The Court of Appeal has upheld two judgments, of Arnold J and Henry Carr J, refusing to strike out claims for Arrow declarations in Fujifilm v AbbVie [2017] EWCA Civ 1. While the claimant in this case still has to make out its full case to obtain the declaration, the Court of Appeal’s judgment is important in confirming that Arrow declarations will be available in suitable cases.
What is an Arrow declaration?
In the UK a patent cannot be challenged until it grants. However, under section 69 a patentee can, after grant, claim damages for acts committed prior to grant if they would have infringed the patent (subject to certain provisos relating to changes in the claims). This regime has the potential to create a substantial damages liability for businesses which commercialise technology that is subject to an as-yet ungranted patent.
An Arrow declaration allows a claimant to obtain a declaration that their intended product or process was disclosed or would have been obvious at the priority date of a patent application of concern. Obtaining such a declaration does not have any effect on the validity of any patent application or its ability to grant.
However, if a patent grants in the future and is asserted against the party which has obtained the Arrow declaration, the declaration can be deployed by way of a ‘Gillette’ defence: if the product or process was obvious then a patent which it infringes is. The advantage of using the Arrow declaration is that the claimant can test the position before launching their product and thereby incurring any damages.
The first Arrow declaration was obtained in Arrow Generics v Merck [2007] FSR 39 where Kitchin J (as he then was) refused to strike out a claim for a declaration of this kind concerning Arrow’s proposed pharmaceutical product, alendronate. The decision was not challenged on appeal and did not go to final judgment.
However, both in that case and in the Fujifilm v Abbvie litigation the patentees raised various arguments to the effect that the Patents Court has no jurisdiction to grant Arrow declarations because they amount to a challenge to validity yet are not one of the permitted kinds of proceedings in which validity may be put in issue under the Patents Act 1977.
Criteria for an Arrow declaration
The Court of Appeal did not set out detailed criteria for obtaining Arrow declarations, holding rather that the detailed principles should be developed by the Patents Court. The Court did hold that the usual principles applicable to the granting of declarations apply to Arrow declarations, i.e. in particular that the declaration would serve a useful purpose and whether there are any special reasons for or against granting the declaration. The Court also noted that the mere existence of a patent application is not a sufficient reason to enable a party to obtain an Arrow declaration concerning subject matter covered by that patent application.
In the original Arrow case the claimant relied on the fact that it had attempted to clear the path for alendronate by revoking Merck’s patent covering alendronate, both in UK proceedings and in EPO opposition. This had represented a considerable investment However, it could not revoke Merck’s pending divisional patent application as it had not yet granted and thus its product, subsequently launched, accrue a substantial liability in damages if that patent granted and yet was not later revoked. Merck intended to enforce its patent when it could.
Fujifilm relied upon similar points: it wished to launch its biological product, adalimumab, but was concerned about AbbVie’s patents. AbbVie had a very large patent portfolio including a number of pending divisionals that were of concern to Fujifilm but which AbbVie prevented from proceeding to grant. There was a dispute as to whether AbbVie’s actions in preventing grant was connected with Fujufilm’s interests but either way the outcome was the same: Fujifilm were at risk from various of AbbVie’s divisional patent applications and yet could not revoke them before they did grant, thus creating great uncertainty for Fujifilm and deterring its launch.
To date no Arrow declaration has been granted following a full trial: all the decisions have concerned applications by the patentees to strike out or obtain summary judgment on a claim for an Arrow declaration. However, the Court of Appeal’s brief guidance and the review of the matter by the Patents Court in both the original Arrow and Fujifilm litigation indicates that relevant criteria are likely to include the claimant having a real interest in obtaining the declaration, the steps it has taken to clear the path, the defendant’s stance in enforcing the patent application against the claimant if it grants and the defendant’s behaviour in dealing with the ungranted patent applications.
Declarations as a remedy
The life sciences sector is the most obvious area where Arrow declarations may be useful: the value of a single product may be very high and work-arounds are difficult, meaning that a relevant patent can completely block a product’s commercialisation. However, in principle an Arrow declaration could be sought in any technology sector if the circumstances require it – and the product is sufficiently valuable.
The Arrow declaration exemplifies the flexibility of the English legal system. Because the courts have inherent jurisdiction to grant declarations and injunctions, innovative litigants may be able to obtain relief even if it is not expressly provided for in legislation. This feature of the English legal system provides a rich arsenal for litigants to use, facilitating the determination of disputes.
