Commentary by Partner Andrew White has been featured in Law 360, Solicitors Journal, The Patent Lawyer and The Global Legal Post, discussing how an increase in defence spending is thought to be driving a rise in the number of national security patent filings.
Read the extended press release below.
The number of secret ‘National Security’ patents filed in the UK – those deemed by the government to be critical to defence of the country – has increased 36% from 45 in 2021 to 61 in 2022 *, shows research from Mathys and Squire, the leading intellectual property law firm.
The latest figure represents the highest number of National Security patents filed since 2018. The rise is partly driven by an increase in defence spending especially in technology heavy areas such as drones and cyber-defence. Another major factor in the increase may also be the government’s increasing sensitivity around the publication of military-grade technology.
National Security patents cannot be disclosed publicly as the Government believes that it would impact the security of the country if details were available to hostile groups.
The Impact of the war in Ukraine
The increase in the filings of National Security patents could be due to the development of military technology following Russia’s invasion of Ukraine. 80% of national security patents filed in 2022 were filed by defence companies.
Andrew White, Partner at Mathys and Squire, says: “These patents show how the UK is investing heavily in developing cutting-edge security and defence technology.”
“For national security reasons the Government actively monitors patents related to the defence industry and in some cases restricts the publication of those patents.”
“The UK and other western governments are increasingly concerned about the technical detail of sensitive technology being seen by countries that are not considered friendly. Increased geopolitical tensions and the war in Ukraine has brought that risk to the top of the agenda.”
Out of the 61 National Security patents filed in 2022, filers of UK origin account for 51, representing 84% of all of these patents.
The number of these patents that relate to UK inventions has increased in the last three years, demonstrating the increasing importance of British manufacturers in developing new defence and security innovations. UK inventors accounted for 76% of patents in 2020, which then increased further to 80% in 2021.
Examples of patent applications that can be covered by the national security patents rules include:
*The most recent data available from the Intellectual Property Office (IPO)
Introduction
In April 2023 the EU published draft legislation which, if enacted, would represent a major shift in the regulatory and IP framework for pharmaceutical products in Europe.[1] As well as establishing a unitary SPC (to complement the recently-introduced unitary patent), the proposed legislation alters the regulatory exclusivity periods available for innovative products, and changes the Bolar exemptions. Overall, the proposed legislation strongly favours the generics industry and undercut the rewards available to pharmaceutical innovators.
Recently, the EU Parliament has approved some significant changes to the provisions which deal with regulatory exclusivities and the Bolar exemption.[2] [3] These changes reduce the negative impact of the legislation on the period of exclusivity, and they reduce the burden on innovators to obtain regulatory exclusivity. The changes do, however, significantly extend the scope of the safe harbour available to generics manufacturers under the Bolar exemption. It also raises a serious question of whether the proposed Bolar provisions are compliant with the EU’s obligations under TRIPS.
Changes to the Proposed EU Pharmaceutical Legislation for Medicinal Products
Changes to Regulatory Protection Periods
The initial proposal for the new Directive would have reduced the duration of data exclusivity for innovative medicinal products from 8 years to 6 years, whilst retaining the additional 2 years of market protection as at present (to a total of 8 years of regulatory exclusivity, as compared to 10 years at present). However, to “encourage innovation” the initial proposal provided various options for extending the exclusivity period, with the longest of these being an extra +2 years of data exclusivity available to certain innovators if the medicinal product is launched in all 27 EU member states. This seemed like an onerous requirement to restore the level of regulatory exclusivity to that which is currently provided.
In the latest changes, the period of data exclusivity for innovative medicinal products is increased to 7.5 years from the date of grant of the MA, and there is no longer any exclusivity benefit from launching in all EU member states.[4], [5] There are also additional periods of data exclusivity available for:
The total period of regulatory data exclusivity may not exceed 8.5 years,[9] which means that not all of the above extensions may be applied simultaneously.
In addition to the extra data exclusivity which is available, the amended Directive allows an additional +1 year of market protection to be obtained (i.e., in addition to the 2 years which is already provided) where an additional therapeutic indication is authorised which provides a “significant clinical benefit” over existing therapies.[10] This extension may only be granted once.
Overall, the changes to the regulatory exclusivity periods in the proposed new Directive seem broadly in favour of pharmaceutical innovators – they largely restore the extent of regulatory protection and they remove what would have been very onerous requirements to obtain additional protection (for those entities who were eligible to apply for the longest extensions to the periods of data exclusivity). Seen in this light, the changes which have been approved by the EU Parliament may be seen as balancing what would otherwise have been a heavily generics-friendly shift in EU law.
It may be noted that the latest changes do not alter the situation as regards orphan medicinal products, which are handled under a proposed new medicinal products Regulation.[11] For orphan drugs, the standard period of market exclusivity is to be reduced from 10 years to 9 years, and the existing 2 years of additional exclusivity for completing pediatric studies is to be abolished. However, options for extending the period of exclusivity are available, where the product addresses a high unmet medical need (+1 year) and/or is launched in all 27 EU member states (+1 year). An additional +1 year is also available for each new MA obtained for a new orphan indication of the product (up to an extra +2 years). It remains to be seen whether any further changes are made to these proposals, e.g. whether the reward for launching in all EU states is removed (as it has been in the new Directive).
Changes to the Bolar Exemption
The Bolar exemption available under existing EU legislation provides a limited safe harbour against infringement of patent or SPC rights in connection with conducting “necessary studies and trials” for seeking authorisation of a generic medicinal product.[12] There are, however, significant differences in the implementation of the current Bolar exemption across Europe. The uncertainty caused by the different interpretations currently adopted by the national courts could be resolved through judicial harmonisation, e.g. through rulings by the UPC or the CJEU, rather than by further regulation. Nevertheless, the proposed new Directive, in its initial version, seeks to clarify and expand the scope of the exemption. Thus, the proposed Bolar exemption references “biosimilar, hybrid or bio-hybrid medicinal products” explicitly alongside “generic” products.[13] This appears to clarify that the exemption should not apply to innovative medicinal products. The initial proposal also provides security for Third Party entities that supply the MA applicant with a patented product for use in trials, or who carried out such trials on behalf of the MA applicant (at least within Europe).
In the latest amendments, the EU Parliament has approved some major changes to the proposed Bolar provisions which are weighted heavily in favour of the generics industry. In doing this, they have apparently rejected alternative amendments which would seek to address concerns from pharmaceutical innovators about the initial version of the new Directive. In an Opinion on the new Directive, published in November 2023, the EU Committee on Industry, Research and Energy sets out reasons why the new Bolar provisions as originally proposed could weaken IP protection across Europe and damage confidence in the European IP framework.[14] In particular, that Opinion recommends limiting the Bolar exemption to activities solely related to obtaining MAs.[15] It appears that those proposals were purposefully rejected in the version approved by the EU Parliament.
As amended, the proposed Bolar provision of the new Directive reads:[16]
“Patent rights, or supplementary protection certificates … shall not be regarded as infringed when necessary studies, trials and other activities are conducted for the purpose of:
The activities conducted exclusively for the purposes set out in the first paragraph, shall cover as relevant the submission of the application for a marketing authorisation and the offer, manufacture, sale, supply, storage, import, use and purchase of patented medicinal products or processes, including by third party suppliers and service providers.
This exception shall not cover the placing on the market of the medicinal products resulting from such activities.”
References to biosimilar, hybrid and biohybrid products are removed from Article 85, thus potentially opening the exemption to innovative products which happen to fall within the scope of pending patents. This appears to be consistent with the amended Article 85 not mentioning a “reference medicinal product” which is a term used in the current legislation. This would also be consistent with an amendment made to one of the Recitals in the proposed new Directive which relates to the Bolar exemption, whereby the Recital no longer refers to “the market entry of generics and biosimilars” but instead to “the timely market entry of medicinal products, in particular the market entry of generics and biosimilars”.[17]
The proposed Bolar exemption does not adopt the amendment recommended by the EU Committee on Industry, Research and Energy, namely to state in the preamble that the product is used for the exclusive purpose of performing actions in pursuit of a MA. Whilst the second paragraph of the Bolar exemption characterizes what is covered by “activities conducted exclusively for the purposes set out in the first paragraph”, it is not apparent that this statement necessarily limits the scope of the exemption to activities carried out exclusively for the aforementioned purposes. It is unclear, therefore, which other commercial activities might fall under the Bolar exemption. Given the concerns raised by the EU Committee on Industry, Research and Energy, it is perplexing that the amended Directive does not state in its preamble that the exempted activities must be conducted exclusively for the purposes set out in points (i) to (iiia) of paragraph 1, or otherwise make this point explicit in paragraph 2.
The proposed wording does clearly permit commercial, or at least pre-commercial, activities relating to inter alia manufacture, storage and offer for sale of patented products in the context of authorization and pricing approval. The final paragraph of the Bolar provision clarifies that the exemption “shall not cover the placing on the market of the medicinal products resulting from such activities” but it neither expressly forbids a party from offering to sell medicinal products during the term of a patent or SPC nor expressly prevents a party placing medicinal products on the market after patent or SPC expiry where those products have been made, stored and/or offered for sale during the lawful term of the patent or SPC.
All of the above observations indicate that the scope of the Bolar exemption will be significantly wider under the new Directive.
Is the Bolar Exemption of the New Directive Compliant with TRIPS?
The apparent breadth of the proposed new Bolar exemption, in particular as regards commercial or pre-commercial activities, raises a serious question of whether the EU will comply with its legal obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights (the “TRIPS Agreement”) if it enacts the new Directive.
Article 30 of the TRIPS Agreement provides signatories with limited powers to implement an exception to the exclusive rights conferred by a patent, where such an exception “do[es] not unreasonably conflict with a normal exploitation of the patent”. The lawful extent of such an exception was addressed by the WTO panel in Canada – Patent Protection of Pharmaceutical Products, a complaint brought by the European Communities and their member states against proposed legislation from the Canadian government.[18] In that case, the WTO panel systematically reviewed the wording of Article 30 and the intention of the legislature, and held that a Bolar exemption which exempted acts carried out solely for the purpose of seeking regulatory authorisation would be permitted[19], but that the exemption of commercial acts would run contrary to Article 30. In particular, the WTO panel expressly disapproved of the notion that Article 30 would permit the exemption of commercial acts carried out in anticipation of a large-scale pharmaceutical product launch immediately after patent expiry, e.g. an act such as stockpiling.[20] The WTO panel held that a gradual process of market entry after patent expiry is part of the normal patent framework under TRIPS, and that a Bolar exemption cannot be used to flood the market with generic product immediately after patent expiry.
It is precisely such acts which the new Directive appears to endorse. Looking first to the Recitals of the new Directive, whilst Recital 63 states that “[t]he exemption must be confined to conduct studies and trials and other activities needed for the regulatory approval process, health technology assessment and pricing reimbursement request” and that “there can be no commercial use of the resulting final medicinal products obtained for the purposes of the regulatory approval process”, the indication in Recital 64 that the Bolar exemption “will allow all necessary steps to support timely access to generic medicinal products, inter alia, to conduct studies to support pricing and reimbursement as well as the manufacture or purchase of patent protected active substances for the purpose of seeking marketing authorisations during that period” calls into question how the term “commercial use” is being used. Indeed, Recital 64 goes on to state that the Directive will contribute to “the timely market entry of medicinal products, in particular the market entry of generics and biosimilars on day one of loss of the patent or SPC protection”.[21] In order to enter the market on “day one”, a generic or biosimilar manufacturer must not only have completed all of the regulatory requirements, and sought agreement on pricing or completed offers for tender in at least some countries, but must also have manufactured and stockpiled the product ready to distribute and sell. These acts are clearly considered as being “commercial use” within the ruling of the WTO panel in Canada v EC.
Looking to the language of Article 85 of the new Directive, this may (as noted above) permit aspects of manufacture and storage of a medicinal product which is then placed on the market in large scale immediately on patent expiry. Such a situation is expressly identified in Canada v EC as failing to be compliant with Article 30 of the TRIPS Agreement. The new Directive goes further than this, however, and also permits tenders or offers for sale that may occur during the pricing and reimbursement approval process. Obtaining pricing and reimbursement approval at least represents an implicit offer to sell a medicinal product in many countries, and in some other countries it can involve an explicit offer to sell or even sale of the product. “Offering for sale” and “selling” are two fundamental patent rights protected under Article 28 of the TRIPS Agreement and the reasoning set out by the WTO panel in connection with stockpiling arguably applies equally to any commercial or pre-commercial offer for sale. As such, the exception under part (iii) of Article 85, and the recital of “offer” and “sale” in paragraph 2 of Article 85 (insofar as it relates to pricing and reimbursement approval), would also fail to be compliant with Article 30 of the TRIPS Agreement.
Summary
The initial version of the proposed new Directive significantly reduced the amount of data exclusivity available and set onerous requirements for innovators to extend the exclusivity period. In the latest changes, the EU Parliament has approved a version which relaxes those requirements and largely restores the amount of regulatory exclusivity which is available. In this respect, it dials back the heavily pro-generic stance which was apparent in the initial version.
The changes made to the proposed Bolar exemption, however, provide for a wider exclusion from infringement which appears to swing the pendulum back in favour of the generics industry. Not only are new products arguably within the scope of the safe harbour, but there is also a lack of clarity around which other activities, including commercial activities, would be permitted during the term of patent or SPC protection. In particular, the wording of the new Directive does not expressly forbid that products manufactured or stored under the Bolar exemption are placed on the market on “day one” after patent or SPC expiry. Furthermore, the extension of the safe harbour to activities conducted in the process of seeking pricing approval undercuts another commercial activity (offer for sale) which would otherwise be protected by a patent or SPC. Absent an EU-wide mechanism to adjudicate when any given medicinal product comes off-patent (i.e., a mechanism to help promptly and finally determine “day one” before it occurs – thereby providing well-needed certainty not only to the pharmaceutical industry, but also to patients, stakeholders and the public at large), the proposed pricing and reimbursement exemption may encourage generics manufacturers to offer a product for sale at an early stage when patent or SPC protection is still pending – this would be contrary to the interests of rights holders, of member states and of patients. The proposed Bolar exemption may thus be unworkable and fail to achieve its intended aims.
Finally, the extent to which the Bolar exemption has been widened merits an investigation of its compliance with Article 30 of the TRIPS Agreement. The jurisprudence which the EU itself (in an earlier guise) helped to develop sets limits on the extent to which Bolar exemptions may be defined; those limits are arguably exceeded by the new Directive as regards both the potential for stockpiling and the proposed pricing and reimbursement exemption.
If the Bolar exemption is considered as a ‘grand bargain’ between innovators and generics, under which generics can perform studies necessary for regulatory approval in advance of patent expiry, and in exchange for which innovators are provided additional term of exclusivity (e.g. by way of SPC protection), then the proposed new Directive rewrites that bargain in favour of an earlier market entry of generics without offering any compensation for innovators. This is particularly problematic in a regulatory environment where there is no clear determination of “day one” before it occurs. Overall, therefore, while the balance has shifted, the new legislation still looks to represent an erosion of the protections currently afforded to the innovator pharmaceutical industry and it raises serious questions of non-compliance with the EU’s international legal obligations.
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[1] The main changes are summarized by Creemer et al., Pharm Pat Anal (2023) 12(6):249-252
[2] The initially proposed Directive is COM(2023)192, “Proposal for a Directive of the European Parliament and of the Council on the Union code relating to medicinal products for human use, and repealing Directive 2001/83/EC and Directive 2009/35/EC”, published 26 April 2023.
[3] The adopted text of the amendments to the Directive has reference T9-0220/2024 and is dated 10 April 2024.
[4] Article 81(1) of the new Directive as amended (Amendment 199 of T9-0220/2024).
[5] Articles 81(2)(a) and 82 of the new Directive are deleted (Amendments 200 and 207 of T9-0220/2024).
[6] Article 81(2)(b) of the new Directive as amended (Amendment 201 of T9-0220/2024).
[7] Article 81(2)(c) of the new Directive (not amended).
[8] Article 81(2)(ca) of the new Directive (newly added by Amendment 202 of T9-0220/2024).
[9] Article 81(3)(a) of the new Directive (newly added in Amendment 206 of T9-0220/2024).
[10] Article 80(2)(a) of the new Directive (newly added in Amendment 196 of T9-0220/2024). Note that the initial version of the new Directive provided a +1 year extension to the period of data exclusivity in these same circumstances (former Article 81(2)(d) of the new Directive, as deleted by Amendment 203 of T9-0220/2024).
[11] COM(2023)193, dated 26 April 2023. See especially Articles 71 and 72.
[12] Article 10(6) of Directive 2001/83/EC (in its current form).
[13] Article 85(a)(i) of the new Directive (newly added in Amendment 211 of T9-0220/2024).
[14] 2023/0132(COD): “DRAFT OPINION of the Committee on Industry, Research and Energy for the Committee on the Environment, Public Health and Food Safety on the proposal for a directive of the European Parliament and of the Council on the Union code relating to medicinal products for human use, and repealing Directive 2001/83/EC and Directive 2009/35/EC (COM(2023)0192 – C9-0143/2023 – 2023/0132(COD))”.
[15] 2023/0132(COD) at Amendments 13 and 14, and their corresponding “Justifications”.
[16] Article 85 of the new Directive, as amended by Amendments 209-215 of T9-0220/2024.
[17] Recital 64 of the new Directive (Amendment 47 of T9-0220/2024, emphasis added).
[18] See the decision of the panel in WT/DS114/R, 17 March 2000 (“Canada v EC”).
[19] See Canada v EC, sections 7.45-7.50.
[20] See Canada v EC, sections 7.35-7.36.
[21] Recital 64 of the new Directive (Amendment 47 of T9-0220/2024 with emphasis added), noting that the definition of “day one of loss of patent or SPC protection” is undefined in the new Directive.
Mathys & Squire attorneys: David Hobson, Martin MacLean and Nicholas Fox have filed a Petition for Review on behalf of Ipsen Bioinnovation asking the European Patent Office’s (EPO) Enlarged Board of Appeal to set aside a decision which resulted in the revocation of Ipsen Bioinnovation’s patent EP 2677029.
A Petition for Review is an exceptional remedy which enables a party to overturn a decision of an EPO Board of Appeal. The success rate for Petitions for Review is notoriously low, with fewer than 5% being successful. This is because Petitions for Review can only be based on very specific grounds and there is an obligation on parties to bring issues to a Board’s attention at a hearing. Failing to do so renders a Petition for Review inadmissible unless the circumstances are such that an objection could not have been raised during the appeal proceedings.
Unusually, valid grounds for a Petition for Review appear to have been made out in the present case.
Background to the case
EP 2677029 was opposed as allegedly being invalid on the grounds of added matter, lack of sufficiency and lack of inventive step. At first instance, the added matter objection was rejected. However, the allegation of lack of sufficiency was upheld. No ruling was made on inventive step.
Ipsen Bioinnovation appealed.
When responding to the Grounds of Appeal, in addition to asking the Board of Appeal to uphold the Opposition Division’s finding of lack of sufficiency, the respondent also asked the Board to overturn the Opposition Division’s decision that the claims of Ipsen Bioinnovation’s Main Request did not add matter. This argument gained traction with the Board of Appeal, and in a Preliminary Opinion, issued by the Board a few weeks before a hearing was scheduled, the Board indicated that they were of a preliminary view that three of the dependent claims in the Main Request contained added matter.
Mathys & Squire responded by filing arguments to the contrary and in addition, submitted two additional auxiliary requests into the proceedings which deleted these dependent claims, noting that such claims could not have been filed with the original appeal because the Opposition Division had previously found in Ipsen Bioinnovation’s favour. Mathys & Squire further noted that the deletion dealt fully with the added matter objections, did not raise any new issues, and did not in any way shift the focus of the appeal which, from the beginning of the case, had been the issue of sufficiency.
Fundamental violation of the right to be heard
At Oral Proceedings, after initially rejecting an added matter attack against claims 1 and 3 of the Main Request, the Board ruled that dependent claims 2 and 4 of the Request added matter. The Board then proceeded to refuse to admit the requests deleting these claims into the proceedings and revoked the patent. No explanation for the refusal to admit the auxiliary requests which deleted the dependent claims alleged to add matter was given at the oral hearing itself.
When the Board’s written decision was issued, it became apparent that the Board had departed from previous EPO case law which would have admitted the requests deleting the relevant dependent claims into the proceedings.
Starting with the decision in T1480/16, many Boards[1] have ruled that deleting dependent claims (particularly when such a deletion does not result in a shift of the focus of a case) is merely a restriction of the scope of an appeal and as such does not constitute an amendment of an appellant’s case. Under such an interpretation of the law, such a request can be made at any time during appeal proceedings and a Board does not have a discretion to refuse the request merely because it is submitted after parties have been summoned to Oral Proceedings.
A second line of case law has taken a different view, holding that the deletion of dependent claims does constitute an amendment of a party’s case. This means that a party has to establish “exceptional circumstances” that justify the admission of a request. However, invariably this has been held to satisfy the “exceptional circumstances” test for admission whenever a request has related solely to the deletion of dependent claims which:
In the present written decision, it became apparent that the Board had declined to follow either of these approaches and instead had decided to refuse to admit the amendments on the ground that they did not address the Board’s concerns relating to sufficiency of disclosure; a ground that had never been discussed at the Oral Proceedings.
Basing a decision on a ground on which a party has not had the opportunity to present comments is a clear breach of a party’s right to be heard under Article 113 EPC and constitutes grounds for a Petition for Review. Further, as there was no prior indication that the Board would depart from the previous case law and that the Board required arguments on sufficiency to be presented, it was not possible to bring this breach to the attention of the Board at the hearing itself.
David Hobson, commented: “Our client Ipsen clearly suffered an injustice here. I recall my surprise at the hearing that our claim requests were not admitted given that: (i) they unquestionably addressed the added matter issue; and (ii) our position was supported by well-established EPO case law. It was only upon receipt of the decision that the underlying reasoning of the Board of Appeal became clear. I could not have guessed at the time that Ipsen’s right to be heard had been violated and that a consideration of sufficiency was central to the Board of Appeal’s refusal to admit the claim requests. We are hopeful that the Petition for Review will put right this wrong.”
Martin MacLean commented: “The post-grant proceedings in relation to this patent have been as unconventional as I have experienced in 25 years of practicing as a European Patent Attorney. The whole purpose of Oral Proceedings is to give patentees the opportunity to be heard prior to a Board of Appeal ruling on the validity of a patent. When issuing their decision to revoke this patent, the Board must have been aware that questions of sufficiency had not been discussed. The Board’s decision to revoke this patent is therefore clearly unsafe and should be overturned.”
The case is proceeding as case number R14/24.
[1] For example in: T914/18, T995/18, T1857/19, T884/18, T565/16, T981/17, T1792/19 and T2201/19.
[2] See for example T853/17, T306/18, T682/16, T1224/15, T853/17, T306/18, T884/18, T494/18 and T2920/18.
Mathys & Squire is pleased to be ranked as a leading European patent law firm by the Financial Times (FT) in their 2024 report.
Mathys & Squire has also been highlighted in five specialised areas of industry expertise: ‘Biotechnology, Food & Healthcare‘, ‘Chemistry & Pharmacy‘, ‘Electrical Engineering & Physics’, ‘IT & Software‘, and ‘Mechanical Engineering.’
This annual ranking is based on client and peer recommendations, compiled by the FT’s research partner, Statista. We would like to extend our thanks to all our clients and contacts who took the time to recommend our firm.
To access the full report and rankings tables, please visit the FT website here.
Mathys & Squire is thrilled to be ranked in the 2024 edition of IAM Patent 1000: The World’s Leading Patent Professionals . IAM is known for being the definitive resource outlining word-class private practice patent expertise, and conducts extensive qualitative research to identify leading firms and individuals based on their abilities, market presence, and the complexity of their work. Only those with exceptional skills and deep insights into patent matters are featured in the directory.
In addition to our firm ranking, a record number of Mathys & Squire attorneys have been recognised as ‘Recommended Individuals’. Partners Paul Cozens, Stephen Garner, Anna Gregson, Chris Hamer, Dani Kramer, Alan MacDougall, Martin MacLean, James Pitchford, Juliet Redhouse, Michael Stott, Craig Titmus, Andrew White and Consultant Partner Jane Clark have all maintained their rankings. We are also pleased to see Partners Philippa Griffin and Nicholas Fox ranked for the first time.
Mathys & Squire has been recognised as a ” real industry leader that provides a very high level of service and support. It has a real breadth and depth of technical understanding paired with European legal expertise and experience dealing with legal systems elsewhere.” Our team have also been praised for their ability to “collaborate and communicate effectively with clients and each other to efficiently manage global portfolios, coordinate patent strategies, advise on FTO matters and represent patrons in proceedings at the EPO. They keep up to date with commercial developments to provide proactive and cost-effective advice, and always make themselves available to answer questions, providing clear and concise summaries.”
Commentary by Partner Nicholas Fox has been featured in Law Society Gazette, Law Society of Ireland Gazette, World IP Review, Life Sciences Intellectual Property Review, The Canadian Lawyer and The Australian Lawyer, looking back at one year of the Unified Patent Court (UPC) and discussing how national courts still dominate patent litigation in Europe.
Read the extended press release below.
One year in, the jury is still out on the new UPC as its caseload is still dwarfed by national courts, say leading intellectual property law firm Mathys & Squire.
The UPC opened on June 1, 2023 with the aim of becoming Europe’s primary patent court. In its first year of operation, 205 cases were filed at the court (134 infringement cases, 39 revocation actions and 32 provisional measures actions). This represents around 15% of the total number of patent cases filed in Europe in 2021, when a total of 1,275 patent law cases were heard in the UK, Germany, France, Italy and the Netherlands combined.
Although 205 cases in an initial year is an impressive total, the UPC still has a long way to go before it becomes Europe’s primary court for patent litigation. The UPC’s caseload places it slightly ahead of the French courts, which heard 174 patent cases in 2021, and a long way behind Germany, which heard 841 patent cases that year.
Most important of all, very few UPC cases have yet to reach any form of conclusion. That is not unexpected. Under the UPC’s court rules, cases are expected to reach a final hearing in 12 months with decisions issued shortly thereafter. It is only now that the Court has been running for a full 12 months that we can start to expect the Court to begin issuing substantive decisions. Up until now, the Court has only ruled on a handful of cases, primarily on procedural issues.
It is likely to be quite some time before the jurisprudence of the UPC resembles anything approaching a settled state. Although there should be a steady stream of substantive decisions over the next 12 months, such decisions will only be decisions at first instance. It will not be until settled practice begins to develop through a substantial body of decided cases or cases are referred to the UPC Court of Appeal that the approach of the new court to substantive patent law is likely to become clear.
UPC case numbers dwarfed by other courts
A slow start for the UPC was baked-in by design.
The UPC has no jurisdiction over patents granted by national patent offices. However, a significant proportion of European patent disputes relate to such national patents rather than to patents granted by the European Patent Office, over which the UPC does have jurisdiction.
Nor does the UPC jurisdiction extend over all European countries. The UK was forced to withdraw from the UPC following Brexit and many significant European countries, notably Spain and Poland have chosen not to join the new system.
Additionally, patent holders have the choice to opt patents out of the jurisdiction of the court and around two-thirds of European patents in existence when the court opened were opted-out. This will have included the vast majority of patents which patent holders thought might have been the subject of third-party revocations actions before the UPC.
The 39 stand-alone revocation actions brought before the UPC in its first year is in stark comparison with the thousands of oppositions filed annually at the European Patent Office (EPO). Although the total number of UPC revocation actions will be bolstered by counterclaims for invalidity brought against patents which are sought to be enforced in the UPC, such numbers are dwarfed by the 3,775 oppositions filed in the EPO in 2022 and are likely to continue to be so for the foreseeable future.
Says Nicholas Fox: “The success of the UPC in attracting work to date is significant – but that shouldn’t be overstated. When we compare the UPC to other national patent courts we see that the UPC is still just one of many courts developing European patent case law.”
“Currently, most businesses tend to focus on bringing patent cases at a national level. If the UPC wants to become Europe’s hub for patent litigation it has to convince patent holders that litigating continent-wide is worthwhile.”
“Both corporates and lawyers will also need to become more comfortable that the UPC will deliver predictable and very robust judgments. At the moment, most of the very big ticket patent litigation, for example in pharmaceuticals, is staying within the national court systems.”
Managing IP has released its 2024 guide of the IP STARS legal directory, which recognises the most outstanding practitioners covering several IP practice areas and more than 50 jurisdictions. Each year, the research analysts obtain information through firm submissions, client interviews, as well as online surveys, to identify the leading IP STARS.
We are delighted to announce that Partners Jane Clark, Hazel Ford and Paul Cozens have been named as ‘Patent Stars’ and Partners Gary Johnston, Rebecca Tew as well as Consultant Margaret Arnott have been recognised as ‘Trade Mark Stars.’ Additionally, Partners Philippa Griffin, Nicholas Fox, David Hobson, Martin MacLean and Andrew White have been featured as ‘Notable Practitioners’ in the latest guide. The 2024 Rising Star rankings are due to be released in September 2024.
The firm is also pleased to have maintained its rankings for ‘Patent prosecution’ and ‘Trade mark prosecution’ in the 2024 directory.
For more information, and to view the rankings in full, visit the IP STARS website here.
In recent EPO decision T 293/19 a Technical Board of Appeal has suggested that claims to products that could be envisaged as obvious improvements over the prior art, but which could not be produced using methods known in the art, may not be deemed inventive. This decision departs from a long-standing line of previous case law.
The case at issue included claims to both a process and products that were obtainable using that process. The Board decided that the process was both novel and inventive, and then went on to consider the patentability of the product claims. In one request, the product (an IgM antibody preparation) was defined by a specific property (a proteolytic activity of less than 8U/l) that was not disclosed in the closest prior art document. The Board had doubts over whether this feature was sufficient to distinguish the closest prior art but gave the proprietor the benefit of the doubt for the sake of argument.
Whilst it was undisputed that a low proteolytic activity was considered a desirable property in the prior art, the proprietor argued that there were no processes in the prior art that could lead to a product having a proteolytic activity below the claimed threshold and that the product should thus be considered inventive. In support, the proprietor referred to earlier decision T 595/90 which states that “an otherwise obvious entity… may become nevertheless non-obvious and claimable as such if there is no known way or applicable… method in the art to make it and the claimed methods for its preparation are therefore the first to achieve this in an inventive manner”. The reasoning of that decision has subsequently been followed in a number of cases and until now seemed to be a well-established principle of EPO case law.
The Board had doubts over whether known processes could produce the claimed composition, but again assumed in favour of the proprietor. However the Board did not accept the proprietor’s argument that the product claim should thus be held inventive, stating that the EPO’s problem-solution approach for assessing inventive step “[a]t no point…includes the question of whether a product could or could not be obtained by a process known from the art for it to be inventive” and that “an obvious improvement…is not necessarily inventive for the reason alone that it cannot be prepared by methods available at the filing date”. The product claim was thus found obvious, with the Board of the view that the invention lay in the development of the process to produce the product and not the product itself.
This conclusion is in some ways difficult to understand. The EPO’s problem-solution approach does only ask whether the invention was “obvious” to the skilled person without explicitly addressing whether this means that the skilled person should merely be able to envisage the invention or actually produce it. However, in order to destroy novelty, an enabling disclosure of a product is required in the prior art (i.e. the skilled person must be able to make the product based on its disclosure in the art), and so it is not clear why this should not also be a consideration when assessing inventive step. If somebody produces a product for the first time using inventive skill, why should they not be entitled to a claim to that product in addition to the process used to make it?
The Board’s conclusion thus seems to represent a significant departure from the principles established by T 595/90. The Board in T 293/19 states that its conclusion would depend on the facts of the case and the claim wording but provides minimal additional guidance, and so it will be interesting to see if any other Boards follow this decision.
Leading intellectual property (IP) law firm Mathys & Squire is pleased to announce the promotion of Laura Clews, Samantha Moodie and Edd Cavanna to Partners at the firm.
An extended version of the press release is available below.
Laura Clews has been appointed to Partner in Mathys & Squire’s life sciences & chemistry team, continuing a 13 year-career with the firm. Laura holds a doctorate in liquid chromatography and is a highly skilled patent lawyer with global knowledge of drafting and litigating patent applications, particularly in the fields of ionic liquids, composite materials, polymer chemistry, solar cells, medical stents and oil and gas technologies.
Samantha Moodie has also been promoted to Partner at Mathys & Squire, having joined the firm’s life sciences & chemistry team in 2011. A specialist in molecular biology and biotechnology and holding a doctorate in molecular virology, Samantha has extensive experience managing complex worldwide patent portfolios. Areas of particular focus for Samantha include antibody-based therapeutics, nucleic acid-based diagnostics and stem cell and regenerative technologies.
Edd Cavanna too has been appointed Partner in Mathys & Squire’s IT & engineering team. With a PhD in Physics, Edd joined the firm in 2015 and specialises in the IP and technology areas of mechanical, electronic, software and energy. Edd’s promotion will strengthen the firm’s services across all technology fields, especially semiconductor devices and applied superconductivity.
Says Alan MacDougall, HR Partner at Mathys & Squire: “It’s a great pleasure to see Laura, Samantha and Edd continue very successful careers with Mathys & Squire and welcome them to our partnership. After joining Mathys & Squire as Technical Assistants, all three have grown into highly regarded specialists in their respective fields. Their wealth of expertise will make a vital contribution to the exceptional services we deliver to our clients.”
Mathys & Squire has also promoted five lawyers to Managing Associates – Alex Elder, Adam Gilbertson, Lionel Newton, Oliver Parish and Leonard Wright.
Says Alan MacDougall: “Congratulations to Alex, Adam, Lionel, Leonard and Oliver are also due, whose promotions are another reflection of the remarkable talent within our firm. Our talented new Managing Associates will deliver valued support to our partners across all service lines and sectors.”
Commentary by Partner Andrew White has been featured in The Independent and The Patent Lawyer, discussing how R&D in defence, alongside agriculture and logistics, is driving innovation in drone technology.
Read the extended press release below.
The number of global patents filed for drone technology has increased 16% from 16,800 in 2022 to 19,700 in 2023* (includes patents for drone countermeasures), shows new research from leading intellectual property (IP) law firm Mathys & Squire.
Increased innovation in drone technologies has been driven by greater research and development (R&D) spending in the defence sector, the ongoing integration of AI into drone technology as well as drones that can better handle countermeasures. This reflects the growing usage of drones in military conflicts.
Russia is now in the top five countries for filing drone patents. 333 drone-related patents were filed by Russian entities in 2022 and 2023. Ukraine only filed 4 patents relating to drone technology over the same period.
Andrew White, Partner at Mathys & Squire, says: “Military applications now make up a significant proportion of R&D in drone technology. We’re seeing more investment in drone research from defence businesses as governments realise that they are in a literal arms race within this field.”
Industrial and commercial applications continue to drive drone innovation
Commercial applications of drone technology also continue to expand rapidly, with some emerging applications including:
China remains at the forefront of drone innovation, with 82% of all global drone patents filed since 2015 originating from Chinese companies. During 2023 this rose to 87%, accounting for 17,285 patent filings. Drone manufacturer DJI of China was the most frequent filer of drone patents – filing 88 in the last year. The US was the second largest filer of drone patents, filing 858 in 2023.
With the global drone market estimated to be worth over $100 billion**, Mathys & Squire emphasises the importance of proactive patent strategies for businesses looking to capitalise on the opportunities presented by drone technology.
White concludes, “As drones continue to be adopted across more industries, it’s crucial for businesses to safeguard their IP in this competitive space through patent protection.”
* Source: World Intellectual Property Organisation. Year end December 31 2023
** Source: Goldman Sachs
