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Ireland tipped to grow as centre for patent litigation

ANALYSIS: Ireland is set to grow in popularity as a place businesses will choose to assert or challenge patent rights.07 Nov 2018

The country is well-placed to develop as a hub for patent litigation in the life sciences sector in particular as it is already home to all 10 of the world's top 10 pharmaceutical companies and is the largest net exporter of pharmaceuticals in the EU.

Brexit will leave Ireland as the largest common law jurisdiction in the EU, and Irish decisions will continue to be recognised and enforced throughout the EU.

There are other aspects of Ireland's legal framework for litigating patents that is also proving attractive to businesses.

Judiciary and legal system

Ireland's judiciary is well respected internationally for its integrity, commercial awareness, fairness and impartiality. According to the World Economic Forum scorecard on 'judicial independence', the UK and Ireland rank 6th and 7th place respectively out of 137 countries.

Patent cases in Ireland for revocation and infringement are heard in the High Court, with limited exceptions, and may be transferred to the Commercial List on application by either of the parties. The Commercial List is a fast track court and cases admitted to the list are subject to efficient case management procedures. Cases must meet at least one of the criteria for entry set out in Order 63A of the Rules of the Superior Courts in order to be eligible for entry into the Commercial List, which include that the proceedings are brought under Ireland's Patents Act 1992.

The court retains discretion as to which cases will be admitted. However, provided that the case meets the relevant criteria, and the applicant has not delayed in issuing proceedings or making the application, patent cases will generally be admitted to the Commercial List.

The availability of the fast track system appeals to general counsel in international companies who seek an efficient, well considered determination of their patent dispute. The fact that proceedings benefit from case management saves time and costs, and results in decisions which, due to Ireland's membership of the EU, may be enforced in other EU jurisdictions. 

Examination in chief

An attraction for many parties to patent litigation is the fact that patent litigation proceedings in Ireland regularly involve evidence in chief, thus allowing parties to examine their expert witnesses and subject the other side's witnesses to cross examination. As such, the capacity for examination in chief in Ireland often means that, from a patent litigation strategy perspective, it is important to consider the merits or otherwise in suing or being sued in Ireland in patent proceedings.

Discovery and evidence

In Ireland, parties are entitled to seek discovery of documents from the other side which are or have been in the "power, possession or procurement" of the other party, and which are relevant to the matters in question in the proceedings, and necessary for the fair disposal of the matter or for saving costs.

The potential scope of discovery in Ireland is quite broad. The test for relevance extends not only to documents which are likely to contain information which will either advance the requesting party's own case, or damage the case of their adversary; but also to documents which as a matter of probability, may lead the party requesting them on a train of inquiry, which may have either of those two consequences.

The Court of Appeal  in Ireland has previously confirmed that the principles applicable to discovery in patent cases are no different to discovery in other types of cases.

It is also possible for parties to obtain Norwich Pharmacal Orders in Ireland, which enable the party to obtain pre-action disclosure of documents identifying alleged infringers from third parties, such as a person found in possession of infringing goods, or using infringing services, on a commercial scale.

Preservation or 'Anton Piller' orders are also available. Such orders require a party to preserve documents and items, which are vital to the applicant's case, and which are at risk of imminent destruction or disposal.

In addition, Ireland may see a rise in the use of interrogatories in the near future. In a recent Court of Appeal decision, Mr Justice Hogan recommended that interrogatories should be used in advance of seeking discovery in order to reduce the factual issues in dispute, narrow the scope of the potential discovery and thus reduce time and costs for the parties. It remains to be seen whether this recommendation will be taken up by litigants, or if it will be placed on more formal footing with an amendment to Rules of the Superior Courts.

Standing

In Ireland, any person may apply to the High Court or the Controller of Patents, Designs and Trade Marks for revocation of a patent. This is a relatively low threshold and does not require a party to show that it is at risk of infringement proceedings from the patent owner in order to bring proceedings. 

In addition, any party may apply for a declaration of non-infringement of a patent, provided they have written to the proprietor, or licensee, in advance seeking written acknowledgment that they are not infringing and have been refused such acknowledgment.

The proprietor or the exclusive licensee may bring patent infringement proceedings. If the exclusive licensee brings proceedings, the proprietor must either be joined as a co-plaintiff, or as a defendant to the proceedings, so that they have sufficient notice of the proceedings.

Injunctions

The Irish courts will grant a preliminary injunction where the applicant establishes that:

  • there is a serious issue to be tried.
  • damages are not an adequate remedy.
  • the 'balance of convenience' favours an injunction.
  • rights holders are required to provide an undertaking as to damages to the court to compensate the alleged infringer in the event that the preliminary injunction should not have been granted.

Rights holders need to show extreme urgency in order to succeed with an application for an interim injunction to be issued against an alleged infringer without the other side having a chance to put arguments against the application forward before the court. These are referred to as 'ex parte' applications.

It is more common for interlocutory injunctions, which are applied for on notice to the other party, to be granted. Interlocutory injunction applications are typically heard within four to six weeks from the initial application.

Registered patents enjoy a presumption of validity under Irish law. Typically, the courts will not assess the merits of the case in detail at the interlocutory injunction stage.

In the case of pharmaceutical patents, an interlocutory injunction application is more likely to be granted where the infringing drug has not yet been put on the market, or it has just been launched.

On occasions, parties to patent litigation will forgo issuing an application for an injunction when the other side agrees to seek an expedited case managed trial in the Commercial Court.

Remedies

There are a wide range of remedies available for patent infringement in Ireland. These include: damages, an account of profits, injunctions, delivery up and/or destruction of infringing goods or articles, a declaration of infringement, and publication of the judgment.

Costs

Generally, costs follow the event in Ireland. A successful litigant may reasonably expect to recover around 75% of the costs incurred by it in relation to the proceedings from the other party to the dispute.

There are circumstances in which the courts may decide to award costs differently. In doing so, it will take into account a number of factors, including: whether it was reasonable for a party to raise, pursue or contest the issue, or issues, concerned; whether a party has succeeded on part or all of its case; offers to settle made by either party; and a party’s refusal to mediate or to attempt to settle the case.

Pricing and reimbursement for pharmaceutical products 

Another relevant consideration for pharmaceutical companies considering Ireland as a jurisdiction in which to do business is the applicable pricing and reimbursement regime for medicines.

In Ireland, once a marketing authorisation has been granted by the Health Products Regulatory Authority (HPRA), pharmaceutical companies can apply to the Health Service Executive (HSE) for reimbursement approval for their drug. The reimbursement price for originator products is set by the HSE in accordance with the Framework Agreement on the Supply and Pricing of Medicines 2016 and the Health (Pricing and Supply of Medical Goods) Act 2013.

In the case of medicinal products for which there are a number of generic alternatives available, the HPRA will maintain a list of interchangeable medicines. If the HPRA determines that a generic product is pharmaceutically interchangeable with an existing branded or generic product, it will add the generic product to the list of interchangeable medicines. The HSE will then set a reference price for all of the products contained in that list. The reference price will be the reimbursement price paid by the HSE in respect of all of the products contained in the list, regardless of any variations in the retail price of those products.

A product may be suitable for inclusion on the list of interchangeable medicines where: it has the same qualitative and quantitative composition in each of its active substances; it is in the same pharmaceutical form; it has the same route of administration; and has not more than two active substances.

The 2013 Act also provides for the introduction of a system of generic substitution, whereby pharmacists are obliged to offer patients the cheapest available substitute medicinal product when presented with a prescription which prescribes a medicine appearing on the interchangeable list, unless the prescriber has written 'do not substitute' on the prescription.

Although the patient is not obliged to accept the generic substitute, they are incentivised to do so. Unless substitution is prohibited for clinical reasons, if a patient opts for the more expensive product, they will have to pay the difference between the reference price and the cost of the branded medicine. 

Recent cases

A recent case worthy of note is the judgment of the Commercial Court in respect of Eli Lilly's application to revoke Eisai's patent for it's Alzheimer's drug.

Eisai applied to the court for a stay on the proceedings pending the determination of European Patent Office (EPO) opposition proceedings. The court deviated from precedent in ordering that while the trial itself should be postponed, all of the remaining pre-trial preparations, including discovery, should proceed. The court was influenced by the fact that the drug concerned was targeted at Alzheimer's disease, and the court considered that there was a public interest in ensuring that any risk of delay in the supply of a potential treatment for such a devastating disease should be minimised. 

The decision is significant as it demonstrates that the Commercial Court is willing to take a pragmatic approach to ensure that applicants seeking to clear the way in Ireland are not unduly delayed in prosecuting their case by ongoing EPO proceedings. Although it is unlikely that an Irish judgment will be handed down before the EPO decision, the parties will able to proceed to obtain discovery in Ireland and make preparations for trial in the meantime.

An attractive jurisdiction for patent litigation

Ireland is a common law jurisdiction in Europe with a well respected judiciary and a fast track court system capable of dealing with complex patent disputes. The courts system, the potential to obtain wide ranging discovery and the availability of costs recovery in Ireland makes Ireland an appealing jurisdiction for all litigants.

Many generics companies already have manufacturing operations in Ireland, and the low bar for standing in revocation actions, along with recent decisions such as the Eli Lilly case make Ireland an attractive jurisdiction to these companies. In addition, the availability of pre-trial disclosure, coupled with wide ranging remedies for infringement, including interlocutory relief, is causing the general counsel of originator companies to look to Ireland as a forum for infringement proceedings.

Ireland is already proving to be an increasingly important jurisdiction for patent litigation in Europe, and following Brexit, Ireland's popularity is only expected to increase.

Dublin-based Ann Henry and Karen Gallagher are patent law experts at Pinsent Masons, the law firm behind Out-Law.com.