For the half-year to 30 June 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Alberto Bellan, Darren Meale and Nadia Zegze.

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Friday, 27 December 2013

Contingent abuse of process? No way says Patents Court

End of year: always a good time to catch up
with those little things that might otherwise
permanently escape a busy Kat's attention ...
The IPKat and Merpel always think the end-of-year break is a great time to catch up on recent cases. One such ruling is Actavis UK Ltd v Eli Lilly & Company [2013] EWHC 3749 (Pat), a decision of Mr Justice Arnold in the Patents Court, England and Wales, on 27 November 2013. It's another of those interesting, but generally expensive and essentially unproductive bits of patent litigation which are not directed at the merits of a patent infringement or validity claim but are merely litigation about litigation itself -- a pastime which appears to be increasingly popular these days.

In short, Eli Lilly held a patent for a cancer-treating drug sold under the brand name Alimta. Actavis wanted to market its own cancer-treating drug on the expiry of Eli Lilly's Alimta supplementary protection certificate (SPC) and sought declarations of non-infringement in advance of that date. Actavis, wanting to determine this same issue with respect to the French, German, Italian and Spanish versions of the same patent in a single trial,  commenced two actions which, the court decided exactly a year earlier, it had jurisdiction to deal with. The court accordingly ordered them to be tried together.

Eli Lilly then served a defence that sought to undermine Actavis's litigation strategy: said Eli Lilly, Actavis had no locus standi to bring the proceedings because it had failed to comply with French and Spanish procedural requirements to give requisite notice in those jurisdictions (three months and one month respectively) before commencing proceedings there. Actavis disputed that French and Spanish law applied, but in any event began two further actions to assist in addressing Eli Lilly's procedural arguments. Eli Lilly then applied to stay the later actions pending the trial in the earlier actions on the basis that they were an abuse of process: after all, Actavis only commenced them in order to circumvent the French and Spanish procedural requirements. Eli Lilly's position was not unattractive: a stay would be appropriate because (i) if the earlier actions were held to be ill-founded, the later actions would be an abuse of process, and (ii) if the earlier actions were held to be well-founded the later actions would be unnecessary.

Arnold J refused the application for a stay. In his view:

* Eli Lilly had not sought to strike out the earlier actions as a abuse of process, but argued that there would be an abuse of process in respect of the later actions if the earlier actions were held to be ill-founded. However, it was not proper for a court to stigmatise a claim as an abuse of process on a contingent basis. The problem arose by virtue of the earlier actions and the consequences in terms of lis pendens that those actions had.

* If Eli Lilly was right to say that the consequences of those actions being pending was to prevent it from raising the procedural objections that it wished to raise in the later actions, that was a natural consequence of the existence of the earlier actions -- not the consequence of bringing the later actions.

* Despite its apparent logic, Eli Lilly's application was logically incoherent. Why was this? Because, even if the later actions were stayed, the court would not have deseized itself of those actions. Accordingly they would have lis pendens priority and would prevent actions being taken in France and Spain. If Eli Lilly was right that the earlier actions were ill-founded, and if it was right as to the consequences, it could raise its abuse of process objections to the later actions at that time.

The IPKat is sure that the good judge is right about there being no such thing as a contingent abuse of process -- and presumably the date on which a process is adjudged abusive must be the date on which it occurs.  It seems to him that the time to challenge a process is when the contingency comes to pass and it would be abusive to continue. Is this in fact the case?

The official motto of the
new European Patent Package
Says Merpel, events like this are just the sort of thing that we all hope to avoid when the new European patent package comes into operation.  But how would this issue be resolved on these facts under the new regime? With a single patent and a single court, what could go wrong? Apart from the fact that Spain has not bought into the unitary patent and that neither Spain nor Italy seem keen on the unified patent court, and bearing in mind that the unitary patent does not extend to the grant of SPCs (the Commission is now said to be taking this seriously, despite the dangers with which this path is fraught: see Alan Johnson's note on Bristows' website here), might there be any other problems? One can hardly imagine ...

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