UK: Patents Court Grants Arrow-Style Declarations Aimed At Piercing Secondary Patent Shields

Last Updated: 18 April 2017
Article by Rachel Fetches

Mr Justice Carr has granted an "Arrow" declaration to Fujifilm Kyowa Kirin Biologics Company Limited ("FKB"), Samsung Bioepsis UK Limited and Biogen Idec Limited (SB/Biogen) that their biosimilar adalimumab product for the treatment of rheumatoid arthritis, psoriatic arthritis and/or psoriasis administered at 40mg every other week by subcutaneous injection was anticipated and/or obvious at the claimed priority dates of AbbVie's patents [2017] EWHC 395 (Pat).

Although Mr Justice Carr was keen to stress the unusual nature of this case, the grant of the declaration is of interest as it provides an effective tool for parties seeking to clear the path for a product launch where the patentee has created multiple layers of secondary patent protection. The focus on the product being obvious or anticipated as at a certain date provides powerful protection and commercial certainty without conflicting with a patentee's ability to obtain patent protection. In granting the declaration, Carr J held that the declaration sought would still serve a useful purpose despite the fact that after revocation proceeding had been issued AbbVie had disapproved of the text of two of the patents (EP (UK) 1,406,656 and EP (UK) 1,944,322) with the effect of revoking them centrally and de-designating a further patent (EP (UK) 2,940,044).

Carr J rejected AbbVie's submissions that the undertakings it offered gave at least as much protection to the relief sought in the declaration finding that there was no coherent explanation why AbbVie had refused to submit to judgment, or alternatively gave an acknowledgement in the same form as the declarations. The Judge considered that the intention and objective effect of AbbVie's conduct was to shield AbbVie's Humira patent portfolio from examination of validity whilst continuing to file further divisionals and threatening infringement proceedings in respect of biosimilar products wherever launched. The declaration therefore provided clarity and was useful in that they dispelled commercial uncertainty, particularly in relation to the supply chain in the UK (and European) market.

The Judgment also dealt with a number of issues of the formal assignment of priority of EP'656, with Carr J finding that the patent applicant had the right to claim priority as the beneficial owner of that right through a complex chain of title relying on the US and German law pertaining to employee inventions, the requirements for effective nominations and construction of contracts.


AbbVie was the proprietor of a number of patents relating to its antibody product Humira (adalimumab), which was the highest selling prescription drug in the world by global sales, achieving net sales of over US$12.5 billion in 2014. Adalimumab is a fully human antibody that binds and neutralises the activity of TNFα and is used in the treatment of rheumatoid arthritis ("RA"), psoriatic arthritis and psoriasis. The basic patent and associated SPC expires on 15 October 2018. AbbVie owned and has applied for a number of patents and divisionals relating to the dosage regime for the treatment of the licensed indications.

FKB and SB/Biogen were seeking to "clear the path" in relation to these secondary patents in order to launch their biosimilar adalimumab products in Europe, including the UK after the SPC expired. Due to regulatory requirements, the biosimilar products must utilise the same dosing regimens authorised for Humira. FKB and SB/Biogen initially started revocation proceedings and also sought "Arrow" declarations (Arrow Generics v Merck & Co Ltd [2007] EWHC 1900 (Pat) that their biosimilar product administered in a particular way was anticipated and/or obvious at the priority dates. AbbVie subsequently disapproved of the text of EP'656 and EP'322 with the effect that the EPO revoked them centrally and de-designated a further patent EP'044 in the UK. AbbVie offered undertakings to the claimants and made an offer to pay the costs of the proceedings. Leading up to the trial, AbbVie sought to strike-out parts of the claims, including the Arrow declaration, which was dismissed by both the Patents Court and Court of Appeal ([2016] EWHC 425 (Pat); [2017] EWCA Civ 1; and [2016] EWHC 3383 (Pat)).

On the technical case, the issues at trial was whether the administration of the proposed products at a dose of 40 mg via subcutaneous injection every other week was anticipated and/or lacked inventive step over certain prior art publications by Dr Kempeni, referred to as Kempeni 1999 and Kempeni 2000 as well as certain pleaded prior uses.


FKB and SB/Biogen alleged that the applicant for the PCT that led to EP'656, Abbott Bermuda was not entitled to claim priority to US application no. 60/296,961 ("(US'961") because it was not the successor in title to the inventors, Dr Fischkoff, Dr Weiss (the "US Inventors") and Dr Kempeni at the date of filing the PCT application.

In December 2000 Abbot Laboratories agreed to buy BASF AG's pharmaceutical business BASF Pharma, collectively used to refer to the activities of a number of BASF corporate entities including Knoll AG and Knoll Pharmaceutical Company ("KPC"), under a Purchase Agreement. The rights to the invention (D2E7) in question was a major driver for the ~$7 billion purchase. AbbVie claimed that rights arising from clinical development (such as D2E7) were owned by Knoll AG and that where other companies within BASF Pharma participated in such R&D, Knoll AG would reimburse them.

Following completion of the Abbott/BASF AG Purchase Agreement on 2 March 2001, all shares in Knoll AG transferred to Abbott Deutschland Holding GmbH and shortly thereafter Knoll AG changed its name to Knoll GmbH. For tax planning purposes, the rights to D2E7 were divided between Abbott Biotechnology Limited (US rights) and Abbott Bermuda (rest of world). To effect this, on 29 October 2001, a US Asset Purchase Agreement ("US APA") was executed by Abbott Deutschland Holding GmbH and Knoll GmbH as sellers with Abbott BioTechnology as purchaser and for the ex-US Asset Purchase Agreement ("ex-US APA") with Abbott Bermuda as purchaser.

In the intervening period between execution of the Purchase Agreement and the two APAs, US '961 was filed in the name of all three inventors. The PCT Application was subsequently filed on 5 June 2002 with Abbott Bermuda as applicant for all designated non-US states and the inventors as applicants for the US only. All the inventors had left Knoll GmbH and KPC by the time of the PCT filing and had not signed the original PCT application. A correction with the inventors' signatures was filed subsequently on 20 September 2002.

At the time the invention was created, Dr Kempeni was an employee of Knoll AG in Germany, which in March 2001 became Knoll GmbH. The employment contract was subject to the law if the Federal Republic of Germany. Dr Kempeni remained the legal owner of the invention but under German law it could have been claimed by Knoll GmbH at any time as an unreported service invention.

The US Inventors were employees of KPC and had both signed Employee Invention and Secrecy Agreements ("EISAs") that were governed by New Jersey law. Under the EISAs, the US Inventors had agreed to assign their rights to KPC or its nominee, which had the effect of transferring equitable but not legal title to their employer.

The fact that the inventors and Abbott Bermuda were all applicants on the PCT application did not assist AbbVie. Carr J held that Article 4A of the Paris Convention did not permit both the original applicant(s) and his successor in title to enjoy right of priority. As at 5 June 2002, the inventors did not retain that substantive right. Additionally, the inventors were designated as applicants for the "US only". Following Arnold J in KCI v Smith & Nephew [2010] EWHC 1487 (Pat), [2010] FSR 31, the Judge held that the only part of the PCT application which was material to the question of entitlement to priority was the part that related to the European patent. Therefore, it was Abbott Bermuda's claim to priority that was material. Carr J did not accept that the inventors' names on the application meant he could infer their consent to transfer title to Abbott Bermuda. The later correction including the signatures of the inventors did not assist either.

Whether the EISAs were effective to transfer the equitable title held by KPC to Knoll AG was governed by US law. The EISAs stated that all inventions made during the course of the US Inventors' employment "shall be the property of BASF whether patented or not". It was common ground that in this context, this referred to KPC. Further, the US Inventors agreed to execute all documents required "to transfer to BASF, its nominees or assigns" all right title and interest in and to such inventions.

AbbVie put in evidence to prove that the BASF Pharma businesses had operated on the basis that all rights in clinical inventions such as D2E7 were held by Knoll AG. No written document relating to the ownership of IP as between KPC and Knoll AG was disclosed. However, agreements within the BASF Pharma companies were governed by German law which allowed for binding agreements to be concluded orally or in writing.

According to AbbVie's expert, there was no special requirements under US law for a person or company to be nominated under an agreement to be the beneficiary of rights, or for that person to be expressly identified in a contract providing for assignment to a nominee before the agreement could take effect. Under New Jersey law, it was possible to assign equitable title by express written or oral agreement, or by conduct.

Under German law, Dr Kempeni was required to report the invention to Knoll AG but this had not happened. Therefore, at the time that Knoll GmbH entered into the ex-US APA with Abbott Bermuda, legal ownership of Dr Kempeni's part of the Invention remained with the inventor, subject to the right under German law for Knoll GmbH to claim it.

On that basis Carr J held that Knoll AG was KPC's nominee to hold all rights resulting from international clinical development, including the US inventors' part of the invention. Knoll AG could have compelled KPC to transfer legal title at any time and was therefore the beneficial owner of the US Inventors' rights in the invention under US law. Furthermore, Knoll GmbH also had the right to claim Dr Kempeni's part of the invention and was in substance, the owner of the whole invention.

The last issue was whether Knoll GmbH had properly transferred US' 961 to Abbott Bermuda. The issue was that the ex-US APA listed a number of patents but did not refer to US'961. It was to be construed and governed in accordance with German law. AbbVie adduced evidence aimed at demonstrating that despite this omission there was an intention between all parties to the APAs to transfer all ex-US rights in D2E7 to Abbott Bermuda. The ex-US APA stated that the sellers agreed to sell and deliver "all of their interest in the assets relating to D2E7 listed on Schedule 1 and Schedule 2". The preamble stated that the "sellers desired to sell the rights and assets related to a recombinant fully human therapeutic antibody (hereinafter called D2E7)...".

Many of the principles of German law were agreed, including that under German law the concordant subjective intention of both parties was of primary importance and superseded the wording of the contract. Carr J noted that construction of the ex-US APA under English law would have given a different result, here the concordant subjective intention of the parties under German law was the decisive element. He found AbbVie's evidence on this point credible and observed that it made a great deal of commercial sense. On that basis, the Judge found that Abbott Bermuda was "successor in title" to the invention the subject of US'961.


Having decided the priority issue, Carr J then considered the technical case, finding that the relevant dose regime (subcutaneous injection of 40 mg given every two weeks) for the treatment of RA was obvious in light of Kempeni 1999 and Kempeni 2000 as at 8 June 2001. Furthermore the prior uses relied on by FKB and SB/Biogen were held to be established such that administration of the Claimants' products with the proposed dose regime for the treatment of psoriasis and psoriatic arthritis was anticipated or obvious as of 18 July 2003.

On the basis of that finding, Carr J went on to consider whether to exercise the Court's discretion to grant the declarations sought by the Claimants. AbbVie's wider conduct around maintaining patent protection for Humira was a significant factor in the Judge's findings. AbbVie had made a number of statements about threatening infringement proceedings around the world and had dragged out proceedings as long as possible, then abandoning patent rights at the last moment but maintaining further protection through filing further divisionals with similar claims. This strategy was said to be designed to encourage market uncertainty, whilst shielding the patents from the risk of a finding of invalidity.

With respect to EP'656, this was subject to 15 oppositions that AbbVie were defending and had three divisional pending. However, within six days of the UK proceedings being issued, AbbVie disapproved of the text of EP'656 and filed a fourth divisional patent (EP'044) with a similar claim set. At the same time, AbbVie offered extensive undertakings in respect of the marketing of biosimilar adalimumab products in the UK. Carr J did not believe AbbVie's explanation that it had decided to abandon EP'656 at that juncture because of an insufficiency objection was credible. It subsequently de-designated EP'044 in respect of the UK but also filed a further, fifth divisional application. Furthermore, Carr J held that it was possible that similar claims could possibly arise out of the EP'322 family as well.

Carr J noted that the Court's approach to the grant of declarations was pragmatic and a matter of unfettered discretion. For the more unusual category of negative declarations, caution must be exercised in their grant. They must serve a useful purpose and absent any special circumstances, could be deployed to ensure that the aims of justice as between the claimant and defendant were achieved.

It was well established that the attainment of commercial certainty in patent cases satisfy the requirement of serving a useful purpose and that it could be in the interests of justice to grant a declaration to dispel such commercial uncertainty. This had to be considered having regard to the existence of the statutory remedy providing for revocation of patents. In this instance, the Claimants had sought to clear the way by seeking revocation of the granted patents. And whilst there was an acknowledged potential "spin-off" value of a UK Judgment in other European courts, the declaration must serve a useful purpose in the UK.

AbbVie's offered undertakings did not provide the same degree of commercial certainty as the requested declarations. AbbVie's resistance to submitting to Judgment or providing an acknowledgement in the same form as the declarations was held to be meaningful. AbbVie's intention in the course of conduct pursued was relevant and the objective effect of that conduct was to shield the patent portfolio from scrutiny whilst extending protection and threatening infringement proceedings. There was also a "chilling effect" on the UK markets in that manufacturers of the product were likely to have difficulties with confining their manufacture and supply chain to within the UK, putting the UK supply at risk despite the patent position. Lastly, the declarations were likely to promote settlement in Europe.

On that basis the declarations did serve a useful purpose. Furthermore, following the contested trial and AbbVie's conduct it was just to grant the Claimants the declarations sought. There was no injustice to AbbVie in the grant of the declarations in light of the findings and such relief could not be resisted. The circumstances of the case, particularly AbbVie's conduct, constituted special reasons in support of the grant of the declarations, as did the amount of money at stake for the Claimants in terms of investment in clinical trials and potential damages from an at-risk launch. Carr J therefore considered that it was in the interests of justice to grant the declarations in what he termed "the unusual circumstances of this case".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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