Actavis v ICOS – clearing the way between a rock and a hard place?

25.10.2016

On 10 August 2016, judgment in Actavis v ICOS was handed down. This was a patent action relating to the compound tadalafil, sold under the brand name CIALIS for male erectile dysfunction and ADCIRCA for arterial hypertension. The Claimants (Actavis, Actelion, Teva and Mylan) sought revocation of two patents: (i) EP (UK) 1,173,181 (‘EP 181’), a dosage regime patent; and (ii) EP (UK) 1,200,092 (‘EP 092’), which concerned a formulation of tadalafil. The patents and exclusive licences were held by Lilly and ICOS.
Birss J found EP 181 valid and infringed while EP 092 was held to be obvious over the prior art and therefore invalid. The Defendants had counterclaimed for threatened infringement.
The judgment covers many issues relating to validity of the two patents, including entitlement to priority, obvious to try with a reasonable expectation of success and anticipation by inevitable result. The assessment of infringement of EP 181 is contained in a fraction of the judgment but considers a point of practical significance, specifically whether seeking a marketing authorisation (‘MA’) in combination with a clearing the way action constitutes a sufficient threat to infringe a patent.
Having found that the Claimants would infringe EP 181 if they launched their 2.5 mg and 5 mg tadalafil products, Birss J had to consider “whether a rival company can seek to clear the way with a revocation action, with a contingent intention to launch a product if the action succeeds, without being held to be threatening to infringe the patents and thereby subject to an infringement counterclaim?”.
Birss J referred to his earlier summary of the law on threats to infringe, in the context of a “clearing the way” action, in Merck Sharpe & Dohme v Teva ([2013] EWHC 1958 (Pat)). In that case the Judge held that the relevant question is whether there is a “sufficiently strong probability that an injunction would be required to prevent the harm to the claimant to justify bringing the proceedings”. It was also held that both a defendant’s subjective intentions and an objective analysis of their overt acts would inform the answer. The Judge considered the objective position before considering the Claimants’ case on actual intentions and found as follows.
The UK market for tadalafil is large (branded sales for CIALIS amount to $99 million). Actavis and Mylan had both applied for and were obtaining MAs, an expensive and time-consuming process. Objectively, an MA application only makes sense if there is an intention to sell tadalafil sometime. While commencing revocation proceedings is not proof of an intention to sell, it does support an inference based primarily on the MA process.
It was accepted that Mylan and Actavis’ intentions were contingent only – i.e. that they would only launch if successful in clearing the way and obtaining an MA. However, the Judge noted that intentions can change. In addition, the Claimants were likely to have substantial supplies of tadalafil. Furthermore, no undertaking to abandon the MA was offered by the Claimants in case they lost the revocation action; an ‘at risk’ launch may still be attractive even if an injunction is later imposed. In light of these factors, the Judge found a sufficiently strong probability that an injunction would be required to prevent Actavis and Mylan from infringing EP 181.
Of particular interest is Birss J’s statement that the inference on which the quia timet infringement action is based derives predominantly from the MA process, not from the fact the Claimants had sought to clear the way. The judgment envisages that where there is an MA in place, or an application proceeding, the claimant in a revocation action should give an undertaking not to launch in the event that the patent is upheld. The judgment also mentions the possibility of an undertaking to abandon the MA. However, this appears not to have in mind situations where the MA holder wishes to keep its authorisation and launch after expiry of secondary patents or where the MA was obtained via the centralised procedure and there are Member States in which there is no patent protection.

Chloe Dickson

Author