2.2.1 The right to make the product

Perhaps the most important right given to the owner of a patent for a product is the exclusive right to ‘make’ the product. Few problems have arisen in determining what is meant by the right to make a product. One exception to this is where the defendant repairs or modifies the patented product. Patent law has long recognized that purchasers of patented products should be able to repair and modify those products. As Lord Hoffmann said in United Wire,²² ‘repair is one of the concepts (like modifying or adapting) which shares a boundary with “making” but does not trespass on its territory’. He added that:

[A]‌s a matter of ordinary language, the notions of making and repair may well overlap. But for the purposes of the statute, they are mutually exclusive. The owner’s right to repair is not an independent right conferred upon him by licence, express or implied. It is a residual right, forming part of the right to do whatever does not amount to making the product.²³

At the same time, however, patent law has been keen to ensure that while a person who obtains a patented product is able to repair or modify the product, they may not go so far as to make the product anew.²⁴ In these circumstances, the question arises: how much of a product is a person able to repair or modify before they infringe the owner’s right to make the product? To put it another way: when does the legitimate act of repair or modification switch to become the illegitimate making of the patented product?

These questions were considered at length by the Supreme Court in Schütz v. Werit.²⁵ This was an infringement action brought by Schütz in relation to a patent for an intermediate bulk container—that is, a device used to transfer large quantities (around 1,000 litres) of liquids (such as chemicals, soft drinks, or cosmetics). The patent consisted of two parts: the large plastic bottle, which held the liquid; and the metal cage, which protected the bottle in transit and storage (see Fig. 22.1).²⁶ The novel and inventive part of Schütz’s patented intermediate bulk container was the particular way in which the cage was made. One of the notable things about intermediate bulk containers is that it was often necessary to replace the plastic containers, either because the bottle had become damagedp. 641↵

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Fig. 22.1 Intermediate bulk container

Source: Schütz Ltd

or because they contained residue of a toxic material. Many secondary organizations, known as ‘reconditioners’, undertake this work. This usually consists of them removing the old bottles, repairing the cage if needed, and putting in a new bottle (either of the same type as that which had been removed or a different one). Delta and Werit worked in the reconditioning industry. Delta purchased second-hand intermediate bulk containers that had been made by Schütz. Delta replaced the plastic bottles made by Schütz with new bottles that it had bought from Werit. The resulting reconditioned intermediate bulk containers were a mixture of the old Schütz cage and a new Werit bottle. Schütz objected to this, arguing that, in producing the reconditioned intermediate bulk container, Werit and Delta had infringed its exclusive right to ‘make’ the patented invention.

In considering this issue, the Supreme Court was called upon to determine how much of a product a person could modify before they infringed the owner’s right to make the product. Lord Neuberger stressed that the answer to this question depended on how ‘make’ was interpreted. He also emphasized the ‘somewhat slippery nature of the meaning of the word, and the very important role which context plays in determining whether a particular activity involves “making” an article’.²⁷ Thus while placing a Schütz bottle in a Schütz cage would clearly have been a ‘making’, replacing the detachable lid would not.²⁸ What, then, of the situation in which someone placed a Werit bottle in a Schütz cage?

p. 642↵In answering this question, Lord Neuberger began by critically examining some of the approaches that had previously been used to determine whether, in replacing part of an article, a person had repaired or made the article. One approach that has been used to answer this question focuses on the inventive concept of the patented article. Under this approach, if the defendant’s activities were to relate to the inventive part of the patented article, they would infringe. Conversely, if their conduct were limited to replacing the non-inventive parts of the article, they would be engaged in non-infringing repair. Thus if a patented product were to relate to the invention of a pool table with a novel and inventive coin-operating system, it would almost certainly be legitimate for a person to replace the cloth on the pool table. Under this approach, it would probably not be legitimate, however, for them to replace an old coin-operating system with a new one, since it is likely that this would be an essential component of the invention.²⁹ This is the approach that was adopted by Floyd J at first instance in Schütz v. Werit,³⁰ who held that the reconstituted bulk containers were non-infringing because the defendant had only replaced the non-inventive plastic bottle and not the inventive part, which was the cage. Using the inventive part of the invention as a touchstone for determining whether someone has ‘made’ the patented invention has the advantage of providing certainty (although it may be difficult to determine the inventive element of the invention in some cases).

While Lord Neuberger was willing to accept that the question of whether a defendant had replaced the inventive part of an article was a factor to be taken into account when deciding whether a particular activity constituted a making of the article, he stressed that it was wrong to use the inventive concept as a single touchstone for deciding whether, in replacing or modifying part of an article, a person had repaired or made the article. Specifically, Lord Neuberger was critical of the ‘oversimplified approach’ adopted by Floyd J at first instance, who had said the ‘correct approach is to ask whether, when the part in question is removed, what is left embodies the whole of the inventive concept of the claim’.³¹

Lord Neuberger was also critical of approaches that used the relative importance of the part that had been replaced to the article as a whole to determine whether the article had been made or repaired. Under this approach, if the part replaced was a material part of the article as a whole, it would be a making. In contrast, where the part in question was an immaterial part of a product, it was less likely for a court to hold that a person has made a patented product.³² Lord Neuberger rejected this approach, saying that the ‘mere fact that an activity involves replacing a constituent part of an article does not mean that the activity involves “making” of a new article rather than constituting a repair of the original article’.³³ Thus if an original Schütz intermediate bulk container was reusable except for the detachable lid, which had been damaged, Lord Neuberger said that it ‘could not be plausibly contended that the replacement of the lid constituted “making” the claimed article, even though the [intermediate bulk container] would be unusable without the new ‘lid’.³⁴

It is important to note that Lord Neuberger did not reject out of hand the use of the inventive concept or the relative importance of the part taken as tools for determining whether replacing part of an article constituted a making of the article. Instead, what he objected to were situations in which these factors were treated as the only factor to be taken into account. Drawing upon the idea that ‘making’ was to be decided contextually, Lord Neuberger said that it was important to focus on a range of factors, which would p. 643↵vary from case to case. On the facts before him, Lord Neuberger found that placing a Werit bottle in a Schütz cage did not constitute a ‘making’ of the patented article and, as such, was non-infringing. In reaching this conclusion, Lord Neuberger drew on a number of factors, including the fact that the bottle was a free-standing replaceable part of the patented article and that it had no connection to the claimed ‘inventive’ part of the intermediate bulk containers—namely, the metal cage. Another important factor was that the bottle had a much shorter life expectancy than the metal cage. It was also important that the bottle could not be described as the main component of the article. Lord Neuberger also said that it was important that apart from replacing the bottle and undertaking very minor repairs, Delta did not undertake any additional work on the bulk container.

In light of Schütz v. Werit, the question of whether something is ‘made’ or whether it is merely repaired or modified is decided by looking at the facts of the case as a whole. This will include quantitative factors, such as the amount of the product that is repaired and the relative life expectancy of the part that is being replaced. It will also include qualitative considerations, such as whether the inventive part of the patented invention has been replaced and the relative importance of the part of the patented product that has been repaired. While the test for determining whether someone has made a patented article takes account of a wide range of factors, there are limits. For example, it is does not matter who carries out the work,³⁵ nor how a party views or markets its products (such as claiming that it is ‘re-manufactured’).³⁶ While the courts now need to take a more holistic approach when deciding whether something has been repaired or made, it seems that this is unlikely to lead to different results.³⁷

Where purchasers of a patented article are entitled to repair the product:

[They] must be entitled to carry out what is a genuine repair whether it is economical to do so or not, and whether the part repaired or replaced in the course of what is truly a repair is crucial to the function of the patented article or not.³⁸

It also seems that if the repaired article does not work as well or as safely as the original product, this will not affect the decision as to whether the repair is legitimate.³⁹

2.2.2 The right to dispose of the product

Another important right given to the owner of a product patent is the right to sell (or vend) the product. The right to sell, which is part of the general right to dispose of the invention,⁴⁰ includes the sale of individual articles.⁴¹ It also applies where the patented product is sold to people who intend to use the article in non-infringing activities (such as sale to a p. 644↵person who intends to use the article for experimental purposes).⁴² A patent owner’s right to dispose of a product will be infringed where a person supplies the product in kit form. As with all infringement actions, the kit must fall within the scope of the claims.⁴³ If the kit partially falls outside the claims, a patentee will have to rely on indirect or contributory infringement to prevent sale of the kits.⁴⁴ These matters are discussed later.⁴⁵

Implied licences and exhaustion⁴⁶ A patent owner’s ability to control the way patented products are disposed of is limited by the common law doctrine of implied licence and the doctrine of exhaustion as developed under EU law.⁴⁷ According to the doctrine of implied licence, in the absence of any limitation to the contrary, where the patentee sells a patented product, the patentee is unable to rely on the patent to prevent the resale of the article. This is because the sale of a product carries with it an implied licence to keep, use, and resell the product.⁴⁸ However, where there is an express limitation, it will bind those who receive the goods with notice of the limitation—unless the limitation contravenes Article 34 or 101 of the Treaty on the Functioning of the European Union.

Under the doctrine of exhaustion,⁴⁹ a patentee is unable to use a patent to prevent the further disposal of an article that has been placed on the market in the European Economic Area (EEA) with the patentee’s consent.⁵⁰ Consequently, an express limitation on further disposal of a patented article will contravene Article 34 and thus be void if it prevents import into or resale in another member state. However, such a limitation might enable a UK patentee to prevent export to Australia, or perhaps further disposal within the United Kingdom.⁵¹

2.2.3 The right to import the product

The patentee has the right to control the import of products that fall within the scope of the product. It seems that where the patented product is passively imported (that is, where the patented product is of no importance as far as any question of carriage is concerned), p. 645↵the patent will not be infringed.⁵² As Tomlin J said: ‘I cannot think … that the employment of a patented cutting blow-pipe or a patented hammer in the manufacture of some part of a locomotive would necessarily render the importation of the locomotive an infringement.’⁵³ A person will infringe where they deal with the patented product in the course of trade or for the purposes of profit.⁵⁴ Because an importer must have a legal and beneficial interest in the infringing goods, foreign parties will not infringe where they transfer their interests in the infringing object outside the United Kingdom (although they might be liable as a joint tortfeasor).⁵⁵ As with the right to dispose of the product, the patentee’s right to prevent import is limited by the common law principle of implied consent and by the doctrine of EU/EEA exhaustion.

2.2.4 The right to keep the product

The patentee’s monopoly also includes situations where an infringer keeps the product, whether for disposal or otherwise. The scope of this right was considered in SKF v. Harbottle,⁵⁶ where the court was called upon to decide whether the storage of a product in a London warehouse fell within the meaning of ‘keep’ in section 60(1) of the Patents Act 1977. This decision arose from the fact that British Airways, which was in the process of transporting an antihistamine drug called Cimetidine from Italy to Nigeria, stored 20 kg of the drug in a warehouse in London. While the drug was being stored, a patent infringement action was brought by the UK patentees (SKF) against the owner and importer of the drug, Harbottle. British Airways was joined as co-defendant in the infringement action on the basis that it had infringed the owner’s right to keep the product. Finding in favour of British Airways, the court held that the act of passively storing a patented drug in a warehouse in London could not be construed as the ‘keeping of a product’ within the meaning of section 60(1). While declining to arrive at a definitive meaning of the term ‘keep’, the court was strongly influenced by the ‘very much more limited’ terms employed in Article 29(a) of the Community Patent Convention (CPC), where the equivalent wording refers to ‘stocking’ a patented product. On this basis, it was said that ‘keep’ implied ‘keeping in stock’ rather than acting as a custodian.

Despite the approach adopted in Harbottle, a broader interpretation of the right to keep a product was adopted in McDonald v. Graham.⁵⁷ In this case, the patentee asserted that the defendant (a marketing consultant who had been introduced to the patentee), who retained certain articles (and later made them available to a third party), had infringed their right to ‘keep’ the patented product. In response, the defendant argued that the materials had not been kept ‘for disposal or otherwise’. The Court of Appeal held that the defendant had kept the product ‘in the sense of keeping them in stock for the purposes of his business in order to make use of them as and when it would be beneficial to him to do so’.⁵⁸ As such, the patent had been infringed.

p. 646↵In circumstances where the patentee has placed the product on the market, a person will be free from liability under the implied licence theory. However, if no such licence is implied, liability for mere possession or use is absolute (irrespective of knowledge or intent).

2.2.5 The scope of protection for biotechnological inventions

In the lead-up to the Biotechnology Directive,⁵⁹ questions arose about the scope of protection for biotechnological inventions. The issues were dealt with by Articles 8–10 of the Directive. The Patents Act 1977 has been amended to take account of these provisions.⁶⁰ The scope of protection of product patents for biological material is dealt with in Articles 8(1) and 9 of the Directive.

Article 8(1) provides that the protection conferred by a patent on biological material (possessing specific characteristics) extends to any biological material derived from that biological material by propagation or multiplication in an identical or divergent form. This would apply, for example, to inventions for herbicide-resistant plants and genetically manipulated animals.⁶¹ For the derivative biological material to be covered by the patent, it must possess the same characteristics as the patented biological material. This means that a patent for a genetically modified animal would extend to include future generations (so long as they retain the ‘specific characteristics’ of the ‘original’ animal).⁶²

Article 9 (which is mirrored in the United Kingdom in paragraph 9 of Schedule A2 to the Patents Act 1977)⁶³ deals with the scope of protection for a product that contains genetic information. More specifically, it provides that the protection conferred on a patent containing or consisting of genetic information shall extend to all material, save as provided in Article 5(1),⁶⁴ in which the product is incorporated and in which the genetic information is contained or performs its function.

In recent years, there has been a growing concern about the nature of the protection granted to biotechnological inventions, particularly in relation to product patents granted for genes, DNA sequences, and the like. The main problem with product patents is that they give the patentee control over subsequent uses of the product, even for uses that they did not envisage or know about. For example, if a research team were to discover that the ABC gene caused acne, it might be possible for them to obtain a product patent over the isolated ABC gene. If another research team were subsequently to discover that the ABC gene also played a role in the development of skin cancer, this would be covered by the earlier product patent. One objection to a situation such as this is that the reward granted to the patentee outweighs the benefits that flow from their disclosure. Another related problem is that product patents may stifle research into new uses of a patented product In Monsanto v. Cefetra⁶⁵ the Court of Justice considered the scope of Article 9. It concluded that where an isolated DNA sequence is protected as a patented product and it is contained in the material, but it no longer performs its function (the enzyme made the plant roundup ready and so resistant to that herbicide during its lifetime) then it falls outside the scope of protection conferred even if the product could be taken from the biological material and used again.⁶⁶ There is therefore no absolute protection granted and if modified crops are grown outside Europe and once grown, provided the function p. 647↵is no longer performed, they can be sold within the EU without infringing the patent.⁶⁷ In 2016, an Expert Group appointed by the European Commission published a report which considered two interpretations of Monsanto.⁶⁸ The minority view of the Group was that the decision took DNA sequences out of the scope of protection of patents.⁶⁹ The majority of the Expert Group said the relevant question was whether the patented product was capable of performing the function protected by the patent. The example they used was the sale of DNA in a dry state, where it could not perform its function; however, if the dry substance was put in an aqueous environment, it was able to perform its function once more. The sequence was ‘capable’ of performing its function, but it was not performing the function during the manufacture, sale, or importation of the product and so would not infringe.⁷⁰ However, if it is used after being rehydrated then that use would infringe. While special defences have been introduced to minimize the impact of product patents for biological inventions,⁷¹ many commentators believe that further action is necessary. One solution that has been suggested is that the scope of protection for gene patents should be limited to the use that is actually disclosed in the patent.⁷² To continue with the example mentioned earlier, this would mean that the initial patent would only be granted for the ABC gene insofar as it triggers acne. In this situation, the protection reflects the disclosure. The more limited protection also means that the patent would not act as a disincentive for others to look for other uses of the ABC gene. It has been suggested that this proposal is supported by Recital 25 of the Biotechnology Directive insofar as it limits product claims to the parts of the product that are essential to the invention—that is, it restricts the scope of DNA-product patents based on their disclosed function.⁷³ Another more radical suggestion, which harks back to the way in which chemical inventions were treated in the early part of the twentieth century, is to limit gene patents to process claims—that is, product production would simply not be available for gene-based inventions.

2.5.1 Novelty-of-use claims

Given the difficulty in establishing direct liability in relation to novelty-of-use patents (discussed earlier), indirect liability may take on a greater significance. Taking the example of a patent for the use of a substance in oil as a lubricant, where it was previously known that the substance inhibited rust, it would seem that a defendant would infringe if they supplied the oil to people and advertised it as a lubricant. However, a person would not infringe if they were to continue to supply the oil as a rust inhibitor. While it might be known that the oil could be used as a lubricant, it would be difficult to prove that the defendant ‘intended’ that the oil be used in this way (as is required under section 60(2)). In these circumstances, secondary factors may be helpful, such as the documentation that accompanies the product, which might indicate the way in which the product was expected to be used.¹¹⁴ It would be more difficult to determine whether a defendant indirectly infringes where they supplied the oil saying that it acted both as a rust inhibitor and a friction reducer. The liability of the defendant would also be uncertain if they were to supply the oil saying that it acted as a rust inhibitor, where it was widely known that the oil could also be used to reduce friction. In these circumstances, the likelihood of the user using the oil as a lubricant is high, but not certain. Jacob J, who has expressed doubts about the role of novelty-of-use claims, has called for these issues to be considered in detail by the European Patent Office whenever it gives further consideration to claims for uses.¹¹⁵ So far, these pleas have fallen on deaf ears.

3.1.1 Purposive interpretation

While there is an important but largely neglected pre-history,¹²⁹ the history of patent claim interpretation in the United Kingdom usually begins with Lord Diplock’s celebrated 1982 p. 657↵House of Lords’ judgment in Catnic v. Hill and Smith¹³⁰ (decided under the 1949 Patents Act), which held that the fundamental principal that underpins claim interpretation is the idea that the claims should be construed ‘purposively’. This means that rather than limiting the meaning of a claim to a literal or strict meaning, it was necessary to interpret claims from the perspective of the person skilled in the art.¹³¹ As Lord Hoffmann said in Kirin-Amgen, the key question to ask was:

[W]‌hat would a person skilled in the art have understood the patentee to have used the language of the claim to mean? … Everything else … was only guidance to a judge trying to answer that question.¹³²

We can get a sense of the impact that a purposive interpretation can have on the way in which claims are interpreted from the facts in Catnic v. Hill and Smith.¹³³ In Catnic, the House of Lords was called upon to decide whether in manufacturing the steel lintels, the defendants had infringed the claimant’s patent for galvanized steel lintels. (A lintel is a load-bearing beam that spans open spaces, such as doors and windows, in cavity walls.) While it was evident that the defendant’s lintel and the patented invention (see Fig. 22.2) were very similar, one issue remained unclear. This arose from the fact that while the patent specified that the rear side of the lintel should be ‘vertical’, the defendant’s lintel (see Fig. 22.3) was at an angle of 84 degrees. In order to determine whether the claimant’s patent had been infringed, the House of Lords had to decide whether a claim that specified that the rear support be vertical encompassed a lintel whose rear support was not ‘precisely’ vertical.

While a literal reading of the claims would have limited the claimant’s patent to lintels at 90 degrees (and thus to a finding of non-infringement), Lord Diplock said that the patent ought to be construed purposively. A purposive interpretation demands that the claims are to be read through the eyes of the person skilled in the art and that the purpose or function of the invention be borne in mind when the patent is interpreted.¹³⁴ This meant that when deciding whether ‘vertical’ included lintels at an 84 degree angle, the person skilled in the art would take into account the function or purpose of the invention. On reading the patent, it was decided that the person skilled in the art would have understood that the reason why the patent specified that the rear support member was to be ‘vertical’ related to the load-bearing capacity of the lintel. An important factor in the finding that the patent had been infringed was that a 6 degree movement away from 90 degrees only led to a 0.6 per cent reduction in the load-bearing capacity of the lintel. This meant that the defendant’s lintel effectively performed the same purpose or function as the claimant’s lintel.p. 658↵

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Fig. 22.2 Claimant’s lintel

Source: Catnic v. Hill and Smith [1982] RPC 183

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Fig. 22.3 Defendant’s lintel

Source: Catnic v. Hill and Smith [1982] RPC 183

While the patent specification is read from the perspective of the person skilled in the art, the question of the construction of the claims is ultimately a matter for the court. In some cases, the courts will draw on external assistance to help it to determine the meaning of a claim. In some cases, a court can hear expert evidence on the meaning of technical terms.¹³⁵ Although a purposive interpretation may allow the courts to extend the scope of the claims beyond that which would be allowed by a literal reading, this does not mean that a purposive approach is an open-ended and unconstrained process. Indeed, there are a number of factors that shape the way in which purposive interpretation is applied, one of which is the fact that the person skilled in the art is presumed to proceed on the basis that the purpose of the specification:

… is both to describe and demarcate the invention—a practical idea which the patentee has had for a new product or process—and not to be a textbook in mathematics or chemistry or a shopping list of chemicals or hardware.¹³⁶

p. 659↵It will also be presumed that the patentee is attempting to describe something that is new, with all of its attendant problems. It is also presumed that the skilled person will read the patent specification as a whole,¹³⁷ and will draw upon the description and drawings to interpret the claims.¹³⁸

A lot will turn on the skill and expertise that is attributed to the person skilled in the art, which will always vary depending on the invention in question. The person skilled in the art is presumed to read the specification ‘with common general knowledge of the art available at the time of its publication’.¹³⁹ It is also presumed that the notional skilled reader would be aware, and take account, of the drafting conventions by which the patent and its claims were framed.¹⁴⁰ They are also presumed to be aware of the language conventions that have developed over time, which ascribe particular meanings to words such as ‘comprising’ and ‘suitable for’.

While the use of a purposive style of interpretation often means that the scope of the monopoly is broader than that which would arise if the claims were to be interpreted literally, purposive interpretation does not necessarily require that the claims be read broadly or indeed in the patentee’s favour. All that the purposive approach requires is that the court interprets patents through the eyes of the person skilled in the art, while taking into account the purpose of the invention—nothing more, nothing less. How broadly claims will be read in any particular case always depends on the approach undertaken by the person skilled in the art in the case in hand, which in turn is influenced by the purpose of the invention and the way in which the claims are drafted.¹⁴¹

3.1.2 The Protocol on the Interpretation of Article 69 EPC

One of the problems that confronted the drafters of the EPC 1973 was that some member states—notably, the United Kingdom and Germany—approached the task of interpreting patent claims differently. While the British were said to favour a strict, literal reading of the claims, it was suggested that in Germany, the claims simply acted as a guide for determining the scope of protection. Given the potentially important role that claim interpretation plays in determining the scope of protection, if these different styles of interpretation were allowed to continue under the EPC, it would have undermined the aim of a standardized pan-European patent system. In an attempt to overcome these (perceived) differences and to harmonize the way in which patents are interpreted across member states, the Protocol on Interpretation of Article 69 of the EPC 1973 was introduced to provide guidance as to how patent claims should be interpreted.¹⁴² The Protocol, p. 660↵which is said to bear ‘all the hallmarks of a compromise agreement’,¹⁴³ was replicated in EPC 2000 in a slightly modified form.¹⁴⁴

There are three notable features of the Protocol under EPC 2000. The first is that it stipulates the standpoint of interpretation that should not be adopted when interpreting a patent. In particular, it says that the courts should not read the claims literally. The Protocol also says that the claims should not be used as a mere guide to interpretation; instead, it says somewhat cryptically, that the courts should adopt a position in between these extremes.¹⁴⁵ The second, more positive, feature of the Protocol is that it says that the courts should interpret the claims in a way that combines a fair protection for the patentee with a reasonable degree of certainty for third parties.¹⁴⁶ The third feature of the Protocol is that it provides that when determining the scope of protection due account should be taken of any element which is equivalent to an element specified in the claims.¹⁴⁷

3.1.3 The Improver questions

The next important intervention on claim interpretation was Hoffmann J’s 1990 judgment in Improver v. Remington.¹⁴⁸ This decision was concerned with the potential infringement of a patented hair removal device, known as ‘Epilday’ (which operated by trapping hairs in a rotating coiled helical spring which then pulled them out of the skin) by the defendant’s device (which operated in the same way but used a slotted rubber rod to capture and remove the hairs). While the alleged infringing device clearly fell outside the scope of a strict literal reading of the claim, Hoffman J was willing to consider whether it nonetheless still infringed. Holding that the purposive interpretation outlined by Lord Diplock in Catnic was consistent with the 1977 Patents Act, the EPC 1973, and the Protocol, Hoffmann J went on to suggest a three-step approach to determine whether a patent was infringed. As he said, when the issue was whether a feature embodied in an alleged infringement fell outside the ‘primary, literal or a contextual meaning of a descriptive word or phrase in the claim’ (what he called ‘a variant’) was ‘nonetheless still within its language as properly interpreted’, three questions, which have come to be known as the Improver questions,¹⁴⁹ should be asked:

Applying these questions to the facts of the case, Hoffmann J found that the difference between the patented invention and the allegedly infringing device (namely, the difference between the coiled helical spring and the slotted rubber bar) did not have a material effect on the way the invention worked: both functioned to capture and remove body hair. He also found that this would have been obvious to the skilled reader. However, on the p. 661↵basis that it would have been obvious to the skilled reader that the rubber had problems … which might have been difficult to overcome’, Hoffmann J found that the patentee failed to satisfy the third test and as such that there was no infringement.¹⁵¹

3.1.4 Kirin-Amgen

The next important development in this area was the 2005 House of Lords decision of Kirin-Amgen.¹⁵² In considering ‘whether a protein manufactured by gene-activation infringed a patent relating to production of the same protein by recombinant DNA technology’, Lord Hoffmann reviewed the existing law on patent claim interpretation. There are three notable things about the decision. The first relates to the way it promoted purposive interpretation at the expense of the Improver questions. While Lord Hoffmann thought that the purposive interpretation as outlined in Catnic was the ‘bedrock of patent construction, universally applicable’,¹⁵³ he said that the Protocol and the Improver questions were ‘simply guidelines for applying [purposive interpretation] to equivalents … more useful in some cases than in others’.¹⁵⁴ In so doing, he called into question the practice that had developed in the UK post-Improver whereby the Improver questions were routinely applied in UK patent infringement cases.¹⁵⁵ Following Kirin-Amgen the Improver questions fell out of favour in infringement actions in the United Kingdom, to be replaced by the purposive interpretation that asked: what would the person skilled in the art have understood the patentee to mean?¹⁵⁶

The second notable point about Kirin-Amgen was in relation to the so-called doctrine of equivalents and its place within British law.¹⁵⁷ Prior to the passage of the Patents Act 1977, under the doctrine of equivalents, elements of an invention were not only considered to be the same when they were identical, but also when they were functionally equivalent.¹⁵⁸ This meant that ‘there may be infringement even if the accused product falls outside the meaning of the words of the claim when understood in context’.¹⁵⁹ Given that neither Article 69 of the EPC 1973¹⁶⁰ nor the Protocol (under EPC 1973) made specific reference to the doctrine of equivalents,¹⁶¹ when the 1977 Act was passed doubts were raised as to whether the doctrine of equivalents was still applicable under the new law. In many ways, it seemed that the uncertainty about the status of the doctrine of equivalents was answered by the EPC 2000. In affirming the continued role of the doctrine of equivalents, Article 2 of the Protocol on Interpretation of Article 69 in the EPC 2000 reads that for ‘the purposes of determining the extent of protection conferred by a European patent, due account shall be taken of any element which is equivalent to an element specified in the p. 662↵claims’.¹⁶² As a result, it seemed clear that the doctrine of equivalents needed to be taken into account when deciding whether a patent has been infringed.

The belief that the EPC 2000 might have reinstated the doctrine of equivalents under British law was temporarily undermined by the House of Lords in Kirin-Amgen,¹⁶³ when Lord Hoffmann said that the amendment changed nothing; the provision only made it clear that equivalents need to be considered, not that there was a ‘doctrine of equivalents’ allowing a court to extend protection beyond that covered in the claims (as interpreted by the person skilled in the art). As Lord Hoffmann said: ‘[It] seems to me that both the doctrine of equivalents in the United States and the pith and marrow doctrine in the United Kingdom were born of despair. Since the Catnic case we have article 69 which, firmly shuts the door on any doctrine which extends protection outside the claims’.¹⁶⁴ One of the consequences of Kirin-Amgen was that the doctrine of equivalents was subsumed within the purposive approach to interpretation. Thus while the Court of Appeal may have been able to say in 2009 that ‘there is no general “doctrine of equivalents”’,¹⁶⁵ nonetheless it also accepted that a purposive interpretation could ‘lead to a conclusion that a technically trivial or minor difference between an element of a claim and the corresponding element of the alleged infringement nonetheless falls within the meaning of the element when read purposively’.¹⁶⁶ In a strange (literal) reading, this was said not to be because there was a doctrine of equivalents; rather, it was because it was the fair way to read the claims in context¹⁶⁷—a doctrine of equivalents in all but name?

3.1.5 Actavis v. Lilly

The 2017 Supreme Court decision of Actavis v. Lilly was an infringement action that concerned a chemotherapy drug patented by Eli Lilly.¹⁶⁸ It has long been known that while a class of chemicals known as antifolates had valuable therapeutic effects on cancerous tumours, the antifolates had a number of serious, sometimes fatal, side-effects that undermined their value as an anti-cancer drug. Eli Lilly discovered that the side-effects could be avoided if a compound called pemetrexed disodium (which was a type of antifolate) was taken with vitamin B12. Accordingly, the patent claimed the use of antifolate pemetrexed disodium in the manufacture of a medicament for use in combination with vitamin B12 (and, optionally, folic acid) for the treatment of cancer. From 2004, Eli Lilly sold a medicament that combined the antifolate, pemetrexed disodium, and vitamin B12.

The allegedly infringing products that Actavis were considering selling in the United Kingdom (France, Italy, or Spain) were similar to Eli Lilly’s in that they combined antifolates and vitamin B12 together in a single medicament. They differed however in that rather than using pemetrexed disodium with vitamin B12, Actavis used pemetrexed diacid, pemetrexed ditromethamine, or pemetrexed dipotassium.¹⁶⁹ Actavis argued that because they did not use pemetrexed disodium, Eli Lilly’s patent would not be infringed. In contrast, Eli Lilly argued that the Actavis products infringed because they were medicaments consisting of pemetrexed diacid with vitamin B12 to be used as a treatment for cancer. At first instance, Arnold J agreed and held that none of the Actavis products either directly or indirectly infringed. While the Court of Appeal agreed that there was p. 663↵no direct infringement, they did find that there would be an indirect infringement. On appeal the Supreme Court found in favour of Eli Lilly, holding that the Actavis products would directly and indirectly infringe.

Given that the Actavis products and the Eli Lilly patent utilized different chemical compounds, it was clear that on a strict literal reading of the claims, there was no infringement.¹⁷⁰ For Eli Lilly to sustain its infringement action, it needed to show that, despite this literal reading, the claims should be construed in a way that encompassed Activis’s medicaments. To do so, they relied on the Protocol on the Interpretation of Article 69 which, as Lord Neuberger noted, provided that the scope of protection afforded to a patentee was not limited to the literal meaning of the claims. The problem with the Protocol, however, was that ‘it was not at all clear how far a court is permitted to move away from a literal meaning’.¹⁷¹ In addition, while Article 2 made it clear that equivalents needed to be taken into account, it provided no guidance as to how this was to be done. As a result, in determining whether Eli Lilly’s patent had been infringed, the Supreme Court was led to consider the question at the heart of patent claim interpretation, namely: ‘how far one can go outside the wording of a claim to enable the patentee to enjoy protection against products or processes which are not within the ambit of the actual language’?

After reviewing Catnic, the Improver questions, Kirin-Amgen (all discussed earlier), and the approach to claim interpretation adopted in a number of other EPC states,¹⁷² the Supreme Court outlined what it considered to be the proper approach to claim interpretation. As Lord Neuberger said, infringement is best approached by addressing two issues,¹⁷³ each of which is to be considered through the eyes of the person skilled in the art. These are:

If the answer to either question was yes, there is an infringement.

In relation to the first question, Lord Neuberger said that, according to the ‘normal principles of interpreting documents’ in the case at hand, there was no infringement. This was because when read normally there was ‘no sensible way’ in which pemetrexed diacid, pemetrexed ditromethamine, or pemetrexed dipotassium could ‘be said to fall within the expression, “pemetrexed disodium” in claim 1 of the Patent’.¹⁷⁶ As a result, Lord Neuberger turned to the second question which raised a difficult matter of principle; namely, what is it that makes a variation immaterial?¹⁷⁷ To answer this question, Lord Neuberger relied on the Improver questions; which he said were helpful guidelines, but in need of reform.

p. 664↵Lord Neuberger began by noting that the first Improver question, which asks whether the variant has a material effect on the way the invention works, requires the court to focus on whether ‘the variant achieves the same result in substantially the same way’.¹⁷⁸ Lord Neuberger said that when answering this question, the emphasis should not be on how ‘the invention’ works, so much as on the ‘problem underlying the invention’, ‘the inventive core’, or the ‘inventive concept’.

While the first Improver question escaped any real criticism, the same cannot be said for the second Improver question which asks: would the fact that the variant has no material effect have been obvious to a reader skilled in the art at the date of the publication of the patent? For Lord Neuberger, the problem with the second question related to the information that the notional addressee was presumed to have when they asked whether it was obvious that the variant would not have a material effect on the way the invention works. The problem here was that as the notional addressee was presumed not to know whether the variant worked, it required the ‘addressee to figure out for himself whether the variant would work’. While this may have been possible with mechanical inventions, it was more problematic with certain types of chemical research where it was not possible to predict in advance whether a variant would have a material effect on the invention. As a result, this inevitably meant that in these cases the ‘second Improver test could not be answered yes’. For Lord Neuberger, this ran counter to Article 1 of the Protocol which requires fair protection for the patentee. Given this, Lord Neuberger said that the second test should be reformulated to ask: whether, on being told what the variant does, would the notional addressee consider it obvious that it achieved substantially the same result in substantially the same way as the invention?¹⁷⁹

While Lord Neuberger thought that the third Improver question, which asks whether the notional addressee would have understood from the language of the claim that the patentee wanted to limit the claims to a strict literal reading was a valid question, he felt that it was open to misunderstanding. To prevent this, he attempted to clarify a number of issues. The first was that the notional addressee’s understanding was not limited to the language of the claim, but also extended to include the specification and ‘all the knowledge and expertise’ normally attributed to them. Second, the fact that the language of the claim did not, ‘on any sensible reading’, cover the variant was not in itself a reason why a patentee should fail the third test. Rather, it was more of a reason to ask the Improver questions in the first place. Third, while it was appropriate to ask whether the ‘component at issue’ was an essential part of the invention, this was not to be mistaken with the overall product or process which the invention was part of. And finally, when considering whether a variant was obvious at the date of infringement (rather than priority date), the notional address would be imbued with more information.¹⁸⁰

In light of these changes, Lord Neuberger reformulated the Improver questions to read:

p. 665↵To establish non-literal infringement, it would be necessary to answer ‘yes’ to the first two questions and ‘no’ to the third.

Lord Neuberger then applied the revised-Improver questions to the facts-at-hand. Given that the Actavis products worked in the same way as the patented invention (they all involved a medicament that combined the active pemetrexed ingredient (namely pemetrexed anion¹⁸²) and vitamin B12), the answer to the first question was ‘yes’. In contrast to the lower courts, Lord Neuberger felt that the answer to the second question was also ‘yes’. The reason why Lord Neuberger differed from the lower courts was because of the knowledge imputed to the person skilled in the art. While the lower courts had followed the unmodified Improver questions (which led them to presume that the notional addressee did not know that the Actavis products worked), Lord Neuberger assumed that the notional addressee would know that the Actavis products worked. Armed with this knowledge and the fact that the notional addressee would have regarded the testing of the different pemetrexed compounds as a ‘purely routine exercise’, Lord Neuberger said that it would have been obvious to the notional addressee at the priority date that the Actavis products worked in the same way as the patented invention.

Lord Neuberger also disagreed with the Court of Appeal’s decision that the answer to third question was ‘no’. Unlike with the second question, the difference here had more to do with how the patent was interpreted than with Lord Neuberger’s modifications. For Lord Neuberger, the Court of Appeal decision had relied too much on a straightforward reading of the claims and not enough on Article 2 of the Protocol (which calls for a non-literal reading). For Lord Neuberger it was wrong to treat the third question as one of ‘normal interpretation’, not least because it made a nonsense of asking the three questions. This was because ‘if one cannot depart from the language of the claim when considering those questions, what is the point of those questions in the first place?’¹⁸³ While the Court of Appeal had found reason in the specification to limit the patent to pemetrexed disodium,¹⁸⁴ Lord Neuberger disagreed and held that there was no good reason why the patentee would have wanted to limit the patent to a literal reading of the claims. On this basis, the Supreme Court held that the Actavis products provisionally infringed Eli Lilly’s patent.

The reason for treating this conclusion as ‘provisional’ was because the court wanted to consider what effect, if any, the prosecution history (that is, the information exchanged between the applicant and the patent office during the grant of the patent) had on the way the claims were interpreted. Here, Actavis argued that the prosecution history at the EPO suggested that the claims should be limited to pemetrexed disodium. Signaling a move away from Kirin-Amgen,¹⁸⁵ Lord Neuberger said that the UK courts should adopt a ‘sceptical, but not absolutist’ approach to the suggestion p. 666↵that the history of the patent at the patent office could be used to interpret the claims post-grant.¹⁸⁶ Specifically, he said that reference to the file would only be appropriate where the file history unambiguously resolves a point of uncertainty, or where it would be contrary to public interest not to do so.¹⁸⁷ In any case, as the contents of the file did not justify departing from the preliminary conclusion, the court held that the Actavis products directly infringed the Eli Lilly patent.

While it will take some time to see how Actavis is received,¹⁸⁸ it is possible to draw some preliminary conclusions. One thing that is clear is that Actavis has reinstated the importance of the now-modified Improver questions in determining how far a patent can be construed beyond a ‘normal’ reading of the claim. While this is clear, what is less clear is the continued importance of purposive interpretation. Given some of Lord Neuberger’s sweeping claims, it would seem that the purposive interpretation has been subsumed within the second stage of his two-step infringement test.¹⁸⁹ It will be interesting to see whether the courts follow this lead and replace the purposive test with the modified-Improver questions or whether they continue to selectively use the purposive test when dealing with more straightforward cases (as in Catnic).¹⁹⁰ Another subtle but important consequence of Actavis is that it has increased the scope of protection for patentees, particularly in relation to chemical inventions. This is because presuming that the notional addressee knows that the variant works increases the likelihood that the second Improver question will be answered positively and thus that there is a finding of infringement. A third, as yet unexplained issue is whether the variants which might be covered under the test of equivalents outlined by Lord Neuberger can include material which formed part of the state of the art at the priority date. Such an outcome seems undesirable, and might be avoided by applying the third guideline so as to assume that in such a case the patentee would want strict compliance with the literal meaning of the claim.¹⁹¹ Alternatively, it might be necessary to develop a doctrine (such as the so-called ‘Formstein defence’) that equivalents cannot include matter which would not have been patentable in the light of the state of the art.¹⁹²

4.4.1 Exhaustion of biological patents

Article 10/paragraph 10 of Schedule A2 provide that the protection conferred by a patent shall not extend to biological material obtained from the propagation or multiplication of biological material placed on the market by the owner of the patent (or with their consent) where the multiplication or propagation necessarily results from the application for which the biological material was marketed.²³³ This is subject to the proviso that the material obtained is not subsequently used for other types of propagation or multiplication.

In effect, Article 10 introduces a specific form of exhaustion for biological patents. For the patent rights to be exhausted under Article 10, it is necessary to establish that the multiplication or propagation (which potentially infringes the patent) is ‘an incident of what might be called the true purpose of the sale’.²³⁴ The upshot of this is that a person who used a patented yeast to make beer would, on its face, infringe the patent in the yeast. This is because the process of making the beer necessarily involves the multiplication of the yeast. However, if the patented yeast was sold in a home-brew shop for the purpose of beer making, Article 10 (and its British equivalent) would provide the defendant with a ‘defence’. Nonetheless, if the defendant was to propagate the yeast and offer it for sale, the defence would not apply.²³⁵ The defence will allow farmers to sow a patented seed, and to harvest and sell the resulting crop (for example to sell the wheat for flour); they will not be permitted, however, to sell the seed to other farmers for the purpose of propagating new crops.²³⁶

4.4.2p. 672 Farmers’ privilege

In the debates surrounding the Biotechnology Directive, one of the fears raised was that patent protection of biological inventions would have a negative impact on traditional farming practices. In particular, it was feared that patent protection would mean that farmers would not be able to use the seeds that they harvested from their crops to resow in future, nor would they be able to breed patented animals. The potential problem was that sowing and breeding carried out in relation to a patented product would infringe. To remedy problems of this sort, Article 11(1) and (2) of the Biotechnology Directive provide farmers with specific defences. These provisions have been mirrored in section 60(5)(g) and (h) of the Patent Act 1977, introduced under the Patents Regulations 2000.

Section 60(5)(g) provides a defence where a farmer uses the product of their harvest for propagation or multiplication by them on their farm after there has been a sale or other form of commercialization of plant-propagating material to the farmer by the patent owner for agricultural use. In effect, the defence enables farmers to save seeds from one year’s crop to sow crops in the following year. The defence in section 60(5)(g) only applies to the plant species and groups set out in paragraph 2 of Schedule A1 to the Patents Act 1977. This covers various types of fodder plant, cereal, potato, and oil and fibre plant. In situations where a farmer successfully relies on the defence in section 60(5)(g), the farmer must pay the relevant rights holder equitable remuneration.²³⁷ The remuneration must be ‘sensibly lower than the amount charged for the production of the protected material of the same variety on the same area with the holder’s authority’.²³⁸ The need to pay equitable remuneration does not arise if a farmer can prove that they are a ‘small farmer’.²³⁹ Where requested, the rights holder and the farmer must supply each other with certain information.²⁴⁰ The use of the defence is subject to a number of other restrictions (such as ability of the farmer to move protected material from their farm).

Section 60(5)(h) provides farmers with a defence in relation to the breeding of animals. More specifically, it provides that ‘the use of an animal or animal reproductive material by a farmer for an agricultural purpose … of breeding stock or other animal reproductive material which constitutes or contains the patented invention’ is non-infringing. The farmer’s defence for the breeding of animals is potentially very broad. In part, the scope of the defence will depend on how the phrase ‘use for an agricultural purpose’ is construed. The Act tells us that ‘use for an agricultural purpose’ includes situations in which the animal or animal reproductive material is made available for the purposes of pursuing the farmer’s agricultural activity; it does not include ‘sale within the framework, or for the purposes of a commercial reproduction activity’.²⁴¹

It will be interesting to see what impact these defences have upon farming practices. It will also be interesting to see how the biotechnology industry responds to these defences. It has been suggested that defences such as those provided in section 60(5)(g)–(h) may act as a stimulus for the development of techniques such as terminator genes or special hybrids that operate to ensure that seeds will not regerminate.²⁴²