Premaitha's strike out gamble fails before Carr J in new Illumnia patent battle

Gingersnap tried to strike out Murphy...

Interim decisions are always full of interesting tidbits.  Nothing was more juicy than last month's decision from Mr Justice Carr in Illumnia v Premaitha [2018] EWHC 615 (Pat) in which he dealt with two applications brought by the defendants for (i) strike out of Illumina’s claim on the basis of abuse of process, and (ii) summary judgment against Illumina on the basis of issue estoppel.   Although shackled by time in reporting on the decision, the AmeriKat asked a new IP kitten, Constance Crawford (Bristows) to get her paws wet in her first Kat post.  Over to Connie:

"By way of background to this dispute, it is important to understand that since early 2015, these parties have been involved in multiple pieces of patent litigation. 

In mid-2017, not long before the trial in one of the ongoing claims, Illumina became aware of a further patent which it wanted to enforce against the same defendants. For numerous reasons, the parties agreed that a new action could not be accommodated within the current timetabled trial and, so, after being successful at trial, Illumina commenced a new action with respect to the newly discovered patent in September 2017. 

In response, the defendants argued that this new action should be struck out as an abuse of process or dismissed on the basis that Illumina is not entitled to bring these proceedings.  This was because the defendants argued that Illumina failed to raise this new action in the previous rounds of litigation.

(i) Strike out of Illumina’s claim on the basis of abuse of process 

Carr J summarised the legal principles concerning abuse of process at [5] – [21]. In brief, the court has to balance the right to a fair trial of the party bringing the proceedings against the unjust harassment or oppression of the party alleging that the new claim is abusive. The question is not whether the issue being raised now could have been raised in previous proceedings, but whether that issue should have been raised earlier.  

The court will rarely find that a later action is an abuse of process, but it is for the defendant to show that the new proceedings amount to unjust harassment or oppression. Carr J also made reference to the Aldi guidelines, which provides that where a party to proceedings becomes aware of a cause of action which could be brought as part of those proceedings, the proper course of action is to raise the issue with the court so that it can manage the issue so as to be fair to both sides.

Although Illumina had not brought the new proceedings to the attention of the court during the previous action, Carr J found that Illumina’s conduct did not constitute a breach of the Aldi guidelines. This was because Illumina had already disposed of the issue by obtaining the Defendants’ agreement that the new action should be stayed until after the trial had taken place in the previous proceedings. Carr J therefore held that it was acceptable for Illumina not to have sought directions in respect of the new claim at the CMC in the previous proceedings.   

To support their position that the new claim would be oppressive, the defendants argued, inter alia, that the new claim would: 

(i) give rise to exactly the same issues which have already been decided; 

(ii) create further commercial uncertainty;

(iii) prejudice business decisions and opportunities; 

(iv) result in duplication and additional expense; and 

(v) be an additional imposition on the court’s resources. 

Having reviewed the conduct of both parties with respect to the new action, Carr J dismissed all of these arguments. In particular, in respect of (i) Carr J stated that, on the likely basis of a different common general knowledge in the new action, the new proceedings would not amount to a collateral attack on the decision in the previous proceedings.

The defendants’ applications to strike out the new claim as an abuse of process were therefore dismissed.

(ii) Summary judgment against Illumina on the basis of issue estoppel 

The defendants’ application to enter summary judgment in respect of the new claim was brought on the basis of issue estoppel; namely, that it had already been decided that Illumina did not have standing to sue as it was not an exclusive licensee under the patents being enforced and that it should not be entitled to reopen this question.

Carr J explained the law on issue estoppel by reference to Keith LJ’s judgment in Arnold v National Westminster Bank [1991] 2 AC 93, where he succinctly stated that:  

“Issue estoppel may arise where a particular issue forming a necessary ingredient in a cause of action has been litigated and decided and in subsequent proceedings between the same parties involving a different cause of action to which the same issue is relevant one of the parties seeks to reopen that issue.”  

In the previous proceedings, Carr J had held that a particular agreement did not operate so as to grant Illumina an exclusive licence in respect of the patents in issue. Therefore, when Illumina brought the new claim on the basis of being an exclusive licensee of the relevant patent under the same agreement, issue estoppel arose. The defendants succeeded on their applications for summary judgment and Illumina’s new claim was therefore not allowed to proceed.  

However, unfortunately for the defendants, their success in this application is somewhat of a Pyrrhic victory. Whilst the court granted summary judgement against Illumina on the basis of issue estoppel as explained, the proceedings rumble on in respect of the other claimant, Sequenom, As a result, Carr J made it clear that Illumina could not be prevented from applying to be re-joined to the proceedings if it cured the defects in its exclusive licence arrangement. It is clear from the judgment that a new exclusive licence has been granted to Illumina and no doubt its lawyers have already prepared the application to be re-joined to the proceedings.

Tidbits to take away 

This judgment makes it clear that defendants will have to do more than just raise the common disadvantages of litigation (e.g. commercial uncertainty, prejudice to business decisions and opportunities, perceived waste of management time and increased costs) or common litigation issues (e.g. delay tactics) in order to substantiate that a new claim is an abuse of process. Crucially, the court must be convinced that a claimant’s conduct is such that it should be deprived of its article 6 rights to a fair trial. In patent infringement proceedings, striking out a claim for an abuse of process effectively provides an alleged infringer with a licence under the relevant patent in respect of past and future infringements (see [49] of the judgment). As would seem right, this is not something that the court will decide lightly; it must be provided with convincing evidence of oppressive behaviour by the claimant."