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October 2019

Dutch Court provides guidance on the assignment of priority rights

The appeal case of 30 July 2019¹ at the Court in The Hague (the Court) between Biogen² and Celltrion illustrates two patent specific procedural law issues in the Netherlands: the suspension of proceedings awaiting a decision by the European Patent Office (EPO) and the assignment of a priority right.

The dispute concerns the validity of the patent EP 1 951 304 B1 (EP 304) for a "Method for Treating Joint Damages". Biogen is the holder of EP 304 and markets the medicinal product MabThera that is based on EP 304. Celltrion has obtained a market authorization for a biosimilar of MabThera.

There is currently an appeal pending at the Technical Board of Appeal and EP 304 has been the subject of legal action in several EU countries. EP 304 invokes the priority of two US applications, P1 and P2. P1 was applied for by an employee of Biogen. Prior to the filing of P1, Biogen and the employee concluded an agreement governed by Massachusetts state law.

Celltrion argues this agreement does not constitute a valid assignment of the priority right resulting in lack of novelty of EP 304. The Court in first instance followed this reasoning, it found Biogen could not rely on the claimed priority right P1 and that as a result EP 304 lacked novelty

In these appeal proceedings the Court does not rule on the validity of EP 304, but instead suspends that part of the appeal awaiting the decision of the Technical Board of Appeal. It does rule on the validity of the assignment of priority rights. The extensive analysis of the applicable law governing the assignment of priority rights serves as useful guidance on the subject of the assignment of priority rights in the Netherlands.

To establish whether Biogen can invoke the assigned priority right, the Court first determines if and how a priority right can be assigned. The right to priority is (according to the Court) a right which is granted by the lex loci protectionis. The consequence of a priority right is that the application date of the priority application is used as the relevant date for determining novelty and inventive step.

As Biogen invokes the (US) priority right in the context of the validity of a European patent, the governing law is the European Patent Convention (EPC). This is contrary to what both the parties argued as they both agreed US federal law would be applicable.

In order to apply the EPC to the issue of assignment of priority rights the Court first establishes the EPC must be interpreted in accordance with the Vienna Convention on the Law of Treaties. The Court applies an autonomous interpretation of the EPC, instead of an interpretation based on national law. The Court finds the EPC establishes a system of law common to the contracting states for the grant of patents, and this common system of law ought to include priority rights.

Article 87 EPC stipulates a successor in title shall also enjoy a right of priority and the article does not contain limitations on the assignment of a priority right. The Court therefore finds the priority right as such is assignable from a property law point of view. This reasoning by the Dutch Court is in line with the case law of the EPO, German case law and literature. However, the Court notes UK case law differs, as it finds a priority right can only be assigned in combination with the right to the patent itself.

As the next step, the Court determines the EPC does not prescribe formal requirements for the assignment of priority rights. There are formal requirements in Article 72 EPC for the assignment of a European patent application, but there is no reason to apply these requirements to the assignment of priority rights.

In short, the priority right can be assigned and there are no formal requirements that the assignment of the priority right P1 to Biogen must meet. The Court then analyzes the agreement between the employee and Biogen and concludes that the priority right has been validly assigned to Biogen.

Therefore, Biogen can rely on the application date of that priority right. In the event the Dutch national proceedings resume after the EPO decision the Court will take the application date of P1 as the relevant date to judge the validity of EP 304.

The English Court of Appeal rules on "uncertainty" as a validity challenge

In the appeal Anan Kasei & Anor v Neo Chemicals and Oxides & Ors [2019] EWCA Civ 1646 on 9 October 2019, Anan Kasei claimed infringement of European Patent (UK) No 1 435 338, concerned with ceric oxide or ceria, which is an oxide of the element cerium, and is a catalyst known for use in a variety of applications.

The particular use with which the patent is concerned is as a catalyst for purifying vehicle exhaust gases. The defendant denied infringement and counterclaimed for revocation of the patent on the grounds of lack of novelty, obviousness and insufficiency. The appeal was concerned solely with the judge's rejection of the insufficiency ground.

The patentee had limited its claim by the words "consisting essentially of" a particular oxide. The appeal dealt with whether those words give rise to such uncertainty as to lead to invalidity of the patent.

The other issue in the appeal is whether the claim was drawn too broadly and the invention insufficiently described.

The Court of Appeal rejected the insufficiency of the claim (upholding first instance) on the first argument, which said that the words are capable of more than one meaning. In the past, this has been referred to as "ambiguity", but the Court of Appeal has re-named it "uncertainty", thinking this more accurately describes the nature of the objection.

The Court also rejected Neo's second insufficiency attack (upholding first instance) as not having been established on the evidence.

Read on for a little more detail on the "uncertainty" part of the case, which is an argument seen quite regularly but often misunderstood*.

Uncertainty

The Court noted that the words "consisting essentially of" in a claim are something of a hybrid of "consisting of" (which means nothing else is present) and "comprising of" (which means other ingredients may be included).

The words do not restrict the claim to the specified ingredient alone, and might be said to give rise to some uncertainty in the absence of some further guidance as to what it means.

The skilled person would have regard to the practice of the EPO to regard such claims as meaning that, apart from the mandatory ingredient, no other ingredients are present which materially affect the essential characteristics of the product.

Neo's invalidity attack was that the words "consisting essentially of" render the claim invalid for insufficiency, because it is uncertain for the following reasons:

Where the alleged infringing ceric oxide contains an ingredient other than ceric oxide, the skilled person is required to perform a test to determine whether the presence of the extra ingredient has a material effect on the essential characteristics of the product ("the materiality test").

The materiality test which the skilled person would need to perform would be to compare the alleged infringing sample with a control which, whilst otherwise identical, did not have the added ingredient. The requirement for a comparator, Neo said, gives rise to difficulty for the skilled person because the method by which solid ceric oxides are made will always involve a final heating step; the added ingredient will be baked in and it will not be possible to remove it (by analogy, like taking an ingredient out of a cake after it is cooked).

So, the skilled person would not be able to obtain the control sample which they need for the materiality test. Neo say that it is no answer to suggest that the skilled person can obtain a comparator by manufacturing one from scratch, because a person in possession of the alleged infringing sample must be able to tell from the product alone whether it infringes, and will not necessarily know the process by which it was made, which may be secret.

Even if they could obtain access to the process, the argument continues, that would not be enough. The skilled person would not know whether it was the presence of the added ingredient in the final product which was affecting the properties, or whether the added ingredient had affected the process, for example by altering the way in which precipitation occurred. The claim requires a focus on the effect of the added ingredient in the product, teased apart from process effects.

The Court held Neo's insufficiency attack failed:

• First, this is not a case where there is any argument about the criterion which one needs to apply and possibly test for once the argument about the construction of the claim is resolved, as it has been. It is simply whether the added ingredient has a material effect on the essential characteristics of the product.
• Secondly, Neo's case, insofar as it depends on a purchaser not having access to process details in order to make a comparator, is based on a false premise. The test for sufficiency is whether the specification of the patent discloses the invention clearly enough and completely enough for it to be performed by a person skilled in the art. The test is not whether a purchaser of the product lacking the relevant skill in the art could determine whether it infringes. There are many situations countenanced by patent law (product by process claims being one example) where a purchaser will not be able to test for infringement without access to process details.
• Thirdly, and most fundamentally, the suggestion that determining whether a product was inside or outside the claim would impose an undue burden on the skilled person was not made out on the evidence. The judge did not make any detailed findings on the nature of the task which would face the skilled person in deciding whether specific products fell within the "consisting essentially of" wording. The Court rejected straight away the suggestion that the skilled person would think that they were being required to create a comparator with the added ingredient removed from the baked composition. The skilled person would not think that they were being asked to perform the impossible.

If you have any questions on this article or would like to propose a subject to be addressed by Synapse please contact us.

1 Court of Appeal of The Hague 30 July 2019, ECLI:NL:GHDHA:2019:1962 (Biogen and Genentech/Celltrion).

2 The parties Biogen, F. Hoffman- La Roche and Genentech are jointly referred to as "Biogen".

3 District Court of The Hague 27 September 2017, ECLI:NL:RBDHA:2017:11301.

*Note: in the English courts, like the TBA, lack of clarity or indefinite scope (sometimes referred to as a 'fuzzy boundary') is not a statutory ground on which validity can be challenged after grant. In most cases, the court will try to determine what the patentee would be understood by the skilled reader to have intended by the words used.

There is, however, a distinction to be drawn with "uncertainty" (as it is now called by the Court, but was formerly known as "ambiguity"), which is a ground for insufficiency. The factual circumstances in which a truly uncertain claim has been identified so far in the English courts are ones which depend on carrying out a technical test to find out if a product or process is within the claim or not.

If the skilled person cannot know whether they are carrying out the right test, then the claim is truly uncertain and therefore insufficient (although the principle is not limited to cases where a technical test can be applied).

A claim is not uncertain in England & Wales, however, simply because there are cases in which it is difficult to judge what is covered at the edge of the claim. Hence, if a case is one in which a defendant has been found to infringe, because the claim's scope is at least clear enough to work that out, an argument that the claim is uncertain, and therefore insufficient, is likely to be met with scepticism by the court. This is such a case.

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