Andrew Lykiardopoulos QC appeared as lead counsel for the Claimants (“Neurim” and “Flynn” respectively) in an appeal against the orders of Marcus Smith J dated 30 December 2020 and 12 March 2021. The Claimants alleged that the Defendants (“Mylan”) had infringed a second medical use patent claiming the prolonged release of melatonin for the purposes of improving restorative sleep in patients suffering insomnia. Neurim was the proprietor of the patent and Flynn the licensee in the UK.
The appeal raised 2 issues: (1) whether the judge was correct that Flynn was not an exclusive licensee and, therefore, had no standing to sue for infringement; and (2) whether the judge was correct to order the Claimants to pay Mylan’s costs of the proceedings despite having succeeded on all issues except the exclusive licence point at trial. The costs order was made because the EPO Board of Appeal had revoked the patent, with the legal effect that the patent was deemed never to have existed. Following the trial, all costs on validity had been awarded to Neurim. Following the final revocation of the patent at the EPO, the Judge had reversed that costs order. Despite revocation, it was common ground that the exclusive licence issues on appeal were material to subsequent proceedings between the same parties concerning a divisional patent under which Flynn also claimed to be an exclusive licensee under the same agreement.
The Court of Appeal overturned the orders of Marcus Smith J, finding that Flynn was an exclusive licensee. In his leading speech, Arnold LJ stated that: (1) the licence entitled Flynn to work the invention to the exclusion of Neurim; (2) the licence entitled Flynn to bring proceedings for infringement together with Neurim; (3) section 67(1) of the Patents Act 1977 does not require the exclusive licensee to take action independently of the patentee; and (4) the purpose of s.67 and its predecessor in the Patents Act 1949 was to enable the exclusive licensee to recover its own losses in the event of infringement. Arnold LJ rejected Mylan’s Respondent’s Notice on the basis that there is nothing in section 130(1) of the Patents Act 1977 or the authorities to support Mylan’s contention that an exclusive licence must be coextensive with a claim of the patent. Lastly, Arnold LJ held that the judge had erred on the issue of costs. The correct order was for Mylan to pay the costs of the exclusive licensee point and, otherwise, no order as to the costs below.