19 July 2017

Patents: why design-arounds are now harder

A recent judgment of the Supreme Court (Eli Lilly v Actavis) has revisited the law on the scope of protection of patent claims.

Patent holders can be pleased that the decision has broadened the previous test, and they are now more likely to be able to stop competitors who have attempted to design-around their patents.

For those competitors, things are harder: the test requires not only a consideration of the literal scope of the claim of the patent but, even if it falls outside this scope, if your product uses functionally equivalent elements to those directly claimed, there is now a higher chance you will still infringe.

This decision brings the UK’s approach more in line with other key territories in Europe, where the so-called ‘doctrine of equivalents’ has been applied for years. This is to be welcomed since it will reduce the instances of courts in different territories reaching opposite conclusions on the same facts.

However, the expansion of the scope of protection of a patent further outside the literal meaning of its claims adds to the uncertainty and complexity on both sides: it will be harder to advise on the prospects of infringement early on; and any eventual infringement case may turn more on expert evidence.

This additional uncertainty (and potentially cost) could play out either way: if a licensing deal is a possibility to settle a dispute, the parties might be more tempted to take a pragmatic view and settle. However, fierce competitors in high value cases with no intention of settling will have to accept the increased uncertainty and focus on finding the best experts they can.

For those interested in considering further, the test as approved by the Supreme Court is paraphrased below.

A variant of a patented invention will infringe if:

1. the allegedly infringing variant infringes the claims of the patent as a matter of normal interpretation; or

2. the variant nonetheless infringes because it varies from the patented invention in immaterial ways

The first question is comparatively straightforward: you look at the claims with the assistance of the description and the drawings. The second question is obviously more open to interpretation – what does “immaterial ways” mean?

In order to resolve point 2, the Supreme Court reformulated the three questions that apply:

A: does the allegedly infringing variant achieve substantially the same result in substantially the same way as the patented invention?

B: If the answer to A is 'yes', given that the variant achieves substantially the same result, would it be obvious to the reader of the patent (at the priority date) that the variant achieves this result in substantially the same way?

C: Even if the answer to A and B is ‘yes’, would the reader of the patent conclude that the patent holder intended that strict compliance with the literal meaning was an essential requirement of the invention?

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