Company Commercial Notepad - February 2012
2. Patents: Level of Evidence Required to Demonstrate Industrial Application
In order to obtain a patent, it must be shown that the new discovery is capable of industrial application. Two recent successful appeals arising from the same case, before both the UK High Court and the European Patent Office ("the EPO"), reduce the burden that is placed on patent applicants.
Human Genome Sciences Inc ("HGS") had found a newly discovered molecule which was part of a family of proteins and filed a patent to protect it before any practical use for this discovery had been found.
Eli Lilly and Company ("Lilly") argued before the High Court and the EPO that this action by HGS was invalid as it contravened both the European Patent Convention (as the discovery had no known industrial application) and the Biotech Directive (which requires the industrial application of a gene sequence to be disclosed in a patent application).
The patent applied for by HGS identified the molecule and gave a long list of potential activities and uses for the discovery based, not upon the discovery itself, but on what was known about the other members of the molecule's family.
Both the High Court and the EPO found against HGS. The High Court's reasoning was that there was a lack of industrial application for the discovery as well as a lack of contribution to prior art; the EPO's reasoning was that the discovery lacked any inventive step.
The decisions were appealed and whilst the Court of Appeal found against HGS, the EPO changed its decision and allowed the patent. The UK decision was once more appealed, this time to the Supreme Court
The Supreme Court found that the question at the centre of the case was how far a patent application for biological material had to go in showing an industrial application for the discovery.
The Supreme Court found that the crux of the issue revolved around EPO case law which had found that the disclosure of a molecule's existence, structure and gene sequence as well as the family to which it belonged, when considered alongside the common general knowledge, could be sufficient to establish an industrial application and allow a patent to be granted. Whether a discovery could be used to solve a particular problem or treat a specific disease or condition should not be the determining factor in the granting of a patent.
Importantly, the Supreme Court found that whilst a speculative reason as to what application a discovery may have is insufficient; a plausible, reasonably credible claimed use or even an educated guess would be sufficient. The Supreme Court also indicated that later evidence which comes to light after an application has been made can assist in proving plausibility.
The effect of the decision is to lower the bar on the level of evidence required to demonstrate the potential industrial application of new discoveries. The Supreme Court tried to reach a balanced position as whilst it could be argued that allowing early filing for patent protection could lead to the creation of monopolies, the more pressing concern was that discoveries could be made that were incapable of patent protection. This could leave research companies unprotected and unable to attract outside investment, as a company's patent portfolio, will often be important in securing investment.
The judgments allow a degree of protection for small and medium-sized companies whilst still confirming that the practical application of a discovery must be beyond mere speculation in order for it to be capable of protection by a patent. The case also brings UK jurisprudence more in line with EPO guidelines, ensuring that UK companies, especially biotech companies, are not disadvantaged when compared to their European counterparts.
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