Lifesciences Snapshot: Winter 2007/08

Bringing you quarterly news of key developments of relevance to the Lifesciences sector.

INTELLECTUAL PROPERTY

L’Oreal SA and Others -v- Bellure NV [2007] EWCA Civ 936

The Court of Appeal considered the use of a competitor’s trade marks on comparative price lists and the use of similar marks in packaging in relation to whether such use would interfere with the essential function where the marks were used to designate the characteristics (in this case smell) of the competitor’s goods. In commenting on the issues, Jacob LJ gave a clear indication that he considers European trade mark law should resist becoming overprotective as “neither the image nor the essential function of the trade marks for the originals is adversely affected by the lists”. The Court of Appeal also took the opportunity to roundly reject any notion of extending the law of passing off to include broader concepts of unfair competition.

For our full Law-Now on this case, click here.

Rhone-Poulenc Rorer International Holdings Inc and another v Yeda Research and Development Co Ltd [2007] UKHL 43

In this decision the House of Lords overturned the broad principle in Markem Corporation v Zipher Ltd (2005) that any claim of entitlement to a patent (including by someone claiming to be the true inventor) must be based upon ‘some rule of law’, for instance, breach of contract or confidentiality. The only determination for the Court to make is to decide who was the inventor of the claimed invention. The decision also clarified the procedure relating to amending an entitlement claim, especially with regards to how the limitation period applies to an application for amendment.

For our full Law-Now on this case, click here.

In the Matter of an appeal by DLP Limited in relation to the Decision of a Hearing Officer of the UK Intellectual Property Office dated 26 April 2007 pursuant to section 74B of the Patents Act 1977 [2007] EWHC 2669 (Pat)

On 16 November 2007, Mr Justice Kitchin ruled on the first appeal to reach the Patents Court under the scheme for the provision of opinions by the Comptroller of Patents, finding that the Patents Court could hear appeals of this type.

In 2006, DLP Limited (“DLP”) sought an opinion from the Comptroller as to whether Scrabo Bathing Care (“Scarbo”) had infringed one of its UK patents relating to lower level shower trays readily accessible by infirm or disabled people seated in a wheelchair. The examiner issued an opinion that Scrabo’s shower trays did not infringe DLP’s patent. DLP requested a review of the opinion under section 74B of the Patents Act 1977 and the rules made under that section, which was issued by the Hearing Officer acting for the Comptroller, who ordered certain parts of the original opinion be set aside but did not find fault with the examiner’s overall conclusion. DLP brought an appeal against this decision under section 97 of the Act and rule 77K of the Patent Rules 1995, SI 1995/2093.

In his judgment, Kitchin J ruled that the Act and the Rules intended that the review by the Hearing Officer is a decision against which there is a right of appeal and that this type of appeal is not one which the court should decline to exercise jurisdiction, despite it being an inherent feature of the procedure that it can only result in the production of non-binding opinions or decisions.

For our full Law-Now on this case, click here.

REGULATORY

Proposed new Regulatory Authority for Tissue and Embryos (“RATE”) dropped

The Government have accepted the recommendation to reconsider its proposal to establish RATE. In the Government’s response to the Report from the Joint Committee on the Human Tissue and Embryos (Draft) Bill, plans for the proposed new regulatory authority RATE have been dropped. Originally it was planned that RATE would be established to replace the existing regulators the Human Fertilisation and Embryology Authority (the “HFEA”) and the Human Tissue Authority (the “HTA”).

The Joint Committee’s report considered that the regulatory oversight currently being provided by the HFEA and the HTA would be better than that which could be provided by RATE. However, the report did recommend that the Government, the HFEA and the HTA, look at ways to achieve improvements in savings, consistency, efficiency and co-operation between the HFEA and the HTA.

In November the Human Fertilisation and Embryology Bill was published and the Bill is currently being debated in Parliament. The Bill is not expected to enter into force until sometime in 2009.

MHRA phase 1 clinical trials accreditation scheme

The MHRA’s Phase 1 Clinical Trial Accreditation Scheme (the “Scheme”) was launched in November and will initially only be applicable to those units who conduct non-therapeutic Phase 1 trials, though the Scheme will be reviewed at a later date. The Scheme will provide the MHRA and Ethics Committees with a greater depth of information regarding those units conducting trials and thereby aid their consideration of approval applications.

The Scheme is as a result of the report of the Expert Scientific Group on Phase 1 Clinical Trials (“the ESG”), which was set up following the first-in-human clinical trial of TGN1412 in March 2006 in which all six volunteers experienced adverse reactions after receiving TGN1412. One of the recommendations made by the ESG in their report was that a national professional accreditation system for those conducting first-in-human trials should be encouraged.

The Scheme is very much based around participant safety and public confidence in the way in which trials are carried out and places a great deal of emphasis on giving greater assurances that accredited units have in place the necessary facilities, personnel and procedures so as to be able to respond to medical emergencies that may arise.

The Scheme sets out two types of accreditation: Standard Accreditation, which equates to current GCP inspections and Supplementary Accreditation, which is much wider and detailed. Units who want accreditation and who are carrying out trials with risk factors that require review by the Clinical Trials Expert Advisory Group of the Commission of Human Medicine (the “CTEAG”) will need to apply for Supplementary Accreditation. Once achieved, accreditation is valid for two years, with a re-inspection performed on those units who wish to renew their accreditation.

The Scheme is voluntary, as a mandatory scheme would have exceeded the MHRA’s powers under the Clinical Trials Directive. Units who are not accredited will not be prevented from conducting trials, however the National Research Ethics Service have said that they will take a lack of accreditation into account when considering a trial site and an absence of accreditation may lead to them conducting their own site inspection. Furthermore, in practice the Scheme may become something akin to mandatory as Sponsors may choose not to place studies with those units that are not accredited. That said, the MHRA have pointed out that clinical trials remain the responsibility of the Sponsor and Investigator and participation of the unit in the Scheme does not exempt them from their responsibilities.

In addition, units may find that Sponsors seek to include provisions in clinical trial agreements whereby they require units to warrant that they are accredited and that they maintain their accreditation.

PRODUCT LIABILITY

O’Byrne -v- Aventis Pasteur SA [2007] EWCA Civ 939

The Court of Appeal have confirmed that section 35 of the Limitation Act 1980 is capable of applying where the 10 year final cut-off period, for claimants to enforce their rights under the Product Liability Directive 85/374/EC, has expired.

Mr O’Byrne suffered severe brain damage when he was vaccinated with two doses of anti-haemophilius vaccine in 1992. On 1 November 2000, he brought an action under the Consumer Protection Act 1987 against Aventis Pasteur MSD (“APMSD”), believing that APMSD was the manufacturer of the vaccine and that the brain damage was as a result of the vaccine. In November 2001, APMSD served a defence stating that it was the distributor of the vaccine and in April 2002 it informed the claimant that the manufacturer was Aventis Pasteur SA (“APSA”).

In March 2003 the claimant applied to substitute APSA for APMSD, this application being made after the 10-year limitation period specified in Article 11 of the Product Liability Directive 85/374/EC had expired. The judge at first instance ordered the substitution under section 35 of the Limitation Act 1980 and APSA appealed.

The Court of Appeal’s decision in this case confirms an earlier Court of Appeal decision in 2001 that a substituted defendant’s ability to defend a product liability action commenced before the English Courts on grounds of limitation can be ineffective because of the Court’s power retrospectively to substitute one defendant for another defendant, mistakenly named originally by the claimant.

The effect of this decision is the erosion of the legal certainty intended to be provided by the 10-year cut-off period under the Directive.

For our full Law-Now on this case, click here.

COUNTERFEITING

MHRA publish first anti-counterfeiting strategy

In November the MHRA published their first anti-counterfeiting strategy setting out their approach to counterfeit medicines and medical devices in the UK during the next three years. The MHRA’s strategy is broken down into three core areas: Communication, Collaboration and Regulation. On the communication front, the Agency have launched a 24 hour anti-counterfeiting hotline and are actively encouraging both the public and healthcare professionals to report any suspicions regarding counterfeits and/or counterfeiters. From a regulatory stance the Agency will undertake an examination of all aspects of the supply chain, and in particular the ways in which medicines are purchased and distributed and existing licence agreements. Through this review it is likely that recommendations will be made to Government regarding changes to the current legislative framework and potentially this review could also lead to the number of wholesale licences issued by the MHRA being reduced and tougher controls being placed on imports and exports.

In addition, the Agency appear to be placing greater emphasis on a move towards actively pursing counterfeiters under the Trade Marks Act 1994, the Proceeds of Crime Act 2002 and potentially the Fraud Act 2006, the reason being that under these acts longer prison sentences can be imposed than those that are possible under the Medicines Act 1968.

COMPETITION

OFT recommendations on UK medicines distribution

On 11 December 2007 the Office of Fair Trading (“OFT”) published its recommendations to Government on medicines distribution in the UK. Within these recommendations the OFT did not raise objections to “direct to pharmacy” schemes, whereby pharmaceutical manufacturers pay wholesalers a fee for delivering their medicines direct to pharmacies, but did recognise that the scheme had both advantages and potential drawbacks.

The OFT did recommend that the Department of Health makes further changes to the current renegotiation of the Pharmaceutical Price Regulation Scheme to ensure that the NHS medicines costs do not increase as a result of changes on distribution. The changes recommended by the OFT centered on the clawback mechanism whereby a proportion of a pharmacist’s profit margin is recouped by Government, with the OFT recommending two options. Option one, which is preferred by the OFT, involves decreasing list prices by the amount equivalent to current pharmacy discounts and option two involves agreeing a minimum discount to pharmacies off list prices.

Government has 90 days in which to respond to the OFT’s recommendations.

LITIGATION PROCEDURE

Risks in accidentally disclosing privileged documents

The case of MMI Research Ltd v Cellxion Ltd and others [2007] All ER (D) 142 (Sep) highlighted the risks of inadvertently disclosing privileged documents to the other side.

The claimant brought proceedings against the fifth defendant in the German patents court and before this action was settled, the claimant brought proceedings in the UK, alleging patent infringement. The standard disclosure list included an English document (together with a German document, understood to be a translation of it), which was believed to have been filed by the claimant in the German proceedings. Accordingly, copies of both documents were disclosed to the defendants. At a later date the claimant’s solicitor discovered that the English document was a draft pleading that had never been filed at the German patent court. The claimant sought an order preventing further use of the document on the grounds that the document was privileged and disclosed by mistake, or in the alternative that this would have been obvious to the reasonable solicitor.

Even though both parties agreed that the document was privileged and was disclosed by mistake, the court was unsympathetic and held that privilege had been waived since the mistake was not obvious to the receiving party.

For our full Law-Now on this case, click here.

FREEDOM OF INFORMATION

Disclosure of medical records

The Information Tribunal has ruled that a deceased woman’s medical records should not be disclosed. The case concerned Karen Davies who died at Epsom General Hospital in 1988. In 2003 it emerged that the hospital’s treatment had not been satisfactory, that it had admitted liability for her death and that it had reached a settlement with her widower, on behalf of himself and their two children. Pauline Buck, Karen Davies’s mother, sought access to her daughter’s medical records to establish what had happened. The hospital refused to release them without the permission of her next of kin, Karen’s husband Richard Davies, who refused permission.

Pauline Buck took her case to the Information Commissioner, who said that the information should not be released; she then appealed to the Information Tribunal who supported the Commissioner’s decision. This decision confirms that an NHS Trust is right to refuse to disclose records in response to a request made under the Freedom of Information Act 2000 on the basis of the exemption from disclosure in section 41 of the Act.

For our full Law-Now on this case, click here.

New Guidance on how MHRA and VMD will deal with requests for information under FOIA

In November last year the Medicines and Healthcare products Regulatory Agency (MHRA) and other parties published guidance on how they will deal with requests for information under the Freedom of Information Act 2000 (FOIA).

This guidance replaced a memorandum of understanding (MOU) that had been in place since late 2004, which used a ‘traffic light’ system to differentiate between types of information. In the 2004 MOU each information type was coded green, amber or red in accordance with the ease of their disclosure. A good number of the amber classifications left considerable room for disagreement, particularly over the amount of sensitive material to be redacted before disclosure.

The new guidance, like the MOU, categorises information into three tables according to when it may be published:

(i) documents that public bodies will routinely publish online/in print;

(ii) documents/information that public bodies will disclose on request; and

(iii) documents/information that public bodies may be able to disclose on request if disclosure is in the public interest.

It is intended to be helpful for regulators, information requestors and industry. Whilst it does not intend to be a legally binding document, it provides guidance and a statement of good practice for the MHRA when dealing with an individual request under the FOIA.

The new guidance is intended to reflect the greater spirit of openness and commitment to disclosure that the Access to Information legislation was designed to foster in public bodies but in practice it has not affected what the regulatory bodies disclose as they treat each request on its own merits in accordance with the legislation and accompanying legislative guidance.

CORPORATE

Companies Act 2006: provisions in force on 1 October 2007

Monday 1 October 2007 was one of the key implementation dates for the new Companies Act. Among other things important changes relating to directors’ duties, derivative actions and the rules on meetings and shareholder resolutions came into force.

For more information on those provisions that came into force on the 1 October 2007, click here.

New derivative action may lead to increased claims against directors

The new derivative actions provisions under the Companies Act 2006 are now in force. A derivative action is a claim against a director brought by a shareholder on behalf of the company, when a wrong has been committed against the company that the company is not pursing.

The new derivative action provisions are much wider than those previously in place, allowing shareholders to bring claims for:

• any actual or proposed
• act or omission
• involving negligence, breach of duty or breach of trust

by a director, including breach of those duties codified for the first time in the new Act. The director does not have to have benefited personally from the conduct of which the shareholder complains.

For our full Law-Now on this topic, click here.

Pharmaceuticals Year In Review

In early January we held a year in review seminar in which we looked back over the ten most topical issues that faced the pharmaceutical industry in 2007 and what they could mean for 2008.

For a copy of the pack that accompanied the seminar, click here.

For a copy of our year in review article, click here.