Ronak Shah is a JD candidate at Osgoode Hall Law School and is enrolled in Professor Mgbeoji’s Patents class in Fall 2011. As part of the course requirements, students are asked to write a blog on a topic of their choice. The IPilogue has already considered this decision on biotechnology patents, but this post provides another view of the matter.
On November 2, 2011, the United Kingdom Supreme Court (UKSC) in Human Genome Sciences Inc v Eli Lilly and Company1 unanimously reversed the lower court’s decision that Human Genome Sciences (“HGS”) Neutrokine-α was invalid as it lacked industrial application. Thus bringing UK law in line with the European Patent Office’s (EPO) interpretation of industrial applicability.
The five judges of the UKSC ruled that Article 57 of the European Patent Convention (EPC) does not require that patent application for new genes go as far as providing clinical tests as proof of industrial application.
Article 57 of the EPC states that: “An invention shall be considered as susceptible of industrial application if it can be made or used in any kind of industry, including agriculture.”2 It is part of the UK and EPC’s utility requirement.
Lord Neuberger wrote the main judgment for the panel of five justices.
In 1996, HGS filed for a patent for Neutrokine-α, which was granted by the EPO in August 2005. Neutrokine-α is a novel human protein and a member of the TNF ligand superfamily of cytokines (proteins that act as inter-cellular mediators in inflammation and other immune responses). The specification in the patent included the encoding nucleotide, the amino acid sequence and certain anti-bodies of Neutrokine-α; it included contentions as to its biological properties and therapeutic activities along with those of its anti-bodies. The contentions were predictions that were substantially based on the proposition that Neutrokine-α is a member of the TNF ligand superfamily. However, nowhere in the Patent was there any data or suggestions of in vitro or in vivo studies. Bioinformatics assays were the basis of its predictions rather than wet lab tests.
After the Patent was granted to HGS, it became the subject of opposition proceedings brought by Eli Lilly (“Lilly”) at the EPO. After the hearing at the Opposition Division (OD) of the EPO in June 2008, the Patent was revoked. HGS appealed to the EPO Boards of Appeal which allowed the appeal, referring the case back to the OD with the direction that the Patent be maintained.
Lilly also brought parallel proceedings in the UK at the High Court for revocation of the Patent in its jurisdiction. The proceeding was heard by Kitichin J, he revoked the patent based on the conclusion that, (described by Lord Neuberger in summary terms at para 31) in light of the common general knowledge, the notional addressee of the Patent would have concluded that the “functions” of Neutrokine-α “were, at best, a matter of expectation and then at far too high level of generality to constitute a sound or concrete basis for anything except a research project”. HGS appealed this decision at the Court of Appeal. The court dismissed HGS’s appeal, following and approving Kitchin J’s approach. This ruling by the UKSC was based on an appeal by HGS against the Court of Appeal’s decision.
The decision had three main threads of analysis:
a) Consistent Approach: National Courts vs. the EPO
The Supreme Court found that while there is “room for dialogue between the national court and the EPO” and that national courts are free to come to different outcomes than the EPO, the principles behind such decisions must be the same, they must stem from the EPC. The court found that where the EPO has adopted a consistent approach to an issue in a number of decisions, a national court should only rule differently when there are “very uncertain facts to justify” it. The court found that the Technical Board had ruled consistently in its application of Rule 57 to patents for biological material and that there was “little helpful domestic guidance” in the UK on this issue. Therefore, the Court of Appeal and the lower court were wrong in not following EPO’s approach.
b) Wider Policy Concerns
But in making this decision, the court appeared hesitant to overturn the two lower courts ruling, especially since they were consistent with each other, and two patent specialists gave the ruling with extensive trial evidence before them.3 The UKSC’s approach was based on two “strong” policy arguments. Lord Walker elaborates at para 171 that:
The first is to reduce the risk of a chilling effect on investment in bioscience (though here the arguments are certainly not all one way). The other is to align this country’s interpretation of the European Patent Convention more closely with that of other contracting states. To my mind these considerations justify this Court in taking what would otherwise be a questionable course.
The court also seemed to agree with the submissions of the BioIndustry Association (BIA), who were interveners in the case. The BIA had argued that it is important that the law is clear and certain in its application of Article 57. The court agreed, especially since it is important for bioscience companies to decide when they need to file for patent protection. Lord Neuberger outlines why the Court of Appeal’s approach would be a detriment to UK’s bioscience sector. At Para 100-101, Lord Neuberger points out that:
For obvious reasons, the BIA has not set out to support either of the two parties to this appeal in its trenchant written submissions in these proceedings. However, it does suggest that if we agree with the reasoning of the Court of Appeal there is at least a risk that it will “make it appreciably harder for patentees to satisfy the requirement of industrial applicability in future cases.” If that were so, it is suggested that this “would cause UK bioscience companies great difficulty in attracting investment at an early stage in the research and development process”.
This consequence is said to arise from the reasoning of the Court of Appeal (and hence of Kitchin J), on the basis that there will normally be a need to conduct tests to provide experimental data to establish to the standard they require that a protein (or its antagonists) have therapeutic use. This in turn is said to lead to two problems. First, such tests will or may involve clinical work, which, as I understand it, would be hard to keep confidential, especially in the age of the internet. Secondly, such tests would often be expensive to run, and, as already mentioned, funding would be hard to obtain for a project of this sort which had no protection in the form of a patent application.
c) Standard for “Industrial Applicability”
At Para 108, the court summarizes the Board’s approach in relation to the requirements of Article 57 in relation to biological material. The court held that the industrial application requirement was met because Neutrokine-α was a member of a TNF ligand superfamily and that all the members of the family were associated with important immune response related activity. Lord Neuberger at Para 111 agreeing with the Boards conclusion states that:
The Board’s conclusion was effectively this, that the disclosure of what was accepted to be a new member of the TNF ligand superfamily (coupled with details of its tissue distribution) satisfied Article 57, because all known members were expressed on T-cells and were able to co-stimulate T-cell proliferation, and therefore Neutrokine-α would be expected to have a similar function.
The court counters the lower courts argument that the basis for HGS’s patent is “speculative and did not give rise to an immediate concrete benefit”. Lord Neuberger responds by saying that if a statement “is indeed plausible, then, in the absence of any reason to the contrary, it at least prima facie satisfies the requirements of Article 57 according to the Board”. He goes on to say that:
I appreciate that the dividing line between “plausibility” and “educated guess”, as against “speculation”, just like the contrast between “a real as opposed to a purely theoretical possibility of exploitation”, can be difficult to discern in terms of language and application, and is a point on which tribunals could often differ… However, as a result of the decisions discussed above, the Board’s approach to patents such as that in this case is, I believe, tolerably clear.
The court found that the lower courts were mistaken in interpreting what “immediate concrete benefit means” and that it is enough if the Patent satisfies requirements outlined in its summary of the Board’s case law.
Lord Hope also finds that the Court of Appeal was setting as onerous standard, he states at Para 151 that:
I think that there are indications in these passages that the standard which Jacob LJ was setting for susceptibility to industrial application was a more exacting one than that used by the TBA.
He found that the Board’s approach to industrial application was the use of the molecule for research was sufficient in itself as an industrial activity (Para 155). The court adopted this lower standard on the principle that biotechnology investments should be encouraged in the UK.
Impact on Canada
The case demonstrates that there is a clear functional parallel between the European requirement of “industrial application” and the Canadian utility requirement, which means that Canadian courts and the Patent office can look at UK and EPO jurisprudence on the issue of utility.4 But on the point of how far long before a patent should be granted, the Canadian doctrine of Sound Prediction makes it difficult to directly apply European case law on the point, as they don’t have this doctrine.5 While harmonizing with EPO law is not a priority for Canadian courts, Professor Siebrasse in his blog points out that “consistency with the law of other jurisdictions is important in light of the practical reality that Canada is effectively just one part of a world-wide patent system”.6 Therefore he contends that the principles set out in this case deserve to be seriously looked at in Canada especially on the point of whether patents claiming a new protein and encoding gene satisfy the utility requirement.
The court on the main issue found that HGS’s patent satisfied the requirement of Article 57. The court also dismissed Lilly’s cross appeal on the insufficiency issue. The case will now be sent back to the Court of Appeal to deal with other outstanding issues.
1 Human Genome Sciences Inc. v. Eli Lilly and Company,  UKSC 51.
2 The European Patent Convention, online: <http://www.epo.org/law-practice/legal-texts/html/epc/2010/e/ar57.html>
3 James Nurton, “Analysis: Why the Supreme Court Overturned Two Patent Specialists” (2011) Managing Intellectual Property Patents.
4 Norman Siebrasse, “What does HGS v. Eli Lilly mean for Canada?” Sufficient Description (November 2011), online: <http://www.sufficientdescription.com/2011/11/what-does-hgs-v-eli-lilly-mean-for.html>
6 Supra note 4.