England and Wales High Court (Patents Court) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		31 July 2007

MrJustice Kitchin :

Introduction

1. This application raises two points of some importance:

i) Whether it can be said that an EP(UK) patent ever existed in circumstances where the European Patent Bulletin published the mention of grant with a "GB" designation but where that designation was withdrawn before the date of publication.

ii) Where one person holds over another a threat of patent infringement proceedings on the basis of divisional applications, whether this court should necessarily refuse to allow the person so threatened to seek a determination of its rights.

Background

2. The patents and applications in issue relate to a drug called alendronate which is used for the treatment of bone wasting diseases, including osteoporosis. It was first marketed in 1995 and by July 1997 it was approved in a 10mg oral dosage form for daily administration.
3. In July 1998, Merck filed patent application number 98935752.0 claiming an earliest priority date of July 1997. It was granted in November 2001 as EP 0 998 292 ("292"). The key idea of the patent was to treat osteoporosis patients with 70mg of alendronate once a week rather than with 10mg once a day. The justification for the idea was that it produced fewer adverse gastrointestinal events and was more convenient for patients.
4. Shortly after the grant of the 292 patent, Arrow and two other generic drug companies commenced proceedings for the revocation of its "GB" designation – EP(UK) 292. In January 2003, Jacob J held EP(UK) 292 invalid for lack of novelty and inventive step and because it was, in substance, a method of treatment of the human body by therapy. In November 2003, the Court of Appeal upheld his decision. EP(UK) 292 was therefore revoked.
5. In the meantime, the 292 patent was also the subject of opposition by no fewer than seven opponents in the EPO. At oral proceedings in July 2004, the Opposition Division revoked the patent on the same grounds as Jacob J. In March 2006, the Technical Board of Appeal dismissed the appeal, finding the patent invalid for added matter. The Board therefore did not proceed to consider the additional arguments of obviousness and lack of novelty.
6. Since the revocation of the 292 patent, Arrow and other generic companies have marketed 70mg once weekly alendronate for the treatment of osteoporosis in many countries within Europe, with the result that these markets have now become largely generic and seen a considerable reduction in the cost of the drug. For example, the cost of a 4x70mg pack in the UK has fallen from about £15-18 to about £1–2. This has no doubt resulted in a significant loss of revenue to Merck (which sells alendronate under the brand name Fosamax) but it has provided an obvious benefit to the health services. Full details of sales by Arrow were provided to me in a confidential exhibit but it is no secret they have been very substantial indeed.
7. The decisions of the Court of Appeal and the TBA have not, however, brought the dispute between the parties to an end. In the course of prosecution of the 292 patent, Merck filed four divisional applications: 01201913.9 ("913.9"), 01201911.3 ("911.3"), 01201912.1 ("912.1") and 01201910.5 ("910.5"). All of these divisional applications were stayed during the 292 patent opposition proceedings but revived upon their conclusion.
8. As for 913.9, the Examining Division of the EPO has found that, despite the decisions of the Opposition Division, the Technical Board of Appeal and the UK courts in relation to the 292 patent, the subject matter it claims is inventive. It has therefore allowed the application to proceed to grant as EP 1 175 904 ("904"). Claim 1 is in "Swiss" form and directed to the use of alendronate to make a medicament for the treatment of osteoporosis in a human, where the medicament is orally administered as a unit dosage comprising about 70mg of alendronate, according to a continuous schedule having a once-weekly dosing interval. The key idea therefore appears to be essentially the same as that the subject of the 292 patent, namely give osteoporosis patients 70mg of alendronate once a week.
9. The Examining Division has apparently justified this change in position on the basis of a declaration by a Dr. Goldberg of Merck which is said to provide details of a statistically significant effect arising from administration of a 70mg alendronate tablet once a week, rather than a 10mg tablet once a day.
10. Despite its success in the earlier proceedings, Arrow therefore now finds itself facing a threat to its alendronate business from the 904 patent including, so it says, an EP (UK) patent ("EP (UK) 904") resulting from the inclusion in the original application of a "GB" designation, in circumstances I shall explain. But it also now faces the possibility of patents being granted upon the other divisional applications. In particular,

i) Application 911.3 which currently has a claim for: "A pharmaceutical composition comprising about 70mg of a bisphosphonate selected from alendronate, pharmaceutically acceptable salts thereof, and mixtures thereof, on an alendronic acid active weight basis".

ii) Application 912.1 which currently has a claim for: "A kit adapted for a continuous dosing schedule of a bisphosphonate adapted for once weekly dosing comprising a number of unit doses of a pharmaceutical composition wherein the unit doses comprise 70mg of alendronate, pharmaceutically acceptable salts thereof, or a mixture thereof, on an alendronic acid active weight basis".

iii) Application 910.5 which currently has a claim for: "Use of risedronate or a pharmaceutically acceptable salt thereof for the manufacture of an oral medicament for treating osteoporosis in a human in need thereof according to a continuous schedule having a once-weekly dosage interval".

11. Clearly 911.3 and 912.1 are of particular relevance but the claims of any of these applications can be amended during the course of prosecution and so it is quite possible that the claims of any patent granted on application 910.5 could also be directed to alendronate. Importantly, all of these applications include a "GB" designation. Merck estimates that 911.3 will not be ready for grant until the last quarter of this year, 910.5 until the middle to end of 2008 and 912.1 until the first quarter of 2008. Of course, they could take longer and it is possible that yet further divisional applications will emerge.
12. It is hardly surprising that Arrow has greeted these developments with dismay. It sought to "clear the way" by revoking the 292 patent and succeeded in doing so both in the UK and centrally in the EPO for all designated countries. It has since established a substantial market position selling once-weekly 70mg alendronate tablets for the treatment of osteoporosis. But it is now faced with the 904 patent and the possibility of the EPO granting yet further patents based upon the remaining divisional applications.
13. Moreover, it seems clear that Merck does intend to take action to enforce such patent rights it may obtain following this change in position by the EPO. In March of this year, and upon announcement of the decision by the EPO to grant the 904 patent, the Financial Times reported that Merck's "new patent on Fosamax" applies in 23 European countries, including key markets such as Germany (but not the UK), and will be valid until 2018. It also reported that Merck had "vowed to enforce its intellectual property rights on the drug" and continued:

"Stefan Oschmann, chief of Merck's drug business in Europe, said any generic once-weekly alendronate - the chemical name for Fosamax - being sold after yesterday's ruling could be subject to legal challenge seeking damages.

"We will file law suits," Mr Oschmann told the Financial Times. "We would enforce our rights where the patent is valid."

He also said Merck recognised that this could be a shock to the healthcare system for many national programmes, and that the company wanted to ensure "patients have access to the medicine".

"We have to work with the European authorities to try to find a constructive solution," Mr Oschmann said.

The new patent could assist Merck as it restructures and help restore profit growth."

14. Moreover, Merck has brought proceedings against Arrow group companies in Italy and Sweden and has issued infringement proceedings against other generic companies in Holland, Sweden, Italy and France. On any reckoning the situation is a most unusual one. Arrow thought it had established its right to make and sell its once-weekly 70mg alendronate tablets but now faces a real threat to its business.

Arrow's claim

15. On 30 March 2007, Arrow therefore commenced proceedings against Merck seeking the relief set out in the claim form. It is common ground that, at that date, the 904 patent had been granted and, in respect of the UK, EP(UK) 904 had been published in the EPO Bulletin and was entered on the register of UK patents. Further, the other divisional applications to which I have referred were pending before the EPO.
16. As originally formulated, the claim sought declarations of invalidity in respect of non UK patents. In particular, it sought a declaration that the 904 patent is and has at all times been invalid and a declaration that any other European patent for an alleged invention relating to osteoporosis medicaments for administration of about 70mg alendronate once-weekly would be invalid.
17. It is clear that this court could never have granted such declarations. They concern issues of validity which fall exclusively within the jurisdiction of other European courts in accordance with Article 22 (4) of Council Regulation (EC) No 44/2001, as Arrow has now accepted.
18. Arrow therefore no longer seeks relief in respect of anything other than the UK aspects of the 904 patent (that is to say, EP (UK) 904) and the remaining divisional applications. The relevant paragraphs of the claim as proposed to be amended seek the following relief:

1. A declaration that European Patent (UK) no. 1 175 904 ("the Patent") is and has at all material times been invalid;

2. An order that the Patent be revoked;

3. A declaration that any other European patent (UK) for an alleged invention relating to osteoporosis medicaments for administration of about 70mg alendronate once-weekly would be invalid;

4. A declaration that the Defendant is not entitled to rely on the Patent or any other European patent (UK) granted pursuant to applications nos. 01201911.3, 01201912.1 and 01201910.5 and any further divisional applications arising under them to prevent the Claimants from selling or supplying their 70 mg once-weekly alendronate products;"

19. In addition, the claim seeks remedies in respect of unjustified threats and costs and further or other relief, as to which no issue arises.
20. Paragraphs 1 and 2 of the claim address the invalidity of the EP (UK) 904. If this patent exists (and existed at the date of the claim form) then the court clearly has jurisdiction to determine its validity. Merck contends it does not because it withdrew the "GB" designation before the grant of the patent. Arrow contends that it does because the publication of the mention of grant included the "GB" designation. This is the first issue I have to decide.
21. Paragraphs 3 and 4 of the claim address the pending divisional applications. They raise the second issue I have to decide, namely whether this court has jurisdiction to grant such declarations and, if it does, whether I can be satisfied at this stage that the claim has no reasonable prospects of success such that I should disallow the amendment and strike the claim out.

The claim in respect of EP (UK) 904

22. Before turning to the legal framework I must provide a little more of the factual background.
23. Divisional application 913.9 was filed on 17 July 1998. Thereafter, as I have indicated, it was stayed pending the conclusion of the opposition to the 292 patent. Following the revocation of that patent, the Examining Division of the EPO turned its attention to this application once again. By letter of 13 June 2006, it expressed the view that the application contained inventive subject matter. On 18 December 2006, by written communication under Rule 51(4) EPC, it informed Merck it intended to grant a patent for all the designated Contracting States including "GB". By letter dated 22 December 2006, Merck requested immediate grant under Art.97(6) EPC, subject to a few comments on the form of the specification.
24. There followed a little correspondence relating to the detail of the specification after which, by letter of 1 March 2007, the EPO issued a decision to grant the 904 patent in respect of each of the designated Contracting States and so, inevitably, an EP (UK) patent. The letter stated the decision would take effect on the day on which the mention of grant was published in the European Patent Bulletin and that it would do so on 28 March 2007.
25. There matters stood until, on 22 March 2007, Merck wrote to the EPO withdrawing the "GB" designation. The letter was sent by fax and seen by an EPO officer on that day, as established by a witness statement of Mr Horgan, an Assistant Counsel in the European Patent Department of Merck, dated 6 July 2007. He explains that he telephoned Mr Nicolas Michaleczek, a formalities officer at the EPO, who told him that he could see from his computer records that another formalities officer had looked at the letter on 22 March 2007 and that it may have become publicly available on the EPO website EPOLINE from that date. He himself first looked at the letter on 28 March 2007 and this is likely to be the latest date on which it became publicly available.
26. On 4 April 2007, the EPO issued a brief communication confirming withdrawal of the "Contracting State GB" on 22 March 2007 and stating that the decision to grant dated 1 March 2007 would therefore become effective for the remaining Contracting States on 28 March 2007 and that a corrigendum would be published electronically about two months after publication of the mention of grant.
27. On 28 March 2007, the grant was indeed mentioned in the European Patent Bulletin but it included the "GB" designation. On that same day the Financial Times reported Merck's comments in the article to which I have referred in paragraph [13] of this judgment.
28. On 30 March 2007, Arrow issued this claim. On that date both the UK IPO website and the EPO website showed the 904 patent as being in force in the UK. It was not until 10 April 2007 that the UK IPO website noted the UK was no longer designated and on 9 May 2007 the EPO published a corrigendum, that is to say a corrected version of the specification not including "GB" as one of the designated Contracting States.

Legal framework

29. Any application for a European patent must include the designation of all Contracting Sates in which protection is sought. Art.79 EPC provides, so far as relevant:

"(1) The request for the grant of a European patent shall contain the designation of the Contracting State or States in which protection for the invention is desired.

….

(3) The designation of a Contracting State may be withdrawn at any time up to the grant of the European patent. Withdrawal of the designation of all the Contracting States shall be deemed to be a withdrawal of the European patent application. Designation fees shall not be refunded."

Importantly, a designation may be withdrawn at any time up to the grant of the European patent.

30. Grant or refusal of the application is addressed by Art.97 EPC:

"(2) If the Examining Division is of the opinion that the application and the invention to which it relates meet the requirements of this Convention, it shall decide to grant the European patent for the designated Contracting States provided that ….

…

(4) The decision to grant a European patent shall not take effect until the date on which the European Patent Bulletin mentions the grant. This mention shall be published at least two months after the start of the time limit referred to in paragraph 2(b)…."

31. So, if the Examining Division is of the opinion that the application and the invention to which it relates meet the requirements of the EPC then it must grant a European patent provided that various procedural requirements are satisfied. However, and significantly, the decision to grant does not take effect until the date on which the mention of the grant is published in the European Patent Bulletin.
32. Finally, I must refer to the rights conferred. Art.64(1) EPC reads:

"(1) A European patent shall, subject to the provisions of paragraph 2, confer on its proprietor from the date of publication of the mention of its grant, in each Contracting State in respect of which it is granted, the same rights as would be conferred by a national patent granted in that State."

And Art.2 EPC:

"(1) Patents granted by virtue of this Convention shall be called European patents.

(2) The European patent shall, in each of the Contracting States for which it is granted, have the effect of and be subject to the same conditions as a national patent granted by that State, unless otherwise provided in this Convention."

33. This is reflected in s.77 of the Patents Act 1977 ("the Act"), which states:

"(1) Subject to the provisions of this Act, a European patent (UK) shall, as from the publication of the mention of its grant in the European Patent Bulletin, be treated for the purposes of Parts I and III of this Act as if it were a patent under this Act granted in pursuance of an application made under this Act and as if notice of the grant of the patent had, on the date of that publication, been published under section 24 above in the journal; and-

(a) the proprietor of a European patent (UK) shall accordingly as respects the United Kingdom have the same rights and remedies, subject to the same conditions, as the proprietor of a patent under this Act;

(b) references in Parts I and III of this Act to a patent shall be construed accordingly.

…

(2) Subsection (1) above shall not affect the operation in relation to a European patent (UK) of any provisions of the European Patent Convention relating to the amendment or revocation of such a patent in proceedings before the European Patent Office."

Did EP (UK) 904 exist at the date of the claim form?

34. Arrow contends that these provisions make it clear that under the EPC it is the act of publication in the Bulletin, as opposed to the decision to do so, which constitutes the granting of the patent. The 904 patent was published in the Bulletin with a "GB" designation and it originally appeared on both the EPO and UK IPO registers as a UK patent. The 904 patent was therefore granted in respect of the UK and EP (UK) 904 was subsisting as at the date of the claim form and, indeed, it continues to subsist even today. Arrow contends that the fact that the EPO has since issued a corrigendum is neither here nor there. Once the patent had been granted it was no longer in the competence of the EPO (subject to its jurisdiction to deal with opposition proceedings), as recognised by section 77 (2) of the Act.
35. I am unable to accept these submissions. In my judgment they confuse the decision to grant a European patent for a particular designated Contracting State with the date upon which and the mechanism by which any such decision takes effect. In the present case the EPO issued its decision to grant on 1 March 2007. But by operation of Art.97 (4) the decision to grant could not take effect until the date on which the mention of the grant was published in the Bulletin. In the meantime that decision was subject to the opportunity given to Merck by Art.79(3) to withdraw the designation of any, or indeed all, Contracting States. Merck took advantage of that opportunity by its communication of 22 March 2007 which the EPO received and acted upon by making the letter publicly available on EPOLINE. Either through inadvertence or, more likely, because the process of publication was already well in hand, the Bulletin nevertheless proceeded to mention the original decision to grant the 904 patent in respect of all the originally designated Contracting States, including the UK. But in my judgment the decision to grant had by that time been qualified. The mention in the Bulletin of the grant in respect of the UK could not and did not have the consequence that an EP (UK) patent was granted because there was, at that time, no decision to grant the 904 patent in the UK which could become effective. In due course the correct position was made clear by the publication of the corrigendum.
36. It follows that EP (UK) 904 was never granted and this court has no jurisdiction to make a declaration that it is and has at all times been invalid or that it should be revoked. Nor has it any jurisdiction to make a declaration as to the invalidity of the 904 patent in any of the Contracting States in which it has been granted. In my judgment paragraphs 1 and 2 of the claim are therefore bound to fail and must be struck out.

The claim for a declaration in the light of the divisional applications

37. Paragraphs 3 and 4 of the claim form are drawn in rather general terms. But the basis for these claims is elaborated in paragraphs 5A to 5J of the draft amended Particulars of Claim and in a yet further draft supplied to me by written submission in response to certain questions I addressed to the parties in writing following the hearing. Arrow seeks to contend that as of July 1997 it was obvious to the skilled person to use sodium alendronate trihydrate in the manufacture of a medicament in the form of a tablet containing about 70mg sodium alendronate trihydrate for oral administration for the treatment of osteoporosis in a human (in need of such treatment) according to a continuous schedule having a once-weekly dosing interval. Particulars are then provided of those matters which formed part of the art and which rendered such use obvious. It further seeks to contend that its product is a product having such characteristics.
38. In short, therefore, Arrow seeks a declaration that its own product was obvious at the priority date of the divisional applications. Such a declaration would give Arrow the security that dealing with its own alendronate product in this country will not give rise to any liability to Merck for infringement of any patent granted pursuant to the divisional applications or any further divisionals arising under them. It says this court has jurisdiction to grant such a declaration and that it is appropriate so to do because Merck has shown every intention of (a) pursuing and (b) relying upon the divisional applications against Arrow inter alia in the UK. There is therefore an issue between the parties and a real commercial need for the clarification sought.

Arrow's interest

39. Before turning to the general principles concerning the power of the court to grant relief and the objections to the relief sought raised by Merck, it is helpful to identify the particular circumstances upon which Arrow relies in support of its claim and which collectively make this a very unusual case.
40. First, it is right to emphasise that Arrow seeks a declaration of obviousness in respect of particular characteristics of its own product. As elaborated in the draft amended Particulars of Claim and by way of further written submission, those characteristics are clearly defined. There are aspects of the pleading which suggest that Arrow is still seeking relief in respect of patent rights in other jurisdictions. However, in the course of the hearing before me it emphasised that this is not the case and Arrow will make further amendments to the draft pleading to make this absolutely clear.
41. Second, it follows that Arrow does not seek a declaration that no valid patent can be granted to Merck based upon the divisional applications.
42. Third, Arrow sought to clear the way for the launch of its product by bringing proceedings to revoke the 292 patent both in this jurisdiction and before the EPO. It no doubt devoted significant resources to those proceedings and ultimately succeeded. As a result, it reasonably supposed that no objection could be raised to the manufacture or marketing of a 70mg once-weekly alendronate tablet and duly launched its product. But it now faces the prospect of EP (UK) patents being granted on the divisional applications that will cover that very same product.
43. Fourth, Arrow submits it has a very strong case and that Merck is essentially seeking to recast the case it has already lost without any proper basis. I am certainly not in a position to express any conclusion on this application as to the merit of that submission. Nevertheless, I am satisfied that Arrow does have a real prospect of success in establishing that its product was obvious as of July 1997.
44. Fifth, there can be no doubt that Arrow's sales of alendronate in the EU are very substantial indeed and it therefore has hanging over it a large claim in respect of its current and future activities. In this connection it is to be noted that section 69 of the Act confers infringement rights from the date of publication of an application. It provides that where an application for a patent has been published then, subject to certain restrictions, the applicant has, as from the publication and until the grant of the patent, the same right as he would have had, if the patent had been granted on the date of the publication of the application, to bring proceedings for damages in respect of any act which would have infringed the patent. So far as relevant, the restrictions are that an applicant is only entitled to bring proceedings in respect of an act (a) after the patent has been granted; (b) if the act would, if the patent had been granted on the date of the publication of the application, have infringed not only the patent, but also the claims in the form in which they were contained in the application immediately before the preparations for its publication were completed. Arrow is therefore currently incurring a liability in respect of divisional applications 911.3 and 912.1.
45. Sixth, Merck has made it quite clear that it will seek to enforce its patent rights in respect of generic once-weekly alendronate. Such is apparent from its press release following the grant of the 904 patent in March of this year. At the last possible moment (and without any explanation) Merck withdrew the "GB" designation for that patent. But the "GB" designation is retained in respect of each the other divisional applications. In a witness statement dated 4 July 2007, Mr Forsyth, a solicitor acting for Arrow, invited Merck to give various undertakings, including:

i) that it will not contend (or maintain any current contention) that Arrow's 70mg alendronate product infringes any valid claim arising under the 904 patent, or under any valid claims that may be granted in relation to the divisional applications 911.3, 912.1 and 910.5, and any further divisional applications arising under them;

ii) within a reasonable time period, to withdraw the "GB" designations of each of the divisional applications 911.3, 912.1 and 910.5, and any further divisional applications arising under them.

As at the date of the hearing of this application Merck has shown no inclination to accept that invitation. Arrow therefore faces an ongoing threat by Merck that it will seek to enforce any patent rights that it may obtain in the UK against Arrow's 70mg once-weekly alendronate product.

46. Finally, Arrow cannot commence revocation proceedings in this jurisdiction until the divisional applications have proceeded to grant. On Merck's current estimate that could be any time between the last quarter of this year and the end of 2008. In the meantime, the scope of the claims of the divisional applications could, of course, change and no doubt yet further delays are possible. Arrow therefore faces a considerable period of commercial uncertainty.

Declaratory relief - the extent of the jurisdiction

47. The jurisdiction to grant declaratory relief is a discretionary one. In Messier-Dowty v Sabena [2001] 1 All ER 275 Lord Woolf M.R. said:

"41. ……..The approach is pragmatic. It is not a matter of jurisdiction. It is a matter of discretion. The deployment of negative declarations should be scrutinised and their use rejected where it would serve no useful purpose. However, where a negative declaration would help to ensure that the aims of justice are achieved the courts should not be reluctant to grant such declarations. They can and do assist in achieving justice.

…..

So in my judgment the development of the use of declaratory relief in relation to commercial disputes should not be constrained by artificial limits wrongly related to jurisdiction. It should be instead kept within proper bounds by the exercise of the courts' discretion.

42. While negative declarations can perform a positive role, they are an unusual remedy in so far as they reverse the more usual roles of the parties. The natural defendant becomes the claimant and vice versa. This can result in procedural complications and possibly injustice to an unwilling "defendant." This in itself justifies caution in extending the circumstances were negative declarations are granted, but, subject to the exercise of appropriate circumspection, there should be no reluctance to their being granted when it is useful to do so."

48. Similarly, in Financial Services Authority v Rourke [2002] CPRep 14 Neuberger J explained:

"The court's power to grant a declaration is to be found in CPR Part 40.20, which in these terms:

"The court may make binding declarations whether or not any other remedy is claimed."

Accordingly, so far as the CPR are concerned, the power to make declarations appears to be unfettered. As between the parties in the section [sic], it seems to me that the court can grant a declaration as to their rights, or as to the existence of facts, or as to a principle of law, where those rights, facts, or principles have been established to the court's satisfaction. The court should not, however, grant any declarations merely because the rights, facts or principles have been established and one party asks for a declaration. The court has to consider whether in all circumstances, it is appropriate to make such an order.

…..

It seems to me that, when considering whether to grant a declaration or not, the court should take into account justice to the claimant, justice to the defendant, whether the declaration would serve a useful purpose and whether there are any other special reasons why or why not the court should grant the declaration."

49. More recently, these principles were considered by Pumfrey J in Nokia Corporation v InterDigital Technology Corporation [2006] EWHC 802 (Pat), a commercial dispute concerning intellectual property rights and the extent to which certain inventions were essential to a mobile telephone system complying with the so-called 3G standard. Nokia sought declarations that some thirty patents of InterDigital did not cover that which it was essential to use for complying with that standard. If the patents were essential then Nokia needed a licence and were at the time of the hearing "technically infringing", as InterDigital put it. Pumfrey J summarised the principles thus at [20]:

"My reason, put shortly, is as follows. A line of authority funning from Guaranty Trust Company of New York v. Hannay & Co [1915] 2 KB 536 through Messier-Dowty Ltd v. Sabena SA [2001] 1 All ER 275, culminating in the judgment of Neuberger J in Financial Services Authority v. Rourke (unreported) 19th October 2001, establishes three relevant principles:

i) The correct approach to the question of whether to grant negative declarations was one of discretion rather than jurisdiction.

ii) The use of negative declarations should be scrutinised and their use rejected where it would serve no useful purpose, but where such a declaration would help ensure that the aims of justice were achieved, the court should not be reluctant to grant a negative declaration.

iii) Before a court can properly make a negative declaration, the underlying issue must be sufficiently clearly defined to render it properly justiciable."

50. His decision was upheld by the Court of Appeal: [2006] EWCA Civ 1618; [2007] FSR 23. Jacob LJ observed at [15] that normally a court will decline to grant a declaration in favour of a party against whom no claim has been formulated for the obvious reason that there is no real point in doing so. However, in the context of the case before him, there was a real point in doing so, as he explained at [20]:

"I do not say that anyone could apply for declarations of the kind sought by Nokia. There would have to be real commercial reasons for the person seeking the declaration to have standing to do so. An interest in making 3G telephones which must therefore comply with the standard is clearly sufficient."

51. In my judgment all of the principles identified in Nokia are relevant to the matters I have to decide. But in addition it is important to consider any other special circumstances or reasons why the court should or should not grant the declarations sought. One of these arises in the light of section 74 of the Act. Merck contends this section is a complete bar to the relief claimed. But in any event it says that the framework of the Act and the EPC contemplate patentability of European patent applications being determined by the EPO and it would be wrong for this court to interfere with that process.

Section 74 of the Patents Act 1977

52. So far as relevant, section 74 reads:

"(1) Subject to the following provisions of this section, the validity of a patent may be put in issue-

(a) by way of defence, in proceedings for infringement of the patent under section 61 above or proceedings under section 69 above for infringement of rights conferred by the publication of an application;

(b) in proceedings under section 70 above;

(c) in proceedings in which a declaration in relation to the patent is sought under section 71 above;

(d) in proceedings before the court or the comptroller under section 72 above for the revocation of the patent;

(e) in proceedings under section 58 above.

(2) The validity of a patent may not be put in issue in any other proceedings and, in particular, no proceedings may be instituted (whether under this Act or otherwise) seeking only a declaration as to the validity or invalidity of a patent."

53. This section gave rise to the following rival submissions. Merck contends that section 74(1) sets out the various proceedings in which the validity of the patent may be put in issue and section 74(2) says that validity may not be put in issue in any other proceedings. These proceedings do not fall within the list in section 74(1) and are therefore prohibited by section 74(2).
54. Arrow's answer is that a "patent" is defined under section 130 of the Act as "a patent under this Act". This does not cover declarations relating to an application under the Act let alone an application for a European patent (UK). Although section 69 provides that "patent" shall include an application in relation to certain sections of the Act, those sections do not include section 74. So section 74 does not prohibit a declaration relating to a published application. Merck's response is that the declarations do indeed relate to patents under the Act because they refer to such patents, as and when granted.
55. Arrow seeks a declaration as to its right to make and sell its own product. In my judgment clear words are required to exclude that right and section 74 should be interpreted no more widely than necessary to give effect to its purpose. What then is that purpose? I consider it must be to ensure that patents which are invalid are not merely declared to be invalid but are in fact revoked. But revocation proceedings cannot be commenced until a patent has been granted. Had it been intended that section 74 should exclude the right of a person to seek a declaration in relation to his own product, particularly in circumstances where the need to do so arises from the existence of a published application, then it could have said so in express terms. But it does not and in my judgment it should not be so construed. Section 69 supports this conclusion. It expressly deals with the provisions of the Act that are to take effect in relation to a published application but contains no reference to section 74(2) or any equivalent prohibition.
56. I should also mention the decision of Jacob J in Organon Teknika v Hoffmann-La Roche [1996] FSR 383. In that case the plaintiff issued proceedings pursuant to the inherent jurisdiction seeking a declaration that it had not infringed any valid claim of a patent. The claim put in issue the validity of the patent, and particulars of objections were served. The defendant applied to strike out those parts of the claim relating to validity. Jacob J allowed the application. He accepted the submission that an application for a declaration of non infringement under the inherent jurisdiction did not fall within the list of section 74(1) and concluded that section 74(2), probably accidentally, had the effect of limiting the non-statutory claim for a declaration of non infringement to simply a dispute about the claim. He reached his conclusion with some regret and only because the language forced him so to do. Nevertheless he gave the plaintiff leave to introduce a claim for revocation.
57. In the present case Arrow cannot bring a claim for revocation of the applications and, unlike the position in Organon, there is no clear language in section 74 which excludes the claims for the declarations sought. For all these reasons I have reached the conclusion that the claims are not barred by section 74.

Applying the principles

58. I begin by considering whether the declarations sought would serve a useful purpose. In my judgment they undoubtedly would. Arrow took proceedings to clear the path before launching its once-weekly 70mg alendronate product – a generic equivalent to Fosamax. It was successful in all those proceedings. But Merck retained a series of divisional applications which also have a "GB" designation. The EPO has now reversed its position and decided, at least for the moment, that Merck is indeed entitled to patent protection for Fosamax and Merck has indicated that it intends to enforce its rights. One divisional application has proceeded to grant but, at the last possible moment, Merck de-designated the UK (for reasons it has not explained) so Arrow cannot apply here to revoke it. Nor can it incur here any liability in respect of it. But the other divisional applications are following on behind and for each of these Merck has retained the "GB" designation. Two of them presently have claims which cover Arrow's product. Despite an invitation, Merck has declined to give Arrow any assurance that it will not seek to enforce its rights arising from those divisionals against Arrow in this country. So Arrow is currently incurring a substantial liability under section 69 of the Act. There is a public interest in commercial certainty in patent matters as in any others. Business needs to know where it stands. I believe this court should assist in providing that certainty where it properly can. The declarations sought would provide Arrow with the assurance that its alendronate product cannot offend against Merck's patent rights arising in this country from the remaining divisional applications. Accordingly, the declarations have a valuable commercial purpose.
59. I must also consider whether the underlying issue is sufficiently clearly defined to make it properly justiciable. As I indicated earlier in this judgment, the declarations sought in the claim form are framed in general terms. But the substance of what is sought has now been clarified. Arrow does not contend it would be proper for this court to declare that no valid patent could be granted on the remaining divisional applications. Instead, Arrow seeks much more limited declarations, namely that its own product was obvious at their priority date. It has identified the essential characteristics of its product and the prior art which it says renders that product obvious. In my judgment this is a clearly defined issue which is readily susceptible to determination. Indeed, it is the kind of determination which this court is well used to making.
60. Are there any other special circumstances or reasons why the court should not grant the declarations sought? Merck submits there are. It says this court should not be making declarations in respect of the validity of patent applications because they are subject to examination by the EPO and their claims can change. For the court to start anticipating the examination process would be to usurp the function of the EPO and this is inconsistent with the framework of the EPC and the Act. I agree with all of these submissions. I find it hard to conceive of any circumstances in which it would be appropriate for this court to grant a declaration that no valid patent could be granted on a divisional application which is being prosecuted before the EPO. But that is not what is sought. Arrow only seeks declarations that its own product was obvious at the priority date. The existence of the divisional applications gives rise to the need and justification for seeking declaratory relief. Merck could withdraw the "GB" designations of the divisional applications or acknowledge that it can have no claim under them in this country in respect of a product having the specified characteristics of Arrow's product. If it did so then the commercial purpose of the declarations sought would likely fall away. But it has chosen not to take that course.
61. Finally, I should mention the possibility that EP (UK) patents will be granted on one or more of the divisional applications before these proceedings are concluded. In that event it may be necessary for the proceedings to be amended to take the more conventional form of a claim for revocation and a declaration of non infringement in respect of any such patent. But in my judgment this does not affect the jurisdiction of the court to deal with the claim as matters presently stand.

Conclusion

62. The claims in respect of EP (UK) 904 must be struck out. But in the unusual circumstances of this case I am not satisfied this court has no jurisdiction to grant the declarations sought in respect of Arrow's product. Nor am I satisfied this court would necessarily refuse such declarations in the exercise of its discretion. In my judgment these claims have a reasonable prospect of success and must be allowed to proceed. I will hear argument as to the appropriate form of order if it cannot be agreed.