The Court of Appeal reversed the decision of the PCC on the grounds that the PCC had made two errors in light of the prior art:

1. The PCC had failed to identify the correct differences between the prior art and the claims made.
2. The PCC had failed to address whether the differences between the prior art and the claims made amounted to steps that would have been obvious to a person skilled in the art without any knowledge of the alleged invention, or whether those steps required a degree of invention.

One opportunity has been seized by big Pharma company, Bristol-Myers Squibb, through its recent acquisition of Inhibitex, a biopharmaceutical company, at a cost of US$2.5 billion. Inhibitex is currently developing a promising new hepatitis C drug, which though currently only in Phase II development has shown great potential. With over 150 million people worldwide suffering from hepatitis C and over 75% of liver disease being attributed to the illness, producing an effective drug to combat or manage the disease is foremost in the mind of the Pharma industry today; and Bristol-Myers Squibb is not alone. Only last November, Gilead Sciences, Inc agreed to pay US$11 billion for Pharmasset, Inc, another company refocusing on the development of further hepatitis C treatments and with Merck, Vertex and Johnson & Johnson also rumoured to be targeting the hepatitis C market, we can see that big Pharma are on the hunt.

Laura Mole, a member of MAB’s Pharmaceutical and Life Sciences Sector team says, “This latest acquisition by Bristol-Myers Squibb is living proof that the industry is changing and big Pharma are almost panic buying in order to build and diversify their portfolios. This is shown by the acquisition of not only market ready products but also drugs still in the development stages. It is clear that with the Patent Cliff threatening, and with Bristol-Myers Squibb itself to fall victim with its soon-to-expire patent protection on blockbuster drug Plavix, any opportunity to grow and protect will be taken. Small/mid sized Pharma had better be ready for the bidding war to come.”

In AstraZeneca’s case, it has established the Science and Technology Integration Office, which will develop collaborative projects with other businesses, universities, governments and charities. AstraZeneca is continuing with its quest to find “the next big thing” with innovation but through cheaper means – effectively building its links with outside providers of research and development.  Meanwhile, some others in the industry such as GSK, the UK’s biggest pharma company, are looking to mitigate against the dangers by diversifying their operations.

AstraZeneca has already signed a deal last month with the Medical Research Council, under which academics can investigate the use of 22 of AstraZeneca’s clinical compounds in treating diseases. AstraZeneca has also recently entered into an agreement with IMS Health, to use IMS Health’s data to assess how well its drugs respond to patients, so as to be able to prove their value-for-money and usefulness to the customers.

The loss of patents comes against a backdrop of attacks on the prices paid by public health systems for drugs in the face of the debt crisis. With harder regulatory burdens to get any new drugs to pass clinical trials and fewer blockbuster possibilities, pharma companies are affected whichever way you turn.

Paul Gershlick, a Partner and Head of Pharmaceuticals and Life Sciences at Matthew Arnold & Baldwin LLP, predicts: “The combined effects of the patent cliff and other factors are going to force the pharma industry into change.  Things cannot continue to go on the way they are currently doing. It is of great concern that this survey shows that most people think that the industry is not adapting fast enough to the external factors affecting it. If the industry does not change quicker, this will have catastrophic effects on the companies that invest in developing and producing the new drugs that improve people’s health.”

Paul Gershlick, a Partner and Head of Pharmaceuticals and Life Sciences at Matthew Arnold & Baldwin LLP, comments: “According to evidence from the BioIndustry Association, the UK share of clinical trials has fallen from 6% to 2% in the last decade. The UK also went from the fourth largest location for clinical trials in 2006 to twelfth just two years later. The UK has a long history of being a global leader in developing new pharmaceutical products. A lot of jobs and expertise have been based here as a result. Anything the Government can do to make drug discovery conditions better so as to reverse the declining trend and make the UK a more enticing place to discover new drugs has to be a good thing.”

India and China both have an established and successful generics based pharmaceutical industry and as tens of billions of pounds of  patent protected drugs come off patent soon (known as the “patent cliff”), they look set to benefit by releasing cheaper generic  alternatives – making themselves a small fortune in the process. Both the Wall Street Journal and BBC News have reported on the most recent victim of the patent cliff in which India-based firm Ranbaxy Laboratories Limited confirmed the release of an FDA-approved generic version of the 10 billion dollar a year drug “Lipitor” owned by the global pharmaceutical company, Pfizer. The new generic drug will be called “Atorvastatin” and with Lipitor’s patent having now expired, there is nothing Pfizer can do about it – except try to develop itself or buy in the next big thing from another research and developer.

With such a Robin Hood approach to pharmaceuticals there are mixed opinions about the impact the patent cliff is having on the pharmaceutical industry as a whole. The large pharmaceutical companies claim that the patent cliff is affecting their ability to raise funds for research and development which in turn is inhibiting advances in new and improved pharmaceuticals, to the detriment of patients. The smaller generic based companies and some consumer groups however are hailing the patent cliff as an opportunity to offer a wider-ranging and affordable selection of medicines to both the public and private sectors.

Laura Mole, from Matthew Arnold and Baldwin LLP’s Pharmaceutical and Life Sciences Sector Group Team, says, “Whilst I appreciate continued research and development in the pharmaceutical industry as a whole is vital for the production of new, more advanced drugs to combat human illness, I cannot help but see good quality, affordable alternative medicines as a good thing for the consumer and the NHS in these difficult financial times. More drugs will cost less so more patients will benefit. The important thing in the long-term, though, is that there is sufficient funding in the industry to incentivise continued research and development so that patients continue to benefit with further medical advances. More of the early-stage development is being done by start-up companies, with big pharma companies stepping in if the prospects look good.”

In this case, the Supreme Court ruled that it was sufficient to say that the protein was potentially useful for diagnosing, preventing or treating a large number of categories of disorders in the immune system, despite this assertion having been based on the protein’s membership of the TNF ligand superfamily of substances. This was because at the time of the patent application, the particular application of the individual protein was not known.

In following the EPO’s ruling, the Supreme Court said that it was important for UK patent law to be aligned as far as possible with EPO decisions. National courts could still come to its own rulings if it considers that the EPO has taken the law in an appropriate direction, misapplied a previous EPO ruling or not taken a particular argument into account. However, where the EPO had taken a consistent approach in several decisions, it would be unusual for the national court not to follow the EPO’s rulings.

On the type of patent application before the court in this case, the EPO had adopted a consistent approach, being:

• The patent had to disclose a practical application and profitable use which could be expected to lead to commercial benefit.
• The patent had to show a real possibility of exploitation.
• A skilled person had to be able to exploit the patent without undue burden.
• A concrete benefit had to be derived directly from the description and common general knowledge.
• Speculative use would not be sufficient, but plausible use could be.
• The plausible use could be assisted by later evidence.
• If all family or superfamily members of the protein had a role in controlling cells, it would be sufficient to assign a similar for the protein.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments, “This case should give businesses in the pharmaceutical industry certainty. It will also act as encouragement for innovating businesses that discover a protein where the protein is a member of a wider family or superfamily that has a clear role.”

UK patent applications can be refused on various grounds, one of which is if the patent subject matter falls within an excluded type, such as pure business methods, a method for performing a mental act or computer programs that do not have a technical effect.

The High Court has allowed the appeal, and has referred the application back to the IPO for reconsideration.  The ruling was made on the basis that the application made a significant contribution with a relevant technical effect, such that the software should not be considered wholly within the computer program exclusion from patentability.

This ruling is further evidence of the alleged ‘over strict’ interpretation of the exclusions from patentability by the IPO.

A hearing officer at the Intellectual Property Office has allowed Hewlett-Packard’s appeal against the rejection. The appeal was allowed following the consideration of previous cases, in particular the High Court’s ruling in Halliburton, which concluded that mental acts could be patented where mathematical calculations with software and are technical enough to be patentable, and that the exclusion of patentability for mental acts should be interpreted narrowly. The application was sent for further examination by the IPO following the decision.

The PCC ruled that there had been an infringement under the Copyright and Rights in Databases Regulations 1997 for the following reasons:

-          there had been a substantial extraction of records from the database by loading the records onto computers in preparation for the mass-mailing, which amounted to infringement; and

-          the mass-mailing was an infringement as each letter with the name and address printed on it amounted to an insubstantial extraction in a systematic and repeated way.

This ruling is useful in that there are relatively few cases relating to infringement of database rights, and this offers significant guidance in the interpretation of the Copyright and Rights in Databases Regulations.

The EC has now published the second monitoring report in this area. The report shows that there has been a reduction in those types of settlement agreements that are most likely to have anti-competitive effects, where there was a value transfer from an originator company to a generic company. The reports concludes that the reduction is likely to be because of the increased scrutiny from the EC following the first report and increased awareness by those entering patent settlements of the competition impacts. Patent settlements are still being entered into between companies, but they are increasingly of the harmless variety.

The EC intends to continue monitoring this area for anti-competitive aspects for at least another year.

The EPO ruled that the system relied on existing inventions (known as ‘prior art’ in patent law), and did not consider the reduction of the number of steps involved in the system to be an inventive step to justify patenting the system. The EPO also ruled that the use of cookies was not inventive as the possible uses for cookies have long been known, making the use of cookies in this system obvious.

Last year, Apple filed proceedings against HTC for the infringement of 20 patents, but HTC counterclaimed, accusing Apple of patent infringement, and attempted to have the sale of iPhones, iPads and iPods banned in the USA.

Meanwhile, Apple and Samsung are in a spat, accusing each other of copying each other’s technology.

The MPA said BT was being targeted as it is the largest ISP in the UK. It may also be because BT uses the website-blocking software Cleanfeed to stop access to child sex abuse images, so it clearly has filtering technology available. The MPA hopes the injunction will force BT to block access to Newzbin in the same way it blocks access to websites hosting child porn , and this should then have a knock-on effect on other ISPs and website blocking.

This is a really interesting development and tactic by the entertainment industry in its long-standing cat-and-mouse battle against online copyright infringers. The MPA took action against Newzbin in 2010 in the UK, where Newzbin had been based, and the High Court ordered that Newzbin removed copyright-infringing material from the website. However, the company behind the website folder and a new version of the website set up by a phoenix company has since appeared operated out of the Seychelles. Due to the difficulties in taking action against that site there, the MPA is trying this new tactic. It will be interesting to see the outcome.

This case comes against the backdrop of the Digital Economy Act, which, when its provisions are fully implemented, would require ISPs to pass details of users who infringe copyright material to copyright holders so that they can take action against the infringers. ISPs would also have to suspend Internet access of the infringers.

The parties have each interpreted the ruling differently. IPCom hopes to have 3G Nokia phones banned from the UK unless Nokia agrees to enter a licensing agreement and pay licensing fees relating to the patent. However, whilst the High Court did not specify which Nokia phones infringed the patent, the ruling did refer to phones using alternative software to the patent. Nokia argues that its current 3G phone offerings all use this alternative software, and that any infringement occurred only in older versions –as such, Nokia believes that no ban or injunction preventing the sale of those products in the UK can take place.

However, other countries in the European Union (EU) have implemented the Directives with different interpretations. The UK only exempts those acts specifically required to obtain marketing authorisation of a generic drug. Germany provides an exemption in relation to any medicinal product (not just a generic drug) in any country (not just within the EU). Spain, meanwhile, has a tighter restriction on the exemption in a similar way that the UK does. The variation has come about largely due to the EU Directives being interpreted differently by different national courts in view of national case law.

The IPO has therefore started a consultation with stakeholders to obtain evidence of how the law should evolve in the UK, as there are concerns that stakeholders are avoiding holding clinical and field trials in the UK due to the tighter regulatory framework compared to some other EU countries. Further information in relation to the consultation, including the list of questions for stakeholders to respond to as part of the consultation, can be found at http://www.ipo.gov.uk/pro-policy/consult/consult-live/consult-2011-bolar.htm .

The responses to the consultation must be received by the IPO by 31 July 2011, and results of the consultation are expected in autumn 2011.

• Creation of a Digital Copyright Exchange. This would be a centralised digital copyright works marketplace where licences to copyright content could be readily bought and sold, akin to a copyright shop. This would extend what currently happens with through music collections agencies such as PRS. The aim is to have this implemented by the end of 2012. In addition, the UK should support the European Commission’s proposals to establish a framework for cross-border licensing.
• Introduction of legislation to permit use of orphan works – copyright works where the rights owner has not been ascertained. The European Commission has also come up with similar plans recently.
• Allowing wider exceptions for lawful copying, such as to include format shifting between a laptop and mp3 player, which is still unlawful. This may also include copyright exceptions for non-commercial research, such as digital copying of medical journals for computerised analysis in research. Parody and library archiving would also be exceptions to copyright. The exceptions would be enshrined in law and non-excludable by contracting out by agreement between the parties. There is no place in the report for anything as extensive as the “fair use” exception along the lines that US law has, as that would not be compatible with European Union law.
• Increasing the Intellectual Property Office’s ability to give legally binding opinions on changes to intellectual property law in response to economic or technological changes.
• A careful look at the enforcement of intellectual property rights. The Government should look not just to enforcement but also education, growing legitimate markets and modernising copyright law. Other countries’ experiences should be considered when the Digital Economy Act starts to become operational in 2012.
• Try to remove patent thickets that stifle innovation. Thickets arise where there are overlapping patent claims by multiple applicants, resulting in delays and extra costs in innovation. This should involve cutting backlogs in patent applications. There should also be a disincentive – perhaps through cost of additional fees for patent renewals – to discourage patents that do not add much value. Computer-related patent rules also need to be clearer and stricter to avoid patents being granted for non-technical inventions or business methods.
• Investigate whether the system of protection for designs should be made clearer. The Intellectual Property Office should conduct an assessment based on evidence within the next 12 months to consider the relationship between design rights and innovation.

It now remains to be seen what the Government will do in terms of implementation of the recommendations within the report. There have been other intellectual property reviews previously – most notably the Gowers Review – which were not then followed-up significantly.

The European Commission has been trying to introduce a single patent system in the EU for years, but has always struggled to get political agreement. Aside from Spain and Italy, due to their concerns over being sidelined in favour of the other large EU countries on the language issue, this seems like a possible step. Michel Barnier, the Commission’s Internal Mark and Services Commissioner, said: “It is my deeply held conviction there is no sustainable economic growth without innovation.  And no innovation without efficient intellectual property protection.”

DC manufactures ‘own-brand’ cartridges for sale in the UK, as well as selling under its own ‘Jet Tec’ brand. The case will be watched closely by other ‘own brand’ cartridge manufacturers who base their products on branded designs.

Schütz held a patent for a bulk container for liquids that contained a flexible bottle in a metal cage. Werit had taken the product and replaced damaged or worn bottles with bottles that it had developed. It then sold those bottles in the original caging. The High Court had ruled that Schütz’s patent had not been infringed by Werit’s actions.

The Court of Appeal decided that the High Court’s test had been incorrect. The Court of Appeal said that the patented product should be considered as a whole, of which the cage and the bottle were each parts. By putting a new bottle into the cage, Werit was effectively completing the patented product. In doing so without a licence, Werit had infringed Schütz’s patent.

Hedgehog previously had two directors, FH and another. Due to contentious previous court proceedings between the directors, in which certain orders were made against FH, FH had resigned his position as a director of Hedgehog, leaving the other director as sole director.

Another company had brought a patent infringement claim against the golfing device developed by Hedgehog. A consultant of Hedgehog gave evidence to the High Court that FH had made threats in relation to proposals FH had made to Hedgehog, such that if the proposals were not accepted he would not only stop assisting Hedgehog in its defence of the patent infringement claim, but he would actually offer his services to the other company’s patent attorneys.

The consultant also gave evidence that FH had threatened to publicly announce the limitations of Hedgehog’s registered patent, allowing competitors to take advantage of its shortcomings.

The High Court ruled that it was appropriate to grant Hedgehog a perpetual injunction to prevent FH from disclosing confidential information without Hedgehog’s consent. The High Court ruled that FH’s previous conduct showed that he had intended to damage Hedgehog’s business by releasing information that would prejudice the business, and that he had also intended to reveal information that could put him in breach of the previous orders that had been made against him in the contentious proceedings with Hedgehog’s director.

The seats had initially been designed for Virgin by Premium Aircraft Interiors UK Ltd (known as “Contour”) which subsequently supplied the seats to other airlines, including Delta, and were sued by Virgin. Virgin then brought proceedings against Delta on the basis of joint liability for acts of infringement of the patent by Contour.

Virgin appealed against the grant of summary judgment by the High Court, and queried whether a passenger seating system for an aircraft required assembly on the aircraft or not in order for the patent to be infringed.

The Court of Appeal applied the test outlined in Kirin-Amgen Inc v Hoechst Marion Roussel Ltd which asked what a person skilled in the ‘art’ would have understood the patentee (Virgin) to be using the language of the claim to mean.

The Court of Appeal cited European Patent Office (“EPO”) guidelines and case law from the EPO Boards of Appeal in agreeing that the wording in the patent stating a ‘system for an aircraft’ in context would be understood by a skilled reader as meaning a ‘system suitable for an aircraft’. The Court of Appeal therefore ruled that the wording of the patent covered not only a seating system fitted into an aircraft but also a system capable of being fitted into an aircraft. The seating system itself was manufactured and sold in the United Kingdom, and as such the infringing action was not taking place outside the jurisdiction – which had been the basis of the High Court’s ruling to grant summary judgment.

The Court of Appeal ruled that summary judgment should not have been granted and that the case should proceed to trial.

The details of the claims have not been made public as yet, so it is unclear which specific patents are alleged to have been infringed. However, Kodak’s actions suggest that they are willing to go as far as it takes to protect its patents, which could have an effect on other photo-sharing websites that operate in a similar way to Shutterfly, such as Yahoo’s Flickr and Google’s Picasa. It is also likely to force smaller such businesses to take a licence from Kodak, to avoid the expense of fighting such a claim in court.

Although a small proportion of the University’s highest value IP is likely to be withheld from the scheme, the hope is that the commercial use will show both the quality of the research completed to develop the patent and the advantage to commerce of making use of the new technologies. The move is expected to be particularly popular among small and medium businesses that are looking for ways of standing out from the crowd without significant expenditure.

The Court of Appeal has ruled that the inventor employee is only entitled to be rewarded compensation based on the actual earnings of the employer. It should not be based on the open market if the invention had been fully exploited by licensing it better. There is no effective ‘best endeavours’ obligation on the employer to exploit the patent. In addition, there should not be the bizarre result where an employee could end up with greater compensation than the royalties earned by the employer. That was not the purpose of the legislation, which was intended to reward an employee by receiving part of the employer’s benefit.

Technical standards are usually agreed by businesses that have an interest in co-operating so that they can all benefit from the greater good, and this is usually on the basis of an agreement that any patents involved would be licensed on fair, reasonable and non-discriminatory terms. For the greater good in this case, it must be hoped that the parties will stop fighting and will settle their differences long before the US District Court for the Western District of Washington has to rule.

At present, there is no single European patent. The European Patent Office provides for a single route to apply for multiple individual patent rights in its contracting territories. Applications must be filed in English, French or German.

The trouble is that once granted you have to split the application into multiple separate patents in each of the countries in which you want your invention to be protected. This process is called national validation. As different countries can insist on different amounts of translation, the costs can soon mount up. For example, Spain and Italy require the full text to be translated into their native languages – hardly an ideal unified system.

There have been many failed attempts to create an EU-wide patent system. The most recent proposal is for patents to be applied for only in English, French or German (the EU’s official languages) with translations of the patent claims into the other two of those three languages, and then automatic translations (providing only approximate accuracy) into all other languages. Understandably, other EU countries have cried foul, not least Spain and Italy, as the move would give an advantage to English, French and German speaking countries in registering a patent.  That’s why there is still deadlock.

Amongst all this mess, businesses with patents need a cost-effective solution for protection across Europe. Under the current system, the most effective solution we are aware of is a dedicated patent translations and validations company called Europat, which can be found at www.Europat.eu.com.

The ECJ said that all shapes had some element of being part of achieving a technical result, so ‘necessary’ and ‘exclusively’ should not be interpreted such as to preclude all shapes from being registered. However, the mere addition of a few arbitrary elements should not get around the exclusion. Nor should the exclusion of registrability be stopped from applying if the particular shape for which registration was being applied was not the only way – in other words, if there is more than one way of achieving the same result, the trade mark application could still fail. The ECJ was keen to emphasise that technical solutions have limited duration of protection under intellectual property law; for example, patents last for a maximum of 20 years before competitors can then copy them. If trade marks were to be granted for purely technical solutions, this would effectively extend the exclusive rights indefinitely. That must not happen.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, told the Trusted Reviews web site at www.trustedreviews.com the following:

‘If music is shared without the copyright owner’s permission, the copyright owner has the right to ask people who have distributed or obtained the music without their authorisation for money to cover their losses, costs and expenses. Even if the copyright owner is mistaken about some of the alleged infringement activity, there is nothing to stop them sending the letters. Copyright is different from some other intellectual property in this regard, such as trade marks and patents, where people have to take greater care before making claims.

‘Equally, there is nothing to stop anyone receiving these letters from simply ignoring them. It is up to them what they decide to do, as few, if any, of these sorts of actions have actually reached the courts to date. However, if their case does get to court, any person found to have done wrong may have to pay more, which is why some people simply pay up to take away the worry.

‘As frightening as it may be to receive these letters, especially for people who have done nothing wrong, they do not simply have to pay up. It is for the person making the claim to be able to prove what has happened. A recipient of the letter could deny it and question the evidence alleging the infringement. If the case is contested, recipients of the letter may wonder how likely it would be that the person sending them the letter would be prepared to obtain sufficient evidence and attend a trial, considering the relatively small sums involved in fighting each contested case. To be able to feel confident of winning their case, the claimant would either want to be in possession of a written admission of wrongdoing or the hard drive of the computer. 

‘The implementation of the recently passed Digital Economy Act could make the position more concerning for households. The Act allows for the Government to introduce new laws that would put the onus on people with an Internet connection if it can be shown that copyright infringement had occurred through that connection, regardless of who actually did the infringement. This could affect people sharing a home or people whose Internet connections have been used by cybercriminals. Those new laws have not been introduced yet and would have to undergo Parliamentary scrutiny first, but there could well be pressure to do so if the music industry continues to suffer lost revenues as a result of continued peer-to-peer file-sharing.’

To go to the Trusted Reviews article, click here: http://www.trustedreviews.com/multimedia/news/2010/07/19/Ministry-of-Sound-Gets-Legal-on-Downloaders/p1