2022 UK Patent Litigation

The UK patent litigation market has remained active in 2022, despite the challenging sociopolitical environment. A variety of patent cases have been heard and judgments delivered, with a focus on the life sciences and SEP/FRAND sectors. These cases have resulted in important legal and practice-related trends and developments, as well demonstrating the Patents Court’s renewed focus on bringing patents cases to trial within 12 months of a claim being issued. 

Looking forward to 2023, there is a significant pipeline of patent trials set to keep the Court and legal community busy for the year and beyond. In addition, the anticipated launch of the Unified Patent Court and the Unitary Patent in June 2023 will bring about the most significant changes to European patent litigation in a generation. 2022 has shown that the English Courts continue to position the UK as a jurisdiction that will be influential in the global and European markets; indeed, most of the decisions listed in this article were part of multi-jurisdictional disputes where the UK litigation played a key role in the global strategy. In delivering well-reasoned decisions on the most complex and technical IP issues as well as demonstrating a willingness to understand and engage with the complex economics that sit behind many of those cases, the English Courts will continue to position the UK as a leading jurisdiction and hold an important influential and strategic role in multinational disputes.

Life Sciences

Litigation in the life sciences and pharmaceutical industries continues to be prevalent in the UK. The number of patent disputes remained steady throughout 2022, but they are becoming increasingly complex and high stakes. As set out below, two notable decisions from the Patents Court this year were the Novartis v Teva (fingolimod) and Neurim v Teva (melatonin) preliminary injunction decisions, in which in each case the Court denied injunctive relief sought by the patentee to prevent the launch of a generic version of a blockbuster small molecule drug. Other important developments included a decision involving the plausibility of a compound patent (Sandoz v BMS), which will be considered by the Court of Appeal in 2023. 

In terms of other ongoing trends, as expected, biologics are now firmly established at the forefront of pharmaceutical litigation and comprise the vast majority of the current generation of blockbuster medicines. Further, the success of mRNA-based COVID vaccines has led to renewed focus on using mRNA-based vaccines and treatments for other diseases, as well as other next-generation technologies such as CRISPR gene editing. The complexity of these technologies, along with diverse ownership of IP, leads to conditions ripe for litigation and has led to an increase in litigation between key players in the field. The ongoing legal battle between Moderna and BioNTech/Pfizer is expected to garner further attention in 2023.

The coming year may also see further developments in the law in relation to recovery of damages by the NHS and generic companies in pharmaceutical cases where a patentee obtained a preliminary injunction that was later deemed unjustified. This issue is currently being addressed in the damages phase of the litigation concerning Warner-Lambert’s blockbuster medicine Lyrica (pregabalin), which is due to go to the first of a series of trials in 2023. The outcome is expected to reshape the consideration of damages in pharmaceutical cases in the UK, similar to the impact seen in recent cases in Australia. This is one of many cases before the Patents Court that demonstrates that the UK is, as a forum, willing to engage in highly complex economic analyses that other courts may seek to avoid.

Neurim Pharmaceuticals (1991) Limited and Anor v Teva UK Ltd [2022] EWHC 954 (Pat)

In Neurim v Teva, the Court refused to grant a preliminary injunction restraining Teva from selling its generic melatonin product on the basis that damages would be an adequate remedy for Neurim if a preliminary injunction was not awarded. Traditionally in the UK, preliminary injunctions in patent cases have been rare outside of the pharmaceuticals sector. However, the Patents Court has previously been receptive to the argument that the downward price spiral that the generic launch would trigger was likely to cause irreparable harm to the patentee, justifying a preliminary injunction. In Neurim v Teva, the Court found that the loss Neurim would suffer was capable of being ascertained with a high degree of certainty. Notably the Court found that damages would not be an adequate remedy for the loss suffered by the generic party Teva if it was enjoined, as those damages were considered to be unquantifiable. Further, Teva’s generic product had been on the market for eight months, so preservation of the status quo favoured rejecting the injunction application.

Novartis AG and Anor v Teva UK Ltd and Others [2022] EWHC 959 (Ch)

In Novartis v Teva, Novartis sought a preliminary injunction to prevent the launch of a generic version of its fingolimod product on the basis of a yet-to-be granted European patent application. The Court found that it had jurisdiction to grant a preliminary injunction on a patent yet to be formally granted but, on the facts of this case, would not do so. In refusing the injunction, the Court held that damages were an adequate remedy for Novartis. On the other hand, in assessing whether damages would be an adequate remedy for the generics, the Court found that their damages (individually or collectively) would be hard to quantify on an adequate basis.  The Court did not make any detailed findings on the balance of convenience, given its conclusion that damages would be an adequate remedy for Novartis, but noted obiter that where a patentee has filed numerous divisional patents and amendments which result in the generics company being unable to clear the way, this will be considered as a factor in whether to grant a preliminary injunction.

These decisions mark a trend in the development of the Patents Court’s approach to one less amenable to the grant of preliminary injunctions sought by the patentee. The Court now applies increasingly close scrutiny to patentees’ claims of irreparable harm and the inadequacy of damages as a remedy whilst continuing to consider the potential damage suffered by generic or biosimilar parties to be unquantifiable.

Sandoz Limited v Bristol-Meyers Squibb Holdings [2022] EWHC 822 (Pat)

In Sandoz v BMS, the Court found BMS’ patent in relation to apixaban invalid for lack of plausibility and for obviousness due to lack of technical contribution over the prior art. Lack of plausibility is not itself a ground of revocation but, as it was in this case, can be the foundation for an invalidity attack framed under the grounds of lack of inventive step and/or sufficiency. In its decision, the Court considered the reasoning in three prior cases regarding plausibility (Agrevo, Fibrogen v Akebia and Warner-Lambert) and found it was bound by the UK Supreme Court in Warner-Lambert. In summary, the specification must contain a contribution by the patentee and that contribution must be more than common general knowledge. BMS have appealed and the hearing will take place in the Court of Appeal in early 2023.  The assessment of plausibility continues to become a more and more important element of life sciences patent disputes. In addition to BMS v Sandoz in the Court of Appeal, the Supreme Court will be hearing Fibrogen v Akebia on this issue in 2023 and the EPO’s Enlarged Board of Appeal will give a decision in Sumitomo (G2/21), all of which will likely provide important clarification on the law in this area.

Technology

In the technology sector (not including SEP/ FRAND licensing developments, which are considered below), the DABUS saga continues, with the Supreme Court granting permission to appeal the Court of Appeal’s refusal to allow an AI-based machine to be an inventor of a patent; the appeal will be heard in March 2023. Further developments include guidance in relation to preparing expert evidence and the availability of the “Formstein defence” in UK patent disputes. Additionally, medical device and technology litigation has continued to be active in 2022, with judgments issued in several important cases such as Advanced Bionics v Med-El and Alcon v AMO Development, and other cases pending for trial in 2023 (eg, Abbott v Dexcom). In the coming year, there is expected to be an increased focus on AI and automation, with a key judgment expected in the Autostore v Ocado dispute. 

Alcon Eye Care Ltd v AMO Development LLC and Another [2022] EWHC 955 (Pat)

In Alcon v AMO, the Court found two patents owned by AMO, relating to laser systems for cataract surgery, to be invalid for obviousness, and in the alternative, for insufficiency. Proceedings in Europe and the US are ongoing.

This case re-established the approach to establishing the identity and characteristics of the “skilled team” and illustrated a recent renewed focus on the issue of hindsight and the appropriate instruction of experts in UK patent actions. The parties agreed that a team of at least two experts was necessary, a skilled ophthalmologist (SO) and a skilled engineer (SE) but disagreed as to the mindset and approach of the skilled team. The judgment reflected that where there are real teams operating in an established field, experts who are able to speak to (and from) practical experience in the relevant field will be of greater assistance than those whose evidence is based solely on a theoretical analysis, particularly in relation to establishing the common general knowledge. Further, the judge noted that where a skilled team is involved in which the members would have had to collaborate closely, such interactions between experts should be reflected in the process of the development of the experts’ evidence.

Vernacare Limited v Moulded Fibre Products Limited [2022] EWHC 2197 (IPEC)

Vernacare v Moulded Fibre concerned the alleged infringement of two patents relating to the shape and composition of a disposable washbowl made of moulded paper pulp. The Court held the first patent valid but not infringed and the second patent valid and infringed. Notably, in relation to the assertion of infringement under the doctrine of equivalents with respect to the first patent, the Court applied the Formstein defence (a concept developed from the UK’s Gillette defence with a name borrowed from German case law) finding that the allegedly infringing immaterial variant would have been obvious at the priority date and, accordingly, if the patent was infringed it was invalid. This case marked a significant development in the law in 2022, as it was the first instance where the Formstein defence was determinative of the issues, thereby confirming its availability in the English Courts.

Following Actavis v Lilly in 2017 it is clear that the doctrine of equivalence has become firmly entrenched as an important part of UK patent litigation; decisions such as Vernacare show that the Court will continue to refine its scope, bringing more certainty to the issue of infringement.

SEP/FRAND

The surge in SEP and FRAND litigation globally has continued and the UK remained a prominent jurisdiction in 2022. The key issue in these disputes is the “FRAND licence” and specifically, what constitutes FRAND licence rates. Following on from Unwired Planet v Huawei, the first trials since Unwired Planet in which the Court will determine the FRAND terms for a global SEP licence were heard in 2022 (InterDigital v Lenovo and Optis v Apple), with judgments in both expected in 2023.

Other key matters reconsidered by the Court in 2022 included the form of undertaking required to avoid a FRAND injunction following a finding of infringement and validity of an asserted SEP (Optis v Apple), and the appropriate fora for determining FRAND rates (Nokia v OnePlus). Although the UK has become a favoured jurisdiction for SEP holders, more recently implementers have also asked the Court to determine FRAND rates (Kigen v Thales); this trend is expected to continue and increase in 2023 and beyond.  Another area expected to develop is the resolution of SEP/FRAND disputes through arbitration or mediation. Courts globally appear to be in support of this trend and the Court of Appeal recently advocated for legally enforceable arbitration (Optis v Apple). The UPC Patent Mediation and Arbitration Centre will also be launching in June 2023 and, although it is still unclear exactly how this will operate in practice, given the likelihood that SEP holders will be some of the first adopters of the UPC, there is potential scope for streamlining future SEP/FRAND disputes through UPC arbitration.

Optis Cellular Technology LLC & Others v Apple Retail UK Ltd & Others [2022] EWCA Civ 1411

This decision is part of the ongoing Optis v Apple proceedings, in which Optis seeks the determination of a global FRAND licence in respect of its portfolio of telecommunications patents. The FRAND trial was heard in June 2022 and judgment is expected in 2023.

The Court of Appeal confirmed that a party found to infringe a valid and essential patent will be considered unwilling (and not permitted to rely on the SEP Holder’s ETSI undertaking) if it fails, after judgment in the technical trial, to give an undertaking to take whatever licence the Court determines to be FRAND (notwithstanding that the precise form of those terms has yet to be set). The consequence of failing to give the undertaking would be the imposition of a FRAND injunction after the relevant technical trial.

The Court of Appeal also addressed the proper interpretation of Clause 6.1 of the ETSI IPR Policy, which requires an SEP-owner to give an irrevocable undertaking to grant licences on FRAND terms. The Court of Appeal confirmed that an implementer does not permanently lose its right to rely on Clause 6.1 if it does not commit to enter into a court-determined licence either as soon as the SEP owner indicates that it is willing to do so or when there is a finding of validity and infringement of an SEP (and noted that such an interpretation would promote hold-up). The Court also confirmed that the irrevocable nature of the undertaking means it should be open to an implementer to enforce it at any time, regardless of whether the implementer has previously decided not to do so.

The Court of Appeal also dismissed Optis’ cross-appeal against the High Court’s dismissal of its request for an unqualified injunction (as opposed to the FRAND injunction the High Court considered appropriate). In the postscript to the judgment, Lord Justice Arnold shared his personal views on the appropriate mechanism for the resolution of rate setting disputes, which advocated for legally enforceable arbitration to be incorporated as a dispute resolution mechanism in the IPR policies of standards-development organisations like ETSI.

Nokia Technologies OY & Another v OnePlus Technology (Shenzhen) Co., Ltd & Others [2022] EWCA Civ 947

This decision is part of the Nokia v OnePlus proceedings, in which Nokia seeks inter alia a declaration that three of its UK patents are essential to the relevant standards, that they are valid and infringed by the Defendants (OPPO), and a declaration that the terms of a global licence it has offered are FRAND. In this decision, the Court of Appeal reconsidered OPPO’s request for a stay of the proceedings on jurisdictional and/or case management grounds, which was dismissed at first instance. 

The Court of Appeal dismissed OPPO’s appeal. On jurisdiction, the Court of Appeal agreed that the dispute was correctly characterised as a claim relating to the infringement of UK patents, in line with the position affirmed by the UK Supreme Court in Unwired Planet and Conversant, and as such the English Court is the appropriate forum to determine the dispute. If the dispute was purely related to the terms of a global FRAND licence, then the Chongqing Court in China where OPPO had commenced parallel global FRAND rate determination proceedings would have been an alternative forum. 

The stay on case management grounds was also refused; the Court found that OPPO wanted the FRAND issues to be determined in the forum of their choice, having commenced duplicative proceedings in China, rather than to save time/costs. The Court also noted that if OPPO really wanted an expeditious FRAND determination and to save money on legal costs, they could have achieved this by dispensing with their invalidity and non-essentiality challenges in the UK, and in essence going “straight to FRAND”.

The Supreme Court refused OPPO’s application for permission to appeal.  This decision follows the trend of recent case law confirming the difficulties in successfully challenging jurisdiction or seeking stays of proceedings on global case management grounds in SEP/FRAND cases in the UK since Unwired Planet/Conversant. 

Kigen v Thales [2022] EWHC 2846 (Pat)

Kigen v Thales marked an important development in the English Court’s acceptance that “free-standing” claims for FRAND determination can be brought by implementers. 

Following failed negotiations initiated by Thales, Kigen brought a claim in May 2022, seeking declarations that Thales’ SEPs were invalid or not essential to the relevant standards, a declaration that it is entitled to a FRAND licence to Thales’ Essential IPR, and a determination of those terms.

Thales subsequently brought an application in June 2022 that there was no jurisdiction to grant declaratory relief in respect of Thales’ SEPs, because Kigen only sought declarations of invalidity and non-essentiality of the two patents in suit, and as such there was no issue before the Court giving it a jurisdictional basis to determine FRAND. Thales’ application was later amended to add a request for a stay under CPR Part 3 on the basis that unless and until Kigen gives an unqualified commitment and undertaking to enter into any licence determined by the English Court to be FRAND, no further steps should be taken in the proceedings because such steps would be a disproportionate use of the Court’s time. At a hearing in November, Thales argued further that Kigen’s pleaded case as to FRAND was to seek a licence to Essential IPR (as defined in the GSMA Articles) and without an undertaking to match that case (or an amendment to its pleaded case), Kigen was essentially acting like an unwilling licensee by seeking a declaration from the English Court without committing to accept the terms of the declaration.

In the above decision, the Court accepted that Kigen’s position was now equivalent to that of an unwilling licensee defendant, rather than a claimant who asks for a licence of all essential IPR. Accordingly, the Court stayed the FRAND claim until Kigen amends its claim or (in order to remove doubt as to Kigen’s willingness to take a licence) gives an undertaking that it will enter into a licence for all Thales’ relevant Essential IPR. The Court held that it would be an abuse of process if Kigen did not either amend its claim or give an undertaking to clarify and reinforce its pleaded case.

InterDigital v Lenovo and Optis v Apple FRAND Determinations

The world awaits what will be the second ever global FRAND determination judgment from the English Court in InterDigital v Lenovo, which is expected early in 2023. It remains to be seen what approach the Court will adopt in determining the terms of a FRAND licence, but the degree of transparency in this judgment will be important for those involved in FRAND disputes globally. Greater transparency and guidance from the Courts on how to arrive at FRAND rates could reduce the need to use up valuable Court and judicial time. The FRAND judgment in Optis v Apple is also expected in 2023, hopefully also providing further guidance on what constitutes FRAND rates.

Procedural Developments

Hearing format

The COVID-19 pandemic brought about a fast and widespread use of remote and hybrid trials and hearings. In 2022, the majority of trials and hearings in the Patents Court were heard in person, however the Court retains the flexibility of being able to hear matters remotely or in a hybrid format (and to take witness evidence by videolink, as appropriate). The relevant court will decide whether a case is suitable to hold as a remote/hybrid hearing based on the interests of justice; in general, the shorter and simpler the matters in dispute at a hearing the more likely it is that that hearing may be heard fully remotely. From June 2022, in order to further the principle of open justice, courts and tribunals were granted new powers to allow reporters and other members of the public to observe hearings remotely.

Trial listing

The Chancellor of the High Court released a new Practice Statement in February 2022, reiterating the Patents Court’s goal to bring patent cases on for trial within 12 months of the claim being issued. The statement notes that it does not exclude the possibility of cases being expedited where warranted, or streamlined by other means – ie, the Shorter Trials Scheme.

In 2022, the trend of parties requesting early trial dates before the Case Management Conference (CMC) continued. Nokia v OnePlus [2021] EWHC 2746 confirmed that courts are willing to hear short (30 minute) listing applications in order to bring patent trials within 12 months of issue. Pfizer v Amgen [2022] EWHC 2296 (Pat) provided further guidance for these early trial listing hearings, emphasising the onus on the parties to provide as much detail as possible to the court regarding the trial to be listed.

To maintain the 12-month objective, trials and hearings are now being listed during the court vacation period in September with greater frequency. The Patents Court’s recommitment to quick decisions and expedition where appropriate reinforces its global reputation for efficient and high-quality justice. This will be of increasing importance once the UPC launches this year, given the UPC’s own ambitious timelines.

Interaction with foreign proceedings: expedition and stays

The Patents Court has continued to seek to actively manage its listings in 2022 to ensure the Court’s time is used effectively whilst avoiding prejudice to litigants. This is clearly seen in its decisions in relation to stays and expeditions in the face of parallel proceedings in other jurisdictions. 

In relation to stays in light of parallel EPO proceedings, the Patents Court has continued to apply the Court of Appeal’s guidance from HTC v IPCom which broadly sets out that a stay of the UK proceedings is the default option, but identifies various factors relating to the parties’ need for commercial certainty which mean that, in practice, in the majority of cases that “default” position is overridden. 

Even for matters which do not directly involve a stay, the interplay with EPO proceedings will continue to be important. In Neurim v Mylan [2022] EWHC 109 (Pat), the Court reminded the parties of their duty to keep the Court apprised of parallel EPO proceedings, regardless of whether any application was to be made or it suited their strategy. The judge commented that “the Court might have wanted to make its own decision to put the UK trial a little later in case (as turned out) the EPO revoked the Patent and made it unnecessary”.

As for expedition of cases, the position of the Patents Court remains that expedition is available where there is good reason for it. In the context of parallel foreign proceedings, expedition will only be granted where a foreign decision might have an impact on the UK market; the export value of a UK judgment is not enough.

Declaratory relief

The use of declaratory relief in UK patent litigation (specifically Arrow Declarations (declarations that an alleged infringement would have been obvious at a particular date) and Declarations of Non-Infringement (DNIs)) has become more prevalent. Both types of declarations can provide a useful means of establishing commercial certainty and protection against patent infringement. The availability of Arrow Declarations and DNIs highlights the English Court’s willingness to provide creative solutions to legal disputes and deliver judgments that are commercially useful. Notwithstanding this, the Court of Appeal in Teva UK Ltd and Another v Novartis AG [2022] EWCA Civ 1617 confirmed that English Courts should not make declarations solely for the purpose of influencing a decision of a foreign court, on an issue governed by the law of the foreign court.

It remains to be seen how the UPC will impact the availability of declaratory relief in patent litigation disputes. Whilst the power of the English Courts to grant declaratory relief is primarily derived from statute, it is unclear whether the UPC will have the same levels of flexibility in granting declaratory relief. Nevertheless, at least for now, the English Courts will remain a desirable forum for parties seeking commercially important Arrow Declarations.