A Tight Squeeze: Matters of Comity and Justiciability

Chugai Pharmaceutical v UCB [2017] EWHC 1216 (Pat) is a decision of Mr Justice Henry Carr (correctly named in full to avoid any possible confusion with Mrs Justice (Sue) Carr), which is given in admirably clear terms despite its complex subject matter. The Japanese pharmaceutical company Chugai was looking for a declaration that it did not have to continue paying royalties to UCB under a patent licence. So far so simple, except that the licence was originally for a portfolio of patents relating to an antibody known as tocilizumab. Over time those patents had expired, save for one US patent ("the 771 Patent"). Some of its tocilizumab products are manufactured and sold in the USA, so Chugai wanted the court to rule that those products fall outside the scope of the claims of the 771 Patent, meaning that it would no longer have to pay for them.

His Lordship explains that the patent was
granted in a country far away ...

UCB said that although the case was put as a claim for a declaration relating to a contract, the proceedings required the court to look into the validity of the 771 Patent, not just the scope of its claims. That would be outside the jurisdiction of the English court, which has no power to determine the validity of a foreign patent. Chugai, on the other hand, said that its case was based on a contractual question that the English court did have jurisdiction to determine. It did not say that the 771 Patent was invalid, nor seek any relief as to invalidity, which was only relied on incidentally to support Chugai's construction.

The judge accepted that Chugai was not claiming that the 771 Patent was invalid, but was asking the court to see, as a guide to construction, what would be the hypothetical consequences for validity of rival interpretations of its claims. This is the type of argument known to patent folks as a "squeeze", in which a particular claim construction in favour of infringement might have consequences for validity, and vice versa, thus requiring the court to give thought to validity in that context. Chugai was therefore raising a dispute about the scope of the claims of a US patent before an English court, but not seeking to invalidate the patent. A subtle but intelligible distinction, at least in the view of this GuestKat.

The position was similar to that in Celltech v Medimmune [2004] EWHC 1522; [2004] EWCA Civ 1331, where the courts (Jacob LJ upholding Laddie J) held that the parties had bargained to give jurisdiction to the English court concerning the scope of the licensed patents. That was notwithstanding that a party might advance a "squeeze" argument. Laddie J had pointed out at first instance in Celltech that for parties to agree that all issues of infringement should be determined by one court might make good sense from a commercial point of view, giving a greater chance of consistency. It may also reduce the amount of litigation involved and might mean that only one court, and in some cases only one judge, would need be educated in the patented technology.

In the present case, the judge also rejected a submission that it should decline jurisdiction under the rule in Moçambique [1893] AC 602 (an ancient case deciding that an English court has no jurisdiction to entertain an action about matters to do with foreign land, extended to claims about foreign IP rights as a matter of general principle). The current dispute was clearly not principally concerned with the question of validity, and it was correctly characterised as a contractual claim in which the parties had agreed that the scope of the patent should be determined by the English court; it was not an affront to comity to give effect to that agreement. This case was therefore within the longstanding contractual exception to the Moçambique rule.

Nor would the adjudication of the matters before the court be contrary to the doctrine of "act of state", because the court was not being asked to challenge the validity of foreign legislation or government acts. Anyone can challenge a patent in court proceedings, so the act of state doctrine was not an impediment, even if validity were in issue.

Finally, whilst not needing to decide the point in view of the conclusions he had reached, the judge confirmed that in his view direct challenges to the validity of foreign patents should not be justiciable in the English courts. That should be left to judges of the country in which the patent was granted, as held in Lucasfilm [2009] EWCA Civ 1328; [2010] Ch 503 at [175] per Jacob LJ.