09 November 2011

Patents: Human Genome Sciences Inc. v Eli Little and Co.

In its second intellectual property appeal (the first being Lucasfilm v Ainsworth [2011] UKSC 39 see my case note "Lucasfilm v Ansoworth The Supreme Court's First IP Appeal" 31 July 2011 IP/IT Update) the United Kingdom Supreme Court had to consider the way in which the requirement of industrial applicability extends to a patent for biological material. One of the conditions for the grant of a patent in art 52 (1) of the European Patent Convention ("EPC") is that the invention is "susceptible of industrial application." Art 57 further provides that "[a]n invention shall be considered as susceptible of industrial application if it can be made or used in any kind of industry, including agriculture." S.1 (1) (c) and s. 4 (1) of the Patents Act 1977 makes identical provision in respect of British patents. Footnote 5 to art 27 of TRIPS suggests that the term "capable of industrial application" may be deemed by a WTO member as synonymous with the term "useful".

The Patent
The patent in suit described the encoding nucleotide, the amino acid sequence, and certain antibodies, of a novel human protein, which it called Neutrokine-α. It included contentions as to its biological properties and therapeutic activities, as well as those of its antibodies. It began by explaining that Neutrokine-α is a new protein, and a member of the TNF ligand superfamily of cytokines, which are proteins which act as inter-cellular mediators in inflammation and other immune responses. It stated that all the known members of that superfamily "are involved in regulation of cell proliferation, activation and differentiation, including control of cell survival or death by apoptosis or cytotoxicity...". It went on to reveal the existence and structure of Neutrokine-α, to claim it as a member of the superfamily, and to explain that it is "expressed … in neutrophils … in kidney, lung, peripheral leukocyte, bone marrow, T-cell lymphoma, B-cell lymphoma, activated T-cells, stomach cancer, smooth muscle, macrophages and cord blood tissue." The specification then described the claimed invention as potentially useful for the diagnosis, prevention, or treatment of an extraordinarily large and disparate number of, sometimes widely expressed, categories of disorders of the immune system, and other conditions and actions, either through Neutrokine-α itself or through its antagonists. The question for the Court was whether that was "susceptible of industrial application" (in other words useful) for the purpose of art 52 (1) of the EPC.

Proceedings in the European Patent Office
The patent was granted to Human Genome Sciences Inc. ("HGS") on 17 Aug 2005. The grant was opposed by Eli Lilly under art 99 of the EPC and revoked by the Opposition Division on the ground that that the claimed invention was for "arbitrary member of the the TNF ligand super family without a known function." HGS appealed to the Board of Appeal which allowed its appeal in T0018/09 Human Genome Sciences Inc. v Eli Little & Co. on 21 Oct 2009. The Board reasoned that Neutrokine-α would be "active in directing the proliferation, differentiation, and migration of [T-cells]", and that was sufficient for art 57.

Proceedings in England
Eli Lilly also launched revocation proceedings in England which came on before Mr. Justice Kitchin in Eli Lilly & Company v Human Genome Sciences Inc [2008] EWHC 1903 (Pat) (31 July 2008) [2008] RPC 29, (2008) 31(10) IPD 31066, (2009) 105 BMLR 27. The judge revoked the patent on the ground that the "functions" of Neutrokine-α "were, at best, a matter of expectation and then at far too high a level of generality to constitute a sound or concrete basis for anything except a research project". HGS appealed to the Court of Appeal in Eli Lilly & Company v Human Genome Sciences Inc [2010] EWCA Civ 33 (9 Feb 2010) [2010] RPC 14, (2010) 112 BMLR 161 which affirmed the judgment of the court below on more or less the same grounds.

Grounds of Appeal
HGS appealed to the Supreme Court on the ground that in the light of the decision of the Board of Appeal the Court of Appeal and Mr. Justice Kitchin were wrong. Counsel for HGS adopted the reasoning of the Board of Appeal and argued that the Court of Appeal and trial judge set"too high a standard for industrial applicability in the context of a patent for biological material."

The Judgment
Even though Mr Justice Kitchin's judgment had been affirmed by a very strong Court of Appeal which included Lord Justice Jacob, all five justices of the Supreme Court allowed the appeal. Lord Hope was well aware at paragraph [165] that "it is a strong thing to disagree with the concurrent findings of judges with such experience in this field". Lord Walker said at paragraph [168] that all his instincts as an appellate judge were for dismissing this appeal. Lord Clarke said much the same thing at paragraph [172]. Lord Neuberger noted at paragraph [6] that the specification was "confusingly long, diffuse, and widely expressed, running to over 25 closely typed pages, and nearly 200 paragraphs of descriptive text, and a further twelve pages of sequences of polypeptide amino acids and DNA nucleotides" containing "extravagant and sometimes contradictory claims". After mentioning the possible medical benefits Lord Neuberger observed that "nowhere in the Patent is there any data or any suggestion of in vitro or in vivo studies, so there is no experimental evidence to support any of those suggestions." So why did those judges who practised in completely different areas of the law when at the bar differ from the conclusions of judges who had spent all their working lives in intellectual property."

Reason for the Judgments
The lead judgments were delivered by Lord Hope and Lord Neuberger and a close reading of those judgments suggests that they were swayed, first, by a desire for consistency with the decisions of the Boards of Appeal of the EPO and, secondly, by the submissions of the Bio-Industry Association ("BIA").

Consistency with the EPO
Though Lord Neuberger acknowledged at paragraph [87] that decisions of the Boards of Appeal were not binding on national courts, His Lordship referred to cases such as Generics (UK) Ltd and Others v H Lundbeck A/S [2009] UKHL 12 (25 Feb 2009) [2009] Bus LR 828, [2009] UKHL 12, (2009) 32(5) IPD 32033, 107 BMLR 121, [2009] RPC 13, [2009] 2 All ER 955, (2009) 107 BMLR 121 andCase Xa ZR 130/07 (10 Sept 2009), para 33 where the highest courts of England and Germany had stressed the need for national law to align itself so far as possible with the jurisprudence of the EPO. After considering the EPO's case law on industrial applicability of biotechnological inventions, His Lordship discerned the following principles at paragraph [107]:
"(i) The patent must disclose "a practical application" and "some profitable use" for the claimed substance, so that the ensuing monopoly "can be expected [to lead to] some … commercial benefit" (T 0870/04, para 4, T 0898/05, paras 2 and 4);
(ii) A "concrete benefit", namely the invention's "use … in industrial practice" must be "derivable directly from the description", coupled with common general knowledge (T 0898/05, para 6, T 0604/04, para 15);
(iii) A merely "speculative" use will not suffice, so "a vague and speculative indication of possible objectives that might or might not be achievable" will not do (T 0870/04, para 21 and T 0898/05, paras 6 and 21);
(iv) The patent and common general knowledge must enable the skilled person "to reproduce" or "exploit" the claimed invention without "undue burden", or having to carry out "a research programme" (T 0604/04, para 22, T 0898/05, para 6);

Where a patent discloses a new protein and its encoding gene:

(v) The patent, when taken with common general knowledge, must demonstrate "a real as opposed to a purely theoretical possibility of exploitation" (T 0604/04, para 15, T 0898/05, paras 6, 22 and 31) ;
(vi) Merely identifying the structure of a protein, without attributing to it a "clear role", or "suggest[ing]" any "practical use" for it, or suggesting "a vague and speculative indication of possible objectives that might be achieved", is not enough (T 0870/04, paras 6-7, 11, and 21; T 0898/05, paras 7, 10 and 31);
(vii) The absence of any experimental or wet lab evidence of activity of the claimed protein is not fatal (T 0898/05, paras 21 and 31, T 1452/06, para 5);
(viii) A "plausible" or "reasonably credible" claimed use, or an "educated guess", can suffice (T 1329/04, paras 6 and 11, T 0640/04, para 6, T 0898/05, paras 8, 21, 27 and 31, T 1452/06, para 6, T 1165/06 para 25);
(ix) Such plausibility can be assisted by being confirmed by "later evidence", although later evidence on its own will not do (T 1329/04, para 12, T 0898/05, para 24, T 1452/06, para 6, T 1165/06, para 25);
(x) The requirements of a plausible and specific possibility of exploitation can be at the biochemical, the cellular or the biological level (T 0898/05, paras 29-30);

Where the protein is said to be a family or superfamily member:

(xi) If all known members have a "role in the proliferation, differentiation and/or activation of immune cells" or "function in controlling physiology, development and differentiation of mammalian cells", assigning a similar role to the protein may suffice (T 1329/04, para 13, T 0898/05, para 21, T 1165/06, paras 14 and 16, and T 0870/04, para 12);
(xii) So "the problem to be solved" in such a case can be "isolating a further member of the [family]" (T 1329/04, para 4, T 0604/04, para 22, T 1165/06, paras 14 and 16);
(xiii) If the disclosure is "important to the pharmaceutical industry", the disclosure of the sequences of the protein and its gene may suffice, even though its role has not "been clearly defined" (T 0604/04, para 18);
(xiv) The position may be different if there is evidence, either in the patent or elsewhere, which calls the claimed role or membership of the family into question (T 0898/05 para 24, T 1452/06, para 5);
(xv) The position may also be different if the known members have different activities, although they need not always be "precisely interchangeable in terms of their biological action", and it may be acceptable if "most" of them have a common role (T 0870/04, para 12, T 0604/04, para 16, T 0898/05, para 27)."
Applying those principles to the facts as found by the trial judge Lord Neuberger concluded at paragraphs [108] to [111] that the reasoning of the Board of appeal on the opposition was entirely consistent with its case law while the decisions of the courts below in the English revocation proceedings was not. Lord Hope reached a similar conclusion after a similar review of the EPO's case law at paragraph [165].

BIA's Submissions
The BIA described itself as "a trade association for innovative enterprises in the UK's bioscience sector" with a membership extending to hundreds of companies with an aggregate turnover in 2010 of about £5.5bn, and around 36,000 employees made the following written submissions to which Lord Neuberger referred to its written submissions at paragraph [97]:
"The requirements of clarity and certainty in this area of law are emphasised by the BIA. As its submissions also explain, after the discovery of a naturally occurring molecule, particularly a protein and its encoding gene, a large amount of research and development is required before there can be any therapeutic benefit. It is therefore important for bioscience companies to be able to decide at what stage to file for patent protection. Thus

'If the application is filed early, … [t]he company will be left with no patent protection, but would have disclosed its invention in the published patent application to competitors. If the application is filed late, there is a risk in such a competitive environment where several companies may be working on the same type of research projects, that a third party will already have filed a patent application covering the same or a similar invention, in which case the company may not be able to gain any patent protection for its work and by continuing their programme they may risk infringing that third party's patents. In both cases, the company will have lost much of the benefit of its costly research and development.'"
His Lordship added at paragraph [98]:

"Similarly, funding for research and development on the potential therapeutic value of a newly discovered and characterised protein or its antibodies is dependent on the funders being reasonably confident that the patent (or patent application) concerned will be reasonably safe from attack (or likely to be granted). It is also relevant that bioscience companies attract investment by reference to their patent portfolios, which gives rise to the same need for certainty."

The practical need for funding also seems to have influenced Lord Hope at paragraph [141]:
"It is well known that modern techniques in the field of biomedical science offer immense benefits in the promotion of human health, particularly in the combating of a wide range of degenerative diseases previously thought to be incurable and in the provision of techniques for the effective treatment of cancers. As the BioIndustry Association has pointed out in its written intervention, patent portfolios are often the most valuable asset of companies in the bioscience industry. So assessments of the value of a bioscience company's patent portfolio are likely to be a key consideration in deciding whether to acquire or invest in such a company. This in turn affects the funding that is made available for research and development, without which effective progress in putting a patented invention to practical use is likely to be very limited."

So a venture capitalists' charter perhaps.

Importance of this Decision
Lord Walker described this as an important case at paragraph [167]. Lord Neuberger on the other hand was more circumspect. He said at paragraph [2] that "while this issue can be said to raise an important question of principle, its resolution is inevitably fact-sensitive, and therefore any answer may be of limited value in other cases." Since it does make rather startling reading to those of us who were schooled in the distinction between inventions and mere discoveries it may have little effect outside the biotechnological field. If not, we have to rewrite the text books from the beginning.

Further Information
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