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Yeda Research and Development Company Limited (Appellants)
v. Rhone-Poulenc Rorer International Holdings Inc and others (Respondents)
HOUSE OF LORDS
OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT
IN THE CAUSE
Yeda Research and Development Company Limited (Appellants)
Rhone-Poulenc Rorer International Holdings Inc and others (Respondents)
 UKHL 43LORD HOFFMANN My Lords,
1. Twenty years ago some scientists in the Department of Chemical Immunology at the Weizmann Institute of Science in Israel were experimenting with forms of chemical treatment for cancer. They were trying to combine two different forms of treatment to obtain a synthesis which was more effective than either on its own. One was the use of monoclonal antibodies to bind to epidermal growth factor (EGF) receptors, which are often abundant on the surface of cancer cells. These antibodies are cytostatic, that is, they inhibit the growth of the cancer cells but do not kill them. The other treatment was the use of anti-neoplastic drugs which are cytotoxic, that is, they kill cancer cells. But their disadvantage is that they kill healthy cells as well. Their toxicity to healthy cells limits the doses in which they can be administered.
2. The Weizmann scientists say that their first idea was to try an antibody which was conjugated, that is, chemically coupled, to an anti-neoplastic drug. But they used as controls not only the antibody and the drug separately but also an unconjugated mixture of the two. And they found that the unconjugated combination gave much better results that the others.
3. The Weizmann scientists wrote up their results in the spring of 1988 in the form of an article for publication in a scientific journal. Before publication, they sent a draft to a Professor Schlessinger, who had previously worked at the Weizmann but was on sabbatical leave working for the Meloy Laboratories in Springfield, Virginia. (Meloy was afterwards taken over and became part of the group of which Rhone-Poulenc Rorer International Holdings Inc ("Rorer") is the holding company). Dr Schlessinger had supplied the Weizmann with two of the monoclonal antibodies used in their experiments, which he and his team had developed at Meloy but there is a dispute over whether anything in particular about these antibodies played a part in the synergistic effect which the Weizmann scientists say they discovered.
4. On 15 September 1988, after Dr Schlessinger had received the draft article but before it was published, Rorer applied for a US patent for the combination of antibody and drug. Dr Schlessinger and members of his team were named as the inventors. On 15 September 1989 they applied for a European patent, with the United Kingdom as one of the designated Contracting States. This was granted on 27 March 2002, taking priority from the date on which the application for the US patent was filed. The specification says that the applicant has "surprisingly discovered" that combined treatment with a monoclonal antibody and an anti-neoplastic drug provides a more efficient treatment than either agent on its own. Claim 1 is for a therapeutic composition comprising:(a) a monocolonal antibody which inhibits the growth of human tumour cells by said antibody binding to the extra-cellular domain of the human EGF receptors of said tumor cells in an antigen-antibody complex, said tumor cells being characterized by their expression of human EGF receptors and mitogenic stimulation by human EGF; and (b) an anti-plastic agent subject to the exclusion of two named antibodies.
5. Yeda Research and Development Co Ltd ("Yeda") is an Israeli company which exploits inventions and technology developed at the Weizmann. They claim that Rorer did not make the discovery which forms the basis of the patent. They say it was made at the Weizmann, and Yeda, as assignee of the rights of the inventors, is entitled to have the patent transferred into its name.
6. The Patents Act 1977 contains procedural machinery for determining disputes over who is entitled to a patent. Section 8 deals with the case in which the dispute arises before or during the application stage, before the patent has been granted. By section 8(1)(a), any person may refer to the comptroller the question of whether he is entitled to be granted (alone or with any other persons) a patent for that invention. The comptroller must determine the question and "may make such order as he thinks fit to give effect to the determination". Section 8(2) provides for a variety of orders which the comptroller can make once an application has been made, such as ordering that the application shall proceed in the name of the person claiming to be entitled instead of the person who made the application.
7. Section 37 deals with the case in which the dispute arises when the patent has already been granted and is the provision relevant to these proceedings:
8. It will be noticed that although subsection (1) lists three questions which may be referred to the Comptroller, the only substantive question is (a): who is or are the "true proprietor or proprietors"? Question (b) is a corollary of (a): if the patent has been granted to A but B is the true proprietor, then it should have been granted to B instead of A. And question (c) is concerned with the remedies which the Comptroller may grant pursuant to a finding that the person to whom the patent was granted was not the true proprietor, or not the only true proprietor.
9. Rule 54(1) of the Patents Rules 1955 provides that a reference under section 37(1) must be "made on Patents Form 2/77" and "accompanied by" a statement "setting out fully the nature of the question, the facts upon which the person making the reference relies and the order which he is seeking." Form 2/77 is an omnibus form which can be used for initiating a variety of proceedings before the Comptroller. The applicant is required to state the nature of his application (in part 5 of the form) only by reference to the "relevant sections of the Patent Act 1977". The accompanying statement, however, will contain an outline of the evidence which he proposes to adduce. The purpose of the statement, like that of any other written pleading delivered in advance, is to avoid surprise at the hearing.
10. On 26 March 2004 Yeda made a reference by submitting Form 2/77 and filled in "sections 37(1)(a) and 37(1)(c)" as the relevant sections of the Act. The accompanying statement set out their case. It said that the questions referred were "whether it should be joint proprietor" of the patent (section 37(1)(a)) and whether three of the Weizmann scientists "should be named as co-inventors" (section 37(1)(c).) The orders sought were that the patent be transferred into the co-ownership of Yeda and Rorer and amended to name the Weizmann scientists as co-inventors.
11. The statement then stated the facts upon which Yeda proposed to rely. It alleged that the invention was "largely made" by the Weizmann scientists. It said that Dr Schlessinger provided the Weizmann scientists with two named monocolonal antibodies but said that "the relevant practical work using these antibodies was devised and carried out" by the Weizmann scientists. They had started with an antibody-drug conjugate but during the course of research they "unexpectedly discovered that the unconjugated mixture of drug and antibody in the control produced synergistic and beneficial results." That was "the first conception of the invention". The statement then dealt with the draft article sent to Professor Schlessinger and concluded:
12. After the filing of this statement, two things happened which have given rise to this appeal. The first was that the Court of Appeal decided in Markem Corp v Zipher Ltd  RPC 31 that a person (A) who claims to be entitled to a patent which has been granted to someone else (B) could not succeed merely by proving that he had been the inventor and B had not. Jacob LJ said (in paragraph 79) that:
13. The examples which Jacob LJ gave of reliance on other rules of law were allegations of breach of contract or a duty of confidence. But Yeda had, at any rate expressly, made no such allegations in its statement accompanying the reference. They had simply said that the invention was made at the Weizmann.
14. The other thing that happened was that Yeda decided on reflection that it had been over-generous in accepting that Dr Schlessinger and his team had been co-inventors. In providing the monoclonal antibody they had contributed to an integer in the claim but Yeda now thought that this did not amount to a contribution to the inventive concept. That was devised entirely at the Weizmann. It seems that this insight was derived from Yeda's experience in parallel litigation in other jurisdictions. Yeda did not change its opinion as to what had been the respective contributions of the Weizmann scientists and Dr Schlessinger to the research. But they now thought that they led to a different conclusion on the question of entitlement.
15. The result of these two developments was an application by Yeda to amend its statement in two respects. The first, in compliance with the Markem ruling, was to add references to other rules of law upon which it relied for its title. They were allegations that the draft article had been sent to Dr Schlessinger in confidence and that he was at the time, though on sabbatical, still an employee of the Weizmann. Yeda's counsel showed little enthusiasm for this latter allegation and I shall say nothing more about it. The other set of amendments was to allege that the Weizmann scientists were the sole inventors and that the patent should be transferred into the name of Yeda alone. By the time the application for amendment was made, the two-year limitation period in section 37(5) had expired.
16. The comptroller allowed both sets of amendments but they were disallowed on appeal by Lewison J and his judgment was affirmed by the Court of Appeal. The appeal to your Lordships' House therefore raises two points of some general importance. The first is a question of substantive law. What does a person claiming entitlement to a patent in someone else's name have to prove? Is it enough that he was the inventor and the registered proprietor was not, or must he allege that the registered proprietor had procured registration by a breach of some other rule of law? If the former answer is correct, the first set of amendments was unnecessary. The second is a question of procedure, concerning the power of the comptroller to allow amendments to the statement of case. When the referrer has claimed joint entitlement, can he be allowed to amend to claim sole entitlement after the two-year period in section 37(5) has expired? Or does that require a new reference which would be statute-barred?
17. My Lords, I shall first address the question of substantive law. Section 30(1) of the Act says that a patent or an application for a patent is personal property. The statute brings the property into existence, prescribes its incidents and determines who shall be entitled to enjoy it. The rules for the grant of a patent are contained in section 7:
18. Section 7(2), and the definition in section 7(3), are in my opinion an exhaustive code for determining who is entitled to the grant of a patent. That is made clear by the words "and to no other person." In saying that the patent may be granted "primarily" to the inventor, section 7(2) emphasises that a patent may be granted only to the inventor or someone claiming through him. The claim through an inventor may be made under one of the rules mentioned in paragraph (b), by which someone may be entitled to patent an invention which has been made by someone else (the right of an employer under section 39 is the most obvious example) or the claim may be made under paragraph (c) as successor in title to an inventor or to someone entitled under paragraph (b).
19. In my opinion, therefore, the first step in any dispute over entitlement must be to decide who was the inventor or inventors of the claimed invention. Only when that question has been decided can one consider whether someone else may be entitled under paragraphs (b) or (c). In many cases, including the present, there will be no issue about paragraphs (b) or (c). If the invention was made by the Weizmann scientists, there is no dispute that Yeda is entitled under paragraphs (b) or (c). Likewise if the invention was made by Dr Schlessinger and his team.
20. The inventor is defined in section 7(3) as "the actual deviser of the invention". The word "actual" denotes a contrast with a deemed or pretended deviser of the invention; it means, as Laddie J said in University of Southampton's Applications  RPC 220, 234, the natural person who "came up with the inventive concept." It is not enough that someone contributed to the claims, because they may include non-patentable integers derived from prior art: see Henry Brothers (Magherafelt) Ltd v Ministry of Defence  RPC 693, 706;  RPC 442. As Laddie J said in the University of Southampton case, the "contribution must be to the formulation of the inventive concept". Deciding upon inventorship will therefore involve assessing the evidence adduced by the parties as to the nature of the inventive concept and who contributed to it. In some cases this may be quite complex because the inventive concept is a relationship of discontinuity between the claimed invention and the prior art. Inventors themselves will often not know exactly where it lies.
21. The effect of section 7(4) is that a person who seeks to be added as a joint inventor bears the burden of proving that he contributed to the inventive concept underlying the claimed invention and a person who seeks to be substituted as sole inventor bears the additional burden of proving that the inventor named in the patent did not contribute to the inventive concept. But that, in my opinion, is all. The statute is the code for determining entitlement and there is nothing in the statute which says that entitlement depends upon anything other than being the inventor. There is no justification, in a dispute over who was the inventor, to import questions of whether one claimant has some personal cause of action against the other.
22. Mr Prescott said that such an approach leaves no room for a defence on the ground that an order for transfer of the patent would be inequitable on the ground that, for example, the claimant stood by and allowed the registered proprietor to invest money in, as Jacob LJ said in the Court of Appeal, "the risky and expensive development work to bring [the product] to market." But I do not think that is right. There is no reason why the equitable rules of proprietary estoppel should not apply to a patent in the same way as to any other property. The powers of the comptroller are expressed in terms wide enough to enable him to give effect to such a defence and if he thinks it would be more appropriate for them to be considered by the court, he may transfer the proceedings under section 37(8). But these are questions of whether the registered proprietor has a complete or partial equitable defence to the inventor's claim. They do not go to what the person claiming to have been the inventor has to prove.
23. In my opinion, therefore, the broad principle laid down in Markem Corp v Zipher Ltd  RPC 31 and applied by the Court of Appeal in this case was wrong. It is unnecessary for Yeda to allege that Dr Schlessinger was in breach of some other rule of law. I should add that I have no doubt that the Markem case was nevertheless correctly decided. The facts were that Mr McNestry, an employee of Markem Corporation, a company which made thermal transfer printing machines, left and went to work for Zipher, another company in the same trade. He took with him a good deal of know-how about thermal transfer printing but, the Court of Appeal found, no trade secrets or any information which he was not free to use. While working for Zipher he came up with an inventive concept for improved machines for which they took out a number of patents. Some of the claims were, however, arguably broad enough to cover machines which had been used by Markem. They claimed to be entitled to the patent on the ground that it used information which Mr McNestry had obtained while working for them. But the Court of Appeal found that although that information may have contributed to the claims, the inventive concept had been devised entirely by Mr McNestry while working for Zipher.
24. On this last finding, there appears to me to have been no room for dispute over who was the inventor. It was Mr McNestry. Prima facie, therefore, he was entitled to the patent under section 7(1)(a). The only way that Markem could claim was by virtue of some rule of law or agreement which gave them the right to Mr McNestry's invention under 7(1)(b). But there was no such rule of law or agreement. Mr McNestry was not an employee of Markem at the time he made the invention. On the contrary, he was an employer of Zipher and they were entitled under section 39. There is no rule by which a former employer can claim entitlement to an invention made after the employee has left his employment simply because he has used the knowledge of prior art which he gained with them and has included some of that prior art in his claims. If the claims were too broad and covered what the first employers were doing, that could, as the Court of Appeal said, provide a ground for attacking the validity of the patent or a defence under section 64 against a claim for infringement.