Eli Lilly and Company Ltd v Neopharma Ltd and Another
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Floyd |
| Judgment Date | 05 July 2011 |
| Neutral Citation | [2011] EWHC 1852 (Pat) |
| Date | 05 July 2011 |
| Court | Chancery Division (Patents Court) |
| Docket Number | Case No: HC 08 C0433 |
[2011] EWHC 1852 (Pat)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr. Justice Floyd
Case No: HC 08 C0433
Mr. Thomas Mitcheson (instructed by Simmons & Simmons LLP) appeared for the Claimant.
Mr. Antony Watson QC (instructed by Arnold Porter (UK) LLP) appeared for the Defendants.
Eli Lilly & Co. Limited ("Lilly") bring this action against Neopharma Limited and Gumos Limited (formerly Neolab) for infringement of European Patent UK 0454436. The patent relates to olanzapine and has already been the subject of scrutiny as to its validity in an earlier action between Lilly and Dr. Reddy's Laboratories (the DRL action). I gave judgment in that action in October 2008, rejecting the attacks made on the patent of obviousness, inter alia over items of prior art known as 235 and Chakrabarti 1980. I granted a certificate of contested validity under section 65 of the Patents Act 1977, one consequence of which is that Lilly would normally be protected by an order for indemnity costs in the event of a second unsuccessful attack on the patent in this jurisdiction.
The defendant seeks to meet the allegation of infringement in the present action by alleging invalidity again over those two items of prior art and also over an article by Sullivan & Franklin (S&F). There are three applications before me, all made by Lilly.
The first is an application for summary judgment on the grounds that the defendant has no realistic prospect of defending the action. The second and third applications are, in effect, applications for security for costs: one based on granting security as a condition of dismissing the application for summary judgment under CPR Part 24; the other a straightforward application for security against the counterclaiming defendant under CPR Part 25.
The SPC protecting olanzapine, and for which the basic patent is the patent in suit, comes to an end on 26th September 2011. In February 2008, whilst the DRL action was pending, Lilly became aware of sales of olanzapine bearing the name Neopharma. Although the parties had been in what may loosely be described as negotiations up to this point, the defendant has chosen to launch without notice to Lilly. The launch followed a letter from the defendant in which it stated that it was unable even to provide samples of the product. Mr. Roger Wyand QC, acting as deputy judge on the subsequent application for a disclosure order, described the conduct of the defendant as positively misleading as to the state of its readiness to launch. In the result, the defendant did not challenge the grant of an interim injunction, which remains in force today. They claim that they have a substantial claim on the cross-undertaking in damages against Lilly in respect of sales which they would have made but for their agreement to stay off the market pending expiry of the SPC. To establish that claim, they have to establish that the patent is invalid.
Given that the trial of the DRL action was scheduled for July 2008, Lilly and the defendant agreed to put the present action on hold until the result of the DRL action was known. That agreement was extended after judgment to the pending of appeal. The Court of Appeal gave judgment upholding the validity of the patent in December 2009. That meant that the present action had to be restored and is presently fixed to be heard in a trial window from 16th January 2012 for a period of ten days.
Although the defendant denies infringement in paragraph 11 of the defence and counterclaim, it is clear that the defence turns only on the validity of the patent. Lilly say that the attack on validity can now be seen to have no realistic prospect of success, for the following reasons:
1. The patent has been upheld at first instance and on appeal by the Court of Appeal.
2. Two of the three items of prior art, 235 and Chakrabarti, were included in DRL's unsuccessful attack in the DRL action.
3. The same conclusion has been reached in a number of other jurisdictions which apply the European Patent Convention.
4. In Germany, the Bundesgerichthof held the patent to be inventive over 235 and Chakrabarti. Neolab were a party to that action for revocation but did not rely on S&F.
5. In Austria, the Austrian Patent Office upheld the patent in a revocation action brought by Synthon.
6. Similar decisions have been arrived at in the Patent Offices in the Czech Republic, Slovakia, Romania and Hungary.
7. In non-EPC jurisdictions the position in relation to 235 and Chakrabarti has been similar. So in the United States the patent was upheld over 235 and Chakrabarti. In Canadian Notice of Compliance (NOC) proceedings, a similar result was reached. In subsequent infringement proceedings in Canada, Lilly have prevailed on the issues as well, although decisions on utility and insufficiency are still awaited.
8. Accordingly, say Lilly, there is no realistic prospect of the case on 235 and Chakrabarti succeeding.
9. So far as S&F is concerned, Lilly point out the defendant chose not to rely on it for the purposes of its attack in Germany.
10. Lilly also point out that S&F was specifically cited both by the United States court and by the Canadian court in one of the NOC proceedings. It was also cited by the parties seeking revocation in the Czech and Slovak cases. Each court or tribunal dismissed the challenge based on S&F, although not for identical reasons.
11. Lilly say that it is a fair inference that other parties made a conscious decision not to rely on S&F. For example, DRL was a party to the US action but chose not to rely on S&F in the UK. Moreover, they suggest that Neolab was aware of S&F in the course of the proceedings in Germany, which led to the decision of the Bundesgerichtshof, but chose not to rely on it there.
12. This last fact leads to a suggestion by Lilly, not really answered in the evidence, to the effect that the only reason it is being relied on here is to allow the defendant to say that new issues are raised which have not been previously and repeatedly rejected.
The principles on which the court should grant summary judgment on a claim or issue are well-established. In Virgin Atlantic Airways v Delta Airways Limited, [2010] EWHC 3094 (Pat), 30th November 2010, Arnold J said this, at 32 and 33:
"32. There is no dispute about these. They were conveniently summarised by Lewison J in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15]:
'As Ms Anderson QC rightly reminded me, the court must be careful before giving summary judgment on a claim. The correct approach on applications by defendants is, in my judgment, as follows:
i) The court must consider whether the claimant has a 'realistic' as opposed to a 'fanciful' prospect of success:
Swain v Hillman [2001] 2 All ER 91 ;
ii) A 'realistic' claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8].
iii) In reaching its conclusion the court must not conduct a 'mini-trial': Swain v Hillman.
iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10].
v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550.
vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63.
vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: If the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not...
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...Ltd v Otter Controls Ltd [1991] FSR 354 at 357–358 and Aldous LJ in Monsanto & Co v Merck & Co [2000] RPC 77 at 92. 126 In Eli Lilly & Co Ltd v Neopharma Ltd [2011] EWHC 1852 (Pat), [2011] FSR 43 Floyd J granted summary judgment dismissing an obviousness attack on a patent for olanzapin......