Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Mummery,Lord Justice Longmore,Mr Justice Lewison |
| Judgment Date | 26 May 2006 |
| Neutral Citation | [2006] EWCA Civ 661 |
| Docket Number | Case No: A3/2005/1577&1577A |
| Court | Court of Appeal (Civil Division) |
| Date | 26 May 2006 |
[2006] EWCA Civ 661
Lord Justice Mummery
Lord Justice Longmore and
Mr Justice Lewison
Case No: A3/2005/1577&1577A
HC 05 COO736 & HC 05 COO97
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE CHANCERY DIVISION
INTELLECTUAL PROPERTY
MR TERENCE MOWSCHENSON QC
Royal Courts of Justice
Strand, London, WC2A 2LL
MR MARTIN HOWE QC (instructed by Messrs Maitland Walker) for the Appellant
MR ANDREW LYKIARDOPOULOS (instructed by Messrs Bpe Solicitors) for the Respondent
Introduction
These are appeals against summary judgments granted in two sets of similar proceedings brought by the same claimants against different defendants. The judgments were for infringements of the claimant's trade mark in connection with re-packaged and re-labelled pharmaceutical products imported by the defendants from Spain and marketed in the United Kingdom.
The legal setting is the interface between EU competition law and UK trade mark law. Parallel imports of branded products from one member state into another member state generate tensions between the fundamental freedom of movement of goods under EU law and the protection of trade marks and other intellectual property rights under national law. The tensions are apparent from the developing jurisprudence of the European Court of Justice on the interpretation of the EC Treaty provisions touching on this topic.
The main question raised by the appeals is whether it is appropriate to grant final judgment without a trial on liability and remedies in respect of imports of branded pharmaceutical products. This question involves consideration of (a) the practice and procedure for obtaining summary judgment and of (b) substantive EU competition law, the EU doctrine of the exhaustion of rights and UK trade mark law, as applied to the particular facts, some of which are disputed.
Summary judgment: general
Summary judgment procedures, which are designed for the swift disposal of straight forward cases without trial, are only available where the applicant demonstrates that the defence (or the claim, as the case may be) has no "real" prospect of success and if there is no other compelling reason why the case or issue should be disposed of at a trial: CPR Part 24.2. Thus, without the assistance of pre-trial procedures, such as disclosure of documents, and without the benefit of trial procedures, such as cross examination, the court's function is to decide whether the defendant's prospect of successfully establishing the facts relied on by him is "real", that is more than "fanciful" or "merely arguable." The test to be applied was summarised by Sir Andrew Morritt V-C. in Celador Productions Ltd v. Melville [2004] EWHC 2362 (CH) at paragraphs 6 and 7.
Although the test can be stated simply, its application in practice can be difficult. In my experience there can be more difficulties in applying the "no real prospect of success" test on an application for summary judgment (or on an application for permission to appeal, where a similar test is applicable) than in trying the case in its entirety (or, in the case of an appeal, hearing the substantive appeal) . The decision-maker at trial will usually have a better grasp of the case as a whole, because of the added benefits of hearing the evidence tested, of receiving more developed submissions and of having more time in which to digest and reflect on the materials.
The outcome of a summary judgment application is more unpredictable than a trial. The result of the application can be influenced more than that of the trial by the degree of professional skill with which it is presented to the court and by the instinctive reaction of the tribunal to the pressured circumstances in which such applications are often made.
I doubt, however, whether the decision to have or not to have a trial of the action is much affected by the fact that it is heard by a specialist judge. I see no objection, for example, to the use of judges or deputy judges, who are not intellectual property specialists, to hear and decide applications for summary judgment in this field. I mention this topic and wish to say a little more about it for two reasons. First, as a result of hearing some recent appeals against the grant of summary judgments in a variety of areas of law, I have some general concerns about the use of the summary judgment procedure. Secondly, I am aware of views recently aired in the profession questioning the "efficiency" of using non-specialist judges for summary judgment applications in intellectual property cases.
In my opinion, the decision whether or not an action should go to trial is more a matter of general procedural law than of knowledge and experience of a specialised area of substantive law. All judges, specialist and non-specialist, are experienced in procedure and practice. Procedural justice is the judicial specialisation par excellence. It may take a little longer for the application to be opened to a non-specialist judge, but that may be no bad thing. I am confident that all judges to whom such applications are likely to be made will have the necessary procedural expertise to sort out those cases that can properly be disposed of without a trial. (I add that the leading practitioners' text book on trade mark law (Kerly 14 th edition 2005) contains no discussion of summary judgment procedure in infringement actions. That is an indication that the decision whether or not to grant summary judgment is more one of general procedure and practice than specialist expertise in substantive trade mark law.)
I also wish to say a few words about the litigation expectations and tactics of claimants and defendants. Claimants start civil proceedings (including intellectual property actions) in the expectation that they will win and often in the belief that the defendant has no real prospect of success. So the defence put forward may be seen as a misconceived, costly and time-wasting ploy designed to dodge an inevitable judgment for as long as possible. There is also a natural inclination on the part of optimistic claimants to go for a quick judgment, if possible, thereby avoiding the trouble, expense and delay involved in preparing for and having a trial.
Everyone would agree that the summary disposal of rubbishy defences is in the interests of justice. The court has to be alert to the defendant, who seeks to avoid summary judgment by making a case look more complicated or difficult than it really is.
The court also has to guard against the cocky claimant, who, having decided to go for summary judgment, confidently presents the factual and legal issues as simpler and easier than they really are and urges the court to be "efficient" ie produce a rapid result in the claimant's favour.
In handling all applications for summary judgment the court's duty is to keep considerations of procedural justice in proper perspective. Appropriate procedures must be used for the disposal of cases. Otherwise there is a serious risk of injustice.
13. Take this case. Although it was described by the claimant's counsel as an open and shut case in which a "smoke screen" defence was being raised, it was rightly accepted in the court below that the evidence "looks quite lengthy." It certainly is lengthy for a Part 24 application. The papers look to me more like a set of trial bundles rather than interlocutory application bundles. There are four files of witness statements, exhibits and associated legal documents and two lever arch files of authorities, many of them on EU competition law.
The claimant's counsel supported the application for summary judgment by a 22 page skeleton argument, accusing the defendants of "diversionary tactics designed to try to avoid summary judgment," of introducing "red herrings" and of having used their "best efforts to make the matter appear to be complicated." It was submitted that the case nevertheless "remains a matter appropriate for summary disposal." But already the seeds of doubt have been sown about how open and shut the case really is and whether the court should set out along summary judgment road at all.
On the appeal counsel for the claimant repeated that the defendants' arguments in this court "are further designed to try to make matters look complicated and unsuitable for summary determination" and so attempt to avoid liability. As explained later, the case may turn out at trial not to be really "complicated", but it does not follow it should be decided without a fuller investigation into the facts at trial than is possible or permissible on summary judgment.
In this case there are, as we shall see, two particular fact-sensitive areas: (a) the alleged presence of "economic links" or "the possibility of control" connecting entities which have been or have become proprietors of the relevant trade mark; and (b) whether the circumstances have made it inequitable to enforce the trade mark against the alleged infringers.
It is well settled by the authorities that the court should exercise caution in granting summary judgment in certain kinds of case. The classic instance is where there are conflicts of fact on relevant issues, which have to be resolved before a judgment can be given (see Civil Procedure Vol 1 24.2.5) . A mini-trial on the facts conducted under CPR Part 24 without having gone through normal pre-trial procedures must be avoided, as it runs a real risk of producing summary injustice.
In my judgment, the court should...
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