The UPC Appeal Court overturns the 10x Genomics PI, but focuses on validity

One big decision overturns another

The UPC Court of Appeal, in its first substantive decision, NanoString v 10x Genomics, UPC_CoA_335/2023 ¹, has overturned a first instance preliminary injunction ordered by the Munich Local Division.

The preliminary injunction ordered in Munich a little over five months ago had been headline news because it was the first fully reasoned decision of the UPC to grant such an injunction ².

The Court of Appeal decision focuses on the likelihood that the patent is likely to be held obvious in a decision on the merits and therefore lacks validity with a “sufficient degree of certainty”. As such it is also the first UPC Court of Appeal decision to deal with this area of patent law.

The decision does not, however, address the overall methodology that was used by the lower court to assess the preliminary injunction.

The first instance decision

The decision under appeal was the Munich Local Division decision of 19 September 2023, awarding a preliminary injunction on EP 4 108 782, a method for detecting a plurality of analytes in a cell or tissue sample. The NanoString products injuncted were CosMx Spatial Molecular Imager, which enables highly sensitive, subcellular imaging of a large number of RNAs or proteins directly from individual cells in morphologically intact tissue samples, as well as a detection reagent and certain probes used.

The original decision to award the injunction was based on, amongst other findings, a "sufficient degree of certainty" that the patent would be held valid in the main proceedings. The measures were ordered without the provision of security.

In particular, it was not shown at first instance what reason there was for the skilled person to apply prior art document D6 in order to detect more analytes in situ. D6 itself had been found not to give the skilled person any reason to transfer the encoding and decoding method disclosed for an array of amplified single molecules (ASMs) to cell or tissue samples mounted on a solid support.

Invalidity "predominantly probable"

The appeal held that, contrary to the judgement of the court of first instance, the legal validity of the injuncted patent was not sufficiently certain for the issuance of the requested preliminary injunction – it was predominantly probable that the patent was not valid. In fact, the Court of Appeal considered it to be overwhelmingly probable that the subject-matter of claim 1 as asserted in the main request would prove to be unpatentable; specifically, that it would prove to be obvious.

The Court of Appeal found that D6 was of interest to a person skilled in the art who, at the priority date of the patent in suit, was faced with the problem underlying the invention: developing high-throughput optical multiplexing methods for detecting target molecules in a sample. This is because it disclosed a method for detecting a plurality of amplified single molecules (ASMs) by encoding and decoding the single molecules, in which the encoding is performed by probe-mediated generation of ring-shaped DNA and the decoding is performed by temporally sequential detection of the targeted ASMs.

The disclosure in D6 was arranged in vitro in an array format. However, since at the time of priority there was a need for multiplex analysis techniques, especially for test samples, there was reason for the skilled person to consider whether the encoding and decoding method disclosed in D6 could be transferred to the detection of ASMs in cell or tissue samples.

A suggestion or confirmation to think in this direction also resulted from the information in D6. In particular, that genotyping assays could be performed in situ was clear from a footnote of D6, which referred to a paper which already described an in situ method in its title. In addition, D6 referred to a publication on the in situ observation of protein complexes.

The fact that the skilled person at the priority date of the patent in suit considered the transfer of the method to an in situ environment as the next step after the successful application of an in vitro multiplex method for the detection of ASMs was further evidenced in another prior art publication, B30. This describing a method for the detection of non-polyadenylated RNA molecules using "a new probe format" ("Turtle Probes"), which was initially carried out in vitro and, after successful implementation, was also tested in situ with positive results.

Even if it was assumed that various probes and methods for the production of ASMs were known at the time, whose suitability for an in situ application varied and that the skilled person would not have readily concluded from the successful application of a probe or method in vitro that this probe or method would also work in an in situ context, this aspect did not prevent the authors of B30 from carrying out the detection method with Turtle Probes in situ after it had first been successfully carried out in vitro. There was no apparent reason why this would have been any different from the detection method carried out in vitro with selector probes in D6.

Rather, the Court of Appeal said, it could be assumed that the person skilled in the art was able to adjust the time duration, taking into account further factors such as the binding affinities, the incubation conditions and the concentration of the detector probes, in such a way that the detection reagents bound sufficiently firmly to the analytes. This assessment was confirmed by the fact that even the patent in suit, which in patent claim 1 provided for incubation for a period of time that was sufficient to enable the plurality of detection reagents to bind to the analytes, did not provide any more detailed information on the specific setting. The patent in suit therefore also assumed that the skilled person was able to correctly assess the time component using their general knowledge.

10 x Genomics also provided an auxiliary request, but it was also highly probable that this too would prove to be invalid.

Comments on the approach to obviousness

In its 10x Genomics decision, the Court of Appeal reassess the findings on the prior art and its impact on the skilled person from the first instance division, but does not expressly identify any error in the legal approach take which was more or less consistent with the approach of most national jurisdictions, in particular the German national case law. Nonetheless, there are a number of observations that can be made about the Court's approach to assessing obviousness:

• There is no strict identification of a single closest prior art document, but rather the assessment of a number of possible prior art documents;
• Although the problem underlying the invention is identified from the patent itself, the structural 'problem-and-solution' approach familiar from the EPO is not expressly used;
• Information contained in the footnotes of a prior art document may be relevant;
• A choice of possible routes that the skilled person could take does not prevent any one of them being obvious.

Other points of principle

In its 10 x Genomics decision, the Court of Appeal also makes the following statements of principle:

• In accordance with Article 69 of the EPC and the Protocol on its Interpretation, the patent claim is not only the starting point, but the decisive basis for determining the scope of protection of a European patent.
• The interpretation of a patent claim does not depend solely on its exact wording in the linguistic sense. Rather, the description and the drawings must always be consulted as explanatory aids for the interpretation of the patent claim and not only be used to resolve any ambiguities in the patent claim.
• This does not mean, however, that the patent claim merely serves as a guideline and that its subject matter also extends to what, after examination of the description and the drawings, appears to be the patent proprietor's request for protection.
• The patent claim is to be interpreted from the perspective of the person skilled in the art.

The Court states that, when applying these principles, appropriate protection for the patent proprietor should be combined with sufficient legal certainty for third parties.

These principles for the interpretation of a patent claim apply equally to the assessment of validity as they do infringement.

The Court of Appeal also agreed with the Court of First Instance that the standards of proof should not be set too high, in particular if delays associated with a reference to the main proceedings would cause irreparable harm to the proprietor of the patent. On the other hand, however, they must not be set too low in order to prevent the defendant from being harmed by the ordering of a provisional measure which is revoked at a later date.

The burden of presentation and proof for facts establishing the entitlement to initiate proceedings and the infringement or threatened infringement of the patent, as well as for all other circumstances allegedly supporting the applicant's request, lies with the applicant. But, unless the subject-matter of the decision is the ordering of ex parte measures, the burden of presentation and proof for facts concerning the lack of validity of the patent and other circumstances supporting the respondent's position lies with the respondent.

Our observations

The Court of Appeal decision in 10x Genomics does not comment on or alter the overall methodology to assessing a preliminary injunction set out by the first instance court decision. It also sets out some high-level principles on claim construction, based on the EPC to which the Court is bound.

The focus of the decision is largely on the assessment of obviousness and it is the first Court of Appeal decision to do so. The decision is therefore as much a helpful guide to this area of substantive law as it is to preliminary injunctions.

In this respect, the Court is not referring to the established legal approach of any other jurisdiction (such as the EPO), but instead beginning to develop its own methodology. So far, this includes some helpful hints on how prior art will be addressed and how the skilled person will read it.

We expect further substantive decisions on issues of validity as merits decisions emerge from the UPC divisions later this year.

¹ Court of Appeal, NanoString (appellants) v 10x Genomics (respondents), App_576355/2023, UPC_CoA_335/2023, Grabinski, Barutel, Blok, Friedrich, Schüller (26 February 2024)
² Munich Local Division, 10x Genomics, Inc v NanoString (no.1) (UPC CFI 2/2023), Zigann, Pichlmaier, Kupecz, Enderlin (19 September 2023).