UK: Declarations Of Non-Infringement And Prosecution History – UK Court Of Appeal Rules In Actavis V Eli Lilly

Last Updated: 24 August 2015
Article by Beth Williams

In a judgment that clarifies key areas of patent law, the UK Court of Appeal has overturned a decision by the High Court to award declarations of non-infringement (DNIs) to Actavis, clarifying the UK position on the use of the prosecution history in patent cases and the applicable rules for applying for a foreign DNI.

In this case, the DNIs were awarded in respect of Actavis' pemetrexed dipotassium, pemetrexed diacid and pemetrexed ditromethamine products on the grounds that they did not infringe Lilly's Swiss-form patent EP 1 313 508 for the use of pemetrexed disodium in combination with vitamin B (the Patent). The first instance judgment was particularly important because Arnold J decided that Actavis were entitled to DNIs in respect of the Spanish, French and Italian designations of the Patent.

The Court of Appeal agreed with Arnold J on some issues: that the Actavis products did not directly infringe the Patent and that the UK Court were not prevented from granting Spanish, French and Italian DNIs by the Rome II Regulation. However, crucially for Lilly, the Court of Appeal held that Actavis' products would indirectly infringe the Patent. Finally, although it did not impact on the judgment in hand, the Court of Appeal made the important finding that, contrary to Arnold J's first instance decision, the prosecution history of a patent should not be a factor in legal proceedings.

  • Direct and indirect infringement

The direct infringement issue was whether the wording 'pemetrexed disodium' in the Patent's claims limited the scope of their protection to pemetrexed disodium only, or whether the Patent could cover the Actavis' pemetrexed products. Floyd J agreed with Arnold J's decision. A key deciding factor was that the specification only contained data for pemetrexed disodium and so broader claims would lack support. There was also a striking contrast between the specificity of pemetrexed disodium and the general terms used in the claim for the methyl malonic acid lowering agent and folic acid compounds, which had been referred to as any 'pharmaceutical derivative' and any 'physiologically available salt or ester thereof' respectively.

The Court then turned to whether there had been indirect infringement under section 60(2) of the Patents Act 1977. It had to decide whether Actavis' supply of its pemetrexed compounds to doctors and pharmacists was an essential means that enabled the invention to be put into effect. Lilly argued that it was, because the Actavis products would be reconstituted and diluted in saline solution, which was a source of sodium ions. Thus, both pemetrexed ions and sodium ions would be present. Lilly argued that this process mirrors what happens when the patented product is reconstituted.

Actavis argued that third parties reconstituting their products with saline would not be using pemetrexed in the manufacture of a medicament, which was the requirement under the Patent's Swiss-form claims. At first instance, Arnold J had found this argument persuasive. However, the Court of Appeal disagreed. It held that the skilled team would understand that pemetrexed disodium could refer to solutions containing pemetrexed ions and sodium ions and that, therefore, "section 60(2) does not require the supply of an element of the claim, but a means relating to an essential element. A means for releasing pemetrexed ions into solution related to an essential element of the invention where the invention called for pemetrexed ions and sodium ions in solution, particularly as it is the presence of the pemetrexed ions in the manufactured medicament which is essential for its efficacy as a medicament."

  • Prosecution history

A key issue at first instance was whether the Court should consider the prosecution history of a patent when deciding on issues of infringement. Arnold J acknowledged that "courts should be cautious before relying on prosecution history as an aid to construction" but considered that, in reality, someone who is looking to determine a patent's scope and who is professionally advised would consult the prosecution file. He held that "consideration of the prosecution file may assist in ensuring that patentees do not abuse the system by accepting narrow claims during prosecution and then arguing for a broad construction of those claims for the purpose of infringement". This finding appeared to be at odds with Lord Hoffman's judgment in Kirin-Amgen that a patent should be construed according to what the person skilled in the art would understand its claims to mean and that that meaning "should not change according to whether or not the person skilled in the art has access to the file".

Floyd LJ, giving the lead judgment in this case, disagreed with Arnold J. He did not think that a skilled person would always read the prosecution history to construe the patent. Neither did he agree with Actavis' argument that the prosecution file could assist the Court in preventing a patentee abusing the system by revealing when a patentee who was arguing for a broad construction of its patent had during prosecution argued for a narrower construction. Floyd LJ also commented that he would not have found it necessary to go to the prosecution history in order to read the conclusion on direct infringement.

  • The Rome II Regulation question

The Court then turned to the question of whether Actavis was entitled to seek the foreign DNIs from the English Court under the Rome II Regulation. Actavis had won this point at first instance and, despite deciding not to grant the DNIs, the Court dealt with it nevertheless, on the grounds that it was "potentially a point of some importance".

The issue was this: if Actavis satisfied the English test for a DNI (lex fori), was it also entitled to a DNI under Spanish, French and Italian law as well? Actavis said yes, whilst Lilly counter-argued that Actavis must instead fulfil the procedural requirements of the applicable foreign law in the designated states (lex causae) and that this had not been done.

Under Article 1(1) of the Regulation, its rules apply "in situations involving a conflict of laws, to non-contractual obligations in civil and commercial matters". Actavis relied upon Article 1(3), which explicitly excludes the Regulation's application to "evidence and procedure", to claim that the Regulation did not apply to DNIs because they were matters of procedure. They argued that lex fori was the applicable law because, under private international principles, lex fori governs procedure. Lilly argued that DNIs were a matter of non-contractual obligations. They relied on Article 8(1) of the Regulation, which says that "the law applicable to a non-contractual obligation arising from an infringement of an intellectual property right shall be the law of the country itself."

Floyd J found that Arnold J had been correct to decide that the conditions for applying for a DNI are procedural and, as such, lex fori applies to them. This is because they are "conditions of admissibility of actions, rather than rules concerned with the substance or content of parties' rights".

What Next?

Actavis has come up with a plan to sidestep the Court of Appeal's judgment. The Dublin-headquartered multinational is asking the High Court to grant the DNIs on the basis that it will direct users of its product to reconstitute it in a dextrose solution rather than a saline solution. In the meantime, the dispute has clarified the UK Court's position on the use of the prosecution history in patent cases and the applicable rules for applying for a foreign DNI.

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