Biogen Inc., F. Hoffmann-La Roche AG and Genentech Inc. jointly own a European Patent ("EP") which invokes the priority of a US provisional patent application ("P1"). P1 was filed by the two inventors, as was required under US law at that time. At the time of filing P1, one of the inventors was a Biogen employee (the "Inventor"). The EP originates from an international Patent Cooperation Treaty (PCT) application, which was jointly filed by all applicants of P1 plus additional applicants.
Celltrion claimed that the EP is invalid for lack of novelty, arguing that it is not entitled to invoke the priority of P1. According to Celltrion, the Inventor did not (timely) transfer the priority right to Biogen. The parties agreed that if the EP was not entitled to the priority right, a certain publication would destroy the patent’s novelty.
Biogen argued that the priority right was automatically transferred to Biogen at the time of its creation because the Inventor and Biogen had entered into an “Employee Proprietary Information and Inventions and Dispute Resolution Agreement” ("the Agreement").
In 2017, the District Court ruled against Biogen and considered that Biogen was not entitled to the priority of P1 (and hence that the EP lacked novelty). Biogen appealed the decision and in its (interim) decision of 30 July, the Court of Appeal ruled on the formal entitlement to priority. However, it has not yet dealt with other validity arguments raised by Celltrion.
Court of Appeal assessment
In its decision, the Court of Appeal has focused on two questions:
- Whether and under what conditions someone other than the applicant of the priority application may invoke the priority right, and
- How the Agreement between Biogen and the Inventor should be interpreted. In order to be able to answer these questions, the Court of Appeal had to determine the applicable law.
The Court of Appeal first and foremost considered that the priority right is a right granted by the law of the country in which legal protection for a patent is sought (lex loci protectionis) and not a right granted by the law of the country where the priority application was filed. In the case of a European patent which is granted on the basis of an international application (such as the EP in this case), the lex loci protectionis is the supranational law of the Patent Cooperation Treaty and the European Patent Convention ("EPC").
The Court of Appeal then turned to the first question regarding entitlement to a priority right, and considered that, whether the first question involves patent rights (in Dutch: “octrooirechtelijke kwestie”) or proprietary rights (in Dutch: “vermogensrechtelijke kwestie”), it is governed by the EPC.
Biogen’s entitlement to claim the priority of P1 should thus also be answered on the basis of the EPC. Article 87 EPC provides that the applicant of a priority application or its “successor in title” is entitled to the priority right. The Court of Appeal considered that a priority right relating to (the application for) a European patent could be transferred independently from the European patent itself. In this respect, the Court of Appeal refers to case law of the EPO (T 0062/05; T 0205/14; T 0577/11). Contrary to the transfer of a European patent application, such transfer of a priority right does not carry any formal requirements, according to the Court of Appeal.
On the second question, the Court of Appeal considered that the Agreement between the Inventor and Biogen is governed by the law of that state of Massachusetts because of the governing law clause in the Agreement. Under Massachusetts law, an agreement must be interpreted on the basis of the literal text of the agreement. If that text is not unambiguous, all relevant facts and circumstances, including the intentions of the parties and the scope of the contract should be taken into account. The Court of Appeal considered that, on the basis of the literal text of the Agreement, the priority right (also) was transferred to Biogen. Biogen was thus entitled to claim the priority of P1.
The EPO’s “joint applicants approach”
The formal entitlement to priority is also one of the subjects in the EPO opposition proceedings against this EP. In November last year, the Opposition Division ruled that this EP is entitled to invoke the priority of P1 on the basis of the so-called “joint applicants approach”. An appeal against this decision is now pending.
The joint applicants approach – as accepted by the EPO (e.g. T 1933/12, the EPO Guidelines for Examination and an EPO Notice) – entails that during the international phase several applicants are to be considered as joint applicants, with the consequence that priority rights introduced by one applicant extend to all applicants of the international application and that acts taken in relation to the application affect the international application as a whole. No transfer of priority right is needed where the earlier application was filed by joint applicants, provided that all of them (or their successors in title) are amongst the joint applications for the PCT application.
Interestingly, neither the Court of Appeal nor the District Court in first instance discussed the joint applicants approach in their judgment. It is not clear from the published judgments whether Biogen had also relied on this argument in these proceedings.
We believe that the decision of 30 July is a welcome decision in the Netherlands for patent owners. The Court of Appeal seems to tie up with the intention of the Inventor and his employer: both aimed to transfer the priority right to the employer. It makes sense that, any formal deficiency in such a transfer should not have a possible lethal consequence for the validity of a patent. Unfortunately, it is unclear whether the Dutch Court of Appeal agrees with the EPO’s joint applicants approach so, watch this space for further developments.
Authored by Klaas Bisschop, Liselotte Cortenraad and Joost Duijm