision highlights that some irreparable can be enough for the patentee and that the balance of convenience is not only about balancing the irreparable harm each side will suffer. Ultimately, the Judge seems to apply the most weight to preserving the status quo, especially over such a short period of time. There is a last gasp attempt by Teva to suggest that some of the 23 generic authorisation holders can launch at will as they are not party to the action but this is (rightly) not accepted (and for good measure, Bayer appears to have commenced a number of infringement actions since the date of this decision).

Looking ahead

As noted above, having indicated Judgment would be delivered in w/c 8 April, the Judge did so on 12 August, finding Bayer's patent invalid for obviousness.

While there is typically a gap in the UK between the date of judgment and subsequent administration and formalities, there is now commentary indicating that the form of order hearing occurred on the same date (12 April) and that Bayer's application for permission to appeal was refused.

In the leading case where PI was obtained and maintained pending appeal on a patent held invalid at first instance (Hospira v Novartis, mentioned already), permission to appeal was held to be enough to surpass the first hurdle of a serious issue to be tried. However, even without permission to appeal, the same commentary also reports that PI has been maintained for another 17 days (until 29 April 2024) in order to ensure that the Court of Appeal should be put in a position that allows it to be best able to do justice between the parties. This date is 7 days after a deadline set by the Judge for Bayer to apply for permission to appeal from the Court of Appeal. The significance of this further week is not described, but it could be the timeframe in which Bayer is expecting and/or being asked to seek the Court of Appeal's view on whether their appeal will continue.

If Bayer does get permission to appeal, this case may go on to re-assess the bases on which a PI can be maintained pending appeal in the UK following a first instance decision finding the underlying patent invalid. Or if Bayer's permission to appeal is refused and revocation made final, the PI will fall away leaving the possibility that the generics may seek compensation for any losses incurred due to the PI having been awarded. So in any event, this dispute, which is running in parallel in a number of European countries, looks set to continue and is worth monitoring closely.