Intellectual property

In this chapter of our Annual Insurance Review 2019, we look at the main developments in 2018 and expected issues in 2019 with regards to intellectual property.

Key developments in 2018

In November 2018, the UK Supreme Court in Warner-Lambert v Generics (UK) Limited [2018] UKSC 56 addressed a number of key issues regarding patent infringement.

Warner-Lambert (part of the Pfizer group) marketed a prescription-only drug for three different indications under the brand name Lyrica (patent protection for the drug had expired, bar a medical-use only patent for one of the three indications). It is one of Pfizer’s most successful drugs in the UK, used as treatment for seizure disorders. 

The defendant intended to sell a generic version of the drug limited to the two indications that were not patented.  Warner-Lambert was concerned that although limited to the two non-patented indications, the defendant’s product would (in reality) end up being dispensed for medical use (therefore undercutting Warner-Lambert).

The Supreme Court ruled on a number of points, and considered the test for infringement of a patent where a product is manufactured for a limited use. It unanimously decided that this specific claim would not amount to an infringement (had the patent been valid). However, the judges differed on the reasoning. Two of the judges preferred the view that the intention of the alleged infringer was irrelevant – what matters is whether the allegedly infringing product as it emerges from the manufacturing process is presented as being suitable for the uses that enjoy patent protection. The other two judges preferred the view that the test is whether the alleged infringer subjectively intended to target the patent-protected market.

It is likely that the correct test will be subject to future litigation, meaning that although the case is generally seen as positive for generics companies, patentees may still see scope for successfully proving infringement.

What to look out for in 2019

Many of the significant trends in recent years, and proposed changes for 2019, focus on the continued rise in content disputes – an issue we strongly expect to be high on the agenda next year.

One significant change will be the new EU Copyright Directive, which aims to modernise copyright laws across Europe to fit the internet age. It is expected this could spark a rise in disputes between online businesses and rights-holders. Two provisions are currently provoking considerable controversy: articles 11 and 13.

Dubbed the “link tax”, article 11 proposes to introduce a requirement for online content-sharing platforms to pay news organisations for snippets of their news content. Article 13 proposes that online content-sharing platforms should be required to proactively restrict users uploading content that infringes copyright (often referred to as the “content filter”).

It will also be interesting to see how the UK Supreme Court decision in Cartier v BT & Ors [2018] UKSC 28 affects online content disputes. This decided that the costs of complying with a blocking order should be met by rights holders, and not innocent intermediaries.

Content disputes issues are also expected to give rise to ancillary risks, such as an expected continued rise in privacy and/or data protection claims involving intermediaries.

Authored by Ciara Cullen and Joshua Charalambous.

Download our full Annual Insurance Review 2019 for more insights.