Oh my Lord! - The House of Lords clarifies UK patent law

By Nicholas Tyacke.

Key Points:
The House of Lords clarifies the rules of patent claim construction, whether the US doctrine of equivalents has a role to play in UK law and whether a patent may be infringed by technology not conceived of at the date of the patent in a decision likely to influence Australian courts.

The UK House of Lords rarely considers patent law issues. Until recently, it had not heard an appeal in a patent case in more than a decade. However, late last year it handed down two separate decisions addressing fundamental issues of UK patent law - infringement, inventive step (obviousness), novelty (anticipation), and sufficiency - and a third decision is pending.[1] One of the issued decisions, as well as the pending decision, concerns life sciences patents.

These decisions will have a fundamental impact on UK patent law, with a lesser impact on Australian law. This is due to the prominent role of the European Patent Convention ("EPC") in those decisions. That convention has no impact on Australian patent law. However, one of these decisions is still likely to have a significant impact on a number of aspects of Australian patent law. This article will only address those aspects of that decision.

Amgen v TKT

In Kirin-Amgen Inc & Ors v Hoechst Marion Roussel Limited & Transkaryotic Therapies Inc ("Amgen v TKT"), the House of Lords considered the scope of patent protection for the first time since the current UK Patents Act came into operation in 1977.

Kirin-Amgen Inc held a European patent relating to the manufacture of erythropoietin ("EPO"), a protein that stimulates red blood cell production and is useful in treating a range of disorders including anaemia. EPO produced by Amgen is reported to generate over $1 billion per year in global sales. Transkaryotic Therapies Inc ("TKT") devised a further method of making this protein. Hoechst Marion Roussel Ltd proposed to import the TKT product into the UK. Amgen claimed that the TKT product infringed its patent and TKT and Hoechst sought a declaration of non-infringement and revocation of the patent.

The Amgen patent claimed a method of producing EPO by the introduction of an exogenous DNA sequence coding for EPO into a host cell in which it would be expressed (the "Exogenous Method"). The TKT method did not involve the introduction of exogenous EPO DNA. Instead, the TKT method involved activating the EPO DNA already present in the cells in order to produce the EPO (the "Endogenous Method"). This method was quite different to the methods known or thought to work at the time of the patent. As a result, the case raised important issues as to whether a patent's claims can be construed to cover methods not contemplated at the time of the invention.

The patent included 31 claims. However, only two claims were directly at issue (the second and third claim set out below), with a third (the first set out below) considered due to the dependency of one of the claims in issue on that claim. Those claims were as follows:

• a DNA sequence for use in securing the expression of EPO in a host cell, such sequence selected from tables in the patent or related sequences;
• EPO which is the product of the expression of an exogenous DNA sequence, and which has a higher molecular weight by the "SDS-PAGE" testing method than existing EPO derived from extraction from urine; and
• EPO which is the product of the expression in a host cell of a DNA sequence according to the first claim mentioned above.

The trial judge held that one of the two claims in issue was invalid (for insufficiency) but that the other was valid and infringed. The Court of Appeal held in 2002 that both claims were valid but that neither was infringed. Amgen and TKT then appealed to the House of Lords, Amgen arguing infringement and TKT arguing invalidity on the basis of insufficiency and lack of novelty (anticipation).[2] The House of Lords unanimously upheld the Court of Appeal's finding that TKT and Hoechst had not infringed the patent. However, it overruled the Court of Appeal's finding that Amgen's patent was invalid.

Method of construction - the Improver questions

Addressing the issue of infringement, Lord Hoffman, the United Kingdom's most experienced patent judge, with whom the other Lords agreed, undertook a comprehensive review of the law of purposive construction.

One of the principal issues in the case was the effect of Article 69 of the EPC on the decision of Lord Diplock in Catnic Components Limited v Hill and Smith Limited [1982] RPC 183. In that case, Lord Diplock held that a patent claim should be given a purposive construction rather than a purely literal one. This means that it should be construed to give it the meaning that the person skilled in the relevant art would have understood the patentee to be using the language of the claim to mean. The decision in Catnic was applied by the Full Federal Court of Australia in Populin v HB Nominees Pty Ltd (1982) 41 ALR 471, and has been applied widely in Australia ever since.

From the early 1990s, purposive construction by UK courts in accordance with Catnic consistently involved the application of the Improver or Protocol test. This test is based around the Protocol on the Interpretation of Article 69 of the EPC, and creates a series of three questions to be answered. The Improver test was originally proposed by Justice Hoffman, as he then was, in Improver Corp. v Remington Consumer Products Ltd [1990] FSR 181, 189 in which he stated:

"If the issue was whether a feature embodied in an alleged infringement which fell outside the primary, literal or acontextual meaning of a descriptive word or phrase in the claim ('a variant') was nevertheless within its language as properly interpreted, the court should ask itself the following three questions:

(1) Does the variant have a material effect upon the way the invention works? If yes, the variant is outside the claim. If no -

(2) Would this (i.e. that the variant had no material effect) have been obvious at the date of publication of the patent to a reader skilled in the art. If no, the variant is outside the claim. If yes -

(3) Would the reader skilled in the art nevertheless have understood from the language of the claim that the patentee intended that strict compliance with the primary meaning was an essential requirement of the invention. If yes, the variant is outside the claim.

On the other hand, a negative answer to the last question would lead to the conclusion that the patentee was intending the word or phrase to have not a literal but a figurative meaning… denoting a class of things which included the variant and the literal meaning, the latter being perhaps the most perfect, best-known or striking example of the class."

Australian courts are divided on the application of the Improver questions. Since Improver, a number of decisions of the Federal Court of Australia have considered the question of "infringement in substance" without reference to Improver or the Improver questions.[3] However, in at least four instances, the Federal Court has applied Improver.[4]

In Amgen, the House of Lords (per Lord Hoffman, the author of the Improver questions), clarified the role of those questions in UK patent law. It held that while Article 69 governs the construction of patent claims, the rule required by Article 69 is precisely in accordance with the purposive rule applied in Catnic. The House of Lords indicated that it was important to distinguish the Protocol questions from the Catnic principle. Lord Hoffman stated that while the former are "the bedrock of claim construction, universally applicable," the latter are only guidelines for applying that principle that are more useful in some cases than others, and were not a substitute for trying to understand what a person skilled in the art would have understood the patentee to mean at the time of the claims.

This aspect of the decision is significant from a UK perspective as it throws open the possibility of approaches other than the Protocol questions being used for assessing infringement, something that for more than a decade had not been thought possible. Indeed, the Court indicated that it is in relation to patents in rapidly developing, high technology fields, such as that to which the Amgen patent was directed, that the Protocol questions may be least useful.

This aspect of the decision will also make clear to Australian courts that the Improver questions should not be elevated to the level of a rigid formula under Australian law.

Doctrine of equivalents

There was a further issue in Amgen v TKT regarding the doctrine of equivalents. This is a US doctrine, not adopted in Australia or the UK, relating to infringement. Unlike the purposive approach of Catnic, pursuant to which the words of a claim are construed purposively to expand those words beyond their literal scope, the doctrine of equivalents operates after a claim has been given a literal interpretation. This doctrine provides for infringement by equivalents of that which is literally claimed if the allegedly equivalent measure performs the same function, and achieves the same result in the same way as the measure in the claim. In Amgen, the House of Lords made clear that Catnic had "firmly shut… the door" on the doctrine of equivalents in the UK. As Australian courts have embraced Catnic, the Amgen decision is likely to be strongly persuasive that the door is similarly shut on the doctrine of equivalents under Australian law.

After arising technology

In Amgen, the House of Lords was also required to consider whether a claim can be construed to cover products or processes which involve the use of technology unknown at the time the claim was drafted. The Amgen patent only explicitly claimed the manufacture of EPO by the Exogenous Method. However, Amgen submitted that although homologous recombination, the method used by TKT, was a known phenomenon in 1983, its use to achieve "gene activation" was unknown at that time. Amgen further claimed that the method of manufacture by DNA recombinant technology referred to in the claim was the only one known at the priority date, and thus the claim should be treated as a general claim for manufacture by recombinant DNA technology, whether exogenous or endogenous.

The House of Lords held that a claim may, upon its proper construction, cover products or processes which involve the use of technology unknown at the time the claim was drafted.[5] The question to be asked is whether the person skilled in the art would understand the description in a way which was sufficiently general to include the new technology. Lord Hoffman held that the person skilled in the art would not have understood the claim as sufficiently general to include gene activation, but instead would have understood it to be limited to the expression of an exogenous DNA sequence which coded for EPO.

The issue of whether a claim can be construed to cover after arising technology has not been specifically addressed by an Australian court. However, it is likely that an Australian court would address this issue in the same manner as Lord Hoffman did in Amgen.

Conclusion

More than a decade after its last patent decision, the House of Lords has issued two decisions (with one pending) that address all fundamental issues of UK patent law. One of these decisions, decided in the context of a life sciences patent, is likely to have a significant impact on Australian patent law on the issues of claim construction and infringement. It remains to be seen how Australian courts will apply this new precedent.[6]