Arrow declarations: the English courts devise an end-run for technology users

Today, successful products are frequently protected by a number of patents (as well, potentially as other intellectual property) directed towards specific aspects. Frequently, a product is initially patented in the form in which it was originally launched, but then later modifications and improvements are also the subject of further patent applications.  On top of that, prosecution of those applications can take years to reach grant or rejection, and may even then be caught up in European Opposition or US inter partes review proceedings. Faced with all of this, potential producers of related products can face a nigh-on impossible task in attempting to determine whether their own version will or will not infringe some yet-to-be examined application.  Indeed, launching a product risks finding that the claims of a pending application are amended in order to ensure that the new competitor does infringe.

A flexible approach to remedies

The English courts have a wide discretion as to the forms of order which they can grant in any commercial dispute. This flexibility has led in recent years to the development of new options in the field of patent disputes, alongside the traditional remedies of applications to revoke, claims for infringement and declarations of non-infringement.  These new remedies include (in the context of disputes over standards-essential patents) declarations of non-essentiality, which have enabled a short-circuiting of the usual in-depth analysis of a complex electronic product, by instead comparing an asserted patent against the standard to which it has been declared essential.

Another possible remedy, as recently considered by the Court of Appeal in a dispute between Fujifilm Kyowa Biologics and Abbvie Biotechnology over Abbvie’s blockbuster drug Humira, is the ‘Arrow’ declaration. This form of order, named after the case of Arrow Generics v Merck in which it was first considered, enables a business to cut through the uncertainties of a portfolio of pending applications. The applicant can seek a declaration that the product which it proposes to launch cannot be the subject of any valid grant of a patent, because it is itself either not novel, in the light of specific cited prior art, or lacks an inventive step.  The consequence of such a declaration is that, if the originator succeeds in obtaining the grant of a patent which covers the applicant’s product, then that patent must necessarily be invalid since the infringing product is unpatentable.

In Fujifilm Kyowa Biologics v Abbvie Biotechnology, the Court of Appeal upheld the High Court’s ruling that such declarations are, indeed, within the scope of the English court’s discretion in appropriate cases.  No such ruling had been made in the Arrow case itself since it settled before trial.

What is needed for an Arrow declaration?

Applying for an Arrow declaration requires a similar level of preparation to applying for a declaration of non-infringement combined with a validity attack. The applicant needs to:

• set out all relevant aspects of the proposed product;
• identify the date at which novelty and obviousness are to be assessed; and
• identify the state of the art at that date to enable the comparison to be drawn.

It further needs to establish that there is a genuine commercial controversy, since the English courts are not in the business of deciding hypothetical questions.

In the pharmaceutical field, establishing such a controversy does not necessarily entail a high burden of evidence, since the courts already require a generic company proposing to launch ‘at risk’ of patent infringement proceedings to ‘clear the way’ before launch by bringing revocation actions in respect of any potentially problematic patents. Such actions are routinely brought and decided without the patentee having made any initial motion towards an infringement action – as, indeed, it cannot when the generic has not yet launched a product.  But in this context, if the originator is making significant profits from the product family, and is continuing to diversify and patent around it, and is asked to confirm whether it will seek to enforce any granted or pending patents against a competing product, then it is going to have to make clear and express statements about its intentions or risk the court drawing its own conclusion.  It can in practice be almost sufficient to establish that commercial risk exists, that when put on notice of a possible launch the patentee has not given an unconditional green light.

There will in addition need to be some grounds to argue that the patent applicant is conducting itself so as to shield the subject matter of the application from scrutiny in the national court, whether or not that is its subjective intention. Absent such conduct, the normal remedies available expressly under the Patents Act 1977 should be sufficient protection for the applicant: to challenge validity once the patent has been granted, or apply for a declaration of non-infringement.  In Fujifilm v Abbvie, Fujifilm pointed to the fact that Abbvie had caused one of its recently granted patents to be revoked by the European Patent Office (EPO), notwithstanding that it had only recently filed responses to various oppositions accompanied by no fewer than 19 statements of fact and expert opinions.  This curious decision suggested that until Fujifilm’s UK claim for revocation and a declaration was filed, Abbvie had held every intention of defending the granted patent tooth and nail.

It is important, however, not to frame the request for a declaration too broadly. The court is unlikely to be prepared to declare that the pending European patent applications cannot mature into the grant of valid patents of any form; to do so would be to usurp the function of the European Patent Office.  Nor is the court interested in granting declarations in respect of hypothetical products, though it should be possible for instance to obtain a declaration that generic versions of existing marketed presentations of the same active ingredient are not patentable.  An application seeking protection for the possible outputs of a research project, however, encompassing a range of possible but not yet defined products, will not succeed.

Nor will the grant of such a declaration assist a company whose eventual marketed product does not fall within the description relied upon by the court. Accordingly, the timing of such applications is limited to the immediate pre-launch period and, in the case of pharmaceuticals, effectively to the point where the product is in final form such that a marketing authorisation application has been or is about to be submitted.

Protecting the route to market

Notwithstanding the challenges discussed above, for companies which can meet the necessary conditions, and are otherwise facing the prolonged commercial uncertainty which can result from a sophisticated competitor’s patenting strategy, the opportunity to apply for a declaration in the Arrow form can provide a very valuable way through, and to market at least in the UK, well before the EPO completes its deliberations.