Pan-European declaration of non-infringement can be brought before the English Courts

18 December 2012

Victoria Gardner

The High Court handed down its judgment on an Application Hearing contesting jurisdiction in relation to the cases of Actavis Group hf v Eli Lilly and Company [2012] EWHC 3316 (Pat) on 27 November 2012. Arnold J has made a landmark ruling that proceedings requesting a declaration of non-infringement in relation to both a UK and foreign designations of a European patent can be brought before the English Court.  The High Court also held that proceedings had been validly served on the patentee, a company incorporated in the US, since it was deemed on the facts that for the purposes of CPR 6.9 the patentee had a place of business within the UK.

Background

Actavis (represented by Mark Hilton of Bird & Bird LLP) issued proceedings against Eli Lilly requesting a declaration of non-infringement in respect of UK and foreign designations for France, Germany, Italy and Spain, of a European patent (the “Patent”), relating to the sodium salt of the pharmaceutical drug pemetrexed, which is a cancer treatment.  Proceedings were served on Lilly’s legal representatives and the registered address for service in the UK, as recorded on the UK Patents Register.  Actavis did not challenge the validity of the Patent.

Eli Lilly contended that, in relation to the foreign designations of the Patent, the proceedings were not validly served.  It was accepted that the English Court had jurisdiction over the UK designation.  If the proceedings were held to be validly served then Eli Lilly sought declarations that the English Court did not have, or should not exercise, jurisdiction in respect of the French, German, Italian and Spanish designations of the Patent and therefore a stay should be granted in relation to that part of the claim. 

The High Court’s Decision

The Court held that service was validly effected both under the consent that had been provided by Eli Lilly’s solicitors and under CPR 6.9(2), because Eli Lilly had a place of business within the UK. Both of these findings were fact specific involving an interpretation of the consent provided in the first case and in the second, an analysis of Eli Lilly’s business activities in the UK.  The Court also held that service under CPR 63.14 did not constitute good service in relation to the foreign designations of the Patent.

Having held that Eli Lilly consented to service it was also held that in so doing Eli Lilly had also consented to the English Court’s jurisdiction.  It was agreed that, on the basis of such a finding, Eli Lilly could not contest jurisdiction on the ground of forum non conveniens.  However, on the basis that the jurisdiction of the English Court could be established pursuant to Article 4 of the Brussels I Regulation (Eli Lilly’s domicile being outside the EU), Arnold J went on to consider whether the doctrine of forum non conveniens (which he noted was unique to the UK and Ireland in these circumstances) should be applied in relation to the foreign designations of the Patent in relation to service under CPR 6.9. 

It was common ground that the principles to be applied were those stated by Lord Goff in Spiliada Maritime Corp v Cansulex Ltd.  Arnold J’s assessment of those principles noted that it was common ground that declarations of non-infringement of the French, German, Italian and Spanish designations could be tried in the courts of France, Germany, Italy and Spain respectively.  Also, Eli Lilly did not contend that claims for patent infringement (or declarations of non-infringement) were different from copyright claims so far as the question of justiciability was concerned.  Accordingly, Arnold J considered that the subject matter limitation on jurisdiction in the recent Supreme Court decision in Lucasfilm v Ainsworth were equally relevant to the operation of the forum non conveniens doctrine when validity is not in issue.

Actavis advanced three main reasons as to why all five claims in the present case should be determined by one court.  First, only one set of lawyers using one set of factual witnesses would be required by each side.  Second, it gave rise to the possibility of the case being determined by reference to one law (should Eli Lilly chose not to raise any issue of foreign law).  Third, even if different laws were applied, it would mean one court at first instance and one court on appeal would determine all five claims which should eliminate the prospect of inconsistent decisions.  Arnold J favoured Actavis’ submissions in this regard and held that, on the basis of valid service under CPR 6.9, no stay of the claims under the non-UK designations of the Patent should be granted on forum non conveniens grounds.

Effects of the Decision

Arnold J believed that the impact of Lucasfilm meant that it was only a matter of time before a case such as this presented itself and from this decision it appears that he considers that the English courts are, following Lucasfilm, willing to accept jurisdiction of such claims.  Although all such cases are likely to be dependent on their facts when it comes to valid service, the approach of Arnold J opens the door for pan-European declarations to be obtained with much greater ease.  The impact that this decision will have on future actions in the English Courts will be watched with interest, especially having regard to the appeal by Eli Lilly..

This article was written by:

 

Victoria Gardner
Associate
victoria.gardner@twobirds.com

Other articles in the Life Sciences newletter for December 2012:

> Dutch reference to the CJEU: Georgetown Univeresity v Dutch Patent Office

> Germany: No imminent threat of patent infringement upon obtaining a marketing authorisation

> Czech Republic: New restrictions on advertising of pharmaceuticals

> Spain: Supreme Court ruling on reference pricing system

> CJEU dismisses appeals by AstraZeneca and upholds General Court Judgement