Ablynx NV v Vhsquared Ltd
| Jurisdiction | England & Wales |
| Judge | Lady Justice Asplin,Lord Justice Lewison,Lord Justice Newey |
| Judgment Date | 10 December 2019 |
| Neutral Citation | [2019] EWCA Civ 2192 |
| Date | 10 December 2019 |
| Docket Number | Case No: A3/2019/0795 |
| Court | Court of Appeal (Civil Division) |
[2019] EWCA Civ 2192
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
INTELLECTUAL PROPERTY LIST (ChD)
PATENTS COURT
His Honour Judge Hacon
(sitting as a Judge of the High Court)
HP-2018-000025
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Lewison
Lord Justice Newey
and
Lady Justice Asplin
Case No: A3/2019/0795
Dr Justin Turner QC (instructed by Bird & Bird LLP) for the Respondents
Ms Lindsay Lane QC & Mr Alexander Thompson (instructed by Linklaters LLP) for the Appellants
Hearing date: 27 November 2019
Approved Judgment
Introduction
This is a dispute between two licensees each of which holds a licence to exploit three European patents, each of which has a UK designation. The dispute mainly turns on the interpretation of EU Regulation 1215/2012 usually known as Brussels 1 Recast, or the Recast Regulation.
The licences derive from the same patentee, and the same European patents. Ablynx NV alleges that VHsquared Ltd has infringed the UK designations of the patents within the jurisdiction. The licence (in fact a sub-licence) granted to VHsquared is limited to what the licence calls “the Reserved Sector”. The licence granted to Ablynx applies to all fields except the Reserved Sector. The licence under which VHsquared's sub-licence was granted (described below as the Unilever Licence) includes an exclusive choice of court clause conferring jurisdiction on the Belgian court. VHsquared says that its activities are covered by its licence and therefore there has been no infringement; and that any question about the scope of the licence is within the exclusive jurisdiction of the Belgian court. It also raises other defences to which I will come. Ablynx says that the exclusive jurisdiction clause is invalid because the Recast Regulation allocates exclusive jurisdiction over the validity of patents with a UK designation to the UK court.
Proceedings are on foot both in England and in Belgium. The UK court is the court first seised. The underlying question is which of the two courts has jurisdiction over the dispute. But there is a preliminary question: which court should decide who has jurisdiction over the substantive dispute?
HHJ Hacon decided that the UK court had exclusive jurisdiction; and refused to stay the proceedings in England. The reason for his decision was that the exclusive jurisdiction clause in the Unilever Licence had no legal force because it purported to exclude the UK court's exclusive jurisdiction in an action concerned with the validity of the UK designations of the European patents. His judgment is at [2019] EWHC 792 (Pat).
The facts in more detail
I can take the facts from the judge's judgment. I have simplified them somewhat. To aid simplicity, except where necessary to distinguish between them, I have referred to the current Appellants as VHsquared (even where some of the activities were carried out by other Appellants); and I have referred to the current Respondents as Ablynx. VHsquared is a company domiciled in the United Kingdom. Ablynx is a company domiciled in Belgium.
The invention relates to immunoglobulins derived from camelid antibodies. (Camelids are an animal family which includes camels, llamas and other even-toed ungulates). The patentee is a Belgian university abbreviated to VUB. Each of the patents is a European patent with a UK designation (and, I assume, designations in other contracting states). The patents expired in August 2013.
On 16 April 1997 the patentee, VUB, entered into an agreement with the third defendant (‘Unilever NH’) which included a worldwide licence granted to Unilever NH (‘the Unilever Licence’) under the patents for certain applications of the inventions. The licence was partly exclusive and partly non-exclusive. The exclusive licence was defined as follows (‘the University’ is VUB):
“3.1.a The University shall grant Unilever an exclusive and territorially unlimited licence to exploit [the patents] and corresponding foreign patents … for the following products and sectors:
(i) packed food products;
(ii) washing and cleaning agents;
(iii) cosmetics with a non-medical orientation; and
(iv) process auxiliary agents, more specifically the catalytic and separation process auxiliary agents, for use in fields (i), (ii) and (iii) above.
3.1.b The University shall grant Unilever a non-exclusive and territorially unlimited licence to exploit [the patents] and corresponding foreign patents, as detailed in Annexe 1 to this Agreement for OTC diagnostics for non-medically orientated cosmetics, and for the use of antibodies in cattle fodder, for process auxiliary agents, more specifically the catalytic and separation process auxiliary agents for use in both fields stated in this Article 3.1.b.”
Those sectors are called “the Reserved Sector”. Article 9 provided:
“9. Applicable law and settlement of disputes
9.1 Belgian law shall govern this Agreement. The Court of Brussels shall alone be competent in case of dispute between the Parties or one of their (sub)licensee(s) concerning this Agreement.
9.2 In exemption from Article 9.1, the Parties hereby also agree that all disputes on the definition of the Reserved Sector, the scope of [the patents] and its delimitation from the Community Patents shall exclusively be settled by arbitral tribunal consisting of one jurist and two scientists, sitting in Brussels, according to the rules of the International Chamber of Commerce.”
On 23 September 1998 VUB granted a licence under the patents (‘the VIB Licence’) to an institute abbreviated to VIB. It was an exclusive worldwide licence for all fields except the Reserved Sector. The Reserved Sector was expressly defined to have the same meaning as in the Unilever Licence. On 14 November 2001 VIB granted to Ablynx an exclusive sub-licence under the VIB Licence (‘the Ablynx Licence’). The field of use was defined as:
“… the use of Camel antibodies to develop products and processes for predicting, diagnosing, monitoring, preventing and treating diseases in animals and humans.”
It is common ground that the Ablynx Licence could not be broader than the exclusive VIB Licence, so its permitted field necessarily excluded the Reserved Sector. The Ablynx Licence also contained an acknowledgment by Ablynx that it had received a copy of the Unilever Licence in which the Reserved Sector had been defined.
By an agreement dated 2 June 2005 (‘the Novation Agreement’) between VUB, Unilever NH and BAC IP BV (‘BAC’), the Unilever Licence was novated from Unilever NH to BAC. BAC was part of the Unilever group, under consideration for spinning off. Under the terms of the Novation Agreement, BAC granted back to Unilever NH a non-exclusive worldwide licence to exploit the Patents in the Reserved Sector. The Novation Agreement contained the following terms:
“3.1 With effect from … (the ‘Novation Date’):
(a) BAC agrees to assume all the obligations and liabilities of Unilever to the University under or arising from the [Unilever Licence] except to the extent that such obligations have been fully and properly discharged before the Novation Date;
…
(d) [VUB] agrees with BAC to be bound by its obligations under the [Unilever Licence] (to the extent that they have not been fully and properly discharged prior to the Novation Date) in every way as if BAC had been a party to the [Unilever Licence] in place of Unilever, except if explicitly stated otherwise in this Agreement.
…
7.1 This Agreement and any dispute or claim arising out of it shall be governed by, and construed in accordance with, Belgian law.
All disputes or claims arising out of or relating to this Agreement shall be subject to the non-exclusive jurisdiction of the Courts of Brussels, to which the parties irrevocably submit.”
By an agreement dated 22 December 2010 Unilever NH granted VHsquared a sub-licence under the patents for the Reserved Sector.
In summary, by 2011 Ablynx had the exclusive right to exploit the inventions claimed in the patents by using camelid antibodies for certain medical uses. For its part, VHsquared had a non-exclusive licence to exploit the inventions in the Reserved Sector.
The Dutch litigation
There have been two rounds of litigation in the Netherlands between the parties. The judge set out the details. Only the first is directly relevant to this appeal, because it concerned the scope of the Unilever Licence. That round of that litigation went to the Dutch Court of Appeal. VHsquared's case on the appeal was that it was undoubtedly licensed to produce packaged food products and that there was no limitation as regards the nature of those packaged products. They could be what VHsquared called ‘functional foods’, including foods containing rotavirus antibodies.
The Court recorded at [2.10] that Unilever had carried out research in Bangladesh and India between 2007 and 2012 into the use of antibodies directed against rotavirus in children.
During the course of the appeal, Ablynx narrowed their approach to the interpretation of the “Reserved Sector”. They contended that the patents would be infringed by “products with a therapeutic or prophylactic effect with regard to specific pathogens, whatever the nature of those products”.
The Court rejected VHsquared's argument that they were entitled to make any sort of packaged foodstuff. It held (in agreed translation):
“4.10 The term (packaged) foodstuff is also unsuitable to serve as a limitation, now that the qualification as...
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