Letter from AmeriKat: From Sea to Shining Sea

The AmeriKat was travelling again this past week. Irrespective of the past 25 years of frequent flying transatlantic-ally, continentally, transpacific-ally, and more, she is always surprised to find herself in a completely new location after seemingly no time at all. Leaving behind one established life and role and trading it in for a new role, set of contacts and friends has always given the AmeriKat a bit of a thrill. She can discard her "American lawyer in London" role when she steps off the plane in Dallas and just be someone welcomed home by immigration officials. Entering immigration in other ports her role is constantly transformed by a stamp in the passport to tourist, visiting family, attending a conference, here for business, or "living and working here". The only constant in these travels, from country to country and coast to coast, is her trusty Coach luggage, who has seen her across hundreds of thousands of miles, over-head bins and immigration authorities and is the subject of her first story this week.

Jo-Ann Fabrics sued for infringing fabric by Coach

In most isolated strip malls in U.S. cities from sea to shining sea, usually in between a dry-cleaners and a cell-phone retailer, is a Jo-Ann Fabrics where soccer-moms, crafters, and all in between go to purchase a multitude of fabrics, zippers, buttons and threads. Last Monday, Jo-Ann Fabrics was sued for trade mark, trade dress and copyright infringement in Chicago federal court by New York-based high-end leather goods manufacturer and AmeriKat favorite, Coach. Coach is complaining about a fleece fabric being sold by Jo-Ann Fabrics in store and on-line which is infringing Coach's signature "C" trade mark, associated trade dress rights and copyright in the signature "C" trade mark design (picture, right). Coach is asking the court for $2 million per each infringing mark, additional damages, attorney fees, and an injunction restraining future sales of the infringing product.

The "C" trade mark and insignia is on several of Coach's signature lines of bags, wallets, belts, shoes, hats, scarves and the lining therein and was registered as a U.S. trade mark in September 2002. You can even spot the AmeriKat in Holborn by the violet Coach scarf with the trade mark double "C" pattern that she carries on her Coach bag. However, the "C" insignia and pattern is a prime target for counterfeiters and counterfeit Coach bags (see AmeriKat report on previous action taken by Coach in Chicago) and the market is rife with copycats. According to the complaint Coach sells more than $3 billion products annually and has filed more than 500 trade mark infringement suits since 2010.

According to the complaint the fabric (picture, left) was designed and supplied to Jo-Ann Fabric by the named co-defendant, Feldman Co. and together with Jo-Ann Fabric are accused by Coach of trying to benefit from the "incalcuable goodwill" associated with Coach's C trade mark by selling the allegedly infringing fabric. Coach also argue that consumers will be confused as to the source of the fabric - the AmeriKat does not disagree, but there are some differences between the two fabrics. The "C"s on Jo-Ann's Fabric fabric are almost closed, looking more like "O"s than the clearly differentiated "C"s on Coach's fabric. The AmeriKat believes these differences not to be fatal and also believes that although a consumer would be able to recognize the difference after closer study of the fabric, initial interest confusion is nevertheless present.

Had the Amerikat seen the fabric in a Jo-Ann's Fabrics store her immediate reaction would first be "Why is Coach allowing their signature print fabric to be sold in Jo-Ann's Fabrics?"- a reaction that goes first to the pure dilution argument as argued by the complaint. Her next reaction would be one dealing with tarnishment of the mark - "Why is Coach allowing their signature print fabric to be printed on fleece and sold in Jo-Ann fabrics?". As far as the AmeriKat knows from the Coach range, they have never used their signature print on fleece - a fabric that is not associated with the up-market silk and leather ranges produced by Coach. Of note Jo-Ann Fabrics does sell fabrics with trade mark names and logos, namely for major league sports teams such as the New York Yankees and licensed fabrics from Disney. The AmeriKat does not anticipate this case going all that far and expects it to settle quite quickly given the similarity of the designs and strength of reputation in Coach's mark, however it acts as a warning to fabric buyers not to skate so closely to the edge of trade mark infringement.

Organic farmers sue Monsanto over genetically modified seeds

From Illinois to New York now. Two weeks ago, the Public Patent Foundation (PUBPAT), a non-for profit legal services organization based out of the Cardozo School of Law, filed a pre-emptive lawsuit in Manhattan federal court on behalf of 60 plaintiff family farmers, seed businesses and organic agricultural organizations against agricultural biotechnology company Monsanto challenging their patents on genetically modified seed. The lawsuit was pre-emptive in order to protect the class from anticipated patent infringement suits should their crops ever be contaminated by Monsanto's genetically modified seed. The AmeriKat has read about the 60 plaintiffs and noted that they included three farmers and seed producers from her home state of New Mexico, Chispas Farms, in Albuquerque, Jardin del Alma from Monticello and farmer Paul Romero from Espanola - a reminder that patent litigation does not just impact big businesses in Silicon Valley, but your neighbors.

PUBPAT's Executive Director and law lecturer at the Cardozo School of Law, Dan Ravicher, stated that the case

"asks whether Monsanto has the right to sue organic farmers for patent infringement if Monsanto's transgenic seed should land on their property. It seems quite perverse that an organic farmer contaminated by transgenic seed should be accused of patent infringement, but Monsanto has made such accusations before and is notorious for having sued hundreds of farmers for patent infringement, so we had to act to protect the interests of our clients."

For anyone who has seen Food, Inc., you will be aware about such legal issues involving Monsanto (click here for an excerpt of Food, Inc. about Monsanto) and the case of Percy Schmeiser. Genetically modified seed are alleged to contaminate and destroy organic seeds when they enter organic crops. Further, legally speaking, as with what happened with Schmeiser, when genetically modified seed enters a neighbouring crop and grows and/or cross pollinates with a farmer's crop the farmer can be held to be infringing the patent of that seed. PUBPAT is thus asking the court to declare that if organic farmers are contaminated by Monsanto's seed they need not fear of being threatened with patent infringement proceedings.

PUBPAT are also arguing that Monsanto's genetically modified patents for seeds are invalid because they do not meet the "usefulness" criteria under section 101 of the Patent Act. An invention is "useful" under section 101 if it is capable of providing some identifiable benefit. The complaint cites Justice Story's dicta in Lowell v Lewis (1817) which stated that inventions that are "injurious to the well being, good policy, or sound morals of society" are unpatentable. Ravicher's argument is that genetically modified seed has negative economic and health effects, and the promised benefits and usefulness of the seed, namely increased production and decreased herbicide use, are false. (picture, right - alfalfa)

Monsanto stated that the lawsuit was a "publicity stunt" and that Monsanto is committed to never suing farmers over the inadvertent presence of their genetically modified seed in their fields - (the AmeriKat wonders how does one even prove or disprove inadvertent presence of GM seeds?) Monsanto also stated that the validity of their patents was without question and supported by legal precedent. Monsanto stated that:

"The plaintiffs' approach is a publicity stunt designed to confuse the facts about American agriculture. These efforts seek to reduce private and public investment in the development of new higher-yielding seed technologies. This attack comes at a time when the world needs every agricultural tool available to meet the needs of a growing population, expected to reach 9 billion people by 2050. While we respect the views of organic farmers as it relates to the products they choose to grow, we don't believe that American agriculture faces an all-or-nothing approach."

The suit comes soon after the US Department of Agriculture (USDA) fully deregulated genetically modified strains of alfalfa. The USDA has also allowed farmers to plant genetically modified sugar beets without restrictions while it completes its Environmental Impact Statement (EIS) on that crop. The timing of the lawsuit suggests that the plaintiffs groups may feel that the time is right to take action before an increasing number of GM crops are deregulated by the USDA and before the alleged impacts of GM crops on organic crops become more serious.

The AmeriKat will be watching this fight with anticipation. Although it is unlikely that PUBPAT will be able to create much of a dent in such a powerful organization, like Monsanto, she is interested in any attempt to try to address the balance of power created by the patent system in the agricultural industry. But what do readers think - is it a hopeless publicity stunt, or are the invalidity arguments with merit?

The AmeriKat recommends this recent interesting article by Anna Lappe in The Atlantic about the issues surrounding GM, Monsanto and food production.

Byrne settles with Crist over Talking Heads song use

From New York, we fly south to Florida where Florida's former Governor Charlie Crist settled (picture, left) a copyright infringement lawsuit last week brought against him by Talking Heads' David Byrne after Crist used the 1985 Talking Heads's song "Road to Nowhere" in a political attack ad during his Senate campaign last year. Crist's campaign failed to seek permission from Byrne, the Talking Heads or Warner Brothers when they used the song in the Senate campaign video published on YouTube attacking Crist's Republican opposition, Marco Rubio. Byrne sued Crist for $1 million. Byrne said last year that the lawsuit was

"not about politics...It's about copyright and about the fact that it does imply that I would have licensed it and endorsed him and whatever he stands for."

Rubio himself was also on criticized for using The Steve Miller Band's "Take the Money and Run" in an attack ad against Crist. Rubio, however, was not sued. AmeriKat readers may recall past political song problems, such as in 2008 when Jackson Browne sued then presidential candidate John McCain for unauthorized use of his song "Running on Empty". Browne's lawyer, Lawrence Iser, also represented Byrne and stated in the initial complaint that it was "extraordinary" for another Republican campaign to misappropriate another artists's work without permission.

Another lesson that party politics and rock music do not mix.

Letter from AmeriKat II: Supreme Court greets Microsoft v i4i

The Circuit Courts’ approach

"Let's see what makes
this darned thing tick ..."

Microsoft cites cases from all 12 circuits in support of the contention that the circuit courts adhered to the Supreme Courts dictum in KSR, and in particular emphasizes the cases of Baumstimler v Rankin (1982) in the Fifth Circuit, Manufacturing Research Corp. v Graybar Electric Co. (1982) for the Eleventh Circuit and Futorian Mfg. Corp. v Dual Mfg. & Eng’g. Inc. (1976) in the First Circuit. Given that KSR and the pre-1982 practice recognized that the heighted standard of proof is weakened in cases where evidence was not before the PTO, Microsoft contends that the Federal Circuits departure from this practice must be examined by the Supreme Court. I4i points out that the decisions upon which Microsoft relies are “all decades old”. They would be, says the AmeriKat, because Microsoft’s argument is that prior to the Federal Circuit assuming jurisdiction in 1982 and subsequently getting it wrong, the courts were uniformly applying KSR; such cases are automatically going to be pre-1982. However, i4i are right to point out that given the age of these cases the rulings will not take into account any congressional acquiescence or the later creation of alternative methods to invalidate patents, i.e., the PTO’s invalidity examination proceedings.

i4i argue that section 282’s higher standard of proof has actually been applied uniformly throughout the regional circuits and for the Court to hold otherwise would go against the ratio that the courts are not at “liberty to repeal a statute or to legislate conditions diminishing its effect.” Such a ruling would also invalidate an almost 30-year old statutory construction which Congress has never acted to change. Such inaction following decades of consistent judicial construction, they say, “strongly suggests that the construction [i.e., that of a clear and convincing standard of proof] is correct.” Just because Congress doesn’t do something (which is often) doesn’t mean that it does not need to be changed, says the AmeriKat. i4i counter that Congress has been proactive in patent law and has “moved quickly to limit the potential fallout” for patenting of business methods, the enactment of the Patent Remedy Act and repeated amendments to the Patent Act. Further, i4i argue that Congress had held hearings where it was urged to lower the standard of proof for validity challenges to that of a preponderance of evidence. They were, i4i argue, made aware of criticisms to the higher threshold, but yet they chose not to act.

Of Policy and Philosophy

The Kat meditates
a philosophical point

Microsoft’s final argument is that of policy and philosophy. They contend, citing KSR, that invalid patents “stifle, rather than promote, the progress of useful arts” in that they confer market power without reciprocal consumer and innovative benefit. Given the increasing strain on the PTO due to the patent backlog (485,500 applications in 2009), the limited length of time an examiner has to examine an application (an average of 18 hours per application), and the lack of “reliable information about the claimed technology” Microsoft state that this “predictably and inevitable results in an increasingly large number of mistakes, some of them glaring.” This statement was supported by Justice Breyer’s re-statement of the Federal Circuit’s quote In re Bilski (2010) (AmeriKat reports here) that

“the granting of patents that ‘ranged from the somewhat ridiculous to the truly absurd’”

Because these factors lead to the PTO’s gate-keeping functions being too far stretched it is vital, Microsoft argues, that patent litigation is able to weed out patents that should not have been granted. The adherence to the clear and convincing evidence standard of proof is a bar to this process and was referred to by the 2003 Federal Trade Commission Report “To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy” as

“creating potential for judicially confirming unnecessary, potentially competition-threatening rights to exclude.”

Such a risk, Microsoft say, is even more so in cases where the evidence of invalidity was not even before the PTO at the time of grant.

I4i counter that a heighted burden of proof in litigation actually promotes innovation because it affords a patent

“robust protection against erroneous invalidation of patents [and] recognizes and protects the enormous resources that go into the innovation process”

i4i also argue that any party at any time can bring validity challenges before the PTO which does not require the heighted burden imposed by section 282. The AmeriKat, however, finds this inadequate. Why should the standard of evidentiary proof for invalidity of a patent be different at the administrative level (PTO) than at the judicial level? I4i say that this divergence is acceptable:

“…there is no reason why the two paths should be identical, and Congress was obviously aware of the differences when it authorized re-examination without changing the standard of proof in litigation. Its policy judgment not to establish an exact parallel to litigation should not be second guessed by the courts…”

Although the AmeriKat is sure that Congress appreciates this massive vote of confidence, the AmeriKat says that one should never underestimate Congress’s inability to recognize inconsistencies in their own legislation.

What’s Next

The Supreme Court has declined i4i’s invitation to allow the court of appeals to undertake a “fuller deliberation” of KSR before taking up the case, and has instead accepted Microsoft’s plea to decide on an issue that “will not benefit from further percolation in the circuits.”

Following the Supreme Court’s grant of certiorari, i4i’s Chariman, Loudon Owen, stated that

"The attack on patent holders and the adverse implications from the standard Microsoft is proposing is unprecedented and would deal a devastating blow to any US patent holder, large or small. Naturally, the proposed standard would be particularly destructive to the value of patents for inventors, technology pioneers and entrepreneurial companies that don't have the resources of Microsoft and other giants."

Microsoft’s deputy general counsel for the litigation, David Howard, stated that:

“We are gratified by the Court’s decision. It’s a clear affirmation that the issues raised in this case are critical to the integrity of our patent system.”

However, the AmeriKat can’t help to wonder whether Microsoft’s arguments for a lower standard of proof may ultimately come to bite them when they find themselves again in a plaintiff’s position in later litigation.

Although the Amerikat does not have a trial date to report on as of yet, she can tell readers that Chief Justice Roberts will not be taking part in the trial – he allegedly owns some valuable shares in Microsoft.

The IPKat and AmeriKat are interested to know what readers believe a the standard of proof should be in litigated invalidity proceedings.

Letter from AmeriKat I: Supreme Court greets Microsoft v i4i

Much to give thanks for ...

The AmeriKat is still grazing on her leftovers from last week's Thanksgiving extravaganza. The rosemary lemon chicken and sweet potatoes are all gone, as is the pumpkin and pecan pie courtesy of one of the AmeriKat's colleagues. However, she has been left with the green beans, mashed potatoes and cranberry sauce whose quantities seem to be multiplying, rather than diminishing. Just when she thinks that she has had the final serving of the roasted garlic mashed potatoes, another Lock-n-Lock storage receptacle presents her with another readily prepared meal. In leftovers, as with life, just when you think something is finally over, something else crops up to prolong the inevitable.

US Supreme Court says "Hi!" to Microsoft v i4i

Something else that seems to keep nearing an end only to grasp at one last gasp of air is the i4i v Microsoft litigation (see previous AmeriKat posts here – and there are many). On the same day that the Supreme Court declined to grant Tiffany’s petition for writ of certiorari in the eBay case, the Supreme Court granted Microsoft's writ of certiorari. This follows an epic battle between the two companies which saw Microsoft mostly as the "losing" party as the case journeyed from the Eastern District of Texas's courts to the Court of Appeals for the Federal Circuit. The case, which Microsoft emphasized non-too passively in their petition to the Supreme Court, was the largest patent infringement verdict ever to be affirmed on appeal to the tune of $290 million. Such an award would indicate that even if it wasn't a question of law which made Microsoft petition the Supreme Court, it was surely a question of money. Now that the Supreme Court will be charged with hearing the case, the AmeriKat has set out in brief the parties’ arguments from their petitions which provide a preview of their upcoming oral arguments.

Background

i4i contended at trial that that Microsoft Word infringes their US Patent No 5,787,449 (the “’449 Patent”) which relates to markup languages, specifically Extensible Markup Language (“XML”) used in electronic documents. Markup languages indicate how and where text is displayed in documents. The ‘449 patent covers a method whereby the software can process and store custom XML separately and distinctly from user-imputed content. The separation of the XML is called a “metacode map” which, according to the patent, allows a computer to manipulate the structure of a document without reference to the content entered by the user. Since 2003, Microsoft Word has allowed users to edit documents containing XML.

On 8 March 2007, i4i filed a patent infringement action in the Eastern District of Texas. Microsoft denied infringement and claimed under the “on-sale bar” of section 102(b) that the ‘449 Patent was invalid because i4i previously sold a system, S4, which was alleged to have embodied the claimed invention. Unfortunately for Microsoft, the S4 source code had been “destroyed” over ten years prior to the case so was prohibited from ever-providing “clear and convincing evidence” on this point. The trial jury found in i4i’s favour and awarded the Canadian company $200 million. Microsoft appealed to the Circuit Court of Appeals and in August 2009 Judge Davis upheld the lower court’s finding and increased the damages by $40 million citing the outspoken nature of Microsoft’s trial attorney, Matthew Powers. Microsoft then appealed to the US Court of Appeals whose three-judge panel in December 2009 upheld the lower courts’ rulings. Microsoft then asked for an en banc review (i.e. getting 12 judges on the panel) of the Court of Appeals decision, which was denied in Spring 2010. Microsoft’s remaining options were to either to settle, do nothing, re-apply for an en-banc review based on a revised decision of the federal court, or go straight to the Supreme Court. Microsoft obviously went for the last option.

As the AmeriKat is herself refreshing her memory of over 3 years of litigation, it is interesting to note that Microsoft’s numerous appeals had focused primarily on remittitur of damages following the large jury award, over reliance on the plaintiff’s survey evidence, and the issue of enhanced damages. Microsoft’s petition to the Supreme Court, however, deals with one very finite point about the standard of proof required for patent invalidity arguments, which their initial appeal statement only devoted a handful of its over 100 pages to.

Section 282 and KSR

Microsoft's petition to the Supreme Court was filed on 27 August 2010 after the now-retired Justice Stevens granted them an extension for filing. Their question concerns the standard of proof required by section 282 of 35 USC (the Patent Act section of the United States Code) which states that:

"[a] patent shall be presumed valid" and that "[t]he burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity."

The Federal Circuit for the Court of Appeals held in the i4i case that Microsoft was required to prove its defence of invalidity under section 102(b) of the Patent Act by "clear and convincing evidence", notwithstanding that the prior art on which Microsoft's invalidity defence relied was not before the Patent and Trademark Office (PTO) prior i4i's patent being granted. The basis of section 282 is argued to mean that patents granted by the PTO are presumed to be valid because, in brief, the examiner has the facts and the expertise to properly grant or reject a patent application before it and is therefore “presumed to do its job” (Am. Hoist & Derrick Co. (1984)). Therefore, to rebut the presumption that the PTO has done its job, a party must prove invalidity based on a higher evidential standard of "clear and convincing evidence". This evidential standard is a higher burden than that of a "predominance of evidence", which Microsoft argues should be the standard of proof.

Microsoft argues that the presumption that this higher standard of proof is always automatic is wrong in cases where the PTO did not have the evidence, on which a party relies, before it at the time of granting a patent. Given that the PTO never had an opportunity to see the evidence of prior art, the presumption that they were undoubtedly correct to grant the patent is diminished and thus a lower standard of proof should be allowed, i.e., that of a predominance of evidence.

In finding basis for this argument Microsoft referred to the US Supreme Court decision of KSR International co. v Teleflex (2007) where the Court said that they thought where an invalidity defence relies on evidence never before the PTO, it was

"appropriate to note that the rationale underlying the presumption - that the PTO, in its expertise, has approved the claim, seems much diminished."

In that case, the Court held that claim 4 of the plaintiff’s patent included subject matter that was obvious and therefore not patentable due to an earlier patent not before the PTO during the prosecution of claim 4. Although the Court was not specifically charged with deciding whether the failure to present the earlier patent voided the presumption of validity, the court nevertheless noted that the arguments for requiring a higher evidential standard in such circumstances is diminished – although not destroyed, i4i would point out.


This dictum from the Court was, according to Microsoft, affirmed by all twelve regional circuits prior to the Federal Circuit’s creation in 1982. Ever since the Federal Circuit assumed jurisdiction, Microsoft contends that it has

"repeatedly disregarded KSR's invitation to reconsider its heightened evidential standard. Instead, it has clung to its pre-KSR caselaw and continued to apply the clear-and-convincing-evidence standard even to invalidity defences based on prior-art evidence that the PTO never considered."

More in Part II

Teva v Merck - not a sight for sore eyes

Article 123(2) of the European Patent Convention states, "A European patent application or a European patent may not be amended in such a way that it contains subject-matter which extends beyond the content of the application as filed". The same rule also applies to UK patents under section 76 of the Patents Act 1977 (implemented in a "cack-handed way", according to Jacob LJ here). The basic rule for both is that no amendments can be validly made which would allow something to be claimed (or even described) that was not clearly also there when the application was filed.

The above issue, among several others, arose recently in the case of Teva v Merck, a judgment of Mr Justice Floyd from last week and available from BAILII here. Teva applied for revocation of Merck's EP(UK) patent 0509752, relating to "Ophthalmic compositions comprising combinations of a carbonic anhydrase inhibitor and a beta-adrenergic antagonist", an eye drop formulation for the treatment of glaucoma. After the usual extensive analysis, Floyd J found that the patent was invalid for being obvious over an earlier scientific article in light of the skilled person's common general knowledge (see PatLit here for more).

What the IPKat found more interesting, however, was the argument over added matter relating to one of the claims of the patent. The claim as granted covered a method for making the eye drop formulation, and included a final step of "adjusting the pH of the composition obtained to 5.0-6.0 by the addition of a suitable reagant". This feature was not in the claims as-filed but was added during prosecution, imported from one of 33 examples in the specification, which were whittled down to only 10 in the granted version. Although several of the examples had the step of adjusting pH, none had the range 5-6 together with the composition being claimed. As Floyd J put it, "Once the claim is limited to the specific co-formulation of dorzolamide and timolol, there is no basis for the disclosure of a process for making a co-formulation by adjusting to a pH other than 5.5 to 6.0" (para 70).

Merck tried to correct this by further limiting the claim to the range 5.5-6.0, but this range was only specified in another example that related to a composition that did not fit with the rest of the claim, because it had some further features not in the claim. The amendment by itself would therefore amount to "an impermissible intermediate generalisation" (para 72). Floyd J found that the claim was invalid for added matter, and the amendment could not be allowed.

The IPKat thinks that this is a good example of a case where everything was thrown in to the application at the outset (33 examples seems like a lot), but where not enough thought went into ways in which the different examples could be linked together. In this case, putting in claims to different pH ranges probably would not have saved the patent from being invalid for other reasons. It could however have easily been more important, given the very small differences that often make all the difference, particularly in pharma patents.

Servier perindopril "try-on" slammed

The IPKat has just caught the scent of the publication on BAILII of this morning's decision in Les Laboratoires Servier and Servier Laboratories Limited v Apotex Inc, Apotex Pharmachem Inc Apotex Europe Limited and Apotex UK Limited [2008] EWCA Civ 445, a ruling of the Court of Appeal for England and Wales (Lord Phillips, Lord Chief Justice, Lords Justices Jacob and Lloyd) on an appeal against the decision of Pumfrey J (noted here by the IPKat).

Right: "This should be good for protection till at least the year 2020!"

To summarise, Servier had a patent for "a new α crystalline form of perindopril tert-butylamine salt, a process for its preparation and pharmaceutical compositions containing it" (perindopril being an ACE inhibitor used in the treatment of hypertension). This patent claimed priority from a 2000 French application, but the original perindopril compound was patented in the early 1980s and another earlier patent for the compound patent for "the industrial synthesis of perindopril" from the late 1980s. The patent was lucrative: Servier's turnover in the UK alone was £70 million and generics manufacturer Apotex had sold £4 million worth of perindopril in the short period before Servier, alleging infringement, secured interim injunctive relief. Apotex challenged the validity of the patent, while Servier sought leave to amend it. Pumfrey J dismissed Servier's application to amend the patent, which he revoked. On the evidence, the patent's claims had been anticipated by, and lacked inventive step because of, one of the earlier patents: the proposed amendments couldn't remedy this deficiency.

This morning the Court of Appeal dismissed Servier's appeal in no uncertain terms. Giving the judgment of the Court, Lord Justice Jacob made some pretty pointed comments before he even considered the legal niceties of the appeal -- these being just the sort of things that give the appellant a hunch that things are not going to go in his favour:

"This is an appeal from ... the late Lord Justice Pumfrey. He held that Servier's EP (UK) 1 296 947 was invalid for lack of novelty and obviousness, but that if the patent had been valid, Apotex's product would have infringed. He gave permission to appeal ... [b]ut he also refused to continue an interim injunction pending appeal on the grounds that he considered there was no real prospect of success. ...

Undaunted, and doubtless because much money is at stake, Servier persisted in the appeal. Following Mr Purvis QC's opening of the appeal, we decided that it was unnecessary to hear Mr Watson QC for Apotex. These are my reasons for dismissing the appeal.

The priority date of the patent is 6th July 2000. It is for a particular crystalline form of the tert-butylamine salt of perindopil, a process for making it and for pharmaceutical compositions containing it. The patent, using its own nomenclature, calls this particular crystalline form of salt, the a form. It claims that the a form "especially exhibits valuable characteristics of filtration, drying and ease of formulation." It does not say with what other crystalline form the comparison is being made or why this form is "especially valuable." When asked about this, Mr Purvis could provide no answer.

The first and basic patent for perindopril and its tert-butylamine salt (without any indication or specification of crystalline form) was EP 0 049 658. It had a priority date 2nd October 1980. Servier's pharmaceutical compositions containing the salt have been on the market since the late 1980's (the first, French, marketing authorisation was June 1988). The basic patent was effectively extended by a supplementary protection certificate which expired on 21st June 2003. The market for the product is vast; UK sales alone are about £70m per annum at Servier's patent protected price. It is not surprising that Servier have sought to exploit the patent system as far as possible to protect that vast income stream.

Servier sought and obtained additional protection for perindopril and the tert-butylamine by way of EP 0 380 341 ("341") filed on 16th September 1988, expiring on 16th September 2008. This is for "the industrial synthesis of perindopril" and covers a process for making it and its tert-butylamine salt. There has been no investigation of the validity of this patent, and it does not matter for present purposes.

Finally Servier sought yet further protection for the tert-butylamine salt of perindopril by applying for three patents on 6th July 2000, covering the only three crystalline forms (called by Servier a, ß and ?) which, to date, have ever been found. We were shown the patent for the ß form. It claims that that form too "especially exhibits valuable characteristics for formulation" without saying what these are supposed to be. The Judge describes the fact that there were simultaneous applications for the other two forms "curious." That was perhaps a kind way of saying that Servier were simply trying to extend their monopoly in the salt.

...

The upshot of all this is that were the patent valid, Servier's monopoly in practice would last until 2020. But, as the Judge held and we confirm, it is invalid. And very plainly so. It is the sort of patent which can give the patent system a bad name. I am not sure that much could have been done about this at the examination stage.

Left: Purr-indopril has always been a popular treatment for hypertension in the cat community

There are other sorts of case where the Patent Office examination is seen to be too lenient. But this is not one of them. For simply comparing the cited prior art ('341) with the patent would not reveal lack of novelty and probably not obviousness. You need the technical input of experts both in the kind of chemistry involved and in powder X-ray diffraction and some experimental evidence in order to see just how specious the application for the patent was. The only solution to this type of undesirable patent is a rapid and efficient method for obtaining its revocation. Then it can be got rid of before it does too much harm to the public interest.

It is right to observe that nothing Servier did was unlawful. It is the court's job to see that try-ons such as the present patent get nowhere. The only sanction (apart, perhaps, from competition law which thus far has had nothing or virtually nothing to say about unmeritorious patents) may, under the English litigation system, lie in an award of costs on the higher (indemnity) scale if the patent is defended unreasonably".

A release from Apotex's lawyers Taylor Wessing says:

"This judgment is likely to have ramifications in the pharmaceutical industry, which has long had a policy of "ever-greening" and seeking to obtain as much second and tertiary patent protection as possible."

The IPKat suspects that the ramifications may go no further than the award of costs on an indemnity basis which Jacob LJ mentions -- which would be a small proportion of the value of the patent even if the fees were clocked up on the Allen & Overy Scale. And every day the patent is in contention is another day the proprietor derives some market benefit from it. Merpel mischievously speculates as to whether some sort of account of profits couldn't be conjured up, though he notes that this sort of relief is only ordered against infringers, not naughty patent owners who act within the law.

2020 here and here
Living with hypertension here
Dying with hypertension here