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"Arrow" declarations: Defence against submarine divisionals and opting European patent applications out of the UPC

Date: 16 May 2017


An "Arrow" declaration is a remedy that can be applied for seeking a court declaration that a certain product was known or obvious at a particular date – i.e. that a party is free to make and sell its product notwithstanding a certain pending patent application because any claims that might validly be granted would not be infringed. It is a pre-emptive Gillette defence, because it seeks to establish that the product is old so it does not matter whether the claims would be invalid or not infringed – either way, the path to market is cleared.


Such  a declaration takes its name after Arrow Generics v Merck.2 More recently, the jurisdiction  of the Patents Court to make  such a declaration was  challenged and  reviewed by the Court of Appeal in Fujifilm Kyowa KiriBiologics ("FKB") v AbbVie Biotechnology.3 The Court of appeal upheld the jurisdiction  of the Patents Court to make  such declarations.


Briefly, the principal grounds under which AbbVie argued that the Patents Court had  no jurisdiction  to make such an order  arose from Patents Act 1977  section 74(2) which says that the validity of a patent may not be put in issue other  than  in an action for revocation or by way of defence to an action  for infringement (or in certain other  specific instances) and "no proceedings may be  instituted seeking only a declaration as to the validity or invalidity of a patent". AbbVie argued that the action  was  in essence an attack on the validity of a putative patent and  so was  precluded by s74  (because it would have  to be  brought after grant  under s70). The Court of Appeal held  that (a) the case relates to an application, not a patent and  (b) it is not only invalidity that is in question, but equally  non- infringement. So on both  counts, s74 does not apply  and  moreover there are  sound policy reasons for awarding such declarations in appropriate cases:


Because an applicant may wait until an earlier application has been in prosecutiofor many years before filing even  a first divisional, it should be clear . . . that the final form of any protection based on the subject matter of the parent application may take a very long time indeed to emerge. The protection conferred by the earliest application may have ended, but many divisionals and sub-divisionals . . . may still be in the pipeline [including some] which have not been published, and more to come which have not even  been  filed.


The Court referred to this as the problem of the "submarine divisional" and  said  the uncertainty that arises may have  a chilling effect  on competition.


AbbVie also  tried to run an argument to the effect  that such declarations would undermine the system of allocation of jurisdiction  under Art. 24(4) of the recast Brussels Regulation. This was  a less  forceful argument, but we review it here  for reasons set  out below.  That section of the Regulation says "the courts of each Member State shall have exclusive jurisdiction in proceedings concerned with the registration or validity of any European patent granted for that Member State". AbbVie were in effect  trying to argue that this would be  a back door  way of invalidating a European patent. The Court of Appeal merely  said  that insofar  as the declaration can  be  said  to be "concernewith the registration or validity of patents", it can  only be concerned with the registration or validity of EP (UK)s. Moreover,  when the declaration states that the product is obvious, it will do so as a matter  of UK patent law. The validity of other patents for other  designated states is a matter  for the law of those states.


Arrow  Declarations under the UPC – reason to opt out pending applications?


It would seem that the UPC will be  open to considering Arrodeclarations, because Art. 32(1)(g)  of the UPC Agreement confers exclusive competence  on the Court in respect of, inter alia, "actions relating to the use of the invention prior to the granting of the patent or to the right based on prior use of the invention".


Note that "actions relating to the use of the invention prior to the granting of the patent" does not simply mean damages arising  from the provisional protection conferred by publication – those are  separately covered by Art. 32(1) (f). Further  indications of the competence of the Court can  be  found  in Recital  2 which refers  to "defencagainst unfoundeclaims and claims relating to patents which should be revoked". Recital  5 has  similar words.  Recital  13 may also  be  invoked,  as it calls  for "the right to an effective remedy before a tribunal". Only actions not falling under Art.32(1) lie with the national  courts – see Art. 32(2).


Of course, a party  can  opt out of the exclusive competence of the Court during  the transitional period (Art. 83(3)UPC).4  But the transitional provisions of Art. 83(1) apply only to actions for infringement or revocation of a patent (or SPC) and  do not say  anything explicit about parallel national  jurisdiction  during  the 7-year  transitional period over actions relating  to the use  of the invention  prior to the granting of the patent. Can  we read more  into this? Does  it mean that actions under Art. 32(1) other  than  those listed  in Art. 83(1) are  exclusive to the UPC from the outset? Does  it mean that Arrodeclarations under European patents that are  not opted out are  the exclusive domain of the UPC? Very possibly. It might be  wise to register an opt-out  for a European patent application before an Arroaction  is commenced in the national  court,  otherwise there  may be some force  in a defence to strike out for lack of jurisdiction– contrast the broad scope of Art. 32(1)(g)  ("actionrelating to the use of the invention prior to the granting of the [European] patent") with the narrow  scope of section 24 of the Brussels Regulation (see above "proceedingconcerned with . . . any European patent granted for that Member State").


In contrast to Art. 83(1), if a European patent application is opted out under Art. 83(3), such opt-out  is from the [exclusive] jurisdiction  of the Court for all purposes.


A claim for an Arrodeclaration would seem to fall under Rule 60 of the Rules  of Procedure. Notwithstanding that the rule is headed "Declaration of non-infringement", it isnot limited to claims  under Art. 32(1)(b)  and  extends to any claim for "a declaration that the performance of a specific act does not, or a proposed act would not, constitute an infringement of a patent".5


The potential claimant must  first apply  to the proprietor (or licensee) for a written acknowledgment that the act  would not constitute an infringement, giving full particulars. The proprietor (or licensee) has  one  month  to respond. Whether this month  gives  enough time for the proprietor to lodge an opt-out  and  have  that registered depends on the speed of the Registry.  (An opt out only becomes effective  upon  entry in the Register.)


Accordingly, proprietors of European patents who are considering opting  their patents out of the UPC may also wish to consider pending applications, especially those which have  been divided or are  yet to be  divided.


1   This article  was  published in CIPA Journal, April 2017

2   [2007]  FSR 39

3   [2017]  EWCA Civ 1

4   There  is debate as to the term "exclusive"  in Art. 83(3) and  about the non-sequitur over opting  out of an exclusive jurisdiction  that, for the transitional period, is not exclusive.  It is beyond the scope of this article  to speculate whether the fact that Art. 83(1) leaves out certain actions (and  leaves them  exclusively with the Court) leads to the conclusion that Art. 83(3) is referring  only to those actions – that would seem absurd  – or leaves them  non-exclusively with the UPC and  the national  courts – that would be  very surprising.  It may perhaps only be  put to the test  when  someone applies for an Arrow injunction  under an opted-out patent application.

5   It may be  interpreted that "patent"  strictly means "granted patent" and  not "putative  patent", but the rule seems apt  and  there  is no other  rule.


Tuesday, May 16, 2017

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