Patents - Eli Lilly v Genentech, the Preliminary Issue in relation to EP2784084

Eli Lilly & Co.'s factory in Indianapolis in 1862 Author Eli Lilly & Co. Source Wikipedia

Jane Lambert

Patents Court (Mr Roger Wyand QC) Eli Lilly and Co. v Genentech, Inc [2020] EWHC 261 (Pat) (14 Feb 2020)

This was the trial of a preliminary issue and application for summary judgment in Eli Lilly and Co.'s claim for revocation of Genentech Inc.'s European patent  (UK) EP2784084 for Antagonist antibodies to il-17a/f heterologous polypeptides.  Genentech alleged that the patent was valid and that Eli Lilly had infringed it and counterclaimed for the usual remedies for patent infringement.  The action and counterclaim came on before Mr Roger Wyand QC sitting as a deputy judge of the High Court on 28 and 29 Jan 2020 and he delivered judgment in Eli Lilly and Co. v Genentech, Inc [2020] EWHC 261 on St. Valentine's day.

The preliminary issue was whether certain matters were res judicata by reason of Mr Justice Arnold's decision in Eli Lilly and Company and others v Genentech, Inc [2019] EWHC 387 (Pat) (1 March 2019) in which he revoked EP1641822 of which the patent in suit was a divisional.  I discussed that decision in Patents - Eli Lilly v Genentech on 17 July 2019.  Genetech has been allowed to appeal Mr Justice Arnold's decision on points of law but not on any findings of fact.  Mr Wyand said that he believes that that appeal will be heard next January.  On 10 Jan 2020, the Technical Board of Appeal of the European Patent Office revoked EP1641822 on the ground that it contained added matter.  Notwithstanding the revocation, neither party nor the Court of Appeal has taken any steps to remove the appeal from the list of upcoming appeals.

Both EP2784084 and EP1641822 claimed priority from the same US patent application, Genetech sought substantially the same amendments for  EP2784084 as it had claimed for EP1641822. As I said in my case note on Mr Justice Arnold's judgment on EP1641822. his lordship had described the EP1641822 litigation as one of the most complex that he had ever tried noting that he had considerable experience of trying complex patent cases.  Mr Wyand said that the parties' combined costs amounted to £11 million. Eli Lilly said that it sought summary judgment on issue estoppel and abuse of process grounds to avoid a further lengthy and costly trial that would explore exactly the same issues.

Eli Lilly had brought these proceedings to clear the way for the sale of Taltz® which Mr Wyand described as one of Lilly's flagship products. Taltz® contains the antibody ixekizumab which would have infringed EP1641822 had the patent been valid. The threat of an injunction restraining the marketing and distribution of Taltz® has receded with the revocation of EP1641822 but Eli Lilly remained at risk of an injunction to restrain infringement of  EP2784084 unless that action could be resolved in Lilly's favour quickly and decisively.

Mr Wyand observed at paragraph [44] of his judgement that although the two patents were virtually identical they were different property rights.  For that reason, Eli Lilly could not rely on cause of action estoppel but it could rely on issue estoppel and the abuse of process doctrine first expounded in Henderson v Henderson (1843) 3 Hare 100, [1843] ER 917 and developed by the House of Lords in Johnson v Gore Wood & Co. [2001] CPLR 49, [2001] 2 WLR 72, [2000] UKHL 65, [2001] PNLR 18, [2002] 2 AC 1, [2001] 1 BCLC 313, [2001] 1 All ER 481, [2001] BCC 820. The learned deputy judge noted that the underlying public interest in both issue estoppel and Henderson v Henderson abuse of process is the same:

"that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole." Per Lord Bingham of Cornhill in Johnson v Gore Wood & Co.

However, Mr Wyand acknowledged that circumstances can arise where an inflexible application of those principles can be unjust.  In Good Challenger Navegante S.A. v Metalexportimport S.A.  [2004] 1 Lloyd's Rep 67, [2003] EWCA Civ 1668, [2004] 1 LLR 67, Lord Justice Clarke said:

"The application of the principles of issue estoppel is subject to the overriding consideration that it must work justice and not injustice."

The learned Lord Justice had based his remarks on Lord Keith of Kinkel's observation in  Arnold v National Westminster Bank [1991] 2 AC 93 that: "One of the purposes of estoppel being to work justice between the parties, it is open to courts to recognise that in special circumstances inflexible application of it may have the opposite effect."

Mr Wyand quoted the following passage from Lord Sumption's judgment in Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd : [2014] 1 AC 160, [2013] 4 All ER 715, [2013] RPC 29, [2014] AC 160, [2013] WLR(D) 265, [2013] UKSC 46, [2013] 3 WLR 299:

"(1) Cause of action estoppel is absolute in relation to all points which had to be and were decided in order to establish the existence or non-existence of a cause of action.
(2) Cause of action estoppel also bars the raising in subsequent proceedings of points essential to the existence or non-existence of a cause of action which were not decided because they were not raised in the earlier proceedings, if they could with reasonable diligence and should in all the circumstances have been raised.
(3) Except in special circumstances where this would cause injustice, issue estoppel bars the raising in subsequent proceedings of points which (i) were not raised in the earlier proceedings or (ii) were raised but unsuccessfully. If the relevant point was not raised, the bar will usually be absolute if it could with reasonable diligence and should in all the circumstances have been raised." (emphasis added)

Eli Lilly had argued that the "special circumstances" to which Lord Justice Clarke had referred that may allow derogation from an inflexible application of the principles of issue estoppel are confined to cases where further material becomes available, as in Arnold v National Westminister Bank.  Mr Wyand rejected that contention at [48]:

"I do not accept Lilly's argument that the special circumstances exception is limited to where further material becomes available. I believe that issue estoppel is subject to being disapplied in circumstances where its strict application would cause injustice. The above quote from Lord Sumption states that even where the relevant point could and should have been raised the bar will only usually be absolute. However, it is only in special circumstances that it will not be applied strictly. Those special circumstances will be where its strict application will cause injustice."

Mr Wyand first considered issue estoppel and directed himself that "issue estoppel will only arise where:
a. An issue has been determined in a final decision in an earlier action between the same parties;
b. The issue determined in the earlier action must be fundamental to the earlier decision; and,
c. The issue in the later action is the same as was finally determined in the earlier action."

The deputy judge considered the requirement of finality in paragraph (a) and held that it applied even where the decision was under appeal.  He also addressed the requirement that the issue determined in the earlier action must be fundamental to the earlier decision.  Finally, he weighed the justice of a strict application of the issue estoppel principles against the justice of a departure from them. On that last point he was clear:

"The underlying public interest referred to by Lord Bingham of Cornhill in Johnson v Gore Wood & Co. is a strong factor in this case. The fact that, in the absence of issue estoppel, there would be the prospect of a further trial on exactly the same issues as were determined in the earlier litigation at a combined cost of £11 million suggests that there would be a grave injustice were issue estoppel not to apply here. This case is as close to giving rise to cause of action estoppel as it is possible to get without it applying as all the issues on obviousness are identical in both actions. I find that this is a case where issue estoppel does potentially arise and it is necessary for me to go through each of the pleaded issues to determine whether they are fundamental to the decision."

Mt Wyand looked at each of those issues and arrived at the following conclusions:

"[90] Issues 19, 20, 21, 23, 38, 38A and 39 in Lilly's list are the actual findings by Arnold J of obviousness over the prior art and are legally indispensable to the conclusion of invalidity of claims 1, 2, 13, 14 and 15 and claims 12, 20 and 22 in so far as those claims are directed to rheumatoid arthritis. I find that these issues are the subject of issue estoppel. The only basis on which these can be argued not to be legally indispensable to the conclusion of invalidity is that they include alternative grounds. As I have indicated above, I believe that this is not an answer to issue estoppel as Lilly rely on both grounds and that avoids any injustice.
[91] The following issues are not the actual findings of obviousness but are the groundwork for those decisions and accordingly I find them also to be the subject of issue estoppel:

a. Issues 1 to 5 inclusive identify the skilled addressees of the Patent;
b. Issues 6 to 11 identify the common general knowledge;
c. Issues 12 to 18 identify what the skilled addressees would understand from the Patent and the US344 prior art;
d. Issues 24 to 27 identify what the skilled addressees would have done in following the IL-17A/A prior art;
e. Issues 28 to 33 identify further work that the skilled addressee would have done in following the IL-17A/A prior art;
f. Issues 34 to 38 identify the likelihood that antibodies produced by the skilled addressees following the IL-17A/A prior art would exhibit the characteristics required by the conditional amendments to claims 13, 14 and 20 of the 822 Patent;

[92] Issue 43 is the actual decision that claims 12, 20 and 22 of the 822 Patent are insufficient for lack of plausibility in so far as they are directed to psoriasis at the priority date and is the subject of issue estoppel. Issues 40 to 42 are the groundwork for that decision and I find that they too are the subject of issue estoppel but they also apply only at the priority date."

On the basis of his findings on the preliminary issue, the deputy judge concluded that the Genetech was estopped from arguing that claims 1 to 8 inclusive of EP2784084 and claim 9 as proposed, were valid. He, therefore, found those claims to be invalid.  He further concluded that Genentech was estopped from arguing that claims 10 and 11 as proposed to be inserted by amendment were plausible at the priority date of the patent.  However, Genentech had a real prospect of success in arguing that claims 10 and 11 as proposed were plausible at the filing date on the basis that the common general knowledge had developed sufficiently between the priority date and the filing. He, therefore, refused summary judgment in respect of those claims. He stood the application to amend the patent to the trial of the action.

This is an important judgment on issue estoppel and the abuse of process doctrine as developed in Johnson v Gore Wood both in its application to patent law and generally.  Should anybody wish to discuss this article or any of the issues arising in the case, I can be contacted on 020 7404 5252 during office hours or through my contact page.