In conjoined cases: Actavis Group hf v Eli Lilly & Company (USA)/Medis ehf v Eli Lilly & Company (USA) [2012] EWHC 3316 (Pat), Mr. Justice Arnold has sent a strong signal to potential litigants that claims for infringement and for declaratory relief in respect of foreign designations of patents may be determined by the English courts.

Background

The Parties

The Actavis Group of companies are a multi-national group of generic pharmaceutical companies with headquarters in Switzerland. The claimants in the joined cases, Actavis Group hf and Medis ehf, were each subsidiaries of the parent Actavis Group. The defendant in both claims was Eli Lilly (‘Lilly’), a US corporation incorporated in Indiana and having myriad national subsidiaries, including Eli Lilly and Company Ltd incorporated in England.

The Claims

Eli Lilly has since 2004 marketed a cancer treatment under the brand name Alimta and is the owner of European Patent No. 1 313 508, expiring in June 2021, for the use of pemetrexed disodium in the treatment of cancer. Actavis commenced two separate claims – each one in the name of one member company in the Actavis Group – seeking a declaration of non-infringement for its proposed treatment using pemetrexed dipotassium, both in the UK and with respect to the German, French, Italian and Spanish designations. Eli Lilly challenged the jurisdiction of the English Court over the foreign designations.

Eli Lilly did not dispute that the English Court had subject matter jurisdiction over the claims. In so doing, Eli Lilly accepted that, following the decision of the Supreme Court in Lucasfilm Ltd v Ainsworth [2011] UKSC 39, [2012] 1 AC 208 (the case concerned the subsistence of copyright in the ‘Storm Trooper’ helmet from the well known Star Wars films), the Moçambique rule (established in British South Africa Co v Cia de Moçambique [1893] AC 602)1 did not prevent the English courts from hearing claims concerning non-UK designations of patents, so long as validity of the patent was not in issue. For their part, the claimants undertook not to challenge the validity of Eli Lilly’s patent, either in the claims or by way of defence to any counterclaim.

The question of jurisdiction was somewhat complicated by the manner of service of the claims. As noted above, Actavis commenced two identical claims, save that each named a different member of the corporate group as claimant. Each claim was then served twice upon Eli Lilly; first, on Eli Lilly’s UK solicitors, and then upon the company’s representative before the European Patent Office, an employee of Eli Lilly’s UK subsidiary. After filing an acknowledgment of service in respect of the first claim, Eli Lilly’s solicitors subsequently wrote to the solicitors for Actavis contesting the validity of service on two grounds: First, pre-action correspondence had identified a subsidiary, Actavis Group PTC ehf, and its ‘relevant national subsidiaries,’ whereas the claim was commenced in the name of the parent Actavis Group; second, it was asserted that service was not accepted in respect of any declarations of non-infringement in relation to the non-UK designations. The latter point was again contested with respect to service of the second claim.   

The Decision

In reviewing the parties’ arguments as to whether Eli Lilly’s solicitors had consented to service, Mr. Justice Arnold refused to take a strict view and instead reviewed the circumstances of service. First, it was not disputed that Eli Lilly was aware of the identity of the Actavis Group as a supplier of generic pharmaceuticals. Had the identity of the first claimant been in issue at the time of service, one would have expected the solicitors for Eli Lilly to seek further information from the claimant. Second, insofar as the claims sought only declarations of non-infringement in relation to the non-UK designations, the identity of the claimant was irrelevant. Finally, procedural issues such as disclosure and security for costs were unlikely to raise concern in the proceeding. It was therefore held that the first claim was validly served under the consent to service filed by the solicitors for Eli Lilly.

In case he were to have erred in this conclusion, Mr. Justice Arnold went on to consider whether Eli Lilly had submitted to the jurisdiction by reason of having a place of business in England & Wales, concluding that, in any event, service had indeed been made in accordance with the Civil Procedure Rules on that basis.

The parties agreed that, if the first claim was validly served as a result of the consent to service by Eli Lilly’s solicitors, Eli Lilly could not contest jurisdiction on grounds of forum non conveniens. In the event, however, that service was effective on the basis of CPR 63.14(2)(a)2 or CPR 6.9(2),3 Mr. Justice Arnold considered whether Eli Lilly could seek a stay of the proceedings on the basis of forum non conveniens. Eli Lilly relied in part upon the reasoning of the Court of Appeal in Lucasfilm, where it was held that the English Courts lacked jurisdiction to hear claims of infringement in respect of foreign intellectual property rights. Mr. Justice Arnold, to the contrary, found that the considerations enunciated by the majority of the Supreme Court in relation to subject matter jurisdiction in Lucasfilm were equally relevant to the question of forum non conveniens:

If patents are no different to copyrights for the purposes of justiciability, why should they be treated differently for the purposes of forum non conveniens when validity is not in issue? Patents are, of course, monopolies, whereas copyrights are not, but why should that make all the difference? After all, in many contexts, copyrights have effects that are practically indistinguishable from true monopolies.

Mr. Justice Arnold noted that Eli Lilly had not suggested that the courts of France, Germany, Spain or Italy were able and likely to take jurisdiction over all of Actavis’ claims for non-infringement. In support of its position that the English Courts were the appropriate forum for the claims, Actavis submitted that cost savings could be substantial to the parties: Each side would require only one legal team; the proceeding could be determined with reference only to English law, with the agreement of Eli Lilly not to advance foreign law issues; even if foreign were applied, the prospect of inconsistent decisions from multiple jurisdictions would be eliminated. Eli Lilly countered that foreign law would in fact need to be applied and that this would effectively require the parties to engage multiple legal teams in any event.

While accepting that Eli Lilly should not be obliged to consent to the application of English law to the claims relating to non-UK designations, Mr. Justice Arnold was not persuaded by Eli Lilly’s arguments as to the costs of proving foreign law before the English Courts; not only is foreign law treated as a question of question, but the English Courts have increasing experience of applying decisions from other EU jurisdictions. Actavis’ argument that the claims would be more quickly determined by the English Courts was, however, misguided; only where excessive delay posed a threat to the interests of justice would the relative speed of proceedings in other jurisdictions favour the English Courts as the appropriate forum.

Ultimately, Mr. Justice Arnold concluded that it had not been shown that the Courts of France, Germany, Spain or Italy were clearly the more appropriate forums the proceedings and the ground of forum non conveniens therefore failed.

Conclusion

The decision in these joined cases will be encouraging to those with potential infringement claims where both UK and foreign patent rights are in issue; the ability to litigate multiple claims in the English Courts may allow a claimant both to reduce costs and to obtain a more timely decision than if claims were litigated in multiple jurisdictions. The Court of Appeal will hear an appeal by Eli Lilly later this Spring.