The recent case of Intervet UK Limited v Merial & Others [2010] EWHC 294 (Pat), concerned a dispute over Merial’s European Patent (UK) No. 1 386 617 entitled “Method for the in vitro diagnosis of type II porcine circovirus infection and diagnostic reagents” (the “Patent”). Merial alleged that Intervet had infringed claim 18 of the Patent. Intervet denied infringement and sought revocation of the Patent on the grounds that it lacked an inventive step (the obviousness argument). One issue arising during the course of the litigation was whether Merial was to be granted permission to serve two hearsay notices out of time.

Hearsay Notices

Hearsay evidence is dealt with in section 2 of the Civil Evidence Act 1995 (the “Act”) and Part 33 of the Civil Procedure Rules (“CPR”). Section 2 of the Act provides that a party proposing to rely on hearsay evidence must notify the other party and, on request, give particulars of the evidence.

The general rule is that where hearsay evidence is going to be given orally by a witness or contained in a witness statement, section 2 of the Act is complied with by serving a witness statement.

In all other cases, a party complies with section 2 of the Act by serving a notice on the other parties which identifies the hearsay evidence, states that the party intends to rely on it at trial and the reason why the witness is not being called. The notice must be served no later than the latest date for serving witness statements (which is fixed by court order). However, the Court has a general discretion to extend the time for giving notice.

There is no sanction for failing to serve notice as such. Consequently, failure to give notice does not affect the admissibility of hearsay evidence. However, it may be taken into account by the Court in exercising its general discretion regarding costs and weight to be given to the evidence. Further, the Court’s broad discretion to control evidence can be used to exclude admissible hearsay evidence for any appropriate reason.

In considering whether to grant an application to extend the time limit, the Court should have regard to the factors set out in rule 3.9 (relief from sanctions).

The case was heard on seven dates between 3-12 February 2010. Following the conclusion of oral evidence on 9 February 2010, Merial applied for permission to serve two notices of intention to rely upon hearsay evidence which they had served out of time on 4 and 6 February 2010. Under the Court Order, the notices were due to be served no later than 6 weeks before trial. Intervet opposed the application.

The First Hearsay Notice

Merial’s first hearsay notice related to documents emanating from the inventors. Merial sought to rely on these documents in order to defeat Intervet’s claim for obviousness.

In deciding whether to allow late service of the hearsay notice, the Court took the following factors into account:

  • Merial would have been aware of the significance of these documents by, at the latest, 9 December 2009;
  • Intervet’s argument on obviousness would have been clear following exchange of expert reports and witness statements (30 December 2009);
  • Merial did not at any stage serve a notice to admit facts;
  • It was clear from the facts that Merial was aware of the relevance of the documents at the end of January, yet it did not serve a hearsay notice at that stage;
  • Merial did not serve any evidence in response to Intervet’s expert reports. Nor did they serve any witness statements from any of the inventors (being the authors of the documents in question);
  • The inventors in question gave evidence during earlier US proceedings, yet Merial did not seek to rely on any of the transcripts of those depositions;
  • Merial served a bundle of documents (including those in question) on Intervet’s experts for use in cross-examination. Merial did not serve any hearsay notice at that stage, however Intervet did not object to its experts reading and being asked questions on the documents;
  • The hearsay notice was served about a day before Intervet closed its case.  

Mr Justice Arnold applied these factors to those set out in rule 3.9 of the CPR and noted in particular:

  • The application for permission was not made promptly and the explanation given was that Merial did not appreciate how Intervet was stating its case on obviousness until it saw Intervet’s skeleton argument at the end of January. The Judge did not accept this in view of the factors highlighted above.
  • Merial was not in default of any other rules
  • The trial date (or the likely date) could still be met if relief was granted as neither side suggested the trial should be adjourned
  • With regards to the effect which the failure to comply had on each party, Internet was deprived of (1) the opportunity of applying to cross-examine the authors of the documents (2) asking the authors to provide witness statements (3) asking third parties to give relevant factual evidence
  • By granting relief, Merial would be able to rely on hearsay evidence at an extremely late stage in circumstances where the delay and failure to adduce first-hand evidence has not been justified.

The Court therefore refused to permit late service of the first hearsay notice and consequently declined to admit the hearsay evidence.

The Second Hearsay Notice

The second hearsay notice related to certain documents emanating from Intervet. The documents showed that Intervet itself encountered difficulties when trying to isolate and detect the porcine circovirus. Merial wanted to rely on these documents to demonstrate the non-obviousness of the invention.

The factors taken into account were broadly the same as with the first hearsay notice, save that in this case the documents had emanated from Intervet. Intervet had disclosed the documents during the proceedings and also in previous US proceedings, however Merial did not depose the relevant witnesses so could not adduce transcripts of the depositions as hearsay evidence.

In applying these factors to those set out in rule 3.9, Mr Justice Arnold had the same comments as with the first hearsay notice save that:

  • Merial’s failure to comply with the time limit meant that Internet was deprived of the opportunity to deduce first-hand evidence on these matters, however Intervet did not make an application for an adjournment to enable it to adduce such evidence;
  • Allowing late service of the hearsay notice would mean that Merial could rely on hearsay evidence at an extremely late stage in circumstances where the delay has not been justified. However Merial was not in a position to adduce first-hand evidence and the delay probably made no difference to Intervet’s position.

Taking these factors into account, the Court found it appropriate to permit late service of the second hearsay notice. However, as the documents were technical in nature and Merial had not adduced evidence from its expert to explain them, Mr Justice Arnold stated that it would be difficult for him to attach much weight to their content.

This case demonstrates that unless a party has a justifiable reason for delay, hearsay notices should be served promptly, and certainly no later than the time limit set out in the Court Order. Permission to serve a hearsay notice out of time is likely to be denied where the party seeking to rely on the hearsay evidence could have adduced first-hand evidence. It is also clear from Mr Justice Arnold’s comments that parties to litigation should make use of notices to admit facts where possible.