Omnipharm Ltd v Merial (No 1)

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLord Justice Kitchin,Mr Justice Peter Smith,Lord Justice Richards
Judgment Date23 Jan 2013
Neutral Citation[2013] EWCA Civ 2
Docket NumberCase No: A3/2012/0423

[2013] EWCA Civ 2

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

CHANCERY DIVISION (PATENTS COURT)

THE HON MR JUSTICE FLOYD

[2011] EWHC 3393 (Pat)

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Richards

Lord Justice Kitchin

and

Mr Justice Peter Smith

Case No: A3/2012/0423

Between:
Omnipharm Limited
Claimant/Respondent
and
Merial
Defendant/Appellant

Henry Carr QC and Thomas Mitcheson (instructed by Fasken Martineau LLP) for the Claimant/Respondent

Andrew Waugh QC and Thomas Hinchliffe (instructed by Taylor Wessing LLP) for the Defendant/Appellant

Hearing dates: 16/17 October 2012

Lord Justice Kitchin
Introduction
1

This appeal concerns a judgment of Floyd J dated 21 December 2011 and his consequential order dated 2 March 2012 following the trial of an action brought by the respondent (Omnipharm) to revoke two patents owned by the appellant (Merial) and to secure declarations of non-infringement in respect of certain products it claimed it wished to sell.

2

The first patent, EP (UK) No. 0,881,881 (the 881 patent), relates to "spot-on" formulations of the parasiticide fipronil for protecting small animals against ticks and fleas. It has a priority date of 29 September 1995. The second patent, GB No. 2,317,564 (the 564 patent), relates to spot-on formulations for the same purpose but comprising fipronil in combination with an insect growth regulator or IGR. It has a priority date of 29 March 1996, a little later than that of the 881 patent but nothing turns on the difference.

3

The patents protect various formulations which Merial sells under the trade name Frontline. These formulations constitute a very important part of Merial's business with UK sales of at least £24 million and global sales of about $1 billion each year.

4

Omnipharm attacked both patents on the grounds of obviousness and insufficiency. Merial responded with an application, resisted by Omnipharm, to amend the patents by limiting the scope of their claims.

5

The judge held that the proposed amendments to the 881 patent were allowable and rejected the obviousness and insufficiency attacks against it. He therefore declared it valid. He also granted Omnipharm declarations of non infringement in respect of three out of four of its proposed formulations.

6

The judge also rejected the obviousness attack against the 564 patent. However, the judge found this patent was insufficient, holding that its teaching was inadequate and did not enable the skilled team to whom it is addressed to make products across the scope of its claims without undue difficulty. He therefore declared it to be invalid.

7

Upon this appeal, Merial, represented by Mr Andrew Waugh QC and Mr Thomas Hinchliffe, contends the judge fell into error in finding the 564 patent invalid for insufficiency. It recognises that such a finding is a kind of jury question which should be treated with appropriate respect by an appellate court but argues that the judge made errors of principle in reaching his conclusion which require this court to reverse his finding and reconsider the issue.

8

Merial also argues that the judge erred in principle in the way he approached the issue of costs and invites us to vary that part of the judge's final order which required Merial to pay 40% of Omnipharm's costs, excluding the costs of various interim applications. For that purpose Merial sought and we granted limited permission to appeal, as I shall explain.

9

Finally, Merial asks us to deal with one other outstanding matter concerning the costs incurred in relation to applications which it made for orders that sums paid by Omnipharm into court be maintained as security for Merial's costs pending the determination of this appeal.

10

Omnipharm, represented by Mr Henry Carr QC and Mr Tom Mitcheson, submits that the judge was right on the issue of the insufficiency of the 564 patent, essentially for the reasons he gave and for one further reason which he rejected. Omnipharm also has a contingent cross-appeal: it contends the judge's finding that the 564 patent was insufficient was consequent upon his reasons for rejecting the obviousness attack against the patent. Accordingly, so the argument goes, if the judge had not found the 564 patent insufficient he would or ought to have found it invalid for obviousness. Again, by way of contingent cross-appeal, Omnipharm contends that, by parity of reasoning, the judge ought also to have found the 881 patent invalid for obviousness.

11

At the outset of the appeals we decided to hear full argument on the issue of the insufficiency of the 564 patent. Having heard those arguments, we formed the view that the judge's decision on insufficiency must be upheld and so informed the parties, indicating that we would dismiss the appeal for reasons we would put in writing in the usual way. We also indicated it was our understanding that it was therefore not necessary to hear argument on the cross-appeal, and the parties agreed. Accordingly, we proceeded to hear further argument only on the outstanding issues concerning costs.

12

In this judgment I therefore address:

i) Merial's appeal against the judge's finding and consequential declaration that the 564 patent is invalid for insufficiency;

ii) Merial's appeal against the order requiring it to pay 40% of Omnipharm's costs; and

iii) the costs of the applications by Merial that sums paid into court by Omnipharm be maintained as security pending this appeal.

The addressee of the patents and the expert witnesses

13

There was no dispute that the patents are addressed to a notional skilled but unimaginative team working in a veterinary healthcare company interested in the development of pesticides and their formulation, and that such a team would comprise a veterinary parasitologist and a formulation scientist.

14

Each side therefore called two expert witnesses to assist the judge as to the knowledge, understanding and attitudes of this skilled team, one veterinary parasitologist and one formulation scientist.

15

Omnipharm called Mr Peter Watson as its expert in veterinary parasitology. Mr Watson had worked in a mixed animal practice before joining Bayer Animal Health where he remained until 2002. The judge rejected various attacks made by Merial on Mr Watson's evidence, finding that he did his best to put himself into the position of the ordinary skilled veterinary parasitologist without drawing upon any special knowledge internal to Bayer.

16

Omnipharm called Dr Ken Walters as its formulation expert. Dr Walters has a distinguished academic background and many years' experience in the pharmaceutical industry as a transdermal delivery scientist. As the judge held, Dr Walters is and was a leading figure in the field of the delivery of drugs through the skin and the judge had no doubt that Dr Walters genuinely held the views he expressed although, as I shall explain, the judge considered that not all of those views would have been shared by the notional skilled team.

17

Merial called Professor Michael Dryden as its expert in veterinary parasitology. He is a Distinguished Professor of Veterinary Parasitology at Kansas State University, has published widely on flea biology and, as the judge observed, is such a leading figure in this field that he has become known as "Dr Flea".

18

Finally, Merial called Professor Hadgraft as its formulation expert. He is an Emeritus Professor of Biophysical Chemistry at the School of Pharmacy at the University of London. He too has a distinguished academic background and struck the judge as being, by and large, a very rigorous scientist who sought out the evidential base for any given scientific proposition. But, as in the case of Dr Walters, there were aspects of Professor Hadgraft's evidence which the judge accepted he genuinely held but which he did not think would have been shared by the ordinary skilled team. The judge also observed that there were occasions when Professor Hadgraft's answers were rather combative and inadequately thought out and, as a result, the judge treated his evidence with a degree of caution and endeavoured to assess the extent to which it was supported by the documents.

The technical background and common general knowledge

19

The judge set out the technical background from [14]-[38] in terms with which neither side took issue. The following matters are of particular relevance to this appeal and, save where I indicate otherwise, were all accepted to form part of the common general knowledge, that is to say all that knowledge which was generally known and regarded as a good basis for further action by those in the field.

Fleas

20

Fleas are ectoparasites and they cause irritation and disease. It is therefore important to eliminate them so far as possible. Their life cycle begins with eggs and proceeds through larvae which live in dark areas under furniture or in carpets where they feed on organic debris. In time they mature into adult fleas which infect a host animal, feed on the blood of the host, mate and lay more eggs which fall to the ground, and so the cycle begins again.

Parasiticides and their application

21

Parasiticides are chemical agents which kill parasites. They fall into two broad classes, adulticides which kill the adult parasite and IGRs which interfere with the normal development of the parasite. Generally speaking, to be effective a parasiticide must be distributed, in one way or another, over the whole of the animal's body.

22

Common adulticides at the priority date included synthetic pyrethroids such as permethrin and two relatively new classes...

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