Les Laboratoires Servier v Apotex Inc.
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ETHERTON,LORD JUSTICE KITCHIN |
| Judgment Date | 03 May 2012 |
| Neutral Citation | [2012] EWCA Civ 593 |
| Docket Number | Case No: A3/2011/1158 |
| Court | Court of Appeal (Civil Division) |
| Date | 03 May 2012 |
[2012] EWCA Civ 593
Lord Justice Laws
Lord Justice Etherton
and
Lord Justice Kitchin
Case No: A3/2011/1158
IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
Mr Justice Arnold
HC06C03050
Royal Courts of Justice
Strand, London, WC2A 2LL
Anthony Watson QC, Daniel Toledano QC and Harris Bor (instructed by Taylor Wessing LLP) for the Appellants
Iain Purvis QC and Andrew Lykiardopoulos (instructed by Bristows) for the Respondents
Approved Judgment
Hearing dates : 7th March 2012
Introduction
The issue on this appeal concerns the availability of the defence of illegality to a claim on a cross-undertaking in damages where (1) the holder of a patent enforceable in this jurisdiction has obtained an interim injunction against the defendant from selling infringing products here, (2) the patent is subsequently held to be invalid and the injunction is discharged, but (3) the goods which the defendant would have sold here, but for the interim injunction, would have been manufactured in a foreign country in breach of a valid patent granted and enforceable there.
This appeal is against the order of Arnold J dated 7 April 2011 by which, among other things, he dismissed the claim by the appellants (the defendants in the proceedings) on the inquiry as to damages following the discharge of the interim injunction granted to the respondents (the claimants in the proceedings) to restrain infringement of the respondents' European patent. That patent was subsequently held invalid, but Arnold J considered that the respondents are entitled to defeat the claim on the cross-undertaking because the appellants' claim for compensation under the cross-undertaking is based on manufacture in Canada, which would have been in breach of a Canadian patent held by a company within the same group of companies as the respondents.
In this judgment I shall refer to the appellants and other companies within the same group as "Apotex". I shall refer to the respondents and other companies within the same group as "Servier".
The background
The following account is largely based on the Judge's acount of the background, for which I am grateful.
The parties and their businesses
Servier carries on a pharmaceutical business. One of Servier's products is perindopril erbumine (also known as perindopril tert-butylamine). Perindopril erbumine is a long-acting ACE (Angiotensin-Converting Enzyme) inhibitor used for treating hypertension and cardiac insufficiency. It is marketed by Servier under the trade mark COVERSYL. Servier discovered perindopril and its tert-butylamine salt, and obtained patent protection for them in many countries. It has been both therapeutically and commercially a very successful product.
Apotex also carries on a pharmaceutical business, including the manufacture in Canada and marketing of generic pharmaceutical products.
The European Patent and the English infringement proceedings
Servier was granted European Patent No. 1 296 947 ("the European Patent") on 4 February 2004. It covered a particular crystalline form of perindopril erbumine. The European Patent was opposed. The Opposition Division of the European Patent Office decided to maintain the European Patent for reasons which it gave on 21 September 2006. Some of the opponents appealed, but the appeal was not determined until 2009.
On 28 July 2006 Apotex started selling in the United Kingdom perindopril erbumine tablets imported from Canada. Apotex was the first supplier to market a generic version of perindopril erbumine in the United Kingdom. Between 28 July 2006 and 3 August 2006 Apotex made sales worth over £4.1 million.
On 1 August 2006 Servier commenced proceedings against Apotex for infringement of the European Patent by importing, keeping, offering to dispose of and disposing of perindopril erbumine, alternatively threatening to do such acts.
Servier applied for an interim injunction to restrain Apotex from marketing perindopril erbumine. In paragraph 32 of his first witness statement Dr Eric Falcand, on behalf of Servier, stated that, if Apotex was prevented from continuing to supply the market but was ultimately successful at trial, he believed that the damage suffered by Apotex could be adequately compensated by damages. In paragraph 33 of his witness statement he said that Servier offered an undertaking to pay any damages which the court ordered to compensate Apotex for losses due to the grant of an injunction which the Court later determined should not have been granted.
On 3 August 2006 Mann J granted a short-term injunction. On 8 August 2006 he continued the interim injunction until trial. In paragraphs [20] to [23] of his judgment on 8 August 2006 ( [2006] EWHC 2137 (Pat)) he considered the adequacy of damages for each side. He recorded (at paragraph [22]) Servier's submission that "Apotex would be adequately compensated on the cross-undertaking in damage[s]."
The injunction granted by Mann J prohibited Apotex from disposing of, offering to dispose of, or importing into the United Kingdom, its generic perindopril erbumine product. The orders of Mann J on 3 and 8 August 2006 contained a cross-undertaking in damages by Servier as follows:
"If the Court later finds that this Order has caused loss to the Defendants, which shall include Apotex UK Limited, and decides that the Defendants should be compensated for that loss, the Claimants will comply with any Order the Court may make."
On 11 July 2007 Pumfrey J held ( [2007] EWHC 1538 (Pat)) that Apotex had infringed the European Patent, but that the European Patent was invalid since it lacked novelty, alternatively it was obvious over European Patent No 0 380 341 ("341"). He therefore discharged the injunction granted by Mann J and directed an inquiry as to damages pursuant to the cross-undertakings given by Servier (together "the undertaking").
On 28 April 2008 the Court of Appeal dismissed Servier's appeal from Pumfrey J's decision for reasons which it gave on 9 May 2008 ( [2008] EWCA Civ 445). In his judgment Jacob LJ, with whom Lord Phillips of Worth Matravers CJ and Lloyd LJ agreed, said:
"9. The upshot of all of this is that were the patent valid, Servier's monopoly in practice would last until 2020, But, as the Judge held and we confirm, [the European Patent] is invalid. And very plainly so. It is the sort of patent which can give the patent system a bad name. I am not sure that much could have been done about this at the examination stage. There are other sorts of case where the Patent Office examination is seen to be too lenient. But this is not one of them. For simply comparing the cited prior art ('341') with the patent would not reveal lack of novelty and probably not obviousness. You need the technical input of experts both in the kind of chemistry involved and in powder X-ray diffraction and some experimental evidence in order to see just how specious the application for the patent was. The only solution to this type of undesirable patent is a rapid and efficient method for obtaining its revocation. Then it can be got rid of before it does too much harm to the public interest.
10. It is right to observe that nothing Servier did was unlawful. It is the court's job to see that try-ons such as the present patent get nowhere…"
In a subsequent judgment ( [2010] EWCA Civ 2790]) Jacob LJ said (at [1]):
"The [European Patent] was one that should never have been granted, not through the fault of the Patent Office, but because the patentees must have known that it was invalid."
The appeal from the Opposition Division's decision to maintain the European Patent was ultimately successful. The Technical Board of Appeal revoked the European Patent by its decision dated 6 May 2009 T1753/06.
Servier's Canadian patent and the Canadian infringement proceedings
Servier is the proprietor of Canadian Patent No. 1,134,196 ("the Canadian Patent"). The Canadian Patent is a basic patent covering perindopril erbumine. It was granted on 6 March 2001 and will not expire until 6 March 2018.
On 25 August 2006 Servier commenced proceedings against Apotex for infringement of the Canadian Patent in the Federal Court of Canada. On 8 November 2006 Servier applied for an interlocutory injunction in those proceedings restraining Apotex from using, making, selling, distributing, exporting, supplying and in any other way dealing with compound perindopril and any pharmaceutically acceptable salts thereof in the United Kingdom, Canada and Australia. On 24 November 2006 Noël J granted an interim injunction until 13 December 2006 in relation to perindopril products destined for the Australian market, but on that date Snider J refused to grant any interlocutory injunction at all pending trial.
In a judgment dated 2 July 2008 ( [2008] FC 825, (2008) 67 CPR (4 th) 241) Snider J held that the Canadian Patent was valid and had been directly infringed by Apotex by supplying perindopril erbumine raw material, manufacturing and selling tablets and exporting them. In paragraph [509] of her judgment she said that "Apotex chose to make perindopril in Canada fully knowing that making perindopril would constitute infringement and that it might be required to disgorge its profits." She ordered an injunction, to take effect after the expiry of 30 days, prohibiting Apotex from manufacturing, selling, offering for sale or otherwise dealing in products containing perindopril in Canada. Apotex was permitted during that 30 day period to sell or dispose of such products as it already had in its possession as at the date of the judgment.
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