Briefing note for Patent Practitioners: An analysis of Arrow declarations following Glaxo v Vectura

The purpose of this briefing note is to raise awareness of the increasing use of Arrow declarations, following on from the Fujifilm v AbbVie decision, which was handed down on 12th January 2017 in the Court of Appeal. The latest case of Glaxo v Vectura ([2018] EWHC 3414 (Pat)) looks at the approach being taken by the English Patents Court and seeks to learn lessons from this. To this extent, it is hoped that patent prosecutors and litigators alike will find something useful to help in their everyday practices.

Fujifilm v AbbVie - A reminder  

In what is probably an extreme case, AbbVie sought to extend the protection of its’ blockbuster HUMIRA drug which treated various inflammatory diseases, beyond the SPC expiry date of 15 October 2018. It did so by filing numerous applications in respect of various dosage regimes essentially for the same compound. However, as happened in the UK proceedings, shortly before the Patents Court was due to consider the issue of validity and infringement, AbbVie filed a subsequent divisional application, and subsequently they would either disapprove the text or de-designate the EP(UK), so that the Patents Court never had sight of a granted patent. In one case, they were on the 5th divisional application.

What AbbVie sought to achieve was the uncertainty that FKB’s generic product under the original granted patent, might inevitably infringe something in the other patent families and their divisionals, particularly if the dosage regime was different, for example. It was for this reason that FKB sought a declaration that their product, at a specific date (in this case the priority date of the original parent application), was old and obvious even though there was no issue relating to the validity of a granted patent, as required under s.74 PA 1977.

Arnold J. stated he could make such a declaration and granted Fujifilm the relief sought. AbbVie subsequently appealed.

In essence, the Court of Appeal approved the approach in Arrow Generics v Merck & Co [2007] in accepting that it is possible for an English Patents Court to grant such declarations. They therefore dismissed AbbVie’s appeal.

Glaxo v Vectura

The facts

This case revolved around two sets of patents (the “Patents”) for a method of making particles for use in a pharmaceutical composition, and a method of preparing microparticles for use in pharmaceutical compositions for inhalation. In essence, the first group of patents claimed methods of making “composite active particles” and the second group related to methods of making “microparticles” which exhibited and delayed dissolution. Both groups of patents had in common the use of magnesium stearate to form the composite active particles. All of the patents had a priority date of 30th November 2000, which was not challenged.

On 5th August 2010 Vectura granted Glaxo a licence in respect of a specific patent (“the Staniforth patent”) and any patents deriving from it (which the judge referred to as “the Staniforth Patents”). The licence provided for royalties, which GSK paid (a “substantial” amount according to the judge) as well as an additional class of patents referred to as the “Non-Assert Patents”, over which GSK had an option to take a licence.

The Staniforth Patents expired on 31st January 2016 and subsequently Glaxo stated it did not require a licence under the Non-Assert Patents.

In July 2016 Vectura brought proceedings against Glaxo in the USA for infringement of the US equivalent to the Non-Assert Patents. The following year, in June 2017, Glaxo brought the present proceedings for invalidity (on the grounds of obviousness and insufficiency), as well as seeking the Arrow declaration. Vectura claimed Glaxo infringed the two group of patents by the sale of dry powder inhalers (“DPIs”) containing the active ingredients vilanterol trifenatate (‘vilanterol’) and/or umeclidinium bromide (‘umeclidinium’) which are used to treat asthma and chronic obstructive pulmonary disease (“COPD”), and sold under the trade mark ELLIPTA.

In seeking invalidity of the two groups of patents on the ground of obviousness, Glaxo relied on three pieces of prior art: the original Staniforth patent and two further patents (Keller and Musa) both relating to DPI’s. Glaxo also sought the Arrow declaration based on all three patents (although this was primarily the Staniforth patent, the Musa patent was the one the judge concentrated on). An interesting point for practitioners to note is that at the time of the trial, in the EPO, one patent had already been upheld by the Opposition Division (following opposition by a third party), two were opposed by Glaxo but the proceedings were ongoing, a fourth had been upheld with amended claims (again following opposition by a third party) but the decision was under appeal, and one patent had yet to be opposed.

Glaxo claimed that the process they followed to manufacture its’ ELLIPTA product was an obvious modification of Musa (and also Staniforth and Keller).

In carrying out experiments designed to establish infringement (which also proved key in respect to the finding of non-obviousness) reference was made to the claims of the Patents in which there was a requirement to have an additive material (in this case magnesium stearate) present as a coating on the active substance. None of the experiments or the subsequent analysis and results established that the magnesium stearate coated the active substance. That meant that neither Glaxo’s processes nor products infringed the Patents.

The flip side of that coin was the reason why the judge found that the Patents were not obvious in the light of the three cited prior art patents, namely, because following the teaching of the cited patents did not produce a product failing within the claims of Vectura’s Patents.

The Court’s other findings

In addition to finding there was no infringement, and the non-obvious finding over the cited prior art, the judge also found that all the patents were invalid on the ground of insufficiency.

The Arrow declaration

The crux of Glaxo’s case in respect of the Arrow declaration was that while vilanterol and/or umeclidinium were not known to be active pharmaceutical ingredients (APIs) as at the priority date, nevertheless that did not matter because once they were known it was obvious to apply the process for use with a DPI.

As Arnold J considers the law in this area, his reasoning from the case is set out below.

The law

241. An Arrow declaration is, in effect, a declaration that, as of a particular date, a party has a Gillette defence against claims of infringement of later patents. The relevant legal principles have been recently considered in the Fujifilm v AbbVie litigation.

242. The jurisdictional position was summarised by Floyd LJ delivering the judgment of the Court of Appeal (cited above) at [98] as follows:

“… we do not consider that there is any issue of principle which prevents the granting of Arrow declarations in appropriate cases. Drawing the threads together:

(i) A declaration that a product, process or use was old or obvious at a particular date does not necessarily offend against s.74 of the Act.

(ii) Such a declaration may offend against the Act where it is a disguised attack on the validity of a granted patent.

(iii) Such declarations do not offend against the scheme of the EPC or the Act simply because the declaration is sought against the background of pending divisional applications by the counter-party.

(iv) On the other hand the existence of pending applications cannot itself be a sufficient justification for granting a declaration.

(v) Whether such a declaration is justified depends on whether a sufficient case can be made for the exercise of the court's discretion in accordance with established principles.”

243. The principles upon which the Court will grant such discretionary relief were subsequently considered by Henry Carr J in Fujifilm Kyowa Kirin Biologics Co Ltd v AbbVie Biotechnology Ltd [2017] EWHC 395 (Pat), [2018] RPC 1 at [365]-[371]. In summary, he held that the Court must consider:

i) justice to the claimant;

ii) justice to the defendant;

iii) whether the declaration will serve a useful purpose. The attainment of commercial certainty in patent cases can constitute a useful purpose. The spin-off value of a judgment in other countries may be such a factor, but a declaration sought solely for the benefit of foreign courts will rarely be justified; and

iv) whether or not there are any other special reasons why the court should or should not grant the declaration.

244. At an earlier stage of this case Vectura applied to strike out GSK’s claim for an Arrow declaration. The application was granted by HHJ Hacon sitting as a High Court Judge, but his decision was reversed by the Court of Appeal: Vectura Ltd v Glaxo Group Ltd [2018] EWCA Civ 196. Floyd LJ, with whom Birss J agreed, held:

“25. The jurisdiction to grant an Arrow declaration is … discretionary. Identification of a relevant application is a necessary but not sufficient condition for an application for such relief. It is necessary to go further and examine whether it would serve a useful purpose. The point being made by paragraphs 98(iv) and 98(v) in Fujifilm is the contrast between a remedy which depends only on the existence of a patent (or application) and one whose availability turns on a critical examination of the purpose which its grant would serve.

30. There is no dispute that the declaration must be formulated with clarity. The facts ultimately declared by the court must be clear, otherwise the declaration will simply give rise to further dispute and defeat the purpose for which it is granted. The declaration [i.e. the declaration sought] must also be clear so that the court can know what technical issues it has to decide. The declaration must therefore identify the combination of features of the products and processes in question on which the assessment of obviousness is to take place.

34. … It is clear from Arrow and the subsequent cases that there is no requirement that the declaration should identify all the features of the product or process. …”

In essence, if a manufacturer’s process or product is alleged to infringe, provided the manufacturer can establish that what he is doing is no more than what was known or done before, or with an obvious modification, then either there is no infringement or else the patent is invalid as it covers what was already known. This is a Gillette defence (named after the case it was first used in namely Gillette Safety Razor Co v Anglo-American Trading Co Ltd (1913) 30 RPC 465).

Having set out the relevant principles, the judge then applied those to the present facts of the case as he found them. As the judge acknowledged, a finding that Glaxo’s products were obtained by an obvious process was important, but by itself not sufficient. The judge needed to consider whether granting such relief would serve a useful purpose, and whether the particular circumstances warranted this.

In considering it was appropriate, the judge pointed out that the undertakings given by Vectura were limited in scope, and that it did not mean that with differently formulated claims an infringement finding might occur. This did depend on a method and analysis being able to establish the coating point, but this could not be ruled out. One has to assume that the differently formulated claims point extended also to the insufficiency finding, otherwise if that was insurmountable there would be no point in making the Arrow declaration. Also, the Patents were found not to be obvious in the light of the prior art. In light of these points, the judge considered it appropriate to make an Arrow declaration in a modified version of one of the two forms sought by Glaxo.