Derived from Arrow v Merck,[1] an “Arrow” declaration is a declaratory judgement that a product, process or use would have been obvious at the priority or filing date of a granted patent, and so could not be held to infringe said patent. A successful Arrow declaration effectively grants the claimant a “Gilette defence”,[2] whereby they can argue that, if the subsequently granted patent is infringed by their product, process or use, the patented invention must itself not be novel.
These declarations offer legal certainty, often in the pharmaceutical field, where third parties wish to sell generic copies of drugs for which a patent has expired. Specifically, they allow for determination of patent infringement before the patent has been granted. The recent judgement of Teva v Novartis [2022] EWCA[3] poses an interesting question, however, as to the applicability and persuasiveness of UK courts’ Arrow declarations in foreign jurisdictions.
Novartis’ Patents
Throughout the European Union and the United Kingdom, Swiss-American pharmaceutical company Novartis AG market the S1P receptor modulator fingolimod for the treatment of relapsing-remitting multiple sclerosis (RRMS) under the trade mark “Gilenya”. With patent protection for fingolimod having expired in the UK, and regulatory data exclusivity for Gilenya having similarly expired, competitors sought to acquire marketing authorisation for generic fingolimod. Teva UK Limited was one such manufacturer.
Novartis also own several families of patents and patent applications protecting dosage regimes and formulations relating to fingolimod. One of these families included the divisional application EP2959894 (“EP894”), since approved for grant by the EPO on 18th August 2022. This divisional right protects the use of fingolimod for the treatment of RRMS at a daily dosage of 0.5 mg p.o. The opposition period for EP894 runs until 12th July 2023, and the number of oppositions filed is already in double figures, indicating that a lengthy period of opposition proceedings, and questions as to the validity of the patent, are on the horizon. A further pending divisional application (EP3797765 (“EP765”)) also protects this dosage regime for the treatment of RRMS.
Teva’s request for a declaration
Having obtained a marketing authorisation for generic fingolimod, Teva sought in the Patents Court an Arrow declaration that the importation, disposal, use and keeping by Teva of generic fingolimod in the UK for use in the treatment of RRMS at a daily dosage of 0.5 mg p.o. would have been obvious at the priority date of EP894.[1] When Novartis filed a cross-claim for an interim injunction to prevent several suppliers of generic drugs, including Teva, from marketing generic fingolimod in the UK, Teva and three other suppliers counterclaimed for an Arrow declaration as relief.
On 10th August 2022, Novartis removed UK designation from EP894 and EP765, and discontinued their infringement claim against the generic drug suppliers. They also sought to have Teva’s claim and counterclaim struck out. In response, Teva amended their statements and submitted five reasons in favour of an Arrow declaration being granted, as follows:
- Novartis was attempting to impede sales of generic fingolimod across contracting states to the European Patent Convention (EPC) through aggressive enforcement of EP894.
- A declaration would provide clarity to Teva’s customer in the UK, the NHS.
- Novartis’ undertakings in dispelling uncertainty in the UK market were inadequate.
- A UK judgement would potentially be of use in a decision in Germany on whether to grant a preliminary injunction against Teva.
- An injunction in an undisclosed country through which Teva’s supplies to the UK transited would threaten that supply chain.
Ultimately, the claim for an Arrow declaration was confined to the issue of whether, as a matter of discretion, a declaration should be granted even though Novartis do not have patent protection for a 0.5 mg dosage regime in the UK.
“Useful purpose”
Bacon J sought to identify “whether the declaration would serve a useful purpose”, as per Neuberger J in Financial Services Authority v Rourke.[2] Drawing on Fujifilm v AbbVie [2017],[3] Bacon J specifically stated that the court should be concerned with whether the declaration sought will serve a useful purpose in the UK, noting that a declaration sought solely for the benefit of foreign courts will rarely be justified.
In view of this, Teva’s claim was refused on the grounds that an Arrow declaration would only serve as a persuasive argument in the courts of a foreign jurisdiction.[4] In making this assessment, Bacon J worked through each of Teva’s reasons for requesting a declaration in turn:
- Novartis’ withdrawal of its UK patent designations after proceedings had commenced, in spite of their aggressive litigation strategy across Contracting States of the EPC, was considered to be done to shield the patent from an adverse decision in the UK. However, a declaration was judged to serve no useful purpose in addressing Novartis’ conduct and so their conduct could only be considered a factor in the assessment of a useful purpose in relation to the other reasons.
- There was no evidence that Novartis’ conduct resulted in any confusion on the part of the NHS.
- Novartis offered clarified undertakings to address Teva’s concerns, and these were accepted, negating Teva’s third reason.
- The German courts would undoubtedly take account of a declaration and would consider it alongside other evidence available, including the decisions of the EPO and other EPC Contracting States. However, where the only or predominant purpose of a declaration sought is to use the judgement in a foreign court, there must be a compelling reason for doing so (which none of Reasons 1-3 provided, meaning the decision rested on Reason 5).
- It was accepted that an injunction in the unnamed country would be disruptive to Teva’s supply chain to the UK. However, the purpose of an Arrow declaration in this instance would be to use it in the courts of the unnamed country (and other countries), and not to obtain or enforce any right in the UK.
The appeal and future prospects
Most recently, an expedited appeal was granted by Arnold LJ because Novartis commenced infringement proceedings against Teva in several EU states and Teva wished to rely upon a successful request for an Arrow declaration and the influence of the English court on the issue of obviousness in the fast-approaching German hearing.
However, Arnold LJ upheld the refusal,[5] stating that because Novartis abandoned any possibility of obtaining patent protection in the UK in respect of the 0.5 mg daily dosage regime, Teva could not rely on an Arrow declaration in order pre-emptively to establish a Gillette defence against any claim for patent infringement. Rather, Teva would have to look to other reasons for declaratory relief.
Arnold LJ considered that the Patents Court has the power in an appropriate case to make a declaration as to whether or not a foreign patent has been or will be infringed, according to Actavis Group HF v Eli Lilly & Co,[6],[7] Further, Arnold LJ considered the role of the “spin-off value” of a judgement of the Patents Court; that is, the value to the successful party going beyond the legal effect of the judgement in the UK. Spin-off value can be attributed to (a) a judgement the reasoning behind which may assist parties in reaching a multi-jurisdictional settlement, or (b) a judgement considered persuasive by courts of other countries in Europe.
The difference was emphasised between relying on spin-off value where the patent or patent application designates the UK, and relying on spin-off value for the sole purpose of influencing a foreign court applying its own law to an issue before it. He considered four other cases in which the Patents Court has had to decide whether to make a declaration for use in foreign proceedings,[8],[9],[10],[11] only one of which (Fujifilm v AbbVie[12]) resulted in a declaration being granted.
Arnold LJ concluded that, “as a matter of principle, it is wrong for an English court to make a declaration solely for the purpose of influencing a decision by a foreign court on an issue governed by the law of the foreign court”.[13] He further stated that the role of the courts of England and Wales was not to provide advisory opinions to foreign courts deciding upon issues to be determined by their own national laws. For these reasons, Teva’s claims were dismissed.
Ultimately, it appears that Arrow declarations will only be made if there is a value to the applicant within England and Wales, and the criteria that must be met to prove this is the case are difficult to meet where the patent or patent application in question does not apply to the UK. Indeed, even if an Arrow declaration was to be granted in such a case, the reaction of the Düsseldorf Regional Court in response to Takeda UK Ltd v F. Hoffmann-La Roche AG,[14] as noted by Arnold LJ,[15] suggests that just because UK courts are well-regarded, does not mean that their judgements will be considered with the reverence some quarters suggest. Rather, beyond the jurisdiction of England and Wales, Arrow declarations should perhaps be seen simply as evidence to be submitted to foreign courts, where conditions allow, for those courts to do with as they choose.