Neurim v Mylan Skirmish: Court Of Appeal Clarifies License Exclusivity Requirements And Costs Order

• Published date: 20 April 2022
• Subject Matter: Intellectual Property, Patent
• Law Firm: Marks & Clerk
• Author: Imogen Kelso and Ian Turner

This was an appeal in the epic Neurim v Mylan battle against orders declaring that Flynn Pharma was not an exclusive licensee of the patent in suit and that the Claimants, whose patent was found valid and infringed, were responsible for the Defendants' costs of the proceedings. In its decision, the Court of Appeal clarified certain provisions in a licence did not affect its status as an exclusive licence. The court also considered the appropriate order for costs in light of an unusual set of circumstances following parallel EPO proceedings.

Neurim Pharmaceuticals (1991) Ltd and another company v Generics UK Ltd and another [2022] EWCA Civ 359

Background

This appeal relates to the first set of proceedings which concerned the parent patent (for more recent developments in Neurim v Mylan take two see "Neurim again! Final Injunctions - to stay or not to stay, that was the question"). At first instance Marcus Smith J concluded that the patent in issue, EP (UK) 1 441 702 ("EP'702") (as proposed to be amended), was valid and had been infringed, but that the Second Claimant ("Flynn") did not have an exclusive licence so did not have standing to bring proceedings.

A final order hearing was held on 16 December 2021 at which the Defendants ("Mylan") were ordered to pay the Claimants' costs subject to a deduction to reflect the outcome of the exclusive licence issue.

A few days later, a hearing took place at the EPO at which the Board of Appeal announced that EP'702 was invalid for insufficiency leading to its revocation. Given EP'702 was now deemed to never have existed the Claimants infringement claim was dismissed and Mylan succeeded in arguing that the costs order should be reconsidered. Based on the new situation, Marcus Smith J awarded the majority of the costs to Mylan as the commercial winner. See our earlier article on this decision here: Going out with a Bang, what a difference 2 days makes: Neurim v Mylan.

Even though EP'702 had been revoked, the exclusive licence issue was still important to subsequent proceedings between the same parties concerning a divisional patent and therefore the point was permitted to proceed on appeal.

The Court of Appeal decision

The exclusive licence issue

Arnold LJ (giving the judgment of the court) allowed Neurim's appeal, holding that whilst the judge was correct to say that the right to bring proceedings for infringement under section 67(1) of the Patent Act 1977 was not expressed to be a necessary condition for...