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Latin Maxims still alive in patents case

David Knight
12/07/2016
For some years now the English courts and practitioners have been trying to get away from the use of Latin. The recent decision in NAPP Pharmaceutical Holdings Ltd v Dr Reddy's Laboratories (UK) Ltd & Anor [2016] EWHC 1517 (Pat), however, focussed on two Latin Maxims: de minimis and quia timet.

For some years now the English courts and practitioners have been trying to get away from the use of Latin.  The recent decision in NAPP Pharmaceutical Holdings Ltd v Dr Reddy's Laboratories (UK) Ltd & Anor [2016] EWHC 1517 (Pat), however, focussed on two Latin Maxims: de minimis and quia timet.

The case related to Napp's patent for a transdermal patch for use in the treatment of pain.

The de minimis principle

De minimis non curat lex - the law does not concern itself with trifling matters.

Suppose a patent claim provided a range for a particular ingredient in the end product, and further suppose that manufacturing vagaries are such that just occasionally a product is made that falls within that range, does that give rise to patent infringement (assuming that all the other integers of the claim are satisfied)?   This was the question the court had to grapple with in this case - i.e. are the infringements de minimis and therefore can they be ignored?

That the de minimis principle can be applied to cases of patent infringement has long been known (and was accepted by Napp), but there is little case law guidance as to what constitutes de minimis.   In Hoechst Celanese Corp v BP Chemicals Ltd [1998] FSR 586, there were occasional spikes in manufacture during which period the required parameters of the patent claims needed to be satisfied.  The Judge in that case (Jacob J) did not dismiss the concept of the de minimis principle, but did not accept that a product produced during such spikes was de minimis.   (He may have been influenced in this case by the fact that the daily production from BP's plant was 800 tonnes, so even at the time of a short spike a lot of product could be produced.)

Napp argued that if only one patch in one-trillion patches fell within the claim, then the patent would not be infringed.  However, Napp then went on to assert that if the proportion was larger (but still very small), for example, one patch in 10,000 patches (0.01%) that would undoubtedly infringe.  Napp further asserted that it would not matter whether the 0.01% of infringing patches were made in a single hour over a period of one year, or randomly distributed among the production.  The Judge (Arnold J) disagreed; he felt that 0.01% was precisely the kind of situation covered by the de minimis principle.

A difficulty in this case was that most of the patches it was proposed to manufacture had yet to be made, and further testing to determine whether the patches fell within the specified range would destroy the patch.  Therefore sampling and statistical analysis were necessary, and both parties adduced expert statistical evidence.  As is often the way with statistics, the results could be determined in many different ways, but in the end the Judge held that the figures given by the two experts were respectively 1 in 153 million patches, and 1 in 69 million patches.  Even taking the upper limit the Judge held that this was "plainly de minimis".  The Judge went on to add that even if the number was 1 in 25,600 patches (a ratio produced on an alternative statistical analysis), he would still regard that as de minimis.  Accordingly there was no infringement.

In the judgment, Arnold J also added that even on the hypothesis put forward by Napp of 0.01% infringing products, if he had held that this was not de minimis, he still would not have awarded an injunction as to have done so would have been disproportionate and a barrier to legitimate trade.  In such a case, the remedy would have been a financial one.

Quia timet claims

Quia timet - because he fears.

Arnold J also went on to examine the law on quia timet claims which is perhaps best summed up in paragraph 150 of his judgment, as follows:

"It is well established that in the context of patent infringement, as in the context of many other wrongs, it is not necessary for the patentee to establish that the defendant has already committed a wrongful act in order to commence proceedings.  Rather, the patentee can commence proceedings on the basis that the defendant threatens to do an act which will infringe the patent.  Such claims are known as quia timet claims.  ...  Occasionally, however, there is a dispute as to whether the defendant has in fact threatened to do the acts which the patentee alleges the defendant has threatened to do. It may be wondered what the point of such a dispute is.  Generally speaking, there are two possible reasons for seeking the determination of such a dispute.  The first is because the patentee wants to obtain an injunction.  Of course, if there is no threat to do the acts, then the patentee does not need an injunction; but the patentee may distrust the defendant's protestations that it does not intend to do such acts. The second reason is because of a dispute over the costs of the litigation.  What has happened in a number of cases is that, by the time of the trial, it is clear that there is no threat by the defendant, but the claimant says that there was a threat when it started the proceedings and so the claimant is entitled to its costs."

In this case Sandoz had already obtained marketing authorisation for its transdermal patch, and was ready to launch its product subject to the outcome of the proceedings.   Dr Reddy's, however, was still awaiting marketing authorisation, and had only just got to the point of starting production. 

In the case of Merck Sharp Dohme Corp v Teva Pharma BV [2013] EWHC 1958 (Pat), Birss J. held that "mere possibilities [of infringement] are not enough.  To justify coming to court requires there to be a concrete, strong and tangible risk that an injunction is required in order to do justice in all the circumstances."  The question in this case was how the quia timet principle interplayed with the de minimis principle.  Sandoz argued that quia timet required something more than de minimis, i.e. "a threat to infringe on a scale which gave rise to a sufficiently strong probability of harm to the patentee."

Arnold J. disagreed; he felt that this muddled two concepts.  One concept is whether there is a sufficiently strong threat to justify starting proceedings.  The other is whether the threatened acts fall within the patent claims sufficiently often that they are not de minimis.  He concluded that if there is a threat to do infringing acts that do not fall within the de minimis  principle, then that is sufficient to justify the bringing of proceedings on a quia timet basis.

Thus, overall, Arnold J. held that neither Sandoz's nor Dr Reddy's products would fall within the claims, and accordingly there was no threat by either to infringe the Patent.

Conclusions

This case is very fact-specific.  It offers some comfort, but not a lot of comfort, to those seeking to avoid the claims of others' patents, where their manufacturing processes and the variabilities of those processes are such that they cannot be certain that 100% of their products will be outside the patent claims.  It is quite clear, however, that to take that comfort, only a very small proportion of the products can fall within the claims, and accordingly if there are variabilities in the manufacturing processes, the parameters need to be set to ensure that on a statistical spread the proportion of products that might fall within the margins of the patent claims are small in number and proportion.

EDIT: Appeal pending

Following the judgment on 28 June 2016, it appears that the High Court has now awarded an interim injunction pending an expedited appeal against both defendants Dr Reddy's and Sandoz, thereby in effect continuing the temporary undertakings given by Dr Reddy's and Sandoz pending an expedited trial. Court of Appeal listings show that the hearing has been fixed for 2 August 2016. We'll be sure to keep you updated....

 

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