The interesting six-jurisdiction patent case between two of the world’s leading enzyme manufacturers, the Danish companies Danisco A/S (now part of DuPont) and Novozymes A/S has already been subject to earlier blogs both here and several times on EPLAW and PatLit. To recap the story briefly, Novozymes started the proceedings by applying for a preliminary injunction against Danisco on the basis of its EP patent 1 804 592 (“the Patent”) in Denmark, and obtained it following a lengthy trial, and then won again in first instance proceedings in the Netherlands where the Rechtsbank held the patent valid and infringed. Shortly thereafter, however, the tide turned and the patent was revoked in its entirety by the EPO opposition division for lack of novelty and lack of inventive step. Danisco was subsequently successful on appeal in Denmark and got the injunction lifted. Meanwhile Novozymes had no success based on utility models derived from the EP patent in Finland (actions rejected) and Germany (actions suspended pending resolution of the validity of the UM by the German Patent and Trademark Office).

While Novozymes appealed the EPO decision, the UK proceedings went on in parallel, resulting in a highly interesting interplay between EPO appeal proceedings and the UK invalidation proceedings. Both proceedings culminated in the EPO Board of Appeal Decision T 1839/11 that just came out (31 July 2012). The appeal proceedings ended with a final success for Danisco on the patent side, as Novozymes’ appeal was dismissed and the revocation of the patent hence became final.

The UK proceedings have already spawned five judgments (although only one [here] has made it onto BAILII). However, the case has not even reached trial and, as a result of the revocation of the patent by the EPO’s Technical Board of Appeal (“TBA”), will never do so. The TBA, in one of the fastest EPO accelerated proceedings yet (overall duration only about one year in opposition and another year on appeal), relied on documents disclosed in the UK proceedings. Thus the case provides an interesting example of the potential impact of such disclosure on parallel proceedings elsewhere in Europe, including at the EPO, and therefore deserves closer consideration.

Background

Novozymes’ Patent related to the production of enzyme-containing animal feed pellets (primarily for pigs and poultry). In essence, it claimed that coating the enzymes with salt would protect the enzyme from damage during steam-pelleting, when the feed mixture is exposed briefly to high-pressure steam and then forced through a die to form pellets.

Novozymes filed its application in 2004 but did not launch any product based on it in the years that followed. In fact, it seems that Novozymes had not been able to reproduce the examples on which the patent relied in subsequent trials, finding that later results blurred the picture.

However, in 2007, Danisco launched a salt-coated enzyme product (Phyzyme XP TPT), developed independently of the Patent by its Genencor subsidiary. Upon launch, Novozymes analysed that product and amended the claims of its patent application. Novozymes also then restarted its own work on salt-coatings and is, later in 2012, expected to launch its own salt-coated product (Ronozyme HiPhos GT) onto the European market.

The Patent was granted on 11 November 2009. Shortly thereafter (in fact, just two days after another of Novozymes’ salt-coated enzyme patents, EP 1 092 007, was revoked by the EPO Technical Board of Appeal as a result of opposition proceedings instituted by Genencor) Novozymes sued Danisco under the Patent in Denmark (a key market for both companies), seeking a preliminary injunction (“PI”) against Danisco’s Phyzyme XP TPT product. Novozymes also filed actions in Germany and (under related Utility Models) in Finland.

Danisco retaliated by filing an EPO Opposition and bringing revocation proceedings in the Netherlands, the UK and Finland. Novozymes counterclaimed for infringement in the Netherlands, but not in the UK.

In early 2011, the Danish Enforcement Court granted Novozymes its PI and the District Court of The Hague found the Patent valid and infringed in first instance merits proceedings.

However, in July 2011, the EPO Opposition Division found the Patent as granted and all auxiliary requests invalid for lack of novelty (main request) and lack of inventive step (auxiliary requests). Novozymes’ appealed this decision, meaning the revocation was suspended pending the decision of the TBA.

First UK hearing: application to stay and to use disclosure documents overseas

Meanwhile, disclosure took place in the UK and evidence was exchanged in preparation for trial in October 2011, although Novozymes chose to file no factual evidence to explain the lack of reproducibility in its trials.

The UK proceedings took a tragic turn in the late summer of 2011 when Danisco’s Expert Witness unexpectedly fell ill and subsequently passed away just six weeks before the UK trial. An adjournment of the trial to March 2012 was agreed by the parties and Danisco applied for a stay of proceedings pending the decision of the TBA, which fixed its hearing for June 2012 (in what might be close to record time).

Danisco also applied for permission to use certain of Novozymes’ disclosure documents in the parallel foreign proceedings (including before the TBA). Danisco submitted that Novozymes’ internal documents established a prima facie case that Novozymes had misled foreign courts and tribunals, particularly as to the repeatability of the examples contained within the Patent. Danisco sought permission to use a table summarising the results of a number of steam-pelleting trials of salt-coated enzyme granules conducted by Novozymes both before and after the priority date (the accuracy of which was not disputed) and an internal report dating from before the priority date discussing trial results up to that time.

In the course of that application, Novozymes belatedly brought a counterclaim for infringement of the Patent against Danisco and its UK subsidiary. Additionally, Novozymes for the first time informed Danisco and the Court that it was in the process of seeking regulatory approval for its Ronozyme HiPhos GT product, which was said to implement the teaching of the Patent, and that it therefore wished the UK proceedings to be resolved (at first instance and appeal) before that product was launched.
Those applications were heard in December 2011. In deciding to dismiss both applications ([2011] EWHC 3288 (Pat)), Arnold J considered that they were inextricably linked. As regards the stay application, in conducting the balancing exercise guided by the principles set down in Glaxo Group Ltd v Genentech Inc. [2008] EWCA Civ 23, the judge took into account the fact that the TBA had (following both parties’ requests for accelerated proceedings) appointed an unusually swift hearing date (the end of June 2012) but balanced against that the fact that the proceedings have been pursued as far as they had (almost to trial) and Novozymes’ interest in clearing itself of the charge that it has misled other courts and tribunals. Given the nature of UK proceedings, with the opportunity for cross-examination and a full investigation of these allegations in detail, it was appropriate for the UK trial to proceed in advance of the TBA hearing.

Having decided that a trial would indeed take place in March 2012, Arnold J rejected the application for permission to use the documents elsewhere, noting that if Danisco was correct in its allegations then it would have the opportunity to use the documents after a UK trial. If Danisco was wrong, then there is no reason why it should have permission to use the documents at all. The Court of Appeal declined to interfere with that decision, and the TBA refused to order Novozymes to allow the documents to be used in the EPO.

Second UK hearing: post-window disclosure

The evidence produced by Novozymes in the course of the first hearing led Danisco to seek further disclosure in January 2012. As in all patent cases, standard disclosure had been limited to the temporal window two years either side of the priority date (here, September 2004). Danisco argued that, since the development of the commercial product said to be an embodiment of the Patent was resumed only after September 2006, documents originating after the end of the disclosure window would be as relevant to its sufficiency arguments as those within the window. In addition, there would be no undue burden on Novozymes providing clearly and precisely identified documents in the same categories as had previously been disclosed. Danisco also sought disclosure of the dossier which had been submitted as part of the regulatory approval process for Ronozyme HiPhos GT, which had been specifically referred to in a witness statement from Novozymes’ solicitor.

With Novozymes refusing to provide the disclosure requested, an application for this specific disclosure came before Mr Justice Morgan in February 2012, four-and-a-half weeks before trial. In his judgment, reported as [2012] EWHC 389 (Pat) (full text available via Lawtel), Morgan J acceded to Danisco’s request in relation to the extension of standard disclosure to outside the temporal window. However, in relation to the regulatory dossier, Morgan J ordered disclosure of only a small part, relying upon Church of Scientology of California v Department of Health and Social Security [1979] 1 WLR 723 as authority for allowing restriction of a party’s right under CPR 31.14 to inspect documents referred to in witness statements made on behalf of a counterparty.

Third UK hearing: Pre-Trial Review

Morgan J also ordered a Pre-Trial Review (PTR) – something which is increasing regarded by judges as useful in more complex Patents Court cases (see also Floyd J’s recent comments in HTC Europe Co Ltd v Apple Inc [2012] EWHC 1789 (Pat) at paragraphs 360-362).

By the time of the PTR (which was heard by Arnold J two weeks before the trial was due to begin), Novozymes were encountering several problems being ready for trial. The disclosure ordered by Morgan J had not yet been completed, primarily due to Novozymes’ main in-house EPO counsel having gone on holiday incommunicado shortly before the hearing, meaning that a privilege review could not be completed. This, in turn, meant that Danisco had been unable to provide its expert evidence on those documents. Novozymes was also having difficulties in completing evidence in reply to (1) Danisco’s expert evidence on the standard disclosure in relation to insufficiency and (2) Danisco’s expert evidence on certain questions of physical chemistry (relevant to the novelty case) which was said by Novozymes to be late-filed.

Fourth UK hearing: Adjournment

Arnold J refused to entertain an adjournment application at the PTR in the absence of an application notice and “chapter and verse” on why Novozymes could not be ready for trial, and instead gave directions which would lead to trial.

Novozymes then filed a formal adjournment application which was heard by Mann J the following week. By the end of that hearing, the parties had essentially accepted that an adjournment was inevitable and that the new trial date would have to be after the TBA hearing in June 2012. The debate therefore revolved around who was at fault and the conditions which would be attached to such an adjournment.

In Mann J’s judgment ([2012] EWHC 696 (Pat), available on Westlaw), Novozymes was at fault. Central to his finding was Novozymes’ election not to serve factual evidence from the inventors of the Patent in relation to Danisco’s insufficiency case based on Novozymes’ own documents, but instead to rely on the evidence of their own expert witness. Mann J held that the main thrust of Danisco’s insufficiency case was well known to Novozymes since, at the latest, the December hearing before Arnold J. Even before then, Danisco made the point repeatedly in correspondence (and again before Arnold J) that the appropriate course should have been for factual evidence from the inventors to be adduced, but Novozymes had refused to do so. This, combined with the delays in disclosure, had led to the situation where Novozymes’ expert witness was unable to properly review and reply to Danisco’s expert evidence on the disclosure, which was a situation of Novozymes’ own making.

Therefore, Mann J granted an adjournment on terms largely as requested by Danisco, including permission to use all of Novozymes’ disclosure documents (and expert reports thereon) in the parallel proceedings (including in the EPO) subject to an obligation of best endeavours to keep the documents confidential in those proceedings so far as possible, a restriction on the ability of Novozymes to resist the introduction of the documents into the EPO proceedings or request an adjournment on the basis of their introduction, and Novozymes to pay Danisco’s costs thrown away as a consequence of the adjournment.

Accordingly, Mann J’s decision led to the unusual situation of UK disclosure documents being used in parallel proceedings before a UK trial in which they would be considered. As discussed below, Danisco made use of this opportunity before the TBA.

Fifth UK hearing: more disclosure

The UK trial was relisted for October 2012. However, the parties were back before the Court in June 2012 in relation to another disclosure application – this has already been reported on PatLit (here) and Arnold J’s judgment ([2012] EWHC 1641 (Pat)) is available on Westlaw.

The TBA decision

In record time, Novozymes’ appeal against the Opposition Division’s decision to revoke the Patent came before the TBA on 28-29 June 2012 (a mere two-and-a-half years after grant of the Patent – if readers are aware of any quicker cases the author would be interested to hear about them). The appeal was dismissed, with the Board relying on material from Novozymes’ UK disclosure in finding lack of inventive step. In particular, the documents were considered highly relevant to the question of whether there was a technical effect across the whole scope of the invention as claimed and, therefore, whether the claimed invention was an improvement over the closest prior art or (as the Board found) a mere alternative.

The full reasons of the Board have just been released (the case reference is T 1839/11). In particular, the manner in which the Board dealt with the parties’ joint request that the disclosure materials from the UK be excluded from public inspection on grounds of confidentiality is worthy of comment.

At the outset of the hearing, the Board (through its legal member Mr Kevin Garnett QC) indicated that documents could only be withheld from public inspection if such inspection would not serve the purpose of informing the public about the Patent (under Rule 144 EPC). The documents the subject of the requests appeared, in fact, to serve exactly that purpose. Therefore the Board proposed to hear the parties’ submissions on the substantive issues, including reference to any such documents, and only after a decision had been reached on the substantive issues would the Board hear submissions regarding exclusion from file inspection. This does not seem markedly different from the approach of the UK courts to ensuring justice is done publicly, and both sides agreed to this approach.

At the end of the first hearing day it turned out that the Board was of the opinion that the main request presented by Patentee (which corresponded to the second auxiliary request defended in opposition proceedings) lacked an inventive step over a combination of references D1 and D3 (the same combination on which the opposition division had relied earlier), particularly in view of that the data in the UK disclosure documents showed that no improvement was present throughout the entire scope claimed. The Board also expressed doubts that the 13 auxiliary requests presented by Patentee until then overcame this inventive step objection. In response to this indication, Patentee (although duly warned by the Board that this might leave him without any request) withdrew all of its preceding requests for maintenance of the patent and replaced them by a new main and two auxiliary requests. These were, however, not admitted into the proceedings by the Board, since they could have been filed earlier in view of the fact that the objection that lead to the Board’s conclusion on inventive step was submitted by the Respondent already with the reply to the statement of grounds of appeal. Appellant thus had an opportunity to respond to the objection by way of an appropriate amendment but chose not to file one, but to defend himself by putting forwarding arguments against this attack. The Board further held that particularly in accelerated proceedings it is incumbent on a party to put its requests on the table at the earliest opportunity. Doing so only towards the end of oral proceedings is too late. Since the new requests were not admitted and there were no other requests for maintenance of the patent on file, the appeal was dismissed.

The Board then continued to discuss the parties’ requests for exclusion from file inspection in greater detail. It held that although a mechanism for exclusion of documents from file inspection exists (per the Decision of the President of the European Patent Office dated 12 July 2007 concerning documents excluded from file inspection (OJ EPO 2007, J.3) and Article 128(4) & Rule 144(d) EPC), prejudice to the economic interests of one party is, while necessary, not a sufficient requirement for excluding documents from file inspection.

If documents are relevant to the patentability or sufficiency of disclosure of a patent then they clearly serve the purpose of informing the public about the patent and will therefore not be excluded from file inspection regardless of their confidentiality status. This will be the case even if allowing the documents onto the public record is prejudicial to the legitimate personal or economic interests of natural or legal persons.

In order to comply with the spirit of the UK Judgment of Mann J, Danisco filed both an unredacted document D46 containing substantially all experimental data and internal memoranda obtained through the UK disclosure proceedings and a redacted version of this document wherein just the relevant parts on which Danisco intended to rely were retained and information not directly related to Danisco’s case was deleted. The Board approved this approach and finally ordered exclusion of the unredacted document from file inspection, whereas the redacted document D46R(2) was made open to file inspection.

The Board summarized its approach to exclusion from file inspection in the following two headnotes:

1. A document filed in proceedings and which serves the purpose of informing the public about the patent may not ordinarily be excluded from file inspection under Rule 144 EPC and Article 1(2) of the Decision of the President dated 12 July 2007 even though such inspection would be prejudicial to the legitimate personal or economic interests of natural or legal persons (Points 3.2 – 3.6).

2. Where a filed document contains information, some of which serves the purpose of informing the public about the patent but some of which does not, the filing of a version of the document in a form from which the latter information has been redacted may form the proper basis for an order excluding the unredacted document from file inspection under Rule 144 EPC, the redacted version being open to file inspection (Points 3.8 and 3.11).

Postscript

Although this brings to a close the story of this Patent, all is not over yet. Novozymes still has five divisional applications in prosecution at the EPO, as well as Utility Model rights still alive in Germany and Finland. For its part, Danisco has one soon-to-be granted patent in relation to its Phyzyme XP TPT product and ten divisional applications in prosecution, with the launch of Novozymes’ new salt-coated feed enzyme granule due imminently in the European market.
A never-ending story? Who knows, but has pig feed ever been so exciting?

Disclosure and Acknowledgement

The contribution of Paul Abbott, UK Solicitor, Arnold&Porter LLP, to this post, in particular with regard to the UK aspects of this case, is gratefully acknowledged. Hoffmann Eitle and Arnold&Porter represented Danisco in the EPO opposition appeal proceedings.


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