Patent dispute decided through a simplified and written process

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Published 02 May 2022
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On 23 March 2022, the Norwegian Supreme Court Appeals Committee (the "Committee") decided to refuse an appeal in a case between Neurim Pharmaceuticals (1991) Ltd ("Neurim") and Orifarm Healthcare AS and Orifarm Generics A/S, (together "Orifarm"). Neurim appealed the Court of Appeal's decision to refuse Neurim's appeal concerning the Norwegian patent NO 334 788 B (the "Patent") validity. On a general note, it could be seen as unfortunate that patent disputes are subject to a simplified process due to the technical nature of such disputes.

By Anna K. O. Eide and Thomas Hagen

Short introduction of the case 

Neurim had developed the medicament Circadin, a melatonin-based medication treating insomnia, based on the Patent. On the other hand, Orifarm received market authorization in 2018 for Mecastrin, a generic medicine with Circadin as its reference preparation. The Norwegian Industrial Property Office ("NIPO") found the Patent invalid as the invention was not considered "new in relation to what was known before the filing date of the patent application", cf. the Patent Act section 2. The decision was appealed on several instances, and Neurim and Orifarm settled that Orifarm would suspend the sale of Mecastrin in Norway until the District Court decided on the Patent's validity. In addition, Neurim agreed that Orifarm would be compensated for loss if the Patent was found invalid.

The District Court found the Patent invalid due to lack of inventive merit. The decision was appealed to the Court of Appeal, which refused the part of the appeal concerning the Patent's validity. The Court of Appeal's decision to deny the appeal was appealed to the Norwegian Supreme Court. Neurim argued that the Court of Appeal's decision was based on procedural errors concerning (i) reliance on a threshold for refusal that was too low, (ii) insufficient reasons for its decision, and (iii) the decision was based on a written and simplified process that did not satisfy the requirements of a sound process.

The threshold for refusal of appeals

The first question the Committee assessed was whether the Court of Appeals relied on a threshold for refusal that was too low. According to the Norwegian Dispute Act section 29-13, an appeal can be refused by the courts if the court "finds it clear that the appeal will not succeed". Neurim argued that the Court of Appeals should be reluctant to deviate from the patent authorities' professional judgment. The European Patent Office ("EPO") had granted a patent for the same invention. Further, the High Court of Justice in England and Wales has maintained a parallel European patent and interpreted the relevant evidence in the case differently than the District Court. Finally, the Committee stated that although parts of the Court of Appeal's application of the laws on the facts in the case might showcase a misunderstanding of the law, the Court of Appeal had clearly expressed its correct understanding of the threshold in the Norwegian Dispute Act section 29-13. Thus, the Committee concluded that the refusal did not constitute a procedural error. 

The court of appeal's reason

The second argument brought by Neurim was that the Court of Appeal's reason for the refusal of the appeal was insufficient according to the Dispute Act section 29-13. The Committee dismissed the argument stating that the reason fulfilled the requirement as it secured the right to an honest assessment, re-examination, and the effective right to appeal.

The assessment of the decision on a simplified and written hearing

The Court of Appeal's decision was based on a written and simplified process. The central question before the Committee was whether this constituted a procedural error. Neurim argued that the question concerning the Patent's inventive merit is based on a professional judgment. Thus, the Court of Appeal should have had access to independent expertise when deciding on the case. The Committee was divided into a majority and a minority. The majority concluded the Court of Appeal's decision to proceed with a written and simplified process did not constitute a procedural error.

Patent disputes are of a technical nature. The core question in the case was whether the Patent fulfilled the requirement for inventive merit in the Patents Act section 2. An invention must "differ essentially" from "what was known before the filing date of the patent application" to have inventive merit. The assessment shall be based on the assessment of how obvious the invention is for a qualified professional with insight into the technical field of the invention. Therefore, most patent cases are decided with expert co-judges. This may also be necessary to ensure proper case processing according to the requirements set out in the Disputes Act section 1-1. Further, relevant case law states that the courts should show restraint in the judicial review of patent cases. The majority noted that the assumption that expert co-judges or court-appointed experts will be appointed in such cases cannot be an exception-free rule. The need for professional expertise may vary in patent cases, and it must be explicitly considered in the individual case.

The majority conclusion in the case was based on an overall assessment of different factors in the case. Firstly, the District Court had two expert co-judges at the request of Orifarm. According to the court records, Neurim did not find it necessary to appoint expert co-judges. Further, the District Court's proceedings were based on five statements from professors and expert witnesses who testified during the main hearing. Finally, the Court of Appeal had access to the written statements from the two expert witnesses in the District Court, and the District Court's decision was unanimous and unambiguous.

Further, the majority pointed to the fact the validity of the Patent did not raise questions of principle. Additionally, the parties did not submit new evidence in the appeal to the Court of Appeal, and the Patent's expiry date was close. The fact that EPO had granted a patent for the same invention and that the High Court of Justice in England and Wales has maintained a parallel European patent did not cause the refusal to be unjustifiable. Patent decisions differ from jurisdiction to jurisdiction. According to the majority, the question regarding the inventive merit was not as distinctly technical. Thus, it was possible to assess it properly without the assistance of expert co-judges or expert witnesses.

On the other hand, the minority concluded that the Court of Appeal's decision must be revoked due to the lack of access to independent experts. The minority argued that the patent dispute required professionals to have insight into the subjects of medicine and/or pharmacy and that the Court of Appeal was not provided with such expert competence. Further, the District Court had not assessed whether it was "clear" that the Norwegian Board of Appeal for Industrial Property Rights grant of the Patent was invalid. Additionally, the minority stated that courts in this area must show restraint in their review of patent cases. Based on this, the minority noted that refusal of cases concerning a patent's validity must have a particularly justifiable basis. In this case, the Norwegian Board of Appeal for Industrial Property Right's decision was with a dissenting opinion. Further, EPO had granted the patent based law that is close to harmonized with the Patent Act. These circumstances combined, seen in connection with the legal and evidentiary issues that arise in the case, led the minority to conclude the refusal of the appeal submitted based on a written and simplified treatment constituted a procedural error.

Key takeaways from the case 

Although the decision can be criticized due to the majority's opinion to dismiss the argument that the Court of Appeal should have had access to professional expertise when assessing the case, a few key take-aways can be deduced from the decision.

Firstly, the case illustrates the importance of obtaining expert witness statements in cases concerning patent disputes. Secondly, it also demonstrates that submitting new evidence can be of importance in appeals and that co-expert judges should be required by parties in patent disputes to ensure that the court has the necessary documentation and evidence. Finally, it will be interesting to see whether this decision signals a trend or if it is a one-off decision.