Teva UK Ltd v Boehringer Ingelheim Pharma GmbH & Co KG

The heading to paragraph 52.3.13 in the current edition of the White Book is “Permission to appeal may be granted more readily in patent cases”. Taken at face value, this is a somewhat surprising proposition. CPR 52.3(6) provides for what would seem to be a uniform and mandatory minimum standard for applications for permission to appeal:

“Permission to appeal may be given only where –

(a)

the court considers that the appeal would have a real prospect of success; or

(b)

there is some other compelling reason why the appeal should be heard.”

The authority cited in support of this proposition is Pozzoli SPA v BDMO SA [2007] EWCA Civ 588, in which, at paragraph [10], Jacob LJ (with whom Mummery and Keane LJJ agreed) stated:

“I would add this about permission to appeal in patent cases generally. Unless the case is very clear and can be understood sufficiently readily in an hour or so, the better course is normally for permission to be granted by the trial judge. For, unlike the trial judge, the Court of Appeal judge(s) who have to decide whether permission should be granted (where the trial judge has refused it) will not be immersed in the technology and evidence in the same way as the trial judge. Faced with but an incomplete understanding and a plausible skeleton argument seeking permission, the Court of Appeal will generally be likely to grant permission, even if it later discerns that the case is indeed clear.”

There are two components to this statement. The first is, or may be, that in highly technical cases a trial judge ought to grant permission to appeal more readily. The second is a suggestion that, in such cases, the fact of technical complexity may make an appeal judge more ready to grant permission to appeal where the judge has refused it. On this renewed application for permission to appeal in a patent revocation action from the decision of Morgan J of 21 October 2015 we have specifically asked for oral argument from both applicant and respondent as to whether the practice reported in the White Book based on Pozzoli is correct. We have been greatly assisted by written and oral submissions by Mr Mitcheson QC on behalf of the applicant Boehringer Ingelheim Pharma GmbH & Co KG (“BI”) and Mr Alexander QC and Mr Chacksfield on behalf of the respondent Teva UK Limited (“Teva”).

The passage in the White Book dealing with patent appeals follows hard on the heels of a section entitled “Permission will be granted more sparingly for appeals on questions of fact from the Technology and Construction Court.” That section cites a passage from the judgment of this court in Skanska Construction UK Ltd v Egger (Barony) Ltd [2002] EWCA Civ 1914 in which Lawrence Collins J (with the agreement of Thorpe and Latham LJJ) explained the special characteristics which affected the readiness of the Court of Appeal to reconsider factual findings of the Technology and Construction Court on appeal:

“First, the findings of fact often fall within an area of specialist expertise, where the evidence is of a technical nature given by experienced experts, which is evidence of a kind which judges of the Technology and Construction Court are particularly well placed to assess. Second the conclusions of fact will frequently involve an assessment or evaluation of a number of different factors which have to be weighed against each other, which is often a matter of degree. Third, the decisions made deal with factual minutiae not easily susceptible of reconsideration on appeal.”

Broadly speaking, everything which is said there about the TCC could be said about appeals on factual findings from the Patents Court. It is notorious that patent cases often arise against a complex technological background. In such cases it is necessary for the court to acquire a sufficient understanding of the technology in order to be able to address the substantive issues in the case. The judges of the Patents Court are a specialised group of judges who are nominated to hear cases of this kind, and who develop special expertise in deciding them. It is also well settled that, issues such as obviousness and insufficiency involve evaluative judgments where a number of factors, many involving technical considerations, have to be weighed against each other. This court will not interfere with the judge’s evaluation unless he has erred in principle: see e.g. Biogen v Medeva [1997] RPC 1 at [54].

It is not surprising, therefore, that in the passage dealing with patent appeals, the editors of the White Book go on to observe:

“At first blush, the difference between the Court of Appeal’s approach to (a) appeals in patent cases and (b) appeals in other cases involving specialist or technical expertise may seem surprising. However, this approach has been authoritatively laid down and its rationale explained.”

We were informed by both counsel that, whilst it has never been disapproved, the practice suggested in Pozzoli is not in fact applied by first instance patent judges. My experience as a first instance judge was the same. The one recorded instance of its application was Les Laboratoires Servier v Apotex [2008] EWCA Civ 445, a case decided shortly after Pozzoli. In that case, permission to appeal was granted by the trial judge expressly on the Pozzoli basis. He nevertheless refused an interim injunction pending appeal on the ground that he considered there was no real prospect of success, a conclusion which was inconsistent with the test for granting permission to appeal in CPR 52.3(6). Lord Phillips LCJ observed at [41] that the Pozzoli test was not satisfied, and that permission to appeal should not have been granted.

The current (18^th) edition of Terrell on the Law of Patents says of the cited paragraph of Pozzoli:

“Whilst this statement has never been formally disapproved of, it is unclear the extent to which the “hour or so” rule set out by Jacob LJ is actually applied in practice. Normally decisions on permission to appeal are based on the criteria in the CPR, namely whether the appeal has a real prospect of success.”

Consistently with all this, although he was referred to Pozzoli, Morgan J in the present case said that he did not place much reliance on it in refusing permission.

Mr Mitcheson reminded us that patent cases cannot be viewed simply as inter partes disputes, as they involve the public interest. He is correct that there is a public interest in securing that valid monopolies are respected (so as to encourage innovation) and that invalid monopolies are swept away so as not to deter competition. He accepted, however, that this did not justify a more lenient approach in patent cases to the grant of permission to appeal. He also did not suggest that it justified a departure from the approach of this court to appeals from specialist courts concerned with evaluative findings involving the weighing of many factors. In my judgment, whilst the public interest aspect of patents justifies painstaking analysis of the issues which arise, including the grant or refusal of permission to appeal, it does not justify a different, more lenient, approach to the granting of permission to appeal.

Since Pozzoli, the rules have moved on. With effect from 3 October 2016 CPR 52.5 provides that the Court of Appeal will determine applications for permission to appeal on paper unless the judge considering the application on paper directs an oral hearing. The judge must so direct where the application “cannot be fairly determined on paper without an oral hearing”. CPR 52.5(4)(a) provides that the judge directing the oral hearing may identify any issue or issues on which the party seeking permission should specifically focus its submissions in order to assist the court to determine the application. The court may also direct the respondent to serve and file written submissions. Accordingly the court is now placed in a good position to obtain the assistance of the parties. Under these rules, it would be wrong for a judge to give or refuse permission without being sure that there is, or is not, an arguable point, simply because of the technical or other complexity of the case. It would not be fair to do so. The procedural background is therefore different to that which faced this court in Pozzoli.

I think the time has come to say that the technical complexity of the background is not a factor which trial judges should take into account in favour of granting permission to appeal. For that reason, there is no justification, in granting or refusing permission to appeal, for treating patent cases any differently to any other cases. In my judgment, the approach in Pozzoli should no longer be followed.

Nevertheless, Jacob LJ was right that the trial judge, immersed in the technology as he will be, is in a good position to understand whether the case does raise an arguable point for an appeal. This court will always be assisted, therefore, if the judge takes the time to give full reasons for refusing permission, as Morgan J did in this case.

I turn to the question of whether permission to appeal should be granted in the present case. The patent in suit, EP (UK) 1 379 220 is concerned with capsules to be used in a dry powder inhaler for the purpose of delivering a particular active ingredient (tiotropium bromide) to the lungs of a patient suffering from chronic obstructive pulmonary disease or asthma. The capsule in question is not ingested: it simply functions as a container for the powdered active ingredient. When activated by the patient, the inhaler punctures or shears the capsule and the powder is conveyed into the patient’s lungs. It was known to make such capsules from gelatine.

The invention is concerned primarily with the material from which the capsules are made. The patent proposes the use of hydroxypropyl methyl cellulose (HPMC) as the capsule material. The specification also discusses the question of the moisture content of the capsule material, saying that, when a cellulose derivative such as HPMC is used, the moisture content is preferably less than 8%, particularly less than 5%, most preferably less than 4% and particularly less than 2% before being filled with powder.

Although various amended claims were in play before the judge, Mr Mitcheson has made it clear that it is claim 6 on which he particularly relies which claims HPMC as the capsule material with a moisture content of less than 2%.

The prior art (“Ogura”) was an article which commended the properties of HPMC for capsules, including for capsules for inhalation devices. One of the properties emphasised by Ogura was the naturally low moisture content. It pointed out that the moisture content of gelatine capsules was generally 13 to 15%, whilst that of HPMC capsule shells was only 2 to 5%.

The judge heard evidence from formulation experts who were called to assist him in coming to a conclusion as to whether, based on Ogura, it was obvious to follow up its suggestion to use HPMC as the capsule material and to dry below 2%. He concluded that the skilled person would follow up the idea of using HPMC. Thereafter, he concluded that the precise level of dryness, above or below 2%, was arbitrary.

Mr Mitcheson attacks the judge’s conclusions on two grounds. Firstly he says that the judge reached an erroneous conclusion that the skilled person would be motivated to try Ogura’s idea at all. The judge had wrongly interpreted the evidence of Prof Buckton, who was the formulation expert for the respondent, as meaning that the skilled person would consider dryer capsules to be inherently advantageous, whereas in fact, all that he had meant was that the capsules should be dry enough to ensure physical and chemical stability of the active ingredient chosen. For the purposes of this submission Mr Mitcheson relied upon an application to adduce further evidence in the form of Prof Buckton’s expert report in corresponding Irish proceedings which, he submitted, showed that the judge had reached a conclusion which was plainly wrong.

In his report in the English case Prof Buckton had said that a skilled formulator would usually seek to keep the formulation as dry as reasonably possible. In his Irish report Prof Buckton sought to explain his evidence more clearly. He said that:

“…a skilled formulator at the priority date would usually seek to keep the formulation dry enough to ensure physical and chemical stability.”

In a footnote Prof Buckton explained:

“… While it is always true that water will be an enemy in DPI formulation and as such it will always be necessary to set strict limits for water content, it is also true that using very low water content is at the very least uncomfortable for operators and expensive to achieve. I clarified this point in cross examination in London, but have adjusted the text here in order to make it clear from the outset. It is more accurate to say that the skilled formulator will use the driest conditions that are necessary to achieve physical and chemical stability, which means the water content must be assessed and suitable control limits established.”

Prof Buckton also explained that, as water is generally regarded as an enemy in DPI formulation, minimising it, to a level that gave adequate improvement in performance, without being over burdensome in terms of complexity of handling and controlling the water, would be expected to be advantageous to physical and chemical stability.

Mr Mitcheson submits that if gelatine, with its relatively high water content, was dry enough to achieve physical and chemical stability, there would be no motivation for the skilled person to move to HPMC.

I do not think that there is anything in this point. Faced with a material with a naturally lower water content, the skilled person would see an immediate advantage over gelatine. Gelatine suffered from a disadvantage that its water content could not be reduced without causing brittleness. The judge concluded in paragraph 95:

“… a lower moisture content in the capsule material was highly likely to be beneficial and beneficial to a degree which was worth pursuing.”

I can see no basis on which this court could interfere with that finding, even in the light of the way in which Prof Buckton expressed himself in the Irish case. Adopting HPMC as the capsule material would be a way of minimising water, the enemy of the formulator, without being over burdensome in terms of complexity or controlling water. The problem of brittleness would not arise.

Mr Mitcheson’s second point was that, even if the skilled person pursued Ogura’s idea, there would be no point in drying to below 2%. The judge had wrongly dismissed the moisture level as arbitrary. Instead he should have accepted that the patent made it plausible that there were technical advantages in drying to low levels, and then asked whether that was obvious without knowledge of the invention.

I do not think that the judge fell into any error of principle here either. There was no significance in the moisture level being below 2%, as opposed to above it. BI’s case does not get any better by saying that you do not need to go this low. The judge was entitled to find that a moisture level below 2% was just as obvious as achieving a moisture level of 2%.

This is a case where the applicant is seeking, illegitimately, to deconstruct the judge’s overall evaluative judgment on the issue of obviousness. I do not think either ground has a real prospect of success. I would refuse permission to appeal.

I agree.