Dr Reddy's Laboratories (UK) Ltd v Warner-Lambert Company LLC
| Jurisdiction | England & Wales |
| Judge | Mr Justice Zacaroli |
| Judgment Date | 03 February 2022 |
| Neutral Citation | [2022] EWHC 189 (Pat) |
| Docket Number | Case No: HP-2015-000007 HP-2014-000021 HP-2015-000049 HP-2020-000034 |
| Year | 2022 |
| Court | Chancery Division (Patents Court) |
[2022] EWHC 189 (Pat)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
PATENTS COURT
Rolls Building
7 Rolls Building
London EC4A 1NL
Mr Justice Zacaroli
Case No: HP-2015-000007
HC-2014-001795
HP-2014-000021
HP-2015-000049
HP-2020-000034
Brian Nicholson QC and Christopher Hall (instructed by Mishcon de Reya LLP) for the First Inquiry Claimant
Philip Moser QC, Brendan McGurk and Alice Hart (instructed by The Government Legal Department) for the Second to Fifth Inquiry Defendants
Douglas Campbell QC, Ligia Osepciu and Daniel Selmi (instructed by RPC) for the Seventh to Twenty-first Inquiry Claimants
Richard Boulton QC, Tim Austen, Tim Goldfarb and Thomas Lunt (instructed by Kirkland & Ellis LLP) for the Inquiry Defendant
Hearing dates: 11, 12 and 14 January 2022
Further written submissions received 28 January 2022
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
In June 2021 a trial took place in these proceedings of preliminary issues in claims by numerous parties (the “Inquiry Claimants”) for compensation under cross-undertakings in damages given by the Inquiry Defendant (“Pfizer”) in respect of various interlocutory injunctions or contractual undertakings, and for damages in respect of threats of infringement of patent proceedings (the “unjustifiable threats claim”) pursuant to section 70(1) of the Patents Act 1977 (the “1977 Act”).
Specifically, that trial (the common assumptions trial, or “CAT”) addressed what common assumptions of law were to be made in the Inquiry Claims when identifying the appropriate counterfactual(s) for the purposes of determining compensation and damages. In a judgment handed down on 30 July 2021 ( [2021] EWHC 2182 (Ch), the “CAT Judgment”) I determined that the appropriate counterfactual for each of the Inquiry Claims was one in which none of the orders, undertakings or threats which it turned out had been wrongly made would have been made. I also determined that findings of fact in each Inquiry Claim would be binding on all Inquiry Claimants.
The background to these proceedings is set out more fully in the CAT Judgment, to which the reader is referred. I will adopt the abbreviations and definitions used in that judgment. As a result of settlements made since the CAT Judgment, the only remaining Inquiry Claimants are Dr Reddy's (a Skinny Label Generic, see §6 and §29(1) of the CAT Judgment), NHS EWNI and NHS Scotland.
This judgment principally addresses applications by Pfizer to amend its pleading in each of the remaining Inquiry Claims. I will address these applications in the following order:
(1) An application to amend Pfizer's defence to Dr Reddy's claim, to advance defences to the unjustifiable threats claim;
(2) An application to amend Pfizer's defence to the NHS Parties' claim, so as to exclude any damage said to have arisen from the sale and supply of pregabalin products which would have been used for or attributable to the treatment of any condition covered by Claims 2, 5, 7, 8 and 9 of the Patent, collectively referred to as the inflammatory pain claims (“IPCs”);
(3) An application to amend Pfizer's defence to the claims of NHS EWNI and Dr Reddy's, so as to include an argument based on the construction of the NHS Guidance Order;
(4) An application to amend Pfizer's defence to Dr Reddy's claim, so as to exclude from Dr Reddy's damages claim any damage arising from the supply of pregabalin used for the treatment of IPCs, either on grounds of illegality because such supply would constitute an infringement of the Patent or because it would be inequitable to allow Dr Reddy's claim to include such damage. Insofar as the claim is put on the latter basis, it already appeared in Pfizer's pleading, but Dr Reddy's made a late application during the course of the hearing to strike it out;
(5) An application to amend Pfizer's defence to Dr Reddy's claim, so as to rely upon other communications it could have made in the counterfactual that would not have amounted to unjustifiable threats;
(6) An application to amend Pfizer's defence to Dr Reddy's claim, to plead an alternative counterfactual case. At the hearing I announced my decision to allow this amendment in principle, subject to Pfizer producing a properly particularised pleading of its alternative case.
Finally, I will address an application by Dr Reddy's to reformulate the directions for the remaining Inquiry Claims.
(1) Pfizer's application to amend as against Dr Reddy's to include a defence to the unjustifiable threats claim
Pfizer seeks permission to amend to include a defence to the unjustifiable threats claim by Dr Reddy's pursuant to section 70(2A)(a) and (b) of the 1977 Act (as those provisions were in force in 2015).
Section 70(2A)(a) provided that if the defendant (Pfizer) proves that the acts in respect of which proceedings were threatened constitute or would if done constitute an infringement of a patent, then the claimant is entitled to relief under s.70 “only if he shows that the patent alleged to be infringed is invalid in a relevant respect.”
By its proposed amendment, Pfizer seeks to contend that to the extent that the actions, in relation to which the threats were made, consisted of pharmacists dispensing generic pregabalin (specifically “Alzain”, Dr Reddy's branded generic pregabalin product) for treating conditions covered by the IPCs then those actions constituted an infringement of a patent which was, in the relevant sense, valid. The IPCs were held to be valid in the earlier proceedings involving Actavis (the “Actavis Proceedings”) – see §9 to §25 of the CAT Judgment. Accordingly, Pfizer claims that Dr Reddy's is not entitled to the relief claimed. The acts of infringement are said to have been committed by pharmacists and to have consisted either in:
(1) (contrary to 60(1)(c) of the 1977 Act) pharmacists dealing in Alzain, which was an infringing product because Dr Reddy's knew and intended that it would be used (among other things) for treating conditions covered by the IPCs; or
(2) (contrary to section 60(1)(b) of the 1977 Act) the preparation of prescriptions by pharmacists (e.g. by attaching the relevant label to the outside of the box) for dispensing to patients, which constituted an infringement by pharmacists because such action would constitute using “the process” when they knew or a reasonable person would have known that it would be an infringement of the patent.
Section 70(2A)(b) provided that if the defendant proves that the acts in respect of which proceedings were threatened constitute or would if done constitute an infringement of a patent, then even if the claimant shows that the patent is invalid in a relevant respect, he shall not be entitled to relief if the defendant proves that at the time of making the threats he did not know, and had no reason to suspect, that the patent was invalid in that respect. Pfizer seeks to rely on this in relation to threats made in respect of actions that would have constituted infringement of Claims 1 and 3 (i.e. the Claims which the Supreme Court has held to be invalid) if they had been valid.
Dr Reddy's principal objection to these proposed amendments is that they are far too late, because the court has already granted Dr Reddy's the relief to which it is entitled under section 70 and these amendments are an attempt to go behind the court's existing orders and declarations. In the alternative, it contends that it is too late on case management grounds for Pfizer to be permitted to resile from its admission, in its defence in the Inquiry Claim, that the six threats of infringement proceedings upon which Dr Reddy's relies in the Inquiry Claim were unjustifiable threats.
Dr Reddy's was originally sued by Pfizer for infringement in 2015. Pfizer pleaded that Dr Reddy's had infringed the Patent by disposing of, offering to dispose of, using, importing and/or keeping whether for disposal or otherwise a product obtained directly by means of a process as claimed “in at least claims 1 and 3 of the Patent”. Dr Reddy's denied that the Patent was valid and denied infringement. It counterclaimed for loss and damage caused by unlawful threats of proceedings for patent infringement. The proceedings between Pfizer and Dr Reddy's were stayed at an early stage, pending the outcome of the Actavis Proceedings.
Following the conclusion of the Actavis Proceedings, Dr Reddy's applied for a final order dismissing the infringement claim against it and for judgment on the threats. By his order of 16 March 2020, Birss J:
(1) Recited the outcome of the Actavis Proceedings, including that Claims 1, 3, 4, 6, 10, 11, 12, 13 and 14 of the Patent had been determined to be invalid, and that Claims 2, 5, 7, 8 and 9 (i.e. the IPCs) had been determined to be valid;
(2) Ordered that Pfizer's claim against Dr Reddy's be dismissed on the basis that Claims 1, 3, 4, 6, 10, 11, 12, 13 and 14 are invalid;
(3) Ordered an inquiry as to damages, so as to quantify the damage suffered by Dr Reddy's pursuant to the cross-undertakings in the various interlocutory orders obtained by Pfizer and “by reason of [Pfizer's] unjustifiable threats of patent infringement proceedings”; and
(4) Declared that Pfizer...
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Dr Reddy's Laboratories (UK) Ltd v Warner-Lambert Company LLC
...OF JUSTICE, BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES, INTELLECTUAL PROPERTY LIST (ChD), PATENTS COURT Mr Justice Zacaroli [2022] EWHC 189 (Pat) Royal Courts of Justice Strand, London, WC2A 2LL Richard Boulton KC and Tim Austen (instructed by Kirkland & Ellis International LLP) for ......