Case No: A3 2016 1199
A3 2016 3772
Neutral Citation Number: [2017] EWCA Civ 1
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Mr Justice Henry Carr, Mr Justice Arnold 
[2016] EWHC 425 (Pat); [2016] EWHC 2204 (Pat)
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 12/01/2017
Before:

LORD JUSTICE LONGMORE
LORD JUSTICE KITCHIN
and
LORD JUSTICE FLOYD

- - - - - - - - - - - - - - - - - - - - -

Between:

	FUJIFILM KYOWA KIRIN BIOLOGICS CO., LTD.	Claimant/
Respondent	
	- and -		
	ABBVIE BIOTECHNOLOGY LIMITED
(a company incorporated under the laws of Bermuda)
	Defendant/Appellant in both appeals	
	-and-
		
	ABBVIE LIMITED	Defendant/Appellant in A3 2016 3772	

- - - - - - - - - - - - - - - - - - - - -

Geoffrey Hobbs QC, Mark Chacksfield and Jeremy Heald (instructed by Herbert Smith Freehills LLP) for the Appellants
Andrew Waugh QC, Thomas Raphael QC and Geoffrey Pritchard (instructed by Gowling WLG (UK) LLP) for the Respondent

Hearing dates: 28-29 November 2016

- - - - - - - - - - - - - - - - - - - - -

Judgment
Judgment of the Court delivered by Lord Justice Floyd: 
1.	 There are two appeals before the court:
i)	an appeal from the decision of Henry Carr J dated 1 March 2016 in an action between Fujifilm Kyowa Kirin Biologics Co., Ltd. (“FKB”) and AbbVie Biotechnology Limited (“AbbVie Bermuda”), (“FKB 1”) in which he declined to strike out a claim by FKB for a declaration that products which FKB proposed to market in the United Kingdom were old or obvious;
ii)	an appeal from the decision of Arnold J dated 8 September 2016 in an action between FKB on the one hand and AbbVie Bermuda and AbbVie Limited (“AbbVie UK”) on the other hand (“FKB 2”), in which he declined to strike out a claim by FKB for a similar declaration, as well as for an injunction against AbbVie Bermuda and AbbVie UK to restrain them from threatening or commencing proceedings for patent infringement in respect of acts covered by the declaration. 
2.	The appeals raise the question of whether, in proceedings such as the present, the court can properly grant declarations that a product was old or obvious in patent law terms at a particular date. An action for such a declaration was held to be arguable by Kitchin LJ (as Kitchin J) in Arrow Generics Limited v Merck & Co. Inc. [2007] EWHC 1900 (Pat), [2007] FSR 39 (“the Arrow case”).  A declaration in these terms has been referred to in argument, for brevity, as an “Arrow declaration”, and we will continue to do so.  The appellants, whom we will refer to collectively as AbbVie (except where necessary to distinguish between them) contend that the Arrow case was wrongly decided, and that actions for Arrow declarations are, amongst other things, precluded by section 74 of the Patents Act 1977 (“the Act”), because they put the validity of a patent in issue.  The question of whether Arrow declarations are a permissible remedy arises in both FKB 1 and FKB 2.  We will call it Issue 1. 
3.	There are two supplementary issues which arise in FKB 2.  The first of these is whether the claim for an injunction to restrain AbbVie from threatening or commencing proceedings for patent infringement in respect of acts covered by the declaration is arguable or, alternatively, should be struck out at this stage. We will call this Issue 2. The second supplementary issue in FKB 2 is whether the claim against AbbVie UK should be struck out, independently of Issues 1 and 2, on the ground that it has no real prospect of success. This point arises principally because AbbVie UK is not the patentee or the exclusive licensee of any relevant patent or application.  We will call this Issue 3. 
4.	To aid understanding of the procedural history of these cases, we first set out the basic framework of the European patent system, so far as relevant to this case, and identify the relevant provisions of national law.
The European patent system
5.	The European Patent Convention (“EPC”) is an international treaty creating, amongst other things, an international system for the grant of patents.  It set up the European Patent Office (“EPO”) as an international organisation based in Munich.  Applicants apply to the EPO for protection for their inventions in such of the EPC member states as they choose (“designate”) in their application. 
6.	The application is required (Article 78(1)(b) and (c) EPC) to include a description of the invention and one or more claims. The EPO examines the application in accordance with the EPC and the Implementing Regulations made pursuant thereto.  The examination is carried out by the EPO’s examining staff.  It includes an examination for obviousness of the claims as drafted.  The applicant can amend his claims in the course of prosecuting his application.
7.	If the application survives examination by the EPO with the claims as originally filed (or as amended in the course of prosecution) the EPO will grant the “European Patent.”  However, as Jacob LJ pointed out in Unilin Beheer BV v Berry Floor NV and others [2007] EWCA Civ 364 at [9], that term is something of a misnomer, because what is granted (at least under current arrangements) is a bundle of national patents, one for each of the states designated by the applicant in his application. 
8.	Some aspects of the application procedure in the EPO require explanation.  Firstly, we should mention divisional applications.  Article 76 of the EPC makes provision for the filing of European divisional applications. Where an applicant has a pending application (“the earlier application”), he may file a new patent application (called a divisional) in respect of some of the subject matter of the earlier application.  Such divisional applications will be entitled to the priority date of the earlier application if their subject matter does not extend beyond the content of the earlier application as filed.  
9.	Sometimes the EPO may require an applicant to make a divisional application, for example because the examiner considers that the application relates to more than one invention, referred to in the jargon as “lack of unity”.  In other circumstances the applicant may file a divisional application of his own initiative.  Under Rule 36 of the Implementing Regulations of the EPC (EPCR) the applicant may make a divisional application at any time when the earlier application is pending.  Because a divisional application is a patent application in its own right, it is possible for divisional applications to be based on applications which are themselves divisionals, and so on. So there may be a cascade of divisionals upon divisionals upon divisionals.  
10.	Because an applicant may wait until an earlier application has been in prosecution for many years before filing even a first divisional, it should be clear from the above description that the final form of any protection based on the subject matter of the parent application may take a very long time indeed to emerge. The protection conferred by the earliest application may have ended, but many divisionals and sub-divisionals based on the same subject matter may still be in the pipeline.  At any given time a third party can examine the published applications which have been filed, but there may be others which have not been published, and more to come which have not even been filed.  This is sometimes referred to as the problem of the “submarine divisional”.  The submarine divisional gives rise to practical problems for third parties in determining the extent of patent protection surrounding the patentee’s product when they wish to launch competing products.  It is plain that this uncertainty may have a chilling effect on competition. 
11.	The original version of the EPCR (Rule 25 in the 1973 version) allowed for the filing of divisional applications up to the date on which the text of the earlier application was approved by the applicant.  Rule 25 was amended in 2002 to allow filing of a divisional at any time during the pendency of the earlier application.  By a decision of the Administrative Council of the EPO dated 25 March 2009, the rule, which had by then become Rule 36, was amended to add a proviso that the divisional application had to be filed before the expiry of 24 months from the Examining Division’s first communication in respect of the earliest application for which a communication had been issued (or 24 months from an objection by the Examiner that the earlier application did not meet the requirements of Article 82 EPC (unity of invention)).  This rule change had the effect of curtailing to some degree the extent to which advantage could be taken by applicants of the procedure of filing divisionals.  According to “Case Law of the Boards of Appeal of the European Patent Office”, 6th Edition 2010, the rationale for introducing the time limit was to prevent the filing of “abusive divisional applications” see page 389.  One can understand why the authors of that publication should have taken that view.
12.	However, by a further decision of the Administrative Council dated 16 October 2013, Rule 36 was amended again, this time to remove the 24 month time limit.  We were not given any explanation as to why this amendment was made.
13.	The grant of the patent (resulting in the bundle of national patents in the designated member states) does not always bring to an end the involvement of the EPO in the life of the patent.  A further aspect of the procedure under the EPC is post-grant “opposition”.  Within nine months of grant, third parties may apply in the EPO for a determination that the patent be revoked. The procedure is a central one, and success by the opponent results in revocation for all the designated member states.  The grounds of opposition are set out in Article 100 EPC.  
14.	The right to oppose in the EPO exists in parallel with the right to apply for revocation in each of the national courts of the states designated by the (now) patentee.  Jacob LJ explained the evolution of this system in (Unilin Beheer BV cited above) at [14] and [15].  In particular, as he pointed out, the new system under the EPC and the Act did not allow for pre-grant opposition of the kind which was formerly provided for under section 14 of the Patents Act 1949.  Under the current, EPC-based system no pre-grant adversarial proceeding is available for a third party to stop the patent being granted at all.  Third parties have to wait until grant, and then either oppose in the EPO within the nine month period allowed, or apply for revocation in the national court (which they can do without time limit).  
15.	Many decisions are taken by the EPO in the course of processing the application for a European patent and in oppositions thereto.  Those decisions are not reviewable in the courts of this country: see Lenzing AG’s European Patent (UK) [1997] RPC 245; Virgin Atlantic Airways Ltd v Jet Airways Limited  [2013] EWCA Civ 1713.  As Jacob J (as he then was) explained in Lenzing, as a public international organisation, the EPO has an internal legal order of its own.  He quoted from International Institutional Law by Schermers and Blokker, 3rd Revised Edition 1995, page 1141:
“Unlike private international organisations, public international organisations are not subject to any national law. Thus, they must create their own internal law. The resulting law is an exclusive part of a separate legal order, which is dependent on the organisation's own constitution, but independent of any other legal order.”
The relevant domestic law 
16.	A number of provisions of the Act are relevant to the interface between the legal orders of the EPO and the UK. The relevant provisions are set out in an Annex to this judgment. We summarise their effect in what follows.
17.	By section 78(1), an application for a European patent designating the UK (henceforth EP (UK)) is treated for the purposes of certain sections of the Act as if it were an application for a UK domestic patent.  The sections of the Act in question include (amongst others) all those under the heading “Infringement” with the exception of the section dealing with groundless threats of patent infringement (section 70) and the section concerned with declarations of non-infringement (section 71).  The specified sections do not include the sections concerned with the powers of the court and the comptroller to revoke granted patents (sections 72 and 73). It would make no sense to do so, as those sections have no bearing on applications.  They do, however, include “section 74 in so far as relevant to any of the sections mentioned above”.  
18.	Section 74 is concerned with the types of proceeding in which validity of a patent may be “put in issue”.  It is common ground that “patent” in this section can only refer to a granted patent, and not to an application.  Section 74(1) identifies the proceedings in which it is permitted to put validity in issue.  Section 74(2) contains the countervailing prohibition on raising validity in any other proceedings.  Section 74(2) points out, in particular, that no proceedings may be brought seeking “only a declaration as to validity or invalidity of a patent”. That final element of section 74(2) reflects the prior common law.  In Traction Corporation v Bennett (1908) 27 RPC 819, Parker J declined to grant declarations which would have the effect that certain grounds of invalidity of a patent were made out.  He declined to do so because, if the underlying facts the subject of the declarations were to be established, the court would be procedurally unable to grant the appropriate relief, which was an order revoking the patent:
“I am asked to declare that the state of circumstances exists which will give rise to the right of revocation. I cannot grant the appropriate relief, because the appropriate relief can only be obtained if the course of procedure pointed out by the Statute is followed. That is not so in the present case, for this is an action, not a Petition for revocation. Therefore I am asked to make a declaration, upon which, if I made it, I could give no sort of relief at all. I do not think it is the practice of the Court to make any such declaration, or to entertain any action for the purpose of such a declaration. The Court it is true has a discretion to make declarations – it is purely a discretionary power – without giving consequential relief, but I do not think it is the practice of the Court, nor do I think it is desirable, to entertain actions for declarations where the Court, if it were to make a declaration, could not give any relief at all as consequence upon the declaration itself.”
19.	Section 74(3) limits the grounds on which validity may be put in issue in the specified proceedings to the grounds on which the patent may be revoked under section 72. 
20.	The proceedings listed in section 74(1) in which it is permissible to put validity in issue are:
(a) by way of defence, in proceedings for infringement of the patent under section 61 or proceedings under section 69 for infringement of rights conferred by the publication of an application;
(b) in proceedings under section 70 for groundless threats of patent infringement;
(c) in proceedings for a declaration of non-infringement of a patent under section 71;
(d) in proceedings before the court or the comptroller for under section 72 above for the revocation of the patent;
(e) in proceedings under section 58 referring to the court disputes about Crown use of inventions.
21.	It is to be noted that the proceedings identified are all proceedings which are expressly required in the respective sections of the Act to be brought before the court (which means the High Court or IPEC), or (in some cases) the comptroller. Thus the practical effect of the provision is that the only proceedings in which validity will be in issue will be proceedings before a court or tribunal which has the power to revoke the patent under section 72.  In addition, validity of a granted patent cannot be raised in proceedings which are not amongst those listed, for example disputes about entitlement to the patent where no alternative claim for revocation is made.
22.	Thus, when section 78 says that one must treat an application for an EP (UK) as a domestic patent application for the purposes of section 74 “so far as relevant to any of the provisions identified above”, it is saying that one must do so in the proceedings identified in section 74(1)(a) and (e): the intervening paragraphs of the subsection being concerned with sections which are not listed in section 78.   This makes sense.  Paragraph (a) (at least in so far as it relates to section 69) and paragraph (e) have some relevance to applications for patents, whilst (b), (c) and (d), groundless threats, non-infringement and revocation, do not. 
23.	Section 69 thus gives the applicant who has a published patent application the right to bring proceedings after grant for acts committed before grant.  The effect of section 78 and section 74(1)(a) is that the application in question may be a published application for an EP (UK), and not only a domestic one, and validity may be put in issue (once the patent is granted).  
24.	Likewise section 58 allows a party to refer to the court a dispute as to the terms for use of an invention for the services of the Crown under section 55.  Such use includes use “at any time after publication of an application for a patent is published but before the patent is granted”, although payment for such use is recoverable only once the patent is granted: see section 55(5).  Such an application may be an application for an EP (UK) and not only a domestic one by the operation of section 78, and validity may be put in issue, (again after grant) because of section 74(1)(e).  
25.	Section 77 provides that, as from grant by the EPO, an EP (UK) is treated as if it were a domestic UK patent granted in pursuance of an application under the Act.  
26.	With that background we can turn to the facts of the two cases.
FKB 1
27.	AbbVie Bermuda, a Bermudan company, is the proprietor of a number of patents and patent applications relating to adalimumab.  Adalimumab is a monoclonal antibody specific for human tumour necrosis factor α, which is a cell-signalling protein the misregulation of which is implicated in several human inflammatory diseases including rheumatoid arthritis, psoriatic arthritis, psoriasis, Crohn’s disease and ulcerative colitis. The basic patent protecting adalimumab is EP (UK) No 0 929 579 (“the basic patent”). A supplementary protection certificate (“SPC”) extends the protection conferred by the basic patent until it expires on 15 October 2018.
28.	Adalimumab is marketed by companies in the group of companies headed by AbbVie Inc. under the trademark Humira.  Worldwide sales of Humira in 2014 exceeded US$ 12.5 billion. AbbVie UK, who market the product in the United Kingdom, achieved a turnover of £438.6 million in 2014. It is the largest selling prescription drug in the world.
29.	It is therefore not at all surprising that AbbVie have sought to protect their market for Humira after expiry of the SPC in every way they can.  They have filed applications for patents protecting dosage regimens, formulations and uses of adalimumab.  As at 19 April 2016 FKB was aware of over 50 European patent applications in 17 families filed by AbbVie Bermuda.
30.	AbbVie have also made clear that they will seek to enforce their patent portfolio energetically against generic competition to Humira when the SPC expires in 2018.  AbbVie Inc.’s chairman and chief executive officer, Rick Gonzalez, is recorded as saying on 30 October 2015 (albeit in relation to its US patent estate): 
“Any company seeking to market a biosimilar version of Humira will have to contend with this extensive patent estate which AbbVie intends to enforce vigorously.
…
In the event a biosimilar attempts to launch at-risk, AbbVie will seek injunctive relief.”
31.	FKB infers, not unreasonably, that AbbVie are likely to seek to enforce their European patent portfolio with similar gusto.  Despite these statements, it will be seen that AbbVie Bermuda has been reluctant to expose its European patent portfolio to scrutiny, either in opposition proceedings in the EPO or before the English court.
32.	FKB is a joint venture between Fujifilm Corporation and Kyowa Hakko Kirin Co. Ltd.  FKB intends to market a biosimilar adalimumab product identified as FKB 327.   It wishes to clear the way of potential patent challenges by AbbVie so that it can launch FKB 327 in the UK after expiry of the basic patent and its associated SPC. 
33.	FKB 1 was commenced on 29 October 2015.  The particulars of claim in their original form sought revocation of two granted patents, namely EP (UK) 1 406 656 (“the 656 patent”) and EP (UK) 1 944 322 (“the 322 patent”). Both of these patents relate to the use of adalimumab in a dosage regime of 40 mg every other week as a single dose by subcutaneous injection, abbreviated by doctors to “40 mg sc eow”.  The 656 patent relates to the treatment of rheumatoid arthritis;  the 322 patent relates to the treatment of psoriasis. 
34.	FKB was also concerned about a number of AbbVie’s divisional applications relating to adalimumab. It therefore also applied for an Arrow declaration that “products containing a biosimilar monoclonal antibody to the antibody adalimumab for the treatment of rheumatoid arthritis, psoriatic arthritis and/or psoriasis by the administration of 40 mg every other week by subcutaneous injection would have been obvious at the priority date of the 656 and 322 patents.”  FKB no doubt hoped that by obtaining such a declaration it would be protected from any subsequent infringement action, based on divisional applications once they had proceeded to grant, in respect of such a product.
The 656 patent and its divisionals
35.	The application for the 656 patent was filed on 5 June 2002. Its prosecution through the EPO took 11 years. It was finally granted on 9 June 2013. The grant of the patent attracted 15 oppositions in the EPO.  AbbVie filed its response to the oppositions on 22 December 2014. However the opposition proceedings never came to a conclusion because on 4 November 2015, less than a week after the FKB 1 proceedings were commenced in England, AbbVie wrote to the EPO stating that it no longer approved the text of the granted 656 patent. Disapproval of the text in these circumstances has the automatic consequence that the EPO will revoke the patent.  It duly revoked the 656 patent on 16 November 2015.  The revocation of the patent also effectively concluded that part of FKB 1 which sought revocation of the 656 patent. At or around the same time AbbVie abandoned the three subsisting divisional applications of 656. 
36.	In the meantime, however, AbbVie had requested the grant of a further divisional application from the 656 patent (“the fourth 656 divisional”).  
37.	FKB accordingly applied before Henry Carr J to amend its pleadings in FKB 1.  By its amended pleadings FKB allege that AbbVie intend to delay the entry of competing Humira biosimilar products by prolonging commercial uncertainty. It claims that the purpose of abandoning the 656 patent was to avoid adjudication of its patentability by the UK court and the opposition division of the EPO, whilst seeking to ensure that the subject matter of the alleged invention of the 656 patent was maintained by the fourth 656 divisional application.  FKB alleges that it will be many years before the EPO will be in a position finally to adjudicate on the patentability of the subject matter of the fourth divisional.  It relies on these allegations to demonstrate that the granting of the Arrow declaration would serve a useful purpose, by achieving commercial certainty in respect of these aspects of the FKB 327 product by the date of its intended launch in the autumn of 2018.
38.	All these allegations are strongly denied by AbbVie. However, AbbVie accepted before Henry Carr J that at this stage it was necessary to proceed on the basis that the pleaded allegations of fact were true. Before us, Mr Hobbs submitted that AbbVie had not committed any legal wrong by proceeding as it had, but otherwise did not dispute the basis on which we were to approach the factual allegations.
The 322 patent and its divisionals
39.	The 322 patent covers the use of adalimumab in accordance with the 40 mg sc eow dosage regime for the treatment of psoriasis.  The 322 patent also had a variety of pending divisionals concerning the treatment of different indications by adalimumab in accordance with the 40 mg sc eow regime. At the date of the hearing before Henry Carr J, the 322 patent was in force, and its validity so far as the UK designation was concerned would have had to be determined in FKB 1. 
40.	Since the hearing before Henry Carr J there have been further developments.  On 1 July 2016 FKB indicated to AbbVie in correspondence that, if the fourth 656 divisional proceeded to grant, FKB would seek to include a claim for revocation of the granted patent. The fourth 656 divisional did proceed to grant by the EPO on 17 November 2016.  However on 15 November 2016 AbbVie had de-designated the UK from the fourth 656 divisional, with the consequence that no EP (UK) came into existence based on the fourth 656 divisional.  
41.	At or about the same time AbbVie filed a new divisional application from the fourth divisional (“the fifth 656 divisional”).  As the application will not be published for some months, it is not yet clear what form the claims of the fifth 656 divisional will take.  It is still a submarine.
42.	 AbbVie have now also disapproved the text of the 322 patent, with the consequence that the 322 patent will be revoked for all designated states including the UK.  Accordingly both of the granted patents originally targeted in FKB 1 have now been revoked.  
43.	As finally formulated in the course of the hearing before Henry Carr J, the declaration sought by FKB was:
"A declaration pursuant to CPR 40.20 and/or the inherent jurisdiction of the Court that importing into the United Kingdom and offering to sell and dispose of, and to sell and dispose of, and to keep for such sale or disposal in the United Kingdom, the Claimant's products containing their biosimilar monoclonal antibody to the antibody adalimumab (Humira) for the treatment of rheumatoid arthritis, psoriatic arthritis and/or psoriasis by the administration of 40mg every week by subcutaneous injection for:
(a) rheumatoid arthritis would have been obvious and/or anticipated at the date from which EP (UK) 1,406,656 was entitled to claim priority whether or not co-administered with methotrexate (as would administration every week in the case of monotherapy in rheumatoid arthritis); and
(b) psoriasis and/or psoriatic arthritis would have been obvious at the date from which EP (UK) 1,944,322 was entitled to claim priority (whether as an initial or continuing dosing regimen)". (emphasis supplied).
44.	The references in the declaration to the dates from which the 656 and 322 patents were entitled to claim priority give rise to some controversy.  It is clearly necessary, however, for the declaration to specify some date for the assessment of lack of novelty or obviousness of the product which it invites the court to decide and declare.  If it were not so, one could not decide what prior art was relevant, or determine anything about the common general knowledge.  
45.	Part of AbbVie’s response in its amended defence was to explain that the declaration sought by FKB would only relate to the identified features of FKB 327, namely that it was for treatment of the specified indication and on the specified dosage regimen.  They point out that subsequent patent claims which covered those features could also include other features which FKB 327 will in fact possess but which were not specified in the declaration.  Accordingly the claim would cover FKB 327, but would not be invalid as the declaration would not relate to all such features.  FKB clarified matters in its reply by saying that the declaration sought is “only insofar as the dosage regimen of the Claimant’s products containing their biosimilar antibody is concerned”.   
FKB 2
46.	 FKB 2 was commenced on 9 May 2016 against AbbVie Bermuda and AbbVie UK seeking an Arrow declaration that:
"importing into the United Kingdom and offering to sell and dispose of, and to sell and dispose of, and to keep for such sale or disposal in the United Kingdom, the Claimant's products containing their biosimilar antibody to … adalimumab (Humira) would insofar as the Higher Initial Dosing Regimens are concerned have been obvious and/or anticipated at the date from which EP (UK) 1,737,491 is entitled to claim priority.” (emphasis supplied).
47.	The Higher Initial Dosing Regimens are dosing regimens for each of psoriasis, Crohn's disease and ulcerative colitis in the Humira SmPC comprising higher initial doses (as multiple initial doses of 40 mg via subcutaneous injection) as follows:
a. 80 mg for psoriasis;
b. 80 mg, or 160 mg then 80 mg, for Crohn's disease; and
c. 160 mg then 80 mg for ulcerative colitis
each of which is followed by one or more doses of 40 mg.
48.	FKB also seeks an injunction against AbbVie Bermuda and AbbVie UK to restrain them from threatening or commencing proceedings for patent infringement in respect of acts covered by the declaration.  
49.	Although the declaration refers to EP (UK) 1,737,491, at the date of the hearing before Arnold J that patent had not been granted, and was still an application. A patent was, however, granted on the application on 2 November 2016.  In a letter to FKB’s solicitors of 15 November 2016 AbbVie have indicated that they consent to revocation of EP (UK) 1,737,491 (“the 491 patent”).  There was therefore a short period when the 491 patent was granted and subsisting.
50.	In order to bring AbbVie Bermuda, a Bermudan company, before the court it had been necessary for FKB to apply for permission to serve it out of the jurisdiction.  Such permission was granted by Master Bowles on 18 May 2016.  On 20 June 2016 AbbVie Bermuda applied (i) to set aside the order of Master Bowles (ii) to strike out alternatively for summary judgment against AbbVie UK.  FKB relied on the jurisdictional gateways in Practice Direction 6B paragraphs 3.1(2), 3.1(3), 3.1(4A), 3.1(9) and 3.1(11) as well as Article 24(4) of European Parliament and Council Regulation 1215/2012/EU of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) ("recast Brussels Regulation").  Arnold J found in favour of FKB on these applications, and no issue about the court’s personal jurisdiction over AbbVie Bermuda arises on appeal.
51.	In support of the Arrow declaration in FKB 2, FKB relied on what it contends is similar conduct by AbbVie to that relied on in FKB 1.  We do not need to rehearse it all in this judgment as it is fully set out in the judgment of Arnold J ([2016] EWHC 2204 (Pat)) at [23] to [27].  We will, however, set out the conclusion he was able to reach at that stage at [28]:
“In my judgment these points are sufficient to show that FKB has a real prospect of establishing that AbbVie Bermuda's purpose in filing the amendments to EPA491, requesting a further rule 71(3) communication and reserving the right to pursue the deleted subject matter by way of one or more further divisional applications was to shield some or all of the subject matter of EPA491 from timely scrutiny by this Court, or at least to prolong the uncertainty as to whether such subject matter founds a valid patent.”
52.	To the points available to Arnold J, FKB now adds the fact that, within a few days of the grant of the 491 patent, AbbVie removed it from impending scrutiny in FKB 2 by consenting to its revocation. That conduct, it submits, is entirely consistent with the allegations which it makes in the action.
The Gillette defence
53.	FKB contends that the declaration it seeks is, in effect, a declaration that it has a Gillette defence to any subsequent claim for patent infringement against FKB 327.  The Gillette defence was first recognised in the judgment of Lord Moulton in Gillette Safety Razor Co v Anglo-American Trading Co Ltd (1913) 30 RPC 465.  At pages 480-481 Lord Moulton said:
"I am, therefore, of opinion that in this case the Defendants' right to succeed can be established without an examination of the terms of the Specification of the Plaintiffs' Letters Patent. I am aware that such a mode of deciding a Patent case is unusual, but from the point of view of the public it is important that this method of viewing their rights should not be overlooked. In practical life it is often the only safeguard to the manufacturer. It is impossible for an ordinary member of the public to keep watch on all the numerous Patents which are taken out and to ascertain the validity and scope of their claims. But he is entitled to feel secure if he knows that that which he is doing differs from that which has been done of old only in non-patentable variations, such as the substitution of mechanical equivalents or changes of material shape or size. The defence that 'the alleged infringement was not novel at the date of the plaintiff's Letters Patent' is a good defence in law, and it would sometimes obviate the great length and expense of Patent cases if the defendant could and would put forth his case in this form, and thus spare himself the trouble of demonstrating on which horn of the well-known dilemma the plaintiff had impaled himself, invalidity or non-infringement."
54.	As Arnold J pointed out in his judgment under appeal, Lord Moulton’s characterisation of the defence as “the alleged infringement is not novel” should be understood in context to be referring to “not novel or obvious”.   That point was made by Oliver LJ (with the agreement of O’Connor and Slade LJJ) in Windsurfing International Inc. v Tabur Marine (G.B.) Ltd. [1985] RPC 59 at 77, where, immediately after citing the above passage from Gillette, he said:
“[the prior user], of course, and indeed any of the persons who witnessed or copied his aquatic feats, are members of the public and one then asks on what principle should such persons, who clearly cannot be prevented from doing exactly that which they did before, be prevented from doing that which is no more than an obvious variant of what they did before?”
55.	Lord Moulton went on to explain that, based upon these considerations, the action had to fail “whatever be the interpretation we give to the Claims of the Specification of the Plaintiff’s Letters Patent”. He went on to explain that he would nonetheless not decide the case in that way:
“… It would not be fair to the parties to content oneself with so deciding the case, because the action has been fought on the ordinary lines, i.e., upon the issues of validity and infringement, and it is important, both for the parties and for the public, that these two issues should be severally adjudicated upon, inasmuch as they have been raised and considered by the Courts below …”
56.	It is, we would accept, still not the practice to adopt Lord Moulton’s approach to deciding conventional patent actions where both validity and infringement are in issue. The court will resolve those issues individually by reference to the claims of the patent, rather than take the short cut of deciding whether the defendant’s product is old or obvious.  That is because, as we think Lord Moulton was recognising, the validity of a granted patent involves more than just the private interests of the parties.  If the patent is indeed to be impaled on the validity horn of Lord Moulton’s dilemma, then it is in the public interest that it be decided and the patent revoked. That same policy is visible in Traction Corporation v Bennett (cited above). That consideration does not, however, detract from the potential usefulness of the principle that Lord Moulton was espousing.  In a conventional patent action a determination that there is nothing new or inventive about the defendant’s product may operate as a cross-check on the outcome of the action as a whole.  It may, however, be difficult to determine that there is nothing new or inventive about a complex product, for example a mobile phone.  Lord Moulton was dealing with a simple mechanical product: the safety razor. 
57.	In Fort Dodge Animal Health Ltd and others v Akzo Nobel NV and another [1998] FSR 222, proceedings were brought in the Netherlands for infringement of granted UK and Dutch patents.  The petitioners (as revocation claimants were then called) sought relief from the English court to restrain the prosecution of the claim in the Dutch courts.  The case raised issues as to the application of Article 16(4) of the Brussels Convention which provided that the courts of the state where a patent was registered had exclusive jurisdiction in proceedings concerned with the registration or validity of the patent.  Article 19 of the same convention provided that the court must renounce jurisdiction over a claim which is principally concerned with the matter over which the courts of another Contracting State have exclusive jurisdiction. The relevance of the case for present purposes is that the petitioners raised an attack on the validity of the patent and also stated that they intended to rely on a Gillette defence. Lord Woolf MR gave the judgment of the court which included Aldous and Chadwick LJJ.  We set out the following long passage because it is heavily relied on by Mr Hobbs. At page 243 Lord Woolf said this:
“Where questions of infringement and validity both arise it is invariably not possible to conclude there is infringement without validity being determined. An extreme example, known as a Gillette defence, is where the alleged infringer’s case is that the patent is invalid if the alleged infringing acts fall within the ambit of the claims. That appears to be part of the appellants’ contentions in this case. It follows that the split contemplated in the Jenard Report between actions for infringement and proceedings concerned with validity cannot always be made.
…
As Article 64 of the European Patent Convention requires the national law to be determinative of what will and what will not amount to infringement, it follows that when there is a bona fide challenge to the validity of a United Kingdom patent, any proceedings for infringement must in English eyes be “concerned with” the validity of the patent. Often, perhaps normally, the issue of validity will be the principal element of the dispute. No conclusion as to the chances of a claim of infringement succeeding can be made until a decision has been reached as to the strength of the allegations of invalidity. No concluded view on infringement can be reached until a decision has been reached as to whether any amendment should be made and the attack on the patent has been rejected. 
In the present case the appellants have raised a substantial attack on the validity of the United Kingdom patent and also intend to rely upon a Gillette defence. This is a case therefore in which no conclusion on the infringement can be reached without consideration of the validity of the patent. We believe that for the purposes of article 19 the claim by the respondents in respect of acts carried out in the United Kingdom are principally concerned with validity of the United Kingdom patent and therefore by reason of that Article and Article 16 the claim falls within the exclusive jurisdiction of the United Kingdom court.”
Declarations
58.	CPR 40.20 provides:
“The court may make binding declarations whether or not any other remedy is claimed.”
59.	The modern approach to the grant of declarations can be taken from two cases: Messier-Dowty Ltd v Sabena SA [2001] 1 All ER 275 at [41]-[42] (Lord Woolf MR) and Financial Services Authority v Rourke [2002] CP Rep 14 (Neuberger J, as he then was).   In Messier-Dowty the court held that the grant or refusal of declaratory relief in relation to commercial disputes should not be constrained by artificial limits wrongly related to jurisdiction.  Instead it should be kept in proper bounds by the exercise of the court’s discretion.  Negative declarations were an unusual remedy which can result in procedural complications resulting in unfairness to the defendant.  But subject to appropriate circumspection, there should be no reluctance to grant negative declarations “when it is useful to do so”.  
60.	In Financial Services Authority v Rourke Neuberger J (as he then was) proposed the following, with which we respectfully agree: 
“It seems to me that, when considering whether to grant a declaration or not, the court should take into account justice to the claimant, justice to the defendant, whether the declaration would serve a useful purpose whether there are any other special reasons why or why not the court should grant the declaration.”
61.	Older cases suggested that there had to be “a claim of right” by the defendant before a declaration could be made against him.  The modern rule is not interpreted so rigidly, although if no claim of right has been made (or is likely to be made) this may show why a declaration would not be useful.  In Nokia Corp v Interdigital Technology Corp [2006] EWCA Civ 1618, this court upheld the granting of declarations that patents did not cover that which was “essential” to do to comply with a particular telecommunications standard.  If the patents were essential in this sense it would mean that Nokia’s phones were infringing. One of the points taken by the patentees was that there had been no, or no sufficient claim of right so as to give rise to the declaratory jurisdiction.  Jacob LJ (with whom Ward and Carnwath LJJ agreed) rejected this argument: Nokia had a manifest and real commercial interest in a decision of the kind sought: they were “technically infringing” if they were wrong: see paragraph 19.  
62.	A further point taken by the patentee in Nokia was that the appropriate remedy was for a declaration of non-infringement under section 71 if the Act, and not via the general jurisdiction to grant declarations. That point had been a ground for refusing a declaration in Unilever plc v The Procter & Gamble Co [2000] FSR 344.  Jacob LJ distinguished Unilever:
“17. … In Unilever [section 71] could have been, but was not invoked.  So there was no reason for permitting the general jurisdiction to apply. This case is quite different for the following reason.
18. What Nokia would have to do to invoke s.71 would be to provide a written description of a telephone in detail. Then if there was no answer or refusal, sue for the declaration. The declarations could only be sought telephone by telephone. What is sought here is something very different – declarations that none of the patents are essential to comply with the standard.  s.71 would not be appropriate for this so the existence of s.71 is no reason, as it was in Unilever, for excluding the general jurisdiction.”
63.	The principle that a statutory remedy, if available, is liable to be regarded as an exclusive remedy is one of long-standing, see for example per Lord Jenkins in Pyx Granit Co Ltd. v Ministry of Housing and Local Government [1960] AC 260 at 302:
“Where a statute creates a new right which has no existence apart from the statute creating it, and the statute creating the right at the same time prescribes a particular method of enforcing it, then, in the words of Lord Watson in Barraclough v Brown [1897] AC 615, 623 the right and the remedy are given uno flatu, and the one cannot be dissociated from the other”.
This principle was referred to in argument as “the Barraclough principle”. However, as Nokia shows, it is not enough simply to point to an available statutory remedy, if the declaration sought serves a legitimate and useful purpose beyond that which could be achieved by that remedy.  
The Arrow case
64.	In the Arrow case, Merck was the owner of a granted patent (“the 292 patent”), which related to the treatment of osteoporosis with the drug alendronate on a dosage regimen of 70 mg, once a week, rather than 10 mg each day.  Arrow had successfully applied to revoke the patent before Jacob J, inter alia on the ground of obviousness, and his decision was upheld by the Court of Appeal.  Co-pending opposition proceedings came to the same conclusion, both at first instance before the opposition division of the EPO and on appeal to a Technical Board of Appeal.  As a consequence Arrow and others started to market a 70 mg once weekly alendronate for the treatment of osteoporosis, inter alia in the United Kingdom.  However, in the course of prosecution of the 292 patent, Merck had filed four divisional applications. One of these, with claims to the use of alendronate to make a medicine for the treatment of osteoporosis in humans, administered as a unit dosage comprising 70 mg of alendronate once weekly was subsequently granted as the 904 patent (essentially the same idea as the 927 patent).  It is significant to note that that grant took place notwithstanding the earlier decision of the Court of Appeal. Arrow therefore faced a threat to its business from the 904 patent.  It also faced a threat from any patents granted on the other three divisional applications, at least two of which currently had claims to the 70 mg once per week alendronate dosage, and the third of which could have been amended to do so. On the grant of the 904 patent Merck had made it clear that it intended to enforce it.
65.	Arrow accordingly commenced proceedings seeking revocation of the 904 patent and, as initially formulated, a declaration that “any other European Patent (UK) for an alleged invention relating to osteoporosis medicaments for administration of about 70 mg alendronate once-weekly would be invalid.”  Arrow also sought a declaration that the defendant was not entitled to rely on any EP (UK) granted pursuant to the outstanding divisionals to prevent Arrow from selling or supplying their 70 mg once-weekly alendronate products.  Merck applied to strike out these declarations. 
66.	An initial issue in the Arrow case was whether the 904 patent had actually been granted for the UK, as Merck had written to the EPO withdrawing the designation of the UK prior to grant.  Kitchin J held that the patent had not been granted for the UK, and accordingly “this court has no jurisdiction to make a declaration that it is and has at all times been invalid or that it should be revoked.”  Accordingly that part of Arrow’s claim was struck out.
67.	The remaining heads of relief claimed by Arrow were refined in the course of the hearing before Kitchin J to  seek, in substance, that as of July 1997, the earliest priority date of the 292 patent,:
“it was obvious to the skilled person to use [alendronate] in the manufacture of a medicament in the form of a tablet containing about 70 mg [alendronate] for oral administration for the treatment of osteoporosis … according to a continuous schedule having a once-weekly dosing interval.”
68.	Having reviewed the extent of the court’s jurisdiction to grant declaratory relief, Kitchin J went on to consider whether there were any special circumstances or reasons why the court should or should not grant the declaration as now sought. Merck contended that section 74 of the Act was a complete bar to the relief claimed and, in any event, that the framework of the Act and the EPC contemplated patentability of European patent applications being determined by the EPO, and that it would be wrong for the court to interfere with that process.
69.	Kitchin J held (paragraph 54) that section 74 did not prohibit declarations in relation to anything other than granted patents.  He noted (paragraph 56) that Arrow had no alternative remedy by way of a claim for revocation. He dealt with the contention that the declaration would be a usurpation of the function of the EPO at paragraph 60:
“[Merck] says this court should not be making declarations in respect of the validity of patent applications because they are subject to examination by the EPO and their claims can change. For the court to start anticipating the examination process would be to usurp the function of the EPO and this is inconsistent with the framework of the EPC and the Act.  I agree with all of these submissions. I find it hard to conceive of any circumstances in which it would be appropriate for this court to grant a declaration that no valid patent could be granted on a divisional application which is being prosecuted before the EPO. But that is not what is sought. Arrow only seeks declarations that its own product was obvious at the priority date. The existence of the divisional applications gives rise to the need and justification for seeking declaratory relief. Merck could withdraw the “GB” designations of the divisional applications or acknowledge that it can have no claim under them in this country in respect of a product having the specified characteristics of Arrow’s product. If it did so then the commercial purpose of the declaration sought would likely fall away. But it has chosen not to take that course.”
70.	Kitchin J also noted that it was possible that the divisionals would proceed to grant before the proceedings had been concluded. In that event it would be necessary for the proceedings to be amended to take the more conventional form of a claim for revocation and a declaration of non-infringement. That however did not affect the jurisdiction of the court to grant the declaration as matters presently stood. He accordingly held the claim for the declarations sought to be properly arguable.
Recent developments
71.	Before turning to the issues we should mention some recent developments.  AbbVie have proffered undertakings that they would not obtain patent protection in the UK which would be infringed by certain acts in relation to FKB’s biosimilar monoclonal antibodies.  They say that they have now gone as far as Kitchin J suggested a patentee ought to go in the final sentence of the passage from the Arrow case which we have cited in paragraph 69 above.  We were told that an application was being made in the Patents Court to determine whether these undertakings should be dispositive of the proceedings.  However, both parties submitted that they wished us, nevertheless, to decide the issues on this appeal. 
Issue 1 
Can Arrow Declarations be granted?
72.	Mr Waugh QC, who appeared on behalf of FKB, contended that, as the issue before Henry Carr and Arnold JJ was not a preliminary issue, but a decision reached on a striking out application, the sole issue before us was whether it was arguable – yes or no - that an Arrow declaration could be granted.  He submitted that FKB’s case plainly crossed this threshold, particularly as such declarations had been held to be arguable by three first instance judges with specialist expertise in patents, and actually granted in a case in the Dutch courts.  He submitted that it would be wrong for us to go further and decide that such declarations could in principle be granted, as such a conclusive finding might lead to a further appeal, and consequent delay in securing the substantive relief which FKB seeks. Mr Hobbs QC appearing for AbbVie, on the other hand, was content for us to decide the issues of principle which arise.  We consider that it would be sensible for us to decide the issues of principle which arise and which are independent of the evidence which will be called at the trial.  It would be an unfortunate waste of the parties’ money and the courts’ resources to hold two full trials and possible subsequent appeals if such declarations are not available in principle, whatever the circumstances and however they are formulated.  
73.	Mr Hobbs submitted as follows:
i)	The scheme of the Act, in particular sections 74-78, made it clear that validity could only be put in issue in relation to a granted patent.  The former procedure for challenging a patent before grant in section 14 of the Patents Act 1949 had been abolished. The moment it is accepted, as it should be, that there is no right to challenge validity of a pending application, you are outside the only qualifying basis that the statute gives for challenges to validity.  The Act was a complete statutory code for the granting and revocation of patents, and therefore the associated challenges to validity. The present proceedings were, in reality, a challenge to the validity of pending applications or the patents resulting therefrom. 
ii)	It was a settled principle, now enacted in section 74(2) of the Act, that you cannot institute proceedings seeking only a declaration of invalidity of a granted patent.  The case of a patent application is a fortiori.  
iii)	Lenzing and Virgin Atlantic (cited above) showed clearly that proceedings within the separate legal order of the EPO were not justiciable in the English courts, even after grant when there is co-ordinate jurisdiction with national courts.  The present declarations were in substance a collateral attack on the proceedings within the EPO, which the English court would not permit.  The declaration, if granted, would say to the EPO, that whatever patent it granted, it would not be valid as against FKB. 
iv)	The Gillette defence was “drenched” with issues of validity.  The concept of infringement cannot exist without validity because there is no such thing as infringement of an invalid claim: see e.g. Pittevil & Co v Bracklesberg Melting Processes Limited [1932] 1 Ch 189 where the Court of Appeal allowed a plaintiff in a threats action to raise issues of validity to show that the threats were not justified because there could be no infringement of an invalid claim.  As Romer LJ put it at page 200 “I do not understand how a patent which is not valid can be infringed”. Fort Dodge (cited above) also showed a Gillette defence put validity in issue. 
v)	The present proceedings sought to put AbbVie on the horns of a Gillette dilemma, and inevitably put both infringement and validity in issue.  It was clear from the pleadings that validity was the principal horn relied on.  The reference to FKB’s product in the declaration was merely a proxy for the patent.  The declaration was saying that a putative patent was obvious.  This was supported by a passage in Terrell (18th Edn) 2016 which says:
“It is submitted that although Lord Moulton’s test may be helpful in assisting a manufacturer to decide whether or not to proceed with some [act] which may appear to fall within the claim of a patent, it does not provide any additional defence to an infringement action. It is in reality an attack on validity which invokes the policy underlying the grounds of anticipation and obviousness.”
vi)	To allow declarations in the Arrow form would be to open the floodgates, so that a claimant faced with patent problems in, say, Romania could come to the English court for a declaration that a product is obvious, because it would be useful for him in connection with his business there. If the Arrow declaration does not raise issues of validity, then it would be a way of undermining the system of allocation of jurisdiction under the recast Brussels Regulation in ways which the courts have striven to prevent: see e.g. Gesellschaft für Antriebstechnik MBH & Co KG v Lamellen und Kupplungsbau Beteilungs KG Case C-4/03 [2006]  FSR 45 (“GAT v LUK”) and Anan Kasei Co. Ltd and another v Molycorp Chemicals & Oxides (Europe) Ltd [2016] EWHC 1722 (Pat) (Arnold J).
vii)	In GAT v LUK it was also held that “proceedings relating to an alleged right of priority by reason of an earlier deposit should be regarded as proceedings “concerned with the registration or validity of patents”. The present proceedings raised issues of priority, and were therefore concerned with the registration or validity of patents.
viii)	In the Arrow case itself, Kitchin J had treated the fact that the action was outside the provisions of section 74 as a virtue when he should have treated it as a vice.  It was not incumbent on the draftsman of section 74 to exclude applications: if you did not come within section 74, then validity could not be put in issue. 
ix)	Moreover, there was a disconnect between the two parts of Kitchin J’s judgment in Arrow.  In the first part he had recognised (paragraph 36) that, as the 904 patent had never existed, the court had no jurisdiction to declare that it had at all times been invalid or to make an order for revocation.  In the second part he had, however, held that Arrow had an arguable case that a declaration could be granted that a specific use of alendronate (effectively the subject matter of that patent) was obvious, and this amounted to the same thing. 
x)	The pleadings in the present cases showed that the actions were attempts to negate the validity of the divisionals flowing from the parent patents.  The framing of the declarations by reference to FKB’s product was a proxy for an embodiment of a claim of such divisionals.  The declarations were merely a disguised form of attack on validity.  
xi)	On the question of discretion to grant the declaration, Wyko Group plc and others v Cooper Roller Bearings [1996] FSR 126 showed that the right (identified in British Leyland v Armstrong) of a motor spares supplier to make and stock parts for motor vehicles was only meaningful when weighed against the counter-right of the motor car manufacturer to stop him.  No such counter-right could, in that case, be asserted.  Here, given that no granted patents are any longer in issue, one also does not know what the asserted counter-right is. 
xii)	Mr Hobbs also relied on the list of factors justifying the exercise of the declaratory jurisdiction set forth by Aikens LJ in Rolls-Royce plc v Unite the Union [2009] EWCA Civ 387; [2010] 1 WLR 318 at 120.  In particular, he submitted that there was an underlying requirement that the dispute should be based on “concrete facts”.  Mere convenience to the claimant based on the possibility that an issue might arise in the future was not enough.
74.	Mr Waugh submitted:
i)	The declaration sought seeks to establish that FKB 327, insofar as the dosing regimens are concerned, cannot be found to infringe any patent granted in the future.
ii)	The declaration does not impact in any way on the jurisdiction of the EPO to grant patents on the divisional applications.  It operates purely inter partes and the EPO is not bound by it.
iii)	The declaration sets up a form of Gillette defence.  Such a defence does not challenge validity: as Lord Moulton said, the defendant’s right to succeed “can be established without an examination of the terms of the Specification of the Plaintiff’s Letters Patent”.
iv)	Moreover, given that all the relevant patents have been de-designated or revoked, there is no patent in respect of which validity can be put in issue.
v)	The fact that there was an issue relating to priority date did not mean that validity was put in issue.  In any event if that point was decisive, FKB would simply insert the alternative possible priority dates in the declarations.
Discussion
75.	The first task is to construe section 74 of the Act.  There are four things to note about the section.  The first is that, as we have already pointed out, the practical effect of section 74 is that proceedings in which validity of a patent is put in issue will always be before a court or tribunal which has jurisdiction under the Act to revoke the patent if the grounds of invalidity are made out.  In that way the public interest in securing the revocation of invalidly granted patents is protected.  We see that as the primary purpose of the section. 
76.	The second thing to note is that section 74 is concerned with putting in issue the validity of patents, that is to say granted patents.  There is no known domestic law concept of the validity of an application.  It is impossible to see how, in a case where there are no relevant granted patents, it can be said that validity of a patent is put in issue. We agree with Mr Hobbs that, if you are outside section 74, you are outside the only qualifying basis for putting validity of a patent in issue.   However if your action is not one in which the validity of a granted patent is put in issue, you do not need the authorisation of the section. 
77.	Thirdly, section 74 has no application where the patent has been revoked.  In such circumstances there is, again, no patent.  The revocation of the patent operates ab initio.  Section 74 does not operate posthumously in aid of the revoked patent to prevent issues being raised which are the same as those which have or could have been raised in revocation proceedings, if there is some valid reason to do so.  Often there will not be any valid reason, but that is another question. 
78.	The situation would be different if the patent had simply expired rather than been revoked.  In those circumstances the grant would not have been nullified. A declaration of invalidity would in those circumstances have to be accompanied by a claim for revocation of the patent (even though it had expired): see North-Eastern Company v Leeds Forge Company Ltd 23 RPC 96,102 and 533. A declaration of invalidity only would not be permissible.
79.	The fourth and final thing to note about section 74 is that section 74(2) prohibits, in particular, the institution of proceedings seeking only a declaration of validity or invalidity of a patent. The word “only” makes it clear, in our judgment, that there is nothing to prevent a declaration of invalidity being sought in conjunction with revocation of the patent.  
80.	We consider, next, what is in issue in the present claims for Arrow declarations, putting to one side for the moment the question of priority date.  Put shortly, the court is called upon to decide whether a particular dosing regimen of a given drug was old or obvious at particular dates.  The claim does not, at least on its face, ask for a declaration that any patent is invalid.  
81.	The fact that the declaration does not, on its face, ask for a declaration that a granted patent is invalid does not, of course, establish that the Arrow declarations sought are not merely covert attacks on the validity of a patent, in breach of section 74.  If a patent has a claim to a product with features A, B and C, a claim for a declaration that such a product with features A, B and C was old or obvious would, in substance, be a claim for a declaration of invalidity of the patent.  Such a claim would offend against section 74(2) and the common law principle derived from Traction v Bennett unless combined with a claim for revocation.   If such a declaration is sought, then the court must be put in the position to revoke the particular patent in question by having proceedings within section 74 before it.
82.	The pursuit of a claim such as that outlined in the previous paragraph would also offend against the Barraclough principle.  The claimant should take the available remedy offered by Parliament to obtain the determination that a product with those features was old or obvious: revocation. 
83.	There is no suggestion that the declarations in the present cases map on to the claims of a granted patent in this way.  In our judgment they do not, therefore, offend against section 74.
84.	AbbVie’s real complaint, as it seems to us, is that the declarations, by asserting that the dosing regimen is old or obvious, are making it clear that a future patent claim to that regimen would be invalid.  Accordingly, if AbbVie were to obtain the grant of claims in that form, the resulting patent would have been pre-emptively adjudged invalid. There is therefore, implicit in the Arrow declaration, an inter partes declaration of invalidity of a putative patent, not yet granted, having those claims. 
85.	Does the scheme of the EPC and the Act preclude a pre-emptive determination of the validity of a putative patent which has not been granted?  If so, then FKB must wait and see whether such a patent is indeed granted and avail themselves of the remedies by way of opposition in the EPO or revocation before the national court.  That may never happen.  In the meantime there will be continuing commercial uncertainty over whether their product will be held to infringe.
86.	In our judgement there is nothing in the scheme of the EPC and the Act to prevent such declarations in cases where there is a real justification for their grant.  It is necessary to examine quite carefully the ways in which it is suggested that the grant of such a declaration would conflict with that scheme.
87.	So far as the EPO is concerned, the following considerations are relevant. Firstly, the declaration has no direct impact on what the EPO can or cannot do in relation to any given application. The EPO will apply its own internal legal order and procedures irrespective of any decision of the national court.  Secondly, the court is not being asked to review or adjudicate on past action within the EPO, as it was in Lenzing or Virgin. It is, however, correct to say that the court is being asked to adjudicate on an issue which may arise in proceedings in relation to one or more applications proceeding in the EPO. 
88.	We do not think that this latter consideration means that the declaration is a collateral attack on the proceedings in the EPO.  On the contrary it is an inevitable feature of the scheme set up under the EPC that national courts will have to decide whether combinations of features are old or obvious, and that they will have to do so while possible divisional applications are still pending in the EPO (or indeed in the national patent office).  Whenever a national court decides that a claim with features A, B and C is old or obvious in the course of revocation proceedings against a granted patent, it is deciding an issue which may arise in relation to a pending application.  That is exactly what happened in the Arrow case itself, when divisionals were prosecuted in relation to essentially the same idea as had been held obvious (albeit in normal revocation proceedings) by Jacob J and the Court of Appeal.  Because of the structure of the EPC, the EPO cannot be insulated from findings by national courts which may run contrary to applications which it is in the process of examining.  The EPO is considered by the scheme to be capable of deciding its cases in accordance with its own legal order.  
89.	For similar reasons, the grant of an Arrow declaration is not inconsistent with the abolition of the right to oppose a patent in pre-grant opposition proceedings.  The declaration will not prevent the EPO from granting any patent.
90.	Is the grant of Arrow declarations incompatible with the Act (albeit not expressly prohibited by it)?  This is the main argument based on the Barraclough principle.  At its most straightforward, the argument is that it is the Act which grants the patent rights enjoyed by the patentee, and which provides for the manner in which their validity is to be examined.  It is not for the courts in those circumstances to find other ways of making findings of invalidity which are not contemplated in the statute. The statute provides the exclusive remedy.
91.	Despite the attractive force of Mr Hobbs’ submissions on this point, we have in the end not been able to accept them for essentially the following reasons.  Firstly, although we agree with Mr Hobbs that the Act is a complete statutory code for challenging the validity of a granted patent, the Arrow declarations sought do not declare any patent invalid. In the present case, it is to be noted that there are now no longer any granted patents in the background in relation to which they could (even possibly) have that effect. 
92.	Secondly, the remedy which the statute provides exists only in relation to granted patents.  We have already said that the Barraclough principle operates to prevent a disguised challenge to validity of a granted patent where such a patent exists.  However, it is one thing to say that the statute should be understood to be providing an exclusive statutory remedy in relation to granted patents (which it does).  It is going much further to say that it is providing an exclusive remedy in relation to patents which have not and may never be granted.  We do not think that it can have been the intention of Parliament to preclude the grant of declarations, however strongly justified, in circumstances where the statutory remedy is simply not available. 
93.	The eventual existence of the statutory remedy of revocation is, in our judgment, of relevance to the question of whether a declaration should be granted in the exercise of the court’s discretion.  A claimant cannot seek an Arrow declaration simply because it would like to know whether a patent application in the course of prosecution will result in a valid patent.  The course envisaged by the statute is that he should wait and see what, if any, patent is granted.  The statutory remedy does not constitute a bar in principle to the granting of declaratory relief in appropriate cases, however.  Where, for example, it appears that the statutory remedy is being frustrated by shielding subject matter from scrutiny in the national court, it should be open to the court to intervene. Just as in Nokia, the statutory remedy does not provide, in practical terms, the relief which the claimant needs.
94.	It follows that we do not accept Mr Hobbs’ criticism of the reasoning in the Arrow case itself.  In saying, in paragraph 36 of his judgment in that case, that the court would have no jurisdiction to declare invalid or revoke the 904 patent, Kitchin J was doing no more than reflecting the fact that there was and never had been a 904 patent.  It therefore made no sense to speak of the invalidity of its (non-existent) grant or permit a claim for revocation of a non-existent patent.  What was permissible, as the rest of the judgment shows, is to identify features of a product or process which the claimant is selling or intends to sell, and to ask the court to determine whether those features are obvious. 
95.	We are not persuaded that declarations in the Arrow form will open any floodgates.  The Arrow decision is now of some age, and has not resulted in many such cases being brought.  The circumstances in which such declarations will be justified, will, we would have thought, be uncommon. Mr Hobbs’ example of a business problem in Romania would be unlikely to justify the grant of a declaration by the English court.  
96.	Likewise we do not think that the availability of such declarations will undermine the system of allocation of jurisdiction under the recast Brussels Regulation.  Insofar as the declaration can be said to be “concerned with the registration or validity of patents”, it can only be concerned with the registration or validity of EP (UK)s.  When the declaration states that the product is obvious, it will so state as a matter of the law of the United Kingdom. The validity of other patents for other designated states is a matter for the law of those states.  The grant of declarations in those terms is no more inconsistent with the Brussels system for allocation of jurisdiction than is the revocation of an EP (UK).
97.	For similar reasons, the priority date which the declaration puts in issue will be decided only as a matter of English law and in relation to a granted EP (UK) (now revoked).  It does not offend against the recast Brussels Regulation. 
98.	We have said enough to explain why we do not consider that there is any issue of principle which prevents the granting of Arrow declarations in appropriate cases.  Drawing the threads together:
i)	A declaration that a product, process or use was old or obvious at a particular date does not necessarily offend against section 74 of the Act.
ii)	Such a declaration may offend against the Act where it is a disguised attack on the validity of a granted patent.
iii)	Such declarations do not offend against the scheme of the EPC or the Act simply because the declaration is sought against the background of pending divisional applications by the counter-party.
iv)	On the other hand the existence of pending applications cannot itself be a sufficient justification for granting a declaration. 
v)	Whether such a declaration is justified depends on whether a sufficient case can be made for the exercise of the court’s discretion in accordance with established principles.
Discretion
99.	Given that a discretionary power exists, it is for the Patents Court to develop the principles for its exercise in more detail.  It will be apparent from the above, however, that we consider an important factor to be borne in mind in the exercise of the discretion is the existence of the statutory proceedings for revocation, which should be regarded as the normal vehicle for obtaining any desired findings of invalidity.  
100.	In submitting, as he does, that this is a case where no judge could exercise the discretion to grant an Arrow declaration Mr Hobbs faced, as we think he recognised, an uphill task.  It seems to us that the pleaded facts in both cases are at least open to the interpretation that AbbVie are deliberately trying to shield the claims of their patents from scrutiny in the EPO and in the national court.  Had the patents not been voluntarily de-designated or revoked, FKB would have had the opportunity to seek findings of invalidity of granted patents in the usual way.  Those findings would have gone a long way to establishing its freedom to operate before launch.  Because of the way AbbVie have appeared to act, there is a case for the court to intervene by way of declaration to provide FKB with a measure of useful commercial certainty.
101.	We do not think Mr Hobbs’ analogy with Wyko v Cooper is a good one, not least because the discretion to grant declaratory relief is now recognised to be much broader than it was when that case was decided.  We also do not think that the declaration should be refused because there are no concrete facts.  The issues are, as it seems to us, tolerably clear ones: namely whether the treatments with adalumimab at the specified dosage regimens are old or obvious.  
102.	For those reasons we would dismiss the appeal on Issue 1.  
Issue 2
103.	FKB’s pleading of its case for an injunction in FKB 2 is in the following terms:
“Further, the Claimant is entitled to an injunction to restrain the Defendants from threatening, commencing or pursuing in the United Kingdom any action for infringement of a patent against the Claimant (or its customers and agents) in respect of any act to which the declaration in paragraph 29 above pertains. By way of particulars of the Claimant’s cause of action for the injunction, the Defendant’s present and threatened future conduct has been and will be objectively (and it can be inferred subjectively) vexatious and oppressive. (1) If the declaration is granted it would be vexatious and oppressive for the Defendants to threaten, commence or pursue in the United Kingdom proceedings for infringement of a patent against the Claimant (or its customers or agents) in respect of any act to which the said declaration pertains. It is to be inferred that the Defendants would commence such proceedings (and they have not undertaken that they would not). (2) Further, independent of the declaration, the Defendants’ conduct as set out above is vexatious and oppressive and an abuse of process insofar as it illegitimately manipulates a persisting threat of patent infringement proceedings and shields from potential examination any patent which the Defendants may be able to obtain in the patent family of the ‘491 Patent. Such vexation and oppression presently exists because of the threat of patent infringement proceedings and would be realised eventual patent infringement proceedings or further threats thereof in respect of the Claimant’s products.”
104.	In oral argument, FKB’s claim for an injunction is put rather more moderately and on two bases.  The first is that the cause of action for the Arrow declaration justifies an injunction in itself.  The second is that the injunction is justified in support of the declaration. They accept that any such injunction would have to be subject to the proviso that proceedings could be brought with the permission of the court.
Abbvie’s submissions
105.	Mr Hobbs submitted that the injunction barred AbbVie’s right of access to the courts, contrary to Article 6 ECHR.  He submitted that short of the clearest evidence that proceedings were being brought maliciously and without proper foundation, the courts did not debar litigants from access to the courts.  There should be no prior restraint.  Rather, any potential case of abuse was looked at on its merits in a fact specific way.  
FKB’s submissions
106.	Mr Raphael QC, who argued the supplementary points in FKB 2 for FKB, supported the judge’s conclusions on the injunction.  It was legitimate to use an injunction to define the scope of the Gillette defence. Alternatively it was legitimate to grant an injunction in support of the declaration.
Discussion
107.	We entertain considerable doubt about whether there will in the end be justification for the grant of an injunction, at least in the wide terms sought.   However we are not being asked to consider at this stage whether an injunction will be granted or what its scope might be.  The question for us is whether there is a real prospect in this case of any injunction being granted at trial.  
108.	We do not consider that the claim for an injunction should be struck out at this stage.  An appropriately framed injunction may be an alternative to the declaration.  It would be wrong to exclude that alternative possibility at this stage.  We do not think any point under Article 6 necessarily arises, particularly given the concession that any injunction may be subject to obtaining the permission of the court.   If it does, this is not the stage in the proceedings to decide it.  
Issue 3
109.	The basis for AbbVie’s contention that AbbVie UK should be struck out from the proceedings is as follows. AbbVie Bermuda and AbbVie UK are sister companies from a common parent.  It is AbbVie Bermuda, not AbbVie UK which was the applicant for the 491 patent and committed the acts in the EPO during its prosecution which FKB relies upon.  AbbVie UK had no interest in the subject-matter of the 491 patent and had no involvement in the proceedings before the EPO.  AbbVie UK was not an exclusive licensee of any rights under the application for the 491 patent or the (now revoked) 491 patent itself, or any divisional applications which may arise therefrom. Moreover, AbbVie Bermuda has stated in evidence that it "will not grant to AbbVie UK an exclusive licence under [the 491 patent] or any potential future divisional patents or patent applications arising therefrom". It follows that AbbVie UK could not bring, or be party to, a claim for infringement of any relevant patent under section 67(1) of the Act. Accordingly, granting a declaration against AbbVie UK would serve no useful purpose. 
110.	Arnold J relied on the following arguments as properly forming a basis for refusing to strike out AbbVie UK from the proceedings:
i)	It is probable that AbbVie Bermuda will grant AbbVie UK an exclusive licence in respect of the subject matter of EPA491 at some point in the future. The evidence of AbbVie Bermuda quoted in the preceding paragraph can only be a statement of its present intention, given that AbbVie Bermuda has not offered any undertaking not to do so. Absent an exclusive licence to AbbVie UK, the only financial remedy which the AbbVie group would be able to claim for infringement would be a reasonable royalty payable to AbbVie Bermuda. To disable itself from claiming the lost profits suffered by AbbVie UK would not be acceptable to the AbbVie group's shareholders. Accordingly, at some point, AbbVie Bermuda would change its intention.
ii)	Even if AbbVie Bermuda did not grant AbbVie UK an exclusive licence, it remains the case that it is AbbVie UK which exploits the inventions in the UK and which therefore has a substantial financial interest in maintaining the monopoly which would be conferred by valid patents. FKB accordingly has a legitimate interest in obtaining a declaration which is binding on AbbVie UK, in particular so as to forestall the possibility of AbbVie making threats to its customers or making statements that its product infringed.
Abbvie’s submissions
111.	 Mr Hobbs submitted that Arnold J’s reasons for leaving AbbVie UK in the proceedings were contrived.  AbbVie was not a licensee, let alone an exclusive licensee under any patents.  The refusal by AbbVie to undertake not to make AbbVie UK a licensee was not a basis for suggesting that it would in fact be made a licensee: a refusal to undertake to do something you had not threatened to do could never, on its own, be a threat.  There was no basis for not accepting at face value the evidence given as to whether an exclusive licence would be granted.
FKB’s submissions
112.	Mr Raphael QC, who argued this part of the case for FKB, submitted that the judge’s assessment of the case against AbbVie UK at this stage was an evaluative judgment with which this court should be reluctant to interfere.  He supported both of the reasons given by the judge. 
Discussion
113.	We think that the judge was amply justified in holding that there was an arguable basis for saying that at trial a declaration and/or injunction might be granted against AbbVie UK. In the light of that conclusion we propose at this stage to say very little about it.  
114.	On the first point, the judge was entitled to draw an inference from the commercial situation that AbbVie would wish to place themselves in the best possible position to obtain financial relief for patent infringement.  AbbVie Bermuda was not a shareholder in AbbVie UK, and accordingly could not even claim for reflected loss.  Any sensible commercial company would make their subsidiary an exclusive licensee of such patent rights as it has so as to be able to claim lost profits.  There could be no doubt that this straightforward exercise would prove worthwhile. The absence of such a licence would also place difficulties in the way of obtaining an interim injunction.
115.	The statement of AbbVie’s intention was not in sufficiently clear terms to preclude a partial assignment of the patent rights or an indirect grant of an exclusive licence.  This did not cast doubt on the evidence given about AbbVie Bermuda’s present intention. Whilst the refusal to give an undertaking, if it stood alone, would not justify any inference, there was more here than a mere refusal of an undertaking.
116.	We would therefore not upset the judge’s order in relation to AbbVie UK.
Conclusion
117.	For the reasons we have given above, we will dismiss these appeals.

Annex
Infringement of rights conferred by publication of application
69.-(1) Where an application for a patent for an invention is published, then, subject to subsections (2) and (3) below, the applicant shall have, as from the publication and until the grant of the patent, the same right as he would have had, if the patent had been granted on the date of the publication of the application, to bring proceedings in the court or before the comptroller for damages in respect of any act which would have infringed the patent; and (subject to subsections (2) and (3) below) references in sections 60 to 62 and 66 to 68 above to a patent and the proprietor of a patent shall be respectively construed as including references to any such application and the applicant, and references to a patent being in force, being granted, being valid or existing shall be construed accordingly.
(2) The applicant shall be entitled to bring proceedings by virtue of this section in respect of any act only -
(a) after the patent has been granted; and
(b) if the act would, if the patent had been granted on the date of the publication of the application, have infringed not only the patent, but also the claims (as interpreted by the description and any drawings referred to in the description or claims) in the form in which they were contained in the application immediately before the preparations for its publication were completed by the Patent Office.
(3) …
Declaration or declarator as to non-infringement
71.-(1) Without prejudice to the court's jurisdiction to make a declaration or declarator apart from this section, a declaration or declarator that an act does not, or a proposed act would not, constitute an infringement of a patent may be made by the court or the comptroller in proceedings between the person doing or proposing to do the act and the proprietor of the patent, notwithstanding that no assertion to the contrary has been made by the proprietor, if it is shown -
(a) that that person has applied in writing to the proprietor for a written acknowledgment to the effect of the declaration or declarator claimed, and has furnished him with full particulars in writing of the act in question; and
(b) that the proprietor has refused or failed to give any such acknowledgment.
(2) Subject to section 72(5) below, a declaration made by the comptroller under this section shall have the same effect as a declaration or declarator by the court.
Power to revoke patents on application
72.-(1) Subject to the following provisions of this Act, the court or the comptroller may by order revoke a patent for an invention on the application of any person (including the proprietor of the patent) on (but only on) any of the following grounds, that is to say -
(a) the invention is not a patentable invention;
(b) that the patent was granted to a person who was not entitled to be granted that patent;
(c) the specification of the patent does not disclose the invention clearly enough and completely enough for it to be performed by a person skilled in the art;
(d) the matter disclosed in the specification of the patent extends beyond that disclosed in the application for the patent, as filed, or, if the patent was granted on a new application filed under section 8(3), 12 or 37(4) above or as mentioned in section 15(9) above, in the earlier application, as filed;
(e) the protection conferred by the patent has been extended by an amendment which should not have been allowed.
(2) …
Proceedings in which validity of patent may be put in issue
74.-(1) Subject to the following provisions of this section, the validity of a patent may be put in issue -
(a) by way of defence, in proceedings for infringement of the patent under section 61 above or proceedings under section 69 above for infringement of rights conferred by the publication of an application;
(b) in proceedings under section 70 above;
(c) in proceedings in which a declaration in relation to the patent is sought under section 71 above;
(d) in proceedings before the court or the comptroller under section 72 above for the revocation of the patent;
(e) in proceedings under section 58 above.
(2) The validity of a patent may not be put in issue in any other proceedings and, in particular, no proceedings may be instituted (whether under this Act or otherwise) seeking only a declaration as to the validity or invalidity of a patent.
(3) The only grounds on which the validity of a patent may be put in issue (whether in proceedings for revocation under section 72 above or otherwise) are the grounds on which the patent may be revoked under that section.
…
Effect of European patent (UK)
77.-(1) Subject to the provisions of this Act, a European patent (UK) shall, as from the publication of the mention of its grant in the European Patent Bulletin, be treated for the purposes of Parts I and III of this Act as if it were a patent under this Act granted in pursuance of an application made under this Act and as if notice of the grant of the patent had, on the date of that publication, been published under section 24 above in the journal; and -
(a) the proprietor of a European patent (UK) shall accordingly as respects the United Kingdom have the same rights and remedies, subject to the same conditions, as the proprietor of a patent under this Act;
(b) references in Parts I and III of this Act to a patent shall be construed accordingly; and
(c) any statement made and any certificate filed for the purposes of the provision of the convention corresponding to section 2(4)(c) above shall be respectively treated as a statement made and written evidence filed for the purposes of the said paragraph (c).
(2) …
Effect of filing an application for a European patent (UK)
78.-(1) Subject to the provisions of this Act, an application for a European patent (UK) having a date of filing under the European Patent Convention shall be treated for the purposes of the provisions of this Act to which this section applies as an application for a patent under this Act having that date as its date of filing and having the other incidents listed in subsection (3) below, but subject to the modifications mentioned in the following provisions of this section.
(2) This section applies to the following provisions of this Act:–
section 2(3) and so much of section 14(7) as relates to section 2(3);
section 5;
section 6;
so much of section 13(3) as relates to an application for and issue of a certificate under that subsection;
sections 30 to 33;
section 36;
sections 55 to 69;
section 74, so far as relevant to any of the provisions mentioned above;
section 111; and
section 125.
…