Eli Lilly V Actavis: Landmark Ruling Makes Patents Harder to Design Around

September 01, 2017

In July 2017, the UK Supreme Court ruled on a patent dispute between Eli Lilly and Actavis, which can be read here. The ruling sets out a new test for distinguishing between what falls within the scope of a UK patent and what falls outside the scope. The new test departs from the previous ‘Kirin-Amgen’ test of 2004.

The new test is regarded as making it more difficult to ‘design around’ patents. This test changes the balance when patent claims do not definitely cover an infringement - the patent owner has additional power.

Introduction to patents

Patents are used to protect technical innovations that have the potential to give their owners a commercial advantage. A patent is a legal document that precisely defines a monopoly granted to the owner of the patent for an innovation. Such a monopoly could be used to prevent a competitor using the innovation even if they develop it independently without copying.

A patent includes one or more claims. A claim is a brief statement which defines the invention broadly, and which determines the scope of protection provided by the patent.

The best patents have patent claims that clearly cover an infringement. The best patents are less likely to be litigated if the result of litigation is clear from a plain reading of the claims.

The present decision concerns UK patents and European patents covering the UK.

Previous test

According to the previous Kirin-Amgen test, the courts assessed what was the monopoly with a primary focus on the meaning of the words chosen in the claims and an interpretation of what those words were intended to cover.

The new test

According to the new test, the words chosen are taken as an indication of the invention and protection broadened to cover certain ‘equivalents’ (also known as ‘variants’). The definition of an equivalent is something which is ‘not within the literal meaning of the relevant claim(s) of the patent’.

The test requires the equivalent to achieve substantially the same result in substantially the same way as the invention, i.e. the inventive concept revealed by the patent.

If the equivalent does appear to meet this requirement, there is certainly a chance that the equivalent could be covered by the patent. The test then moves on to determine if there is any reason why the equivalent should not be covered by the patent. This takes into account whether it was obvious that the equivalent works in substantially the same way, and takes into account whether the patent wording reflected an intention to stick to the literal meaning of the claims.

Advice if you have UK patent rights

Have a look at your existing patent portfolio and potential patents, and re-evaluate their importance.

If you previously thought a competitor had designed around your patent, could they now potentially infringe?

Is there scope for new licensing opportunities or for better royalties for existing licenses?

The test of equivalency can be complex and depends on the content of the patent and the history of the patent case, therefore it is very important to use professional patent attorneys to maximize patent value.

Our advisors at Swindell & Pearson would be happy to discuss with you the implications of the new judgement to your business and provide advice tailored to your commercial needs. If you have any questions concerning the case, please get in touch with your usual contact at Swindell & Pearson Ltd or Tim Gilbert at [email protected].

Swindell & Pearson is a UK based intellectual property firm that has been helping businesses and individuals obtain patent, trade mark, and design right protection for their ideas, innovations and brands for over 135 years. With its head office in Derby, the firm also has offices throughout the Midlands in Stoke, Wolverhampton, Stafford, Burton upon Trent, and in Sheffield. To find out how Swindell & Pearson can help you and your business with any patent, trade mark or design right matters please get in touch via [email protected] or by telephone on 01332 367 051.