COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION (PATENTS COURT)
The Hon Mr Justice Warren
HC 06 C02676
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE JACOB
LORD JUSTICE RIMER
| Actavis UK Limited
|- and -
Merck & Co Inc
appeared for Merck & Co Inc
Antony Watson QC and Thomas Hinchliffe (instructed by Messrs Linklaters)
appeared for Merck & Co Inc
Simon Thorley QC and Piers Acland (instructed by Messrs Bird & Bird)
appeared for Actavis UK Limited
Hearing dates: 4/5/6 March 2008
Crown Copyright ©
Lord Justice Jacob (giving the judgment of the court):
The use of [finasteride] for the preparation of a medicament for oral administration useful for the treatment of androgenic alopecia in a person and wherein the dosage amount is about 0.05 to 1.0 mg.
The dosage amount referred to is per day (see the judgment at ). Androgenic alopecia ("aa") is a type of baldness occurring in men (male pattern baldness, "MPB") and women.
 Androgens are a class of steroid hormones which are responsible for the development and maintenance of masculine characteristics eg male sexual organs, deepened voice, facial hair, baldness and so on. Testosterone is the major circulating androgen in men. In certain tissues, the principal mediator of androgenic activity is not testosterone but one of its metabolites, dihydrotestosterone ("DHT"). Testosterone is converted to DHT by the action of a membrane bound enzyme called 5a-reductase. This enzyme is present in a number of adult tissues including prostate, liver and skin.
 It is now accepted science that there are two forms ("isozymes") of 5a-reductase, which I shall refer to simply as "type 1" and "type 2". Isozymes are variants of the same enzyme. They differ in amino acid sequence but catalyse the same reaction in this case the conversion of testosterone to DHT. .
 Finasteride is one of a class of compounds known as a 4-azasteroids. It is a strong inhibitor of type 2 but not of type 1. It is now known that type 2 is the relevant isozyme in relation to BPH; finasteride is therefore a suitable treatment for BPH, inhibiting reduction of testosterone to DHT in the prostate.
Art 52 Patentable Inventions
(1) European patents shall be granted for any inventions which are susceptible of industrial application, which are new and which involve an inventive step.
(4) Methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practised on the human or animal body shall not be regarded as inventions which are susceptible of industrial application within the meaning of paragraph 1. This provision shall not apply to products, in particular substances or compositions, for use in any of these methods.
Art 54 Novelty
(1) An invention shall be considered to be new if it does not form part of the state of the art.
(5) The provisions of paragraphs 1 to 4 shall not exclude the patentability of any substance or composition, comprised in the state of the art, for use in a method referred to in Art 52(4), provided that its use for any method referred to in that paragraph is not comprised in the state of the art.
Art 56 Inventive Step
An invention shall be considered as involving an inventive step if, having regard to the state of the art, it is not obvious to a person skilled in the art
Art 57 Industrial application
An invention shall be considered as susceptible of industrial application if it can be made or used in any kind of industry, including agriculture.
Swiss form claims in general
 It is legitimate in principle to allow claims directed to the use of a substance or composition for the manufacture of a medicament for a specified new and inventive therapeutic application, even in a case where the process of manufacture as such does not differ from known processes using the same active ingredient."
(a) Finasteride as a substance is not novel;
(b) Nor is its use as a medicine (for treating BPH);
(c) So its use for the manufacture of a medicament for use as a medicine lacks novelty;
(d) Moreover finasteride had been proposed for treating aa, but with a daily dosage of 5mg or more (see below);
(e) So its use for the manufacture of a medicament for treating aa also lacks novelty.
(f) Novelty cannot be saved by specifying a particular dosage regime even if that dosage was not proposed in the prior art.
(g) Even if that is wrong, this court is bound under the English rules as to precedent by its prior decision in BMS to hold that the patent lacks novelty and/or is in substance one for a method of treatment of the human and thus, by virtue of Art. 52(4) is not to be regarded as susceptible of industrial application.
(i) Points (a) to (e) are accepted.
(ii) But (f) is wrong and contrary both to Eisai and EPO Board of Appeal authority subsequent to BMS and this court should follow that,
(iii) There is no ratio decidendi of BMS, or at least not one clear enough, which precludes this court from so doing.
(iv) Even if there is such a ratio, this court should recognise (and apply) a new exception to the general rules of precedent for this court, rules adopted long ago and summarised in Young v Bristol Aeroplane Company  KB 718.
Swiss form claims in more detail
After Jeyes' patent [i.e. the prior art] it was open to all the world to make and sell such a material. The idea of using an old material for an entirely new purpose, not being analogous to purposes for which it has theretofore been used [i.e."obvious"] , may be good subject matter, but such an idea, however ingenious, can hardly justify a claim for the material itself.
So you could patent an inventive new process using the new material, but not the material "for carrying out the process".
19. having regard to the statement of practice of the Swiss Federal Intellectual Property Office, the Enlarged Board has also given careful consideration to the possibility of protecting second (and subsequent) medical indications by means of a claim directed to the use of a substance or composition for the manufacture of a medicament for a specified (new) therapeutic application. Such claims do not conflict with Article 52(4) EPC or Article 57 EPC but there may be a problem concerning the novelty of the invention.
 Where the medicament itself is novel in the sense of having novel technical features e.g. a new formulation, dosage or synergistic combination the ordinary requirements of Article 54(1) to (4) EPC will be met and there will in principle be no difficulty over the question of novelty, whether the claim be directed to the medicament per se or to the use of the active ingredient to prepare the medicament.
The critical case is, however, that in which the medicament resulting from the claimed use is not in any way different from a known medicament.
Article 52(1) EPC expresses a general principle of patentability for inventions which are industrially applicable, new and inventive and it is clear that in all fields of industrial activity other than those of making products for use in surgery, therapy and diagnostic methods, a new use for a known product can be fully protected as such by claims directed to that use.
Article 54(5) EPC provides an exception to this general rule, however, so far as the first use of medicaments is concerned, in respect of which the normal type of use claim is prohibited by Article 52(4) EPC. In effect, in this case the required novelty for the medicament which forms the subject-matter of the claim is derived from the new pharmaceutical use.
It is this passage which is crucial. Art 54(5) is an exception to the general rule about novelty. It is saying that even if a substance is not novel in the absolute sense, it is to be treated as novel as regards a first use as a medicament.
It seems justifiable by analogy to derive the novelty for the process which forms the subject-matter of the type of use claim now being considered [i.e. Swiss form] from the new therapeutic use of the medicament and this irrespective of the fact whether any pharmaceutical use of the medicament was already known or not.
This is saying that the novelty of the process (i.e. use of X in manufacture of a medicament for Y) comes from the "new therapeutic use."
 The intention of Article 52(4) EPC is only to free from restraint non-commercial and non-industrial medical and veterinary activities.
So the method of treatment exception to patentability should be construed restrictively. When Mr Thorley was asked what policy reason there should be for on the one hand allowing Swiss form second medical treatment claims for different diseases but not allowing them for the same disease, the only answer he could devise was that the treatment might cost more. Why, he said, should you have to pay more for a 1mg pill than for an out of patent 5mg pill? The reason is obvious the 1mg pill has only come about because of expensive unpredictable research. Patented things often cost more. And the reason is because the monopoly has been given as result of the research which led to it. Research into new and better dosage regimes is clearly desirable and there is simply no policy reason why, if a novel non-obvious regime is invented, there should not be an appropriate patent reward. Such a reward cannot extend to covering the actual treatment but a Swiss form claim which specifies the new, inventive, regime is entirely in accordance with policy.
57. It is arguable that there is no logical or reasonable distinction between [Mobil] and the decision in Eisai. After all it is the novel (second medical use) purpose of the product of manufacture of the Swiss form claim which is said to create novelty. The product and its method of manufacture are old. So to try and to steer a course between accepting Eisai and yet holding Mobil wrong is at best going to involve more Byzantine logic.
 . the Board interprets decision G 5/83 [Eisai] allowing Swiss form claims directed to the use of a composition for manufacture of a medicament for a specified new and inventive therapeutic application, where the novelty of the application might lie only in the dose to be used or the manner of application. This Board allowed such a claim, where only the manner of application was new, already eleven years ago in T 0051/93 of 8 June 1994. The discussion in decision G 0005/83 concerning further medical indications did indeed refer to use for treating a new illness. But the Board regards this significant only of the fact that most further medical use claims will refer to a new illness, as in that case novelty and inventive step are more likely to exist than in the case of a minor modification of the treatment known for an existing illness. The logic of decision G 0005/83 allowing claims to further medical uses of known compositions, seems equally applicable to any use of such known composition for a new and inventive treatment which cannot be claimed as such because of Article 54(4) EPC first sentence.
 Some of the respondents have argued that these features should not be taken into account for the assessment of novelty and inventive step since they relate to medical methods excluded according to Article 52(4) EPC or do not constitute true distinguishing technical features.
 The board considers that the above arguments raise serious legal questions to which the case law of the boards of appeal has not yet provided a completely uniform response. It furthermore notes the auxiliary request of the respondents to refer questions of law with respect to the interpretation of Article 52(4) EPC to the Enlarged Board of Appeal. However, for the purposes of the present decision, this issue need not be addressed since even if it were to be decided in favour of the appellant, the appeal still has to be dismissed for lack of inventive activity of the claimed subject-matter (see points 8-43 below). ..
 The decisive question to be answered in accordance with [Eisai] is then whether the intended method of treatment for which the medicament was manufactured was novel and inventive and not any further considerations under rt. 52(4) (cf. [Genentech]).
And in EXOXEMIS/Haloperoxide, T292/04 the Board at  referred to  of Genentech ("use of a composition for making a medicament .. for a specified therapy as a further medical indication" patentable subject to novelty and obviousness") with clear acceptance that it was right. Another case in which Genentech was referred to with approval was PRAECIS/GnRH Antagonists T0380/05 at  although the actual decision was not concerned with a novel dosage regime. Genentech was followed by the Boards of Appeal in ARS/Infertility T1074/06 (Swiss-form claim whose novelty depended on the dosage regime being specified in the claim see ), and SCHERING/Combination therapy HCV T1399/04 see .
Use of DCL, or a pharmaceutically acceptable salt thereof, for the manufacture of a medicament for use in treating allergic rhinitis in a human, said medicament to be administered in an amount sufficient to provide daily dose of 0.2 mg to 1 mg of DCL or pharmaceutically acceptable salt thereof to a human, [our emphasis].
Novelty in this claim came from (a) the selection of allergic rhinitis, where the prior art disclosed only general allergies; and (b) the "to be administered in an amount sufficient to provide daily dose of 0.2 mg to 1 mg of DCL" feature. The Board said:
... the claimed use in claim 1 of the second auxiliary request additionally differs from the disclosure of citation (1) by the recommended daily dose of 0.2 mg to 1 mg of DCL or a pharmaceutically acceptable salt thereof. Novelty is therefore beyond any doubt [our emphasis].
116. The EPO has generally taken a more liberal view of what constitutes a "new therapeutic use". Claims have been accepted in which the prescription regime of the treatment was specified (T 570/92 BAYER (unpublished)) and where the distinguishing feature was mode of administration (T 51/93 SERONO (unpublished)). Indeed, in the recent decision T 1020/03 (T 1020/03 GENENTECH/Method of administration of IGF-OJEPO 2007, 204 to any new and inventive use falling within Article 52(4) (equivalent to Section 4(2)) the claim in question was distinguished by the precise dosage regime. Following this decision, the EPO have held that claims drafted in the Swiss format are not objectionable under Article 52(4), regardless of what is defined as the new medical use. However, in view of the binding decision of the Court of Appeal in the Taxol case, such claims cannot be accepted in a UK patent application.
The more restrictive view taken by the UK Office is a result of its interpretation of the Court of Appeal decision in BMS (also known as "the taxol" case).
Use of carvedilol for the manufacture of a medicament for decreasing mortality resulting from congestive heart failure in human patients in conjunction with an angiotensin-converting enzyme inhibitor, a diuretic and a digitalis glycoside, with said medicament being formulated for administration purposes at an initial dose containing either 3.125mg or 6.25mg carvedilol per day for a period of 7-28 days, followed by dose increases in bi-weekly intervals up to a maximum dose of 2 x 25 mg carvedilol per day."
In relation to this claim the court said:
51 1. However, there are no reservations against the admissibility of the patent claims according to subsidiary motion 2, which provides under both patent claims that the medication containing carvedilol is formulated in certain doses for administration over certain periods. Accordingly, protection is to be accorded to the use of a chemical substance in the therapeutic treatment off the human body, such substance being formulated to suit such use for instance, by means of suitable packaging, for the tablet sizes, an inscription on the package or package inserts. Pursuant to this Court's case law, such use of a chemical substance is not excluded from patent protection under Sec. 5(1) German Patent Act (basically, BGHZ 88, 209, 215 Hydropyridine). For Art. 52(4) EPC, which corresponds verbatim with Sec. 5(2)(1) German Patent Act, the same is true. The patent claims of subsidiary motion 2 are not opposed by the ineligibility for patent protection of procedures for the surgical and therapeutic treatment of humans or animals.
The court went on to hold the claim obvious on the grounds that the dosage regime would have been arrived at by routine investigation. As we have observed already dosage requirements will often be obvious and this case is a typical example of that. Mr Thorley tried to persuade us by reference to other parts of the decision that the position was not clear in Germany, but the passage we have quoted is clear.
the United Kingdom Courts must have regard to the decisions of the European Patent Office ("EPO") on the construction of the EPC. These decisions are not strictly binding upon courts in the United Kingdom but they are of great persuasive authority; first, because they are decisions of expert courts (the Boards of Appeal and Enlarged Board of Appeal of the EPO) involved daily in the administration of the EPC and secondly, because it would be highly undesirable for the provisions of the EPC to be construed differently in the EPO from the way they are interpreted in the national courts of a Contracting State.
The Act had a further purpose. The Act did not merely enact the statutory provisions necessary for the provisions of the Convention regarding European patents to take effect in this country. The Act also had a harmonisation objective. On the signature of the Convention for the European Patent for the Common Market, referred to in the Act as the Community Patent Convention, and not to be confused with the European Patent Convention, the governments of the member states of the European Community resolved to adjust their laws relating to patents so as to bring those laws into conformity with the corresponding provisions in the European Patent Convention and other conventions. Accordingly, when construing and applying section l(l) and (2) of the Act, the court must have regard to the legislative intention with which those subsections were framed, namely, that they were framed so as to have, as nearly as practicable, the same effect in the United Kingdom as the corresponding provisions in Article 52(1), (2) and (3) of the European Patent Convention have in the territories in which that Convention applies. That is the effect of section 130(7) in the present case.
From this brief reference to the European Patent Convention one point which emerges is that it is of the utmost importance that the interpretation given to section l of the Act by the courts in the United Kingdom, and the interpretation given to Article 52 of the European Patent Convention by the European Patent office, should be the same. The intention of Parliament was that there should be uniformity in this regard. What is more, any substantial divergence would be disastrous. It would be absurd if, on an issue of patentability, a patent application should suffer a different fate according to whether it was made in the United Kingdom under the Act or was made in Munich for a European patent (UK) under the Convention. Likewise in respect of opposition proceedings.
Now, you cannot have 34 [the current number of EPC members] ships steering in the same convoy unless there is something like a commodore. That is why Mustill LJ in Genentech Inc's Patent  RPC 147, 266 referred to the Board of Appeal of the European Patent Office as "the central decision making body of the European patent system" [which] must be hearkened to with particular attention".
The contentions about BMS
What did BMS decide?
(1) Use of taxol and sufficient medications to prevent severe anaphylactic reactions
(2) For manufacturing a medicament for simultaneous, separate or sequential application
(3) For the administration of from 135mg/m2 up to 175mg/m2 taxol over a period of about 3 hours or less
(4) As a means for treating cancer and
(5) Simultaneously reducing neutropenia.
All but element (5) were specifically disclosed in Winograd. And if you did what he had proposed you would get the benefit of element (5) as an unexpected bonus.
 Nor do I accept that the claim amounts to merely a method of treatment. It is to the manufacture of the medicines to be used in that treatment. I am reinforced in that view by the consideration that the Art. 54(4) provision about methods of treatment is an exception to patentability and as an exception should be construed narrowly. As the Board of Appeal in Harvard/Oncomouse (T0015/90 OJ EPO  476) said, speaking of another exception:
"Art. 53(b) is an exception, for certain kinds of inventions, to the general rule under Art. 52(1) that European patents 'shall be' granted for all inventions which are susceptible of industrial application, which are new and which involve an inventive step. Any such exception must, as repeatedly pointed out by the Boards of Appeal, be narrowly constructed (cf. in particular T320/87, point 6 OJ EPO 1990 76)."
 A like approach is indicated in Plant Genetic Systems/plant cells. (T0356/93 OJ EPO  545) There is also the limited purpose of the exception to be considered. It is not so broad as to stop doctors using whatever they feel they need to treat patients. If that were the purpose then one would not allow patents for medicines or medical implements at all. The purpose of the limitation is much narrower, merely to keep patent law from interfering directly with what the doctor actually does to the patient. Patent monopolies are permitted to control what he administers to, or the implements he uses on, the patient. The thinking behind the exception is not particularly rational: if one accepts that a patent monopoly is a fair price to pay for the extra research incentive, then there is no reason to suppose that that would not apply also to methods of treatment. It is noteworthy that in the US any such exception has gone, and yet no-one, so far as I know, suggests that its removal has caused any trouble.
 The second submission [i.e. that there was no disclosure in the prior art of the less neutropenia effect] depends upon the discovery that less neutropenia occurred during the three-hour infusion than during a 24-hour infusion. That was not mentioned in the lecture, but it was, as I have already pointed out, a discovery not a second therapeutic use as considered in Eisai. Further it is an inevitable consequence of the three-hour, 135mg/m2 infusion, described in the lecture and as such cannot impart novelty to the claim.
So Aldous LJ did not decide that for novelty, a Swiss form claim must specify a second medical use in the sense of a distinct and different medical condition.
 Article 52(4) was not intended to exclude pharmaceutical preparations from being patentable. That has the result that restrictions can be imposed by patentees upon treatment. The section has the limited purpose of ensuring that the actual use, by practitioners, of methods of medical treatment when treating patients should not be subject to restraint or restriction by patent monopolies. The difficulty is to decide whether the restraint concerns a method of treatment as opposed to what is available for treatment.
 In my view the form of claim 1 does not disguise its effect. The invention was the discovery that by changing the treatment from a 24-hour infusion to three hours a similar effect was obtained with less neutropenia. That was a discovery that a change in the method of treatment provided the result. The claim is an unsuccessful attempt to monopolise the new method of treatment by drafting it along the lines of the Swiss form claim. When analysed it is directed step-by-step to the treatment. The premedication is chosen by the doctor, and administered prior to the taxol according to the directions of the doctor. The amount of taxol is selected by the doctor as is the time of administration. The actual medicament that is said to be suitable for treatment is produced in the patient under supervision of the medical team. It is not part of a manufacture. In my view Mr Thorley is correct. The invention made and claimed was a method of treatment precluded from patentability by section 4(2) (Article 52(4)). That is emphasised by the way the allegations of infringement were pleaded [i.e. that the carrying out of clinical trials infringed].
 This may seem to be merely a roundabout way of seeking to patent a medical process, and one that only doubtfully gives proper weight to the first sentence of Article 52(4). It is not, however, in my view open to us to use such doubts as a ground for not applying Eisai at all. That is because, although the observations of the House of Lords in Merrell Dow  RPC 76 at p. 82, line 25 as to the undesirability of departing from decisions of the EPO may strictly speaking not have been part of the ratio of that case, they are considered and reasoned guidance of a unanimous House, which I do not think we are free to depart from.
This is noteworthy because it follows that, if he did go on to lay down any principle inconsistent with Eisai, he surely would not have done so if he had known of the interpretation of that case now followed in the EPO.
 It is important in this enquiry to remember the emphasis placed by the Board on justification by analogy from cases of first medical use. Recognition of first medical use as a subject of patentability necessarily entails the use of the substance for a new and completely different purposes from that in relation to which it is already known. If the Board's analogy is to hold, therefore, the relationship between the first and the second medical use must be of the same nature: the second medical use must be for an end-purpose distinctively different from the first, albeit also medical, purpose for which the substance was used. That not only follows from the structure of the Board's argument, but also from the need to respect the exclusion of methods for treatment from patentability. If the novelty can lie in the nature of use, rather than in the end-result at which that use aims, then it is indeed the method of treatment on which patentability rests.
And, after further reference to Eisai, he went on:
85 .. the very experienced judges of the Patents Court in Wyeth expressed the question as involving "the allowability of claims directed to an invention based on the discovery of a second (or subsequent) pharmaceutical use of a known substance or composition, already known for a particular medical use (or particular medical uses), the new use being unconnected with the previously known use or uses."  R.P.C. 545 at p. 556, line 24, emphasis supplied".
86 That was equally the view of the Court of Appeal of the Hague in Bristol-Myers Squibb v. Yew Tree  ENPR 26 , a case concerned with the patent in suit in our case, which, .. described a second medical indication as
"an application of a substance for a different therapeutic purpose (for example to fight another illness or for prevention instead of cure)".
87 The novelty of the second medical use, on which its patentability rests, must therefore be found in applications that are new in the terms used in Wyeth and Yew Tree. The novelty cannot lie in the method of use, but in the new therapeutic purpose for which the substance is used.
So there must be a therapeutic application or purpose which is not only inventive but new.
That is not clearly saying there has to be a treatment of a different disease. It is the application which has to be new and inventive and a novel dosage regime which is inventive would seem to satisfy Holman J's test.
 In relation to the patent in suit, however, the manufacture claimed is not the use of the active ingredient, paclitaxel, in the manufacture of taxol; but the mixing in the hospital pharmacy of taxol and other ingredients to produce the medium that is injected into the patient. It is that latter process that is said to be susceptible of industrial application, under Article 52(1) of the EPC. I am afraid that I found that assertion to be, at best, artificial, and one that I do not think would have been made were it not for the need to demonstrate that the invention is not of a method of treatment. We were told that the mixing process could be, and in some cases was, sub-contracted outside the hospital; but that does not prevent it from being a long way away from anything that in normal parlance would be considered an industrial application; or, for that matter, as under the old English law, "manufacture". As my Lord has described, the mixing is of amounts and types of premedication, and of amounts of taxol, all determined by the doctor in relation to the specific patient. It is in reality not a self-standing operation, but subordinate and incidental to the doctor's treatment of the patient. True it is that, in treating the patient, the doctor will, or at least may, administer the drugs according to the guidance contained in the patent. But that merely underlines that what the patent teaches is not how to manufacture a drug for use in the treatment of the patient, which would be in form at least a Swiss form claim, but how to treat the patient: which is the teaching that the Swiss form claim is designed to avoid.
The Judge's conclusions
The effect of BMS
What if there is no or only an obscure ratio?
Now, when any tribunal is bound by the judgment of another Court, either superior or co-ordinate, it is, of course, bound by the judgment itself. And if from the opinions delivered it is clear - as is the case in most instances - what the ratio decidendi was which led to the judgment, then that ratio decidendi is also binding. But if it is not clear, then I do not think it is part of the tribunal's duty to spell out with great difficulty a ratio decidendi in order to be bound by it.
I would certainly not lightly disregard or depart from any ratio decidendi of this House. But there are at least three classes of case where I think we are entitled to question or limit it: first, where it is obscure, secondly, where the decision itself is out of line with other authorities or established principles, and thirdly, where it is much wider than was necessary for the decision so that it becomes a question of how far it is proper to distinguish the earlier decision.
He was speaking of the position of a House of Lords considering an earlier House of Lords decision. By parity of reasoning the same must also apply when the Court of Appeal considers an earlier Court of Appeal decision.
Should there be a further exception to the rule in Young v Bristol Aeroplane?
On a careful examination of the whole matter we have come to the clear conclusion that this court is bound to follow previous decisions of its own as well as those of courts of co-ordinate jurisdiction. The only exceptions to this rule (two of them apparent only) are those already mentioned which for convenience we here summarize: (1.) The court is entitled and bound to decide which of two conflicting decisions of its own it will follow. (2.) The court is bound to refuse to follow a decision of its own which, though not expressly overruled, cannot, in its opinion, stand with a decision of the House of Lords (3.) The court is not bound to follow a decision of its own if it is satisfied that the decision was given per incuriam.
The appeal is from a unanimous decision of the Court of Appeal. That court was specially constituted to hear the appellant's appeal from the judgment given against him by Mr. Commissioner Laski K.C., at Manchester Assizes. Besides Lord Greene M.R., who delivered the considered judgment of the whole court, Scott, MacKinnon, Luxmoore, Goddard and du Parcq L.JJ. were parties to the decision. One of the conclusions reached in the judgment of the Master of the Rolls, with which I agree, is that if the Court of Appeal, when sitting in one of its divisions, has in a previous case pronounced on a point of law which necessarily covers a later case coming before the court, the previous decision must be followed (unless, of course, it was given per incuriam, or unless the House of Lords has in the meantime decided that the law is otherwise), and that this application of the rules governing the use of precedents binds the full Court of Appeal no less than a division of the court as usually constituted.
The rule was re-affirmed in Davis v Johnson  AC 264 (see per Lord Diplock at p.323, Viscount Dilhorne at p.336, Lord Scarman at p.349) where it had been suggested that a Court of Appeal of five judges could overrule a previous decision of a three-judge panel.
In an appellate court of last resort a balance must be struck between the need on the one side for the legal certainty resulting from the binding effect of previous decisions, and, on the other side the avoidance of undue restriction on the proper development of the law. In the case of an intermediate appellate court, however, the second desideratum can be taken care of by appeal to a superior appellate court, if reasonable means of access to it are available; while the risk to the first desideratum, legal certainty, if the court is not bound by its own previous decision grows ever greater with increasing membership and the number of three-judge divisions in which it sits as the arithmetic which I have earlier mentioned shows. So the balance does not lie in the same place as in the case of a court of last resort. (p.326)
The point he makes about numbers has some significance here.
There are now as many as 17 Lords Justices in the Court of Appeal, and I fear that if stare decisis disappears from that court there is a real risk that there might be a plethora of conflicting decisions which would create a state of irremediable confusion and uncertainty in the law. This would do far more harm than the occasional unjust result which stare decisis sometimes produces but which can be remedied by an appeal to your Lordships' House.
Ever since 1944, this rule [i.e. that laid down in Young] has been applied by the Court of Appeal except in the instant case. Your Lordships' House on a number of occasions (once before and three times after 1944) has confirmed the application of the rule to decisions of the Court of Appeal, and has thereby greatly strengthened the rule. In the nature of things however, the point could never come before your Lordships' House for decision or form part of its ratio decidendi. This House decides every case that comes before it according to the law. If, as in the instant case, the Court of Appeal decides an appeal contrary to one of its previous decisions, this House, much as it may deprecate the Court of Appeal's departure from the rule, will nevertheless dismiss the appeal if it comes to the conclusion that the decision appealed against was right in law.
A system of law, common to the Contracting States, for the grant of patents for invention is established by this Convention.
And the Patents Act 1977 says in its preamble that it is an Act, inter alia, "to give effect to certain international treaties" one of which is the EPC. Section 91 says that "judicial notice shall be taken" of "any decision of, or expression of opinion by, the relevant convention court on any question arising under or in connection with the relevant convention." By s.137 the EPO Boards of Appeal are included within that definition. Section 91 uses practically the same language as s.3(2) of the European Communities Act 1972, but unlike that Act (which provides in s.3(1) that a question of law, if not referred, "shall be for determination as such in accordance with the principles laid down by and any relevant decision of the European Court or any Court attached thereto"), it does not require our courts to follow EPO decisions.
 As Lord Hailsham observed ( AC 1027, 1054), "in legal matters, some degree of certainty is at least as valuable a part of justice as perfection". That degree of certainty is best achieved by adhering, even in the Convention context, to our rules of precedent. It will of course be the duty of judges to review Convention arguments addressed to them, and if they consider a binding precedent to be, or possibly to be, inconsistent with Strasbourg authority, they may express their views and give leave to appeal, as the Court of Appeal did here. Leap-frog appeals may be appropriate. In this way, in my opinion, they discharge their duty under the 1998 Act. But they should follow the binding precedent, as again the Court of Appeal did here.
 There is a more fundamental reason for adhering to our domestic rule. The effective implementation of the Convention depends on constructive collaboration between the Strasbourg court and the national courts of member states. The Strasbourg court authoritatively expounds the interpretation of the rights embodied in the Convention and its protocols, as it must if the Convention is to be uniformly understood by all member states. But in its decisions on particular cases the Strasbourg court accords a margin of appreciation, often generous, to the decisions of national authorities and attaches much importance to the peculiar facts of the case. Thus it is for national authorities, including national courts particularly, to decide in the first instance how the principles expounded in Strasbourg should be applied in the special context of national legislation, law, practice and social and other conditions. It is by the decisions of national courts that the domestic standard must be initially set, and to those decisions the ordinary rules of precedent should apply.
 We are conscious of the need to place great weight on decisions of the Boards of Appeal, but, given the present state of conflict between the old (Vicom etc.) and the new (Hitachi etc.) approaches, quite apart from the fact that there are three distinct new approaches each to some extent in conflict with the other two, it would be premature to do so. If and when an Enlarged Board rules on the question, this Court may have to re-consider its approach. If such a ruling were to differ from what this court had previously decided a question would arise as to what should be done: should this court (and first instance courts) follow the previous rulings in our courts, leaving it to the House of Lords (or the future Supreme Court) to decide what to do or should the new ruling of the Enlarged Board be followed? It may be that the better course then would be for a decision of the first instance court to be "leapfrogged" to the House of Lords or Supreme Court. For the present we do not have to decide this.
(1) It had already been proposed to treat aa with finasteride but with a dosage of "5 to 2000 mg preferably from 5 to 200 mg" (Merck patent appn. 0285,382A published on 5th October 1988);
(2) It was obvious to follow this up and to investigate suitable doses. One would thereby learn that the lower dose of the patent in suit would do. Hence it was obvious to manufacture finasteride for the manufacture of a medicament for the treatment of aa with such lower doses.
(3) The Sudduth review paper of August 1993 ("Finasteride: The First 5a-Reductase Inhibitor") reinforces this. It says:DHT appears to be the active androgen in the balding scalp. Thus preventing DHT formation by inhibiting 5a-reducatase may be a viable treatment option
And (after summarising a report of some small scale experiments with balding monkeys in a paper by Diani):Results from this study suggest a role in reversing established baldness. It also appears that the combination of finasteride and minoxidil may be more effective than either agent alone. Development of a topical finasteride treatment would allow local treatment of baldness without significant systemic alteration of androgens. Clinical trials in humans are planned to establish the drug's role as either single-agent therapy or in combination with minoxidil in the treatment of MPB.
"Their (i.e. Types 1 and 2) distribution has not been determined in humans"
Once that state of ignorance went and one knew that there was no detectable Type 2 in the scalp, the basis of Sudduth's optimism would go with it.
"5a-reductase 1-type activity appears to be the major reductase activity in the scalp."
And Thigpen reported that Type 2 could not be detected in any region of the balding scalp in experiments which were quite sensitive.
(1) Professor Russell's factual evidence (he was also Merck's expert witness and a consultant to Merck before and at the time of the invention):50. Thigpen thus suggests that balding might be treated by a type 1 inhibitor while a type 2 inhibitor is unlikely to be effective in scalp skin (since the date suggested the type 2 isozyme is absent in the adult scalp). In discussions as a consultant to Merck, I therefore suggested to Dr Ed Scolnick around the time of publication of Thigpen that Merck should concentrate on developing a type 1 inhibitor for MPB."
(2) The fact that Professor Russell gave evidence in chief which was not directly challenged that even if one had a belief that there might be type 2 in the critical area of the follicle, he would have thought it highly unlikely that finasteride would cure baldness. Mr Thorley submitted that the Professor's answers to other questions undermined that evidence, but we do not see that is so and given it was the only oral evidence in chief it cried out for direct attack if a real attack could be made. In the end the position is this: the scalp had lots of Type 1 and finasteride would not tackle that.
(3) The fact that Dr Thornton (Actavis' expert) clearly accepted in several passages in the evidence that you would not use finasteride unless you thought that balding was caused by Type 2 (see transcript p.11310 and p.11410).
1. The use of nicotinic acid for the manufacture of a sustained release medicament for use in the treatment by oral administration once per day prior to sleep, of hyperlipidaemia.
The Board held on the facts that the particular method of administration (once per day prior to sleep) was novel and non-obvious. The question was whether this Swiss-form claim was patentable under the amended EPC ("EPC 2000").
5.2 Whether medicaments for use in methods of treatment by therapy where the only novel feature is a dosage regime are patentable under Articles 53(c) and 54(5) EPC 2000 is an important point of law, as the situation arises quite frequently. If patenting is to be excluded in such circumstances, then applicants need to know this for certain, so that in cases where the novel dosage regime can be practiced using a new physically different form of the medicament, information on this is included in the application on filing, so that at least for this patent protection can be obtained.
"1. Where it is already known to use a particular medicament to treat a particular illness, can this known medicament be patented under the provisions of Articles 53(c) and 54(5) EPC 2000 for use in a different, new and inventive treatment by therapy of the same illness?
2. If the answer is question 1 is yes, is such patenting also possible where the only novel feature of the treatment is a new and inventive dosage regime?
3. Are any special considerations applicable when interpreting and applying Articles 53(c) and 54(5) EPC 2000?"
(a) Kos Life Sciences involved a question under EPC 2000, whereas this case (as is common ground) falls to be decided under the unamended EPC. The last word on that was Genentech and the cases which followed it.
(b) The Board in Kos Life Sciences at no point cast doubt on Genentech. Moreover it is fairly clear that the Board considered that the law established in Genentech should be carried over into EPC 2000 hence its consideration in §5.1 of the travaux prιparatoires to EPC 2000. The real point of the reference was to get an early confirmation that EPC 2000 made no difference to that which had been established in Genentech.
(a) That this final judgment should be delivered;
(b) To allow for the remote possibility that the decision in Kos Life Sciences might affect this case, the time for leave to appeal to the House of Lords should be extended until 28 days after the Enlarged Board gives its decision in that case;
(c) That the form of order should be as proposed by Merck with the following variation. The injunction is to be suspended unless Merck gives a cross-undertaking in damages should Actavis ultimately prevail in this litigation
a) Merck's suggestion that a cross-undertaking in damages is unnecessary because Actavis are not threatening immediate infringement. Whether or not that is so would be a matter for any inquiry as to damages under the cross-undertaking. It is irrelevant here.
(b) Actavis' suggestion that the period for an interim payment of costs of £250,000 should be 28 days. It should be the usual 14 days. No reason is given for the longer period and besides, the result has been known for some time.
(c) Actavis' suggestion that the undertaking to repay the whole or part of the interim payment, if it proved to be too much or the liability reversed on appeal, should be a solicitor's undertaking. The sole reason offered is because Merck are foreign. That is not good enough given Merck's size and international standing. The suggestion is petty and should never have been made.
(d) There is no point in reserving the costs of the inquiry as to damages or account of profits as proposed by Actavis. We are not making any ruling about them.