11 September 2018

US Patent Infringement…in the English Court?

The recent case of Chugai Pharmaceutical Co. Ltd. v. UCB & Celltech [2018] EWHC 2264, concerns a worldwide licence agreement between Chugai Pharmaceutical and UCB Pharma S.A. Under the agreement, UCB licensed a portfolio of patents to Chugai, including US patent 7,566,771 (hereafter ‘771). ‘771 expires on July 29th 2026, and is the only unexpired patent in the portfolio licensed by Chugai. The licence provision stipulating when royalty payments are due reads as follows:

“Royalties shall be payable upon Net Sales in countries where, but for the licence granted by UCB to CHUGAI pursuant to Article 2, CHUGAI or a Permitted Sublicensee would infringe a Valid Claim of the relevant patent…”

The licence requires royalties to be paid on the sale of a particular product in a given territory, provided the product falls within the scope of one of the licensed patents’ claims, unless of course that patent is declared invalid or has expired. While the portfolio included several international patents, the licence agreement is governed by English law, and has an exclusive jurisdiction clause in favour of the English court.

Therefore, it fell to the English court to decide whether Chugai’s immunosuppressive drug tocilizumab infringed the claims of ‘771, and as such whether royalties would continue to be due under the licence agreement for Chugai’s sales of the drug in the US. At trial, Chugai sought a declaration that tocilizumab does not infringe a valid claim of ‘771, and therefore that royalties were no longer due under the licence. Conversely, UCB contended that tocilizumab fell within the scope of ‘771’s claims, and that royalties were still due.

The case is noteworthy because it saw an English court consider the validity of a US patent, as Chugai’s argument that tocilizumab did not infringe a valid claim raised the validity of ‘771 as an important issue. In his decision, Mr. Justice Birss not only provided a detailed overview of the state of the art in antibody technology, but also a helpful summary of US claim construction law, the latter being provided by a pair of American experts on the subject – retired US Judge Paul Redmond Michel (for Chugai) and Professor David Chisum (for UCB).

Background – Earlier Jurisdictional Decision

A 2017 decision (Chugai Pharmaceutical v. UCB [2017] EWHC 1216 (Pat)), concerning the same litigation, determined whether the English court in fact had jurisdiction to deliberate on Chugai’s claim regarding the validity of ‘771. In that instance, Chugai argued that, since their dispute with UCB was contractual in nature, the English court had jurisdiction to consider validity as it related to the scope of the patents licensed under their agreement with UCB. They claimed that if ‘771 were construed so as to cover tocilizumab, this would result in ‘771 being invalidated due to a prior art document identified by the USPTO, which detailed an antibody called anti-Tac.

Chugai also raised the validity issue when addressing claim construction, which in the US requires considering both the intrinsic (the prosecution file, claims, and specification) and the extrinsic (expert evidence, scientific principles, and the meaning of technical terms) evidence. If, under US law, a claim is deemed to be ambiguous after applying the tools of claim construction (ie. considering both the intrinsic and extrinsic evidence), the claim should be construed to preserve validity – a rule referred to as the validity “tie breaker”.  UCB argued that while the case was indeed contractual in nature, the litigation would effectively require the English court to analyse and deliberate on the validity of a US patent, and was therefore outside the English court’s jurisdiction.

In his decision, Mr. Justice Carr found in favour of Chugai, stating that their arguments did not directly challenge the validity of ‘771, but merely sought the court’s guidance on the impacts of differing interpretations of the patent’s claims regarding validity. Such an argument, commonly referred to as a “patent squeeze”, arises when a certain approach to claim construction in support of an infringement argument may impact validity, and vice versa, thereby requiring the court, either in the patent’s home jurisdiction or elsewhere, to consider validity in the context of infringement.  As such, Carr J held that, rather than seeking to invalidate ‘771, the dispute Chugai wished to raise before the English court related to the scope of ‘771’s claims. Therefore, the English court did in fact have jurisdiction to decide the case.   

The decision echoed that taken by Mr. Justice Laddie in Celltech v. Medimmune [2004] EWCA Civ 1331, in which it was held the English court had jurisdiction over a dispute concerning the scope of several international patents, as the licence agreement between the parties granted the English court jurisdiction over the agreement. As Birss J accurately summarised in the present case:

“..the English court has jurisdiction concerning the scope of a licensed patent, but the issue of validity can only be tried by the courts of the country of that patent. Nevertheless considerations about validity, to the extent they are relevant under the applicable law, may be taken into account in this court in resolving the question of claim scope and the fact those considerations arise does not undermine the jurisdiction of this court to decide the issue in this case.”

With Carr J’s decision, the case advanced to trial, where the question put to the court was whether Chugai’s US sales of tocilizumab infringed Claim 2 of ‘771.

Claim Construction – American Style

Claim 2 of ‘771 reads as follows:

“A humanised antibody molecule having affinity for a predetermined antigen and comprising a composite heavy chain and a complementary light chain, said composite heavy chain having a variable domain including complementary determining regions (CDRs) and framework regions, wherein, according to the Kabat numbering system, in said composite heavy chain: said CDRs are non-human donor at residue 31 to 35, 50 to 58, and 95 to 102: and said framework regions are non-human donor at:

  1. Residue 6;
  2. One or more of residues 23 and 24;
  3. One or more of residues 48 and 49;
  4. One or more of residues 71 and 73;
  5. One or more of residues 75, 76 and 78; and
  6. One or more of residues 88 and 91;

Provided that said heavy chain is not a chimeric antibody heavy chain having a donor variable domain and a human constant region”.

The decision before Birss J involved determining the correct meaning of the term “non-human donor”. In order for a given antibody to fall with claim 2 it “requires that certain specified residues in the framework region “are non-human donor” ”. However, difficulty in determining what qualifies as a non-human donor arises when certain amino acids are the same in both the non-human donor antibody and the human acceptor, and thus the term non-human donor can take on different meanings. Birss J’s decision provides an in-depth overview of the current state of antibody technology, and anyone interested in the subject should read the case in full.

Aided by the parties’ experts, Birss J gave a concise overview of US claim construction law and its applicability to the scope of ‘771. He explained that Phillips v. AWH Corp. [2006] USCAFED 37, the leading US case on the subject, states that the language in the claims are to be given their ordinary meaning to a person of ordinary skill in the art at the patent’s effective filing date. Phillips states that the person of ordinary skill is deemed to read the words in the patent with the knowledge of how the words apply to the relevant field, and furthermore that the claim is to be read in the context of any intrinsic evidence.

Birss J clarified that extrinsic evidence, including the meaning of technical terms, scientific principles and expert evidence is also to be considered by the court during claim construction, but is of less significance than intrinsic evidence. Birss J, in summarising Phillips, stated that extrinsic evidence “may be less significant than the intrinsic record in determining the legally operative meaning of the claim language.”  If a claim is still deemed to be ambiguous after the intrinsic and extrinsic evidence has been considered by the court, the validity tie breaker will act to preserve validity.

However, Birss J reiterated that the validity tie breaker should be limited to cases in which claims do in fact remain ambiguous after all claim construction tools are applied. Quoting Phillips, he elaborated on the limited use of the tie breaker, stating:

“While this principle is based on it being reasonable to infer that the USPTO would not knowingly issue an invalid patent, the applicability of the tie breaker in any particular case depends on the strength of the inference that the USPTO would have recognised that one claim interpretation would have rendered the claim invalid and the USPTO would not have issued the patent assuming that to be the proper construction of the claim (Phillips at 1328).”

Not surprisingly, Birss J held that the case before him did not require the application of the validity tie breaker, and that infringement could be determined with reference to the intrinsic and extrinsic evidence alone.

The Decision

In analysing the infringement of claim 2, Birss J held that the intrinsic evidence supported both parties’ interpretation of the claim, but that the extrinsic evidence strongly affirmed Chugai’s construction, stating:

“The claims alone could be read either way. The specification, which is the single best guide and primary basis for construing claims, is hard to interpret and contains some material which positively supports one side and some material which positively supports the other side. The prosecution file is similar, containing statements which support each side’s case. The extrinsic evidence, albeit the least powerful source of evidence, is different. It firmly supports Chugai.”

As such, he held that Claim 2 should be construed as argued by Chugai, particularly given that UCB’s interpretation would result in ‘771 being invalidated due to the Anti-tac prior art identified by the USPTO. In doing so, Birss J elected not to apply the tie breaker, affirming that:

“I do not think the construction issue is in fact so insoluble that only a tie breaker would do. Taking the extrinsic evidence into account, the patent can be construed in a reasonably coherent way using Chugai’s approach provided one accepts that many of the statements which do support UCB are just not talking about the claims. They are talking about the wider work undertaken by the inventors. The claims and that wider description cannot be made to fit together on either party’s case.”

Concluding his decision, Birss J declared that tocilizumab did not fall with claim 2 of ‘771, and therefore that Chugai does not owe royalties under the licence agreement.  In doing so, he built upon the law as established in Celltech, providing an important precedent regarding the English court’s jurisdiction in what may be considered when determining the scope of non-UK patents, and giving a detailed overview of the law relating to US claim construction in the process.


Chugai serves as a reminder that, despite patent validity being determined at the national level, international licensing agreements governing patent rights may result in the patent’s scope, and related validity concerns, being determined by courts internationally. This case can help assure attorneys in the US and elsewhere that, where a patent licence agreement grants the English court jurisdiction, judges presiding over potential disputes will do their utmost to apply correctly the law relevant to the patent or patents at issue.

By taking his cues on US claim construction from the parties’ experts, Birss J illustrated that patent disputes with similar international issues will be well-handled in the UK courts. The question US attorneys should be asking themselves after Chugai is, were this case to have been dealt with by an American court, would the same conclusion have been reached?