American Bar Association: International IP Legal Updates (UK)

Neil Trueman updates the American Bar Association on some of the most recent cases in Intellectual Property within the UK.

This article was first published in Volume 1, Issue 3 of the American Bar Association Journal.

International IP Legal Updates

UK / EUROPEAN TRADE MARKS – SHAPE MARKS – Societe de produits Nestle SA v Cadbury UK Ltd [2014] EWHC 16 (Ch)

The shape of Nestle’s four fingered Kit-Kat bar may be widely recognized, but is that enough for a UK trade mark (TM) registration? Or as the UK High Court put it, “[i]n what circumstances can a trader secure a perpetual monopoly in the shape of a product by registering it as a trade mark?” Nestle applied to register the 3D shape (minus the Kit-Kat embossing) in the UK in 2010. Cadbury successfully opposed, and Nestle appealed to the High Court. The judge identified a need to refer questions of law to the Court Justice of European Union (CJEU) because although shape marks are registrable under European law,“[s]urprisingly however … certain aspects of the relevant law in this area remain unclear”. The first issue was whether the bar shape had acquired distinctive character through use, the question boiling down to: is it enough that a significant proportion of the relevant class of persons would identify the TM applicant if shown the four fingered bar shape, or must a significant proportion of the relevant class of persons rely upon the mark (as opposed to any other trade marks which may also be present – namely the Kit-Kat mark) as indicating the origin of the goods? Although he made the referral, in the judge’s view, recognition is not enough. The remaining issues related to registrability of shape marks are that a trade mark cannot consist exclusively of a shape which either results from the nature of the goods or is necessary to obtain a particular technical result, however, the facts presented a hybrid combination of objections. In particular, three essential features had been identified. One (slab shape) was found to result from the nature of the goods, but the others were found necessary to obtain a technical result (position and angle of grooves and number of grooves). Therefore, the question was whether such hybrid objections preclude registration, or must the type of objection apply to all of those essential features? Also, with respect to obtaining a technical result, the final question is whether the law precludes registration of shapes which are necessary to obtain a technical result with regard to the manner in which the goods are manufactured as opposed to the manner in which the goods function (with Nestle arguing that it must be function). The judge referred the question to the CJEU, although in his view, not only were hybrid objections sufficient to refuse registration, but either kind of technical result would count against the applicant. The CJEU’s answers to the UK referral may be expected about a year from now and should help guide brand owner’s TM application decisions and especially whether it is worthwhile attempting to obtain shape registrations in wrapped goods. While Cadbury appears to have the upper hand in the UK for now, Nestle still has traction in the Community Trade Mark (CTM) proceedings, with the OHIM Board of Appeal upholding the shape application in Class 30 in 2012, although that decision is under appeal.

Neil Trueman, Powell Gilbert, United Kingdom

UK PATENTS – Virgin Atlantic Airways Limited v Zodiac Seats UK Limited [2013] UKSC 46.

In one of the more notable UK patent cases of 2013, the UK Supreme Court overturned its precedent dating from 1908 that held that a plaintiff with a patent found to be valid and infringed is entitled to claim damages for infringement notwithstanding the subsequent revocation of the patent by either the patent office or a third party. In the UK Virgin case, the patent infringement claim against Zodiac related to a flat bed seat used in commercial airlines, Virgin had ultimately been successful on infringement and validity at the UK Court of Appeal level (equivalent to CAFC). Virgin’s appeal routes on the merits were at that point exhausted. But in addition to defending itself in the UK courts, Zodiac had brought opposition proceedings before the European Patent Office (EPO). After the UK Court of Appeal decision, the Technical Board of Appeal at the EPO had ruled that all of the claims that the UK Court of Appeal had earlier held to be infringed were invalid. Under the old precedent (since 2007 called the Unilin principle), the defendant Zodiac would have been liable for damages notwithstanding the claim was invalid ab initio after the EPO final decision, and could not reopen the issue on the merits. The UK Supreme Court took the appeal on the Unilin principle and sidestepped the issue of res judicata by focusing on the fact that the “infringed” claim had never been valid, such that Virgin could not have suffered any loss when it came to calculating damages (which are assessed at a separate proceedings in UK actions). The Virgin case further illustrates the difficulties arising from concurrent jurisdictions of courts and patent offices and bears similarities to Fresenius USA, Inc. v. Baxter International, Inc., Nos. 12-1334, -1335 (Fed. Cir. July 2, 2013), in which CAFC ruled that the PTO’s later invalidity determination in re-examination proceedings effectively trumped CAFC’s own earlier affirmation of non-invalidity of the claims. European-wide cases in which a defendant is forced to pay damages for infringement of a patent that is later held void ab initio are a real possibility in the future European Unified Patents Court (UPC). The UPC, which will have concurrent jurisdiction with the EPO for most of the European Union, is in general unlikely to stay proceedings pending EPO opposition proceedings because one of the UPC’s principle aims is to dispose of cases within a year. Given the short timelines to first instance and appeal decisions in the UPC we may expect to see cases where a defendant is forced to pay over damages by the UPC for infringement of a patent that is later revoked by the EPO opposition division, whose proceedings unfortunately often take years to resolve.

Neil Trueman, Powell Gilbert, United Kingdom

EUROPE – PATENTS – SUPPLEMENTARY PROTECTION CERTIFICATES (SPCs)– Eli Lilly v Human Genome Sciences (HGS) (C-493/12); Actavis v Sanofi (C-443/12), Georgetown University v Octrooicentrum Nederland (C-484/12).

The Court of Justice of the European Union (CJEU) recently handed down three decisions on the same day relating to SPCs (SPCs are akin to US Patent Term Extensions for pharma products), but in typical enigmatic fashion the CJEU has raised as many questions as it answered. The CJEU is the highest authority on SPCs, because while most European patent issues are interpreted according to national (albeit harmonised) law, SPCs arise out of EU law, namely EU Regulation 469/2009 (“SPC Reg”). Matters of interpretation are referred to the CJEU by national courts dealing with the merits, despite the fact that the CJEU has no expertise in technical patent matters.

The Lilly case related to the requirement in Article 3(a) of the SPC Reg that to be eligible a product must be protected by a basic patent in force. Lilly has an antibody (tabalumab) in clinical trials, and if it receives a marketing authorisation (MA), contends that HGS has the opportunity to obtain an SPC for tabalumab based on its patent. On these unusual and somewhat hypothetical facts, Lilly sought a declaration that HGS could not get an SPC, because the product is – for the purposes of an SPC application – not “protected” by a basic patent because HGS’ claim does not specify a structural formula (i.e. the sequence of the actual antibody. The CJEU had previously indicated in the Medeva case that protection required the product be “specified in the wording of claims”. On the Lilly referral, the question was in essence just how specified? The HGS claim covers antibodies binding to a specific protein without specifying the actual antibody, and the CJEU determined that this functional formulation was enough for an SPC.

In the Actavis and Georgetown II referrals, the court came to different conclusions about eligibility for an SPC under Article 3(c), which requires that the product has not already been the subject of a certificate. In Actavis, Sanofi owned a patent covering irbesartan, which included a claim to the combination of irbesartan and a diuretic. Sanofi obtained two SPCs on this patent on the basis of two Mas, the first an SPC for irbesartan marketing authorisation (MA) alone, and a second SPC (with a longer life) for an MA for irbesartan in combination with a specific diuretic, hydrochlorothiazide (HCTZ). The issue came to the CJEU from Actavis’ challenge to the second SPC in the UK courts: the CJEU held that where the patentee has already obtained an SPC on the basis of an MA for a single product the patent holder is precluded from obtaining a second SPC on the basis of the same patent for a second MA for a combination product which includes another active ingredient, but which is “not protected as such by the patent.” Irbesartan and HCTZ in combination were not protected as such by the patent. The court made some observations about the core inventive advance of the patent being irbesartan (alone), and that the second SPC was potentially for a longer period of protection. In contrast, in Georgetown II, the same basic patent was acknowledged to protect a number of products, “at the very least, both the HPV-6, HPV-11, HPV-16 and HPV-18 and the HPV-16 and HPV-18 combinations, as contained in Gardasil and Cervarix, and HPV-16, as marketed in Gardasil”. A first SPC was granted for the combination of the active ingredients, and the question – answered in the affirmative – was whether a second SPC could be obtained for just one on the ingredients. The CJEU noted that there was nothing in the SPC Reg to preclude a second SPC and moreover, such SPC would expire at the same time.

In sum, the Lilly case provided some good news for innovators as Article 3(a) does not preclude an SPC based on a functional claim provided that it relates – in the words of the CJEU – “implicitly but necessarily and specifically” to the active ingredient in question, when applying national law to assess the scope of protection of the claim. However, whether “implicitly but necessarily and specifically” introduces an additional test above and beyond the usual application of national law remains to be determined. Likewise, the court did little to give guidance above and beyond the specific factual circumstances in Actavis and Georgetown II, and so failed to give SPC applicants or national courts much insight into how different facts should be treated. Having spurned the opportunity to bring clarity to two important provisions of the SPC Reg, the CJEU can expect to receive yet more referrals to clog up its busy docket in the coming years.

Neil Trueman, Powell Gilbert, United Kingdom