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Thursday, 17 October 2013

Compulsive Reference Disorder: another SPC case heads for the Duchy -- Part II

For the background to this post, just click here

The Cross-Undertaking

The White Book:
home to para 5.1
of Practice 
Direction to CPR Part 25
Having sorted out the question of which questions to
ask the CJEU, the answers to which would enable him to decide the dispute before him, Birss J then had to work out what should happen during the year or two in which the CJEU answered those posers. Accordingly he moved on to the form of the cross-undertakings of the respective parties.

Actavis wanted to be sure that the benefit of Boehringer's undertaking to compensate for any loss of sales if the SPC turned out to be invalid after all would apply to (i) any company within the Actavis group and/or (ii) any customer or potential customer of a company within the Actavis group.  Henry Carr QC (11 South Square), for Boehringer, argued that this was too wide: the court surely needed to be told who precisely are people to whom the order extended.  In any event, Actavis must know what other Actavis companies are involved especially since Actavis's solicitors (Bird & Bird) informed Boehringer's solicitors (Allen & Overy) that it would be the second claimant -- Actavis (UK) Limited -- who would be marketing the product in the UK.  Henry Carr also argued that the term "customers or potential customers" was unclear and would lead to further disputes.  

Richard Meade QC (8 New Square), for Actavis, argued that the form of the cross-undertaking sought be his client was fair.  In relation to the Actavis Group, it was clear that this was a certain class of persons and if there was, for example  a corporate restructuring during the duration of the undertaking, those companies would be covered.  

The court, said Birss J, when considering the grant of an injunction (or an undertaking provided by the parties, which essentially amounts to the same thing), must exercise discretion with the aim of doing justice between the parties.  If a class of persons can be identified in some suitable way, then it should be.  Because the person providing the cross-undertaking is essentially paying the price of an injunction, that person paying the price needs to know with reasonable certainty what the price is: 
 "A party seeking an interim injunction  or accepting undertakings in lieu of an interim injunction, is entitled to be aware of an indeterminate and open-ended cross-undertaking in favour of persons unknown."
He therefore ruled that

1.  The Actavis class was identifiable and ultimately "the patentee would know that the cross undertaking is a cross-undertaking in favour of the group who is going to sell the product in question.  The nature of the loss that the group would rely on in any claim on the cross undertaking is not going to change during the course of the action and the pendency of this undertaking and cross undertaking".  He therefore permitted Actavis's wording in respect of the Actavis group.  

"Cross" always came more
easily than "undertakings"
2.  The term "potential/actual customer"s is extremely vague, while the nature of the loss is unclear.  First, there should be no customers for the combination product because the point of the undertaking is to stop sales before they have even started.  Secondly, in so far as a third-party customer wishes to come to court and seek an interim injunction (ie, the NHS), that is up to them. The judge stated: "I do not see why the court at this stage should grant an order with a vague description of a class of persons if it is only really intended to cover one entity, the Department of Health."  He did not therefore permit the wording which referred to customers or potential customers.  

The judge concluded:  
"I should emphasise that it is always possible for a person who is not covered by a cross-undertaking in a case such as this to apply to the court and seek permission to be joined in to the proceedings, or at least to be joined in such a way as to take the benefit of the cross-undertaking, if they believe they are suffering loss caused by the interim injunction, but that is a matter that can be dealt with if and when it arises and at that point the court and the person giving the cross-undertaking will be in a position to see whether it is a right or fair thing to do and, from the point of view of the person giving the cross-undertaking, whether they are prepared to continue with the interim injunction on the new terms that would be required."
So, all-in-all, it was a pretty good day for Boehringer in the Patents Court and, for the time-being, a good day for innovators who seek to amend their patents after applying for an SPC.  However, the parties will have to await the decision in the Actavis v Sanofi reference before they can see what the future of their case looks like.  A scurrilous rumour has been spread that we may expect a decision from the CJEU (since there will be no Advocate General's Opinion) by the as early as the end of this year.  In the improbable event that this could ever be so, innovators and generics everywhere will be holding their breath until the holiday season ....

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