Olanzapine is used to treat schizophrenia. It is a member of a class of compounds that Eli Lily had previously disclosed in an earlier invention. The specification of the patent in suit described the steps that Eli Lily had taken to identify its properties in lengthy clinical trials. The company discovered that the drug was an effective treatment inducing none of the side effects of earlier treatments. It applied for and was granted a European patent designating the UK and corresponding patents in other countries for the drug.
Dr. Reddy's Laboratories attacked the grant on the grounds that the invention lacked novelty and did not involve an inventive step. Eli Lily responded that the patent was a valid "selection patent". In answer to that contention, the claimant argued that Eli Lily had failed to disclose the invention sufficiently for it to be disclosed by a skilled addressee. Both attacks failed at trial as did Eli Lily's selection patent argument. Dr. Reddy's appealed against the dismissal of its application and Eli Lily lodged a respondent's notice against the rejection of its selection patent argument.
What is a "Selection Patent?"
None of the Lords Justices defined a "selection patent" but from the context it appears to include the development of a member of a class of compounds that are already known. Lord Justice Jacob explained at paragraph  that before the Patents Act 1977 came into force the general rule was that
"disclosure of the class prima facie deprives its members of novelty" and "prima facie a general disclosure of a class is a disclosure of all members of the class, however obscure and whatever the consequences." (Blanco White QC, Patents for Inventions 4th Edn. (1974) p.120 fn.60, fn. 62. and p.121)."
Consequently, the development of a compound that fell within a previously disclosed class of compounds in an earlier invention was deemed to have been anticipated by that earlier invention unless the subsequent invention disclosed something special about the selected compound. As Mr Justice Maugham put it in I.G. Farbenindustrie's Patents (1930) 47 RPC 289 at p.322-3, "a selection patent to be valid must be based on some substantial advantage to be secured by the use of the selected members (the phrase will be understood to include the case of a substantial disadvantage to be thereby avoided). Secondly, the whole of the selected members must possess the advantage in question. Thirdly, the selection must be in respect of a quality of a special character which can fairly be said to be peculiar to the selected group."
The New Law
Both the Master of the Rolls stressed that the purpose of the Patents Act 1977 was to bring our law into line with the European Patent Convention and that the approach of the European Patent Office, including its boards of appeal, was to be followed. The EPO's practice was to allow a grant where the selection made a technical contribution to the solution of a problem. The work done during the clinical trials certainly qualified. As to want of novelty, a previous invention anticipated a later one only if it provided what a German court had called an "individualized description of the invention." The disclosure of a class of many thousands of compounds including the patented product would just not do.
Reading the case without the benefit of oral argument it seems hard to understand how the outcome could have been otherwise. But perhaps the answer is that there was not much evidence of research and development work on the chosen compound. And maybe there is not all that much difference in practice between a technical contribution and what Mr Justice Maugham called "a special character."