The defendant Eli Lilly (“EL”) manufactured a cancer drug marketed under the brand name ‘Altima,’ which was protected by a UK patent (the duration of which had been extended by a Supplementary Protection Certificate) (the “SPC Patent”) until December 2015. EL also owned a European Patent (“EP”) for the compound upon which Altima was based until January 2021. The claimant, a generic drug manufacturer named Actavis Group HF (“Actavis”), wished to market a generic drug that was incompatible with the SPC Patent, but which they believed would not infringe the EP.

Section 71 of the Patents Act 1977 allows a person to apply to the court for a declaration that their proposed actions will not infringe an existing patent, provided that they have already sought a written acknowledgement of non-infringement from the patent holder itself and the patent holder has refused to give such an acknowledgement. Actavis sought such a declaration from EL in relation to its proposed acts and the EP. No such assurance was provided, and consequently Actavis brought an action in the English courts to obtain a declaration that: (a) under s.71 of the Patents Act 1977, their actions would not infringe the claims of the patent’s UK designation; and (b) pursuant to the Court’s inherent jurisdiction, that dealings in certain other European Patent Convention (“EPC”) Member States would not infringe the patent designations in those jurisdictions.

European patents work on the basis that when applying for a patent, the applicant must designate the EPC Member States in which patent protection is sought. EL’s solicitors argued that the English courts only had jurisdiction to make a declaration as to the compatibility of Actavis’ proposed acts within the EP’s UK designation.  By contrast, Actavis sought a declaration that its dealings would not infringe designations in the UK, France, Spain, German and Italy.

Important points in determining whether the English courts could deal with other European designations included the following:

  1. Traditionally English courts have not accepted jurisdiction over foreign claims. This principle is known as the Moçambique rule (British South Africa Co v Cia de Moçambique [1893] AC 602). However, in the recent decision of Lucasfilm Ltd v Ainsworth [2011] UKSC 39, the English courts accepted jurisdiction over a US claim for copyright infringement.  In Lucasfilm, a movie studio commenced US copyright infringement proceedings against a British prop maker who had been manufacturing replica ‘stormtrooper’ helmets.  The English Supreme Court accepted jurisdiction to hear the English proceedings of a US copyright claim because the defendant was resident in and subject to the jurisdiction of England and Wales. In the current matter, based on Lucasfilm, EL accepted that non-UK designations might in principle be justiciable (even though Lucasfilm was a copyright case and not a patent matter);
  2. Actavis were not seeking to declare EL’s patents invalid. This is important because under Art 22(4) of the Brussels I Regulation, challenges to the validity of intellectual property rights fall within the exclusive jurisdiction of the State in which the right is registered;
  3. The applicable law in deciding whether the English courts could hear the action was English law, by virtue of the doctrine of lex fori (law of the forum) which covers questions of procedure or remedy;
  4. By contrast with lex fori (above), providing that the law of the forum determines justiciability, Art 8(1) of EC Reg 864/2007/EC states that law applicable to the question of whether Actavis’ acts would infringe EL’s rights in a particular State, is the law of the State in which the proposed acts will occur (i.e. the English courts must apply French law to determine potential infringement in France, German law in Germany etc.);
  5. The EU Member States in which Actavis was proposing to act had all contracted to the European Patent Convention (“EPC”) and therefore should (in theory) have adopted a harmonised approach to patent protection (although in reality differing jurisprudence means this is often not the case).

The validity of service was also disputed. It was submitted by EL that service on its UK business (“Lilly UK”) (effected via its solicitors) did not constitute valid service for proceedings involving its European Patent Operations department. The court dismissed this argument as it was clear that the  patent counsel employed by Lilly UK in fact managed EL’s European patent portfolio. 

EL also sought a stay of proceedings on the grounds of forum non conveniens (i.e. that the English courts were not the appropriate forum) and that the place of patent designation was the natural forum for each claim. However, the Court rejected this argument, citing Lucasfilm and stating that when deciding justiciability, there was no reason to treat copyright differently to patents. It also agreed with Actavis’ submission that it would be advantageous to allow one court to hear all five claims, and in doing so both sides would save costs as each could use one team of lawyers and one set of experts, thereby avoiding the quadruplication of efforts.

As a consequence, the Court held that EL failed to establish that the English courts could not hear the proceedings, nor had it demonstrated that it would be more appropriate for each designation to be dealt with in its own jurisdiction. Therefore the matter was justiciable by the English courts.

White and Black Legal’s comment:

While only a High Court decision, this is still an important precedent and one of the first cases to address the impact of Lucasfilm in relation to intellectual property rights other than copyright. Furthermore, future cases citing Actavis may cast further light on the enforceability of patent rights in other jurisdictions, and in the event that the High Court’s decision is appealed, then it seems likely the extent to which the Lucasfilm approach should be applied to other intellectual property rights will end up be clarified by a binding precedent.

Actavis Group HF v Eli Lilly & Company [2012] EWHC 3316 (Pat)