Court of Appeal upholds English High Court decision on invalidity of dapagliflozin patent and SPCs

The Court of Appeal recently handed down a decision upholding the High Court decision invalidating AstraZeneca's patent and associated supplementary protection certificates (SPCs) relating to dapagliflozin for lack of plausibility and lack of technical contribution. AstraZeneca has applied for permission to appeal from the Supreme Court.

At the same time as the validity judgment was handed down, AstraZeneca sought an extension of the interim injunction previously granted by HHJ Hacon to cover the period until the permission to appeal decision was made by the Supreme Court. The Court of Appeal rejected this request on the same day, with full written reasons published later, but exercised its discretion to maintain the interim injunction for 14 days until 4pm on 30 July. The Court of Appeal decided to "hold the ring by preserving the status quo for a further 14 days to enable the Supreme Court to make whatever order it considers just and convenient."

AstraZeneca's patent and SPCs invalid

AstraZeneca appealed, with permission granted by Michael Tappin KC, on eight grounds. The Court of Appeal grouped these grounds into three categories: (1) grounds 1-3 concerning the judge's interpretation of the patent; (2) grounds 4-6 concerning the law on plausibility; and (3) grounds 7 and 8 concerning arbitrary selection. The hearing was expedited by the Court of Appeal.

The Court of Appeal upheld the first instance decision, agreeing that the patent did not make it plausible that dapagliflozin would be useful for treating diabetes. The patent contained assertions that dapagliflozin was an SGLT2 inhibitor useful for treating diabetes but did not provide experimental data or theoretical reasoning to support these assertions. The court found these assertions to be bare and unsupported, failing to meet the Warner-Lambert standard.

In his judgment, Lord Justice Arnold considered the case law of the Enlarged Board of Appeal in G2/21 and its application by the Boards of Appeal and European Patent Convention (EPC) contracting states.

Judge's interpretation of the patent

AstraZeneca argued that the judge had wrongly assessed the disclosure of the patent when he found that it did not disclose a verbal statement of an experimental result confirming the efficacy of dapagliflozin.

The Court of Appeal upheld the judge's interpretation, noting that the patent merely referenced an "inhibitor" being tested in an assay without any experimental results or reasoning to support the assertion that dapagliflozin was the inhibitor being tested. Lord Justice Arnold concluded that if the patent was intended to record a test that had been performed on dapagliflozin, then it should have said so.

AstraZeneca further contended that the judge wrongly assessed the disclosure of the patent when he found that it did not disclose enough to make it plausible that dapagliflozin would effectively treat diabetes. The Court of Appeal again agreed with the judge, finding that even if the skilled team had understood the disclosure of the patent to mean that dapagliflozin had been tested, the patent contained no information about: (i) the level of SGLT2 inhibitor potency obtained from dapagliflozin; (ii) its EC₅₀ value; or (iii) whether the (undisclosed) EC₅₀ value of dapagliflozin was sufficient to confer utility.

Plausibility

AstraZeneca advanced a number of grounds concerning the law of plausibility. First, it asserted that the test set by the Supreme Court in Warner-Lambert set too high a standard for plausibility and must be revisited in light of G2/21. This submission was rejected outright by the Court of Appeal as the decision in Warner-Lambert is binding on the court with respect to the sufficiency of medical use claims.

Second, AstraZeneca argued that claim 2 of the patent was to a product per se and, as such, the first instance judge should have assessed plausibility in the context of inventive step rather than insufficiency. AstraZeneca maintained that product claims should be assessed using the ab initio implausibility standard in accordance with G2/21.

Ab initio implausibility permits a technical effect to be claimed when it is not implausible in light of the technical content of the application read with the skilled person or team’s common general knowledge (that is, when there is no legitimate reason to doubt that the purported technical effect can be achieved).

AstraZeneca accepted that the Court of Appeal's decision in Sandoz v BMS was a prima facie binding authority against this argument. However, it invited the court to depart from Sandoz v BMS using the limited exception recognised in Actavis v Merck. This allows the court to decide what to do if its earlier interpretation of the EPC is later inconsistent with the settled interpretation of the European Patent Office's Boards of Appeal.

Lord Justice Arnold acknowledged the importance of adopting a harmonised approach to the interpretation of the EPC among contracting states. However, having considered the decision in G2/21, other Boards of Appeal and national court decisions, he concluded that there was no settled case law on how the test in G2/21 was to be interpreted and applied (save for an "emerging consensus" that speculative patents are not allowed – but there was little agreement on what constitutes a speculative patent). In his view, the case law of the courts in other EPC contracting states were "some way from unanimity" and did not provide justification for departing from Sandoz v BMS.

The Court of Appeal also held that even if AstraZeneca had prevailed in establishing that the correct standard to be applied was the ab initio implausibility standard, the disclosure of the patent did not even meet this standard. Based on the available evidence concerning the efficacy of structural analogues, the skilled team would have had a legitimate reason to doubt that dapagliflozin was an SGLT2 inhibitor.

Arbitrary selection

AstraZeneca further argued that the judge was wrong in his approach to the issue of arbitrary selection. Specifically, it maintained that where prior art merely asserts that a genus has an advantageous property without rendering it plausible, then a subsequent patent may make a technical contribution by making the same assertion in respect of a selected compound and rendering it plausible.

The court again upheld the judge's approach, finding that a selection from the prior-disclosed genus is only inventive if the selection makes a technical contribution because the selected compound has some useful property that means the selection is a technical advance.

Another interim injunction?

The Court of Appeal also had to decide whether to maintain the status quo and grant AstraZeneca an interim injunction to prevent the marketing of generic dapagliflozin products pending a potential appeal to the Supreme Court.

The Court of Appeal refused AstraZeneca's application, but did grant AstraZeneca a short-term interim injunction for 14 days to enable it to make an urgent application for permission to appeal to the Supreme Court. This decision was made to preserve the status quo and allow the Supreme Court to determine the appropriate course of action.

The Court of Appeal's main reason for refusing AstraZeneca's application was that it held that its appeal to the Supreme Court had no real prospect of success. It determined that there was no arguable point of law that could enable AstraZeneca to succeed.

The Court of Appeal further considered that even if AstraZeneca was able to persuade the Supreme Court to adopt the "ab initio implausibility" standard for assessing plausibility, it would still fail as the patent did not even satisfy that standard.

Although the court did not assess the adequacy of damages, it noted that the evidence provided was insufficiently granular to assess the likely effects of granting or refusing an injunction for such a short period. The court emphasised that preserving the status quo for a brief period was essential to allow the Supreme Court to make its decision.

Osborne Clarke comment

After the long running saga at the High Court, including multiple hearings about interim injunctions, the Court of Appeal's validity decision was eagerly anticipated.

The Court of Appeal has now laid down a further marker concerning plausibility in the UK in light of G2/21. It confirmed the ab initio plausibility standard, in UK law and explained that it did not see any grounds for AstraZeneca appealing the decision to the Supreme Court. It also warned future courts and tribunals about the risk of being swayed by hindsight knowledge if the technical effect has been subsequently proved by data missing from the patent specification.  

In light of the Court of Appeal's validity decision, it was unsurprising that it did not grant AstraZeneca a preliminary injunction pending the outcome of permission to appeal and, if granted, an appeal to the Supreme Court. However, the Court of Appeal did evidence its flexibility by permitting AstraZeneca a short discretionary injunction to allow the Supreme Court to determine the appropriate course of action. All eyes on the Supreme Court.