HomeInsightsHigh Court finds no issue estoppel preventing defendant challenging validity of divisional patent


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In 2020, Neurim Pharmaceuticals (1991) Ltd sued Generics (UK) Ltd t/a Viatris, which at the time was trading as Mylan, for infringement of its second medical use European Patent designating the UK for “Circadin”, which is a prolonged release melatonin product indicated for the short-term treatment of primary insomnia characterised by poor-quality sleep in patients aged 55 or over. Circadin was commercialised in the UK by Flynn Pharma Ltd, the second claimant. Mylan had obtained a Marketing Authorisation (MA) for Melatonin Mylan, in reliance on Neurim’s MA, in order to sell a generic competitor.

At first instance, Mr Justice Marcus Smith found that the Patent was valid and infringed, but that Flynn was not an exclusive licensee under the Patent (the Main Judgment). Smith J ordered an injunction and delivery up. He also refused permission to appeal for Mylan on validity but granted Neurim permission to appeal the exclusive licensee issue.

At the time of trial in the UK, the European Patent Office Opposition Division had also been considering the validity of the Patent and had found that it should be revoked for lacking novelty over a piece of prior art referred to as “Haimov”. Neurim had appealed to the EPO Technical Board of Appeal (TBA), which had begun considering it. However, on the TBA’s refusal to allow Neurim to file further evidence, Neurim had withdrawn its appeal. This meant that the Opposition Division’s decision still stood and, two days after Smith J had made his orders in the UK proceedings, the Patent was revoked.

As a result of the revocation by the EPO, Smith J subsequently revoked his orders on the ground that the EPO’s order “trumped” his orders.

At the same time, Neurim had also begun prosecuting a Divisional European Patent (UK) (the Divisional). Grant was obtained on 30 June 2021. The Divisional will expire in August 2022. Neurim then issued these proceedings for infringement by Mylan of the Divisional. Neurim also applied to amend the claims of the Divisional into a form identical to the claims of the Patent as they had stood at the time of the trial before Smith J.

Neurim alleged that issue estoppel arising from the Main Judgment prevented Mylan from challenging the validity of the Divisional. Mylan argued that Neurim’s application to amend the Divisional was an abuse of process and that Neurim’s conduct in applying to shut out Mylan’s challenge to the validity of the Divisional was an abuse of a dominant position under s 18 of the Competition Act 1998. It was ordered that an expedited trial of these preliminary issues should be held.


The “lay-patient” argument

Mr Justice Meade explained that the claims of the Patent were second medical use claims directed to the use of melatonin for the treatment of insomnia characterised by non-restorative sleep. Non-restorative sleep refers to the situation where a patient spends time asleep but does not feel refreshed. It is therefore distinct from not being able to get to sleep, having trouble maintaining sleep, or getting to sleep but waking up too early.

In the 2020 proceedings resulting in the Main Judgment, Mylan had attacked the Patent on various grounds, including lack of plausibility insufficiency, referred to as the “lay-patient” argument. This was Mylan’s key point in these proceedings before Meade J. Mylan argued that:

  1. because the invention was a second medical use, the clinical result had to be made plausible by the specification;
  2. since the claims specifically addressed non-restorative sleep, they had to render that plausible, not merely some more general improvement in sleep quality;
  3. there was no objective test or measurement of sleep quality in the claims; it was assessed by asking patients about their subjective experience; and
  4. the relevant materials in the Patent related to asking patients about their sleep, but there was no description showing that what they were asked was about restorative sleep, or that that was what they reported on; they might have interpreted the questions as being about improvement in sleep generally and if they reported an improvement, it might only have been an improvement in, for example, getting to sleep.

Meade J found that the general argument had been put before Smith J but had not been well articulated. In any event, Smith J had rejected Mylan’s invalidity arguments and had refused permission to appeal.

Overall, Mylan’s key concern was that it would be unjust if, having won at the TBA, Neurim’s litigation strategy in withdrawing its EPO appeal, suing on the Divisional with claims amended to be identical in substance to the Patent, and then relying on issue estoppel, meant that Mylan never had a full chance to ask for permission to appeal the Main Judgment on the lay-patient argument.

Issue estoppel

The following basic principles of issue estoppel were not in dispute:

  1. issue estoppel arises where there is a decision on an issue in a cause of action as an essential step in the reasoning;
  2. issue estoppel can also arise in relation to issues which were not raised in an earlier proceeding, but could and should have been; it is necessary that if raised and decided, the issue would have been essential;
  3. the determination of the decision must have been fundamental, not collateral; and
  4. the effect of issue estoppel is subject to an exception for special circumstances, if fresh material comes to light, because the doctrine is intended to do justice and might not do so in such circumstances.

The areas of disagreement focused on the proper approach where an estoppel is alleged against the “winner” of the earlier litigation, especially if they cannot appeal the issue.

Meade J noted that the authorities cited tended to support Mylan’s position that if there was no possibility of appeal because the party alleged to be estopped had won, there was no estoppel. Mylan did not dispute that each of its attacks on the Patent was a fundamental issue to the result in the Main Judgment but said that they were not fundamental to the result once the TBA result was known.

On the question of when there might be a possibility of appeal, Meade J said that, following Compagnie Noga d’Importation et d’Exportation SA v Australia and New Zealand Banking Group (No 3) [2002] EWCA Civ 1142, for there to be an appeal the loser must be seeking to challenge a result and if that is not the case, a party cannot challenge a finding simply because they do not like it.

Therefore, the real issue was the proper characterisation of the result of the proceedings before Smith J, the reasons for the result, who was the “winner”, and when.

Meade J said that Mylan could have filed an Appellant’s Notice before revocation of the Patent by the TBA, as a result of Smith J’s initial order following the Main Judgment, under which Mylan had been the loser. However, the situation at that time was provisional because of the imminent TBA hearing, and the provisional nature of the situation was inherent to Smith J’s order.

In these unusual circumstances, Meade J said that the relevant time for the purposes of assessing whether there was a possibility of appeal was not the short period between the Main Judgment and revocation of the Patent by the TBA, but thereafter. At that point, Mylan had won. It was not that Smith J’s Main Judgment was “wrong”, it had simply been trumped by the TBA decision and he had amended his orders accordingly.

Therefore, Meade J concluded that Mylan could not appeal on validity at the relevant time. Consequently, if it could not appeal, there could be no issue estoppel.

Abuse of process

Meade J disagreed with Mylan’s arguments that:

  1. Neurim’s withdrawal of the TBA appeal was to avoid the effect of a written decision; Meade J said that this was factually correct but did not make the application to amend the Divisional in UK proceedings an abuse; if Neurim had let the appeal go to a written decision it would still have been able to seek the Divisional; whether the Divisional results in a valid patent will be capable of being contested in the EPO in any event;
  2. Neurim, by withdrawing its appeal in the TBA, had accepted that the Patent was invalid; Meade J disagreed, as Neurim had always been clear that it believed the Patent to be valid, and had proved as much before Smith J; its withdrawal of the appeal was a practical response to the situation it faced, not an acceptance of the invalidity of the underlying right; and
  3. “[i]n the premises” it was an abuse to put the Divisional into materially the same form as the Patent; since the “premises” had been rejected, Meade J said that this could not help Mylan.

Further, in the absence of a pleaded allegation by Mylan that the course of conduct of using divisionals as backup and bringing a second action was an abuse, Meade J did not think that the precise form of the claims of a divisional and their degree of similarity to that of the patent could give rise to one.

In any case, looking at the situation in the round, Mylan’s argument was unconvincing, and it was not being harassed in the sense described in Johnson v Gore Wood [2002] 2 AC 1:

  1. Mylan had long known that Neurim was prosecuting divisional applications and would be likely to use them as backups if necessary;
  2. having litigation uncertainty was inherent to patent proceedings under the EPC when divisionals are in play;
  3. given the decision on issue estoppel, the burden on Mylan of allowing Neurim to make the amendment application, and hence this action to continue, was only of Mylan trying to appeal the decision of Smith J, and running that appeal if permission was given; and
  4. Mylan’s abuse argument depended on the claims of the Divisional being essentially identical to those of the Patent; therefore, Mylan’s argument could not run if Neurim had put forward claims for the Divisional which were different from the Patent, but which addressed the lay-patient argument, giving Neurim another opportunity to succeed in the UK, but requiring a fuller trial and a greater burden on the parties.

Meade J therefore rejected Mylan’s abuse argument.

Competition issues

Meade J found that, overall, the competition issues were not suitable to be determined as preliminary issues, as the legal questions were very complicated and at the outer edges of developing areas in this field. Further, the definition of the issues had not been properly settled and there was not enough evidence before Meade J at this point to decide the issues. Finally, for Meade J to deal with complex legal submissions would have appreciably delayed his judgment and there was a need for speed in the light of the commercial situation. (Neurim Pharmaceuticals (1991) Ltd v Generics (UK) Ltd t/a Viatris [2022] EWHC 109 (Pat) (24 January 2022) — to read the judgment in full, click here).