Why is ‘reasonable expectation of success’ so tricky? Predictability, empiricism and the effect of time

You can't keep a good Kat down, and that includes our guest Kats. Even once they step back from the team, their brains keep on ticking and they are super-sensitive to the sort of issues that make readers respond.  That's why the IPKat and Merpel are so pleased to welcome this surprise and quite out-of-the-blue guest post from recent guest Kat Suleman Ali, a man who has done some deeper thinking on the significance and future prospect of a patent litigation episode that is now too old for news but still fresh for full appreciation. This is what Suleman writes:

The Court of Appeal of England and Wales, in Teva UK Ltd & Another v Leo Pharma A/S [2015] EWCA Civ 779 (see Katpost here), has recently reversed a finding of obviousness by Mr Justice Birss at first instance ([2014] EWHC 3096 (Pat), see Katpost here). This is a tale of the evaluation of ‘expectation of success’ as part of inventive step analysis having gone wrong in a pharma setting. This post is about trying to discover why ‘expectation of success’ can be so difficult to judge.

Different types of ‘mistakes’ and why decisions need to be reversed

Fergus thought he was wrong ...
but he was mistaken

I think it is important to look carefully at mistakes in judgments on patent cases, and also the corresponding corrections in appeal. The apparent ‘mistake’ can unmask misunderstandings, contradictions, biases, subtleties and nuances that are normally hidden. The Courts of England and Wales have a long tradition of high quality judgments in patent cases, are able to understand the scientific and legal complexity and are able to derive and apply the appropriate legal tests. Our judges have many years of experience and are undoubtedly hard working and brilliant at what they do. Inventive step is not an obscure or rare legal concept. So, why did it go wrong here?

I would say that sometimes judgments that have to be reversed are not ‘mistakes’ in the sense of an error of judgment. They can instead be decisions that need to be reversed because they don’t fit into the wider aspects of how difficult we want it to be to get patents and the extent to which we want to follow the case law and practice of the European Patent Office (EPO).

Mr Justice Birss on the ‘judicial balance between predictability and discretion’

Here is a quote from a recent Katpost on what Mr Justice Birss said at the GFIP conference:

‘Mr Justice Birss was of the view that IP cases are characterized by three particular features: (i) many cases have an international aspect: (ii) often they are technologically complex; and (iii) IP cases tend to be high profile. Against this backdrop, he considered how to achieve a judicial balance between predictability and discretion in reaching the “right” result. He highlighted how this balancing can lead to decisions favouring one over the other by referring to the recent US Supreme Court case in the Kimble Spiderman dispute [on which see the AmeriKat here] and the UK Supreme Court decision in Virgin [noted by the IPKat here]. In Kimble [see here for this Kat’s view of that case], predictability was preferred, while in Virgin the court overruled 100 years of precedent. Mr Justice Birss suggested that it was difficult to reconcile these two results (although he also admonished the audience to remember that nothing said in his presentation in any manner would bind him when called up to render judgment in a given case).’

It is clear that Mr Justice Birss is well aware of the different tensions that are in place when deciding a case. Case law must deliver predictability, but individual decisions must be ‘right’.

Predictability as part of inventive step

In technology areas where the invention concerns the property or activity of a molecule then whether or not that property or activity can be used to ‘solve the problem’ can be an important part of the inventive step analysis. In the chemical, pharma and biotech sciences there are a lot of known general principles about molecules that seem to go wrong in specific situations, i.e. it should have cured the patient’s flu, but it was too toxic. As a consequence being able to predict whether something will work has become an important part of inventive step.

This is normally analysed as the level of ‘expectation of success’ that would be present. This concept is important in Europe (see here) and the US (see here). As an aside it is interesting to note that predictability of outcome was seen as important to obviousness analysis in the pivotal US Supreme Court decision KSR v Teleflex on inventive step (see here).

The empirical approach as one type of research

There are different types of invention:  there are ground breaking inventions, for example where new molecules are created for the first time or new phenomena are discovered; and there are incremental inventions, for example where we take a known molecule or phenomenon and apply it to a new situation. The patent system rewards all these inventions equally in terms of the length of the monopoly given. In the pharma field the initial ground breaking invention might be discovery of a drug that treats a particular condition, and then incremental inventions concern using the drug to treat other conditions, and then providing new formulations of the drug to treat those same conditions. 

Some types of research are clearly more difficult than others. If we take the example of empirical approaches, i.e. where tests are needed to discover whether drugs have the desired properties, certain inventions might be achieved using a known drug tested with a known assay. Others require the discovering of a new molecule and the setting up of a new assay. It is clear that with empirical approaches the ‘difficulty’ of testing might vary tremendously, even though predicting which drugs will pass the test may be equally difficult.

Should expectation of success always be part of inventive step analysis?

We’re at a point in case law where it is probably not acceptable to question whether expectation of success should be part of inventive step analysis in situations where an empirical approach is used. However, arguably the ‘ease’ of testing should impact the expectation of success test. Expectation of success is asked as a very specific question dependent on the factual situation, i.e. what was the expectation that this effect with this substance would have been achieved? In the relevant art it might be a routine and straightforward matter to test thousands of compounds from a library in a test which is easy to perform, and where no real thought is given to why each individual compound is tested, i.e. all available compounds are simply put through the test process. However this fact is not relevant to ‘expectation of success’ because the question is simply asked for the individual compound that passes the test.

In his decision Mr Justice Birss arrived at the concept of the ‘skilled formulator’ that would test compounds that they were not familiar with which might not have been expected to work. In such a situation one could argue that ‘expectation of success’ is not relevant because it would be the norm to test compounds with a very low expectation of success. However the Court of Appeal did not delve into such nuances and simply viewed ‘expectation of success’ needing to be looked at based on the predictability of whether that specific substance would be found to have that particular property.

Different types of pharma inventions

As mentioned above, there are pharma inventions that are based on new molecules where non-routine approaches will often need to be applied, and then there are incremental inventions that take known drugs and use them in new ways. Here Mr Justice Birss was faced with an incremental invention, which was based on a new formulation for a known drug, in this case a ‘combination’ product. He may have reflected on the fact the decision would be adding to the case law on how we judge such inventions and the circumstances in which a combination product would be inventive. He may have felt that combination product inventions are less difficult to achieve than other types of pharma inventions. However, there is also the unwritten rule that patents need to be granted for whatever is being developed in a particular technology field, and at the moment many combination products are being developed in the pharma field.

What is the inventive step test for pharma situations?

In the present case Mr Justice Birss noted:

‘In Conor v Angiotech [2008] UKHL 49, [2008] RPC 28 the House of Lords considered the issue of obviousness. There Lord Hoffmann (with whom the others of their Lordships agreed) approved the following statement of Kitchin J made in Generics v Lundbeck [2007] RPC 32:

"The question of obviousness must be considered on the facts of each case. The court must consider the weight to be attached to any particular factor in the light of all the relevant circumstances. These may include such matters as the motive to find a solution to the problem the patent addresses, the number and extent of the possible avenues of research, the effort involved in pursuing them and the expectation of success."’

While this is an all-embracing statement it does not provide much guidance about how all the different factors need to be applied to a specific situation. Further it is silent on the issues of not disrupting the predictability of case law, not coming to a finding that will render all patents in that field invalid, and keeping in line with EPO case law. The statement reduces inventive step to a case by case determination, which makes it harder for case law to develop, and is also a form of resignation that more specific guidance cannot be developed. I would say the fact that the Court of Appeal had to reverse a finding of inventive step in the present case is evidence of the failure of the present test.

Time and pharma situations 

Time is a funny thing ...

Time is a funny thing when it comes to pharma inventions because often a lot more comes to be known about the invention over the patent lifetime. At the point of examination before a Patent Office there will be a few relevant prior art documents and some data from experiments on cells or possibly even an animal model. Based on that inventive step and sufficiency will be examined, and a certain scope of claim will be granted that takes into account the extent to which one could expect different embodiments to work, i.e. the extent to which the technical effect can be extrapolated in view of scientific assumptions. Many years later (for example when litigation happens) the relevant compound will have been shown to be superior to thousands of others in many assays and in clinical trials. The compound may also have been discovered to be non-effective in certain classes of patients (such as children), apparently making the claim insufficient in respect of those patients. 

How does the Court look at all of this? Inevitably all that is known about the invention will be somehow taken into account when judging validity. However that means that there will no one date at which the invention is judged, and some very relevant facts will only come to light many years after the filing date. 

So how do we look at ‘expectation of success’? 

Coming back to the present case it must be recognised that it is possible to look at two different ‘expectations’ as part of the test. One can look at the situation before the test is performed and ask ‘do I expect this to pass the test?’, and one can also look at the situation where the drug has passed the test and ask ‘looking at the drug that passed the test, am I surprised that it passed the test?’ 

Having come to the conclusion that the skilled formulator was open to testing unfamiliar compounds Mr Justice Birss might have thought about expectation of success in this latter way. There is a certain logic to this. If it was inevitable that a drug was going to be tested in the art shouldn’t the expectation of success question reflect this, and be more about being surprised at the results of the test rather than being able to predict the outcome of the test. Even if Mr Justice Birss had thought along these lines he might not have wanted to explicitly say it as a lower court could not possibly change the expectation of success test in this way. That would be the job of the UK Supreme Court. 

So what did the Court of Appeal decision really do? 

The Court of Appeal decision reads like the correction a simple error. It does not question the appropriateness of the expectation of success test, and whether it needs to be asked differently in different situations. For now, it is accepted that expectation of success is about whether one could predict the results of the test. Whether or not the testing was routine and that thousands of compounds could be easily tested is not relevant. That decision does make things more certain and serves the pharma industry well where empirical testing is the basis of many inventions. I suspect Mr Justice Birss is ahead of his time in reconsidering expectation of success, but perhaps one day when as a UK Supreme Court judge he banishes this test from patent case law historians will look back in time to see that it all started with Teva v Leo.