Tuesday, 16 February 2010

Late-stage amendments: a success for Servier

Back in 2008, in Les Laboratoires Servier and another v Apotex Inc and others [2008] EWHC 2347 (Ch) (noted here by PatLit), Mr Justice Norris gave a ruling which attracted much interest and some critical comment.

To recap, Servier developed and patented a pharmaceutical known as Perindopril (a prescription drug used against hypertension), which it sold as Coversyl. This patent was the '341 patent'. In July 2000 Servier applied for a further patent (the '947 patent') covering an allegedly new form of Perindopril. In July 2006 the European Patent Office dismissed an opposition, so the '947 patent survive unscathed.

Generics manufacturer Apotex decided to make Perindopril, considering the '947 patent to be no more than a rehashed version of '341. Servier sued for patent infringement and secured interim relief, restraining importation of Apotex's product. In subsequent proceedings the patent was found to be invalid and was revoked by the court. Since the interim injunction stopped Apotex selling Perindopril for a large period of time, the court had to quantify the entitlement of Apotex to damages under the cross-undertaking given by Servier when the application for interim relief was granted.

The problem that led to this little morsel of litigation was that, while the inquiry into damages was edging towards its close, Servier sought permission to amend its case in the light of a finding of infringement against Apotex in the Canadian Federal Court in Canada, in proceedings to which Servier was not a party, this patent being held not by Servier but by an associated company. The point of the application was this: the Perindopril which Apotex would have sold if no injunction had been granted would have been made in Canada and would have infringed the associated company's patent.

Norris J dismissed Servier's application on the ground that it was made at too late a stage in the proceedings. The Canadian proceedings actually predated the commencement of the inquiry into damages on the cross-undertaking; the underlying legal point, if valid, had been in existence since the beginning of the inquiry and it had been open to Servier to make the application from the outset -- but it didn't. Norris J added that a party that secures interim relief before failing to establish infringement is not actually a 'wrongdoer', but someone who has obtained an advantage upon consideration of a necessarily incomplete picture. From the court's perspective such a person should be treated as if he had made a promise not to prevent that which the injunction in fact prevented. There had to be some form of symmetry between the process by which he obtained his relief (an approximate answer involving a limited consideration of the detailed merits) and that by which he compensated the subject of the injunction for having done so without legal right, particularly where -- as here -- the paying party had refused to provide full details of the sales and profits which it made during the period when the injunction was in force. For the record, the damages awarded against Servier were assessed at £17.5 million. Servier appealed.

Allowing the appeal, the Court of Appeal (Lords Justices Lloyd-Jacob and Sullivan; Sir David Keene) held last Friday that Norris J failed to have adequate regard to the consideration that, refusing to allow the amendment, the court was gifting Apotex the benefit of the £17.5 million awarded as damages as a total windfall. For Apotex, in English proceedings, to be awarded this sum of £17.5 million -- which might be unjustified -- was a very serious matter and the judge's failure to take this into account seriously affected the exercise of his discretion.

The Court of Appeal added that, after the judge's decision, the Federal Court of Appeal in Canada had affirmed indeed its own decision. This made it even more likely that Apotex had received an unjustified benefit in England. The amendment was accordingly allowed -- but there was a little sting in the tail: the amendment was only to be allowed on the basis that Servier paid all the costs of the inquiry to date, since it should have raised the matter from the outset.

NB: this item is prepared in reliance on a Lawtel note and an earlier weblog post. This decision is not yet available on BAILII.

Addendum: since a number of readers have emailed PatLit to record, correctly, that Lloyd-Jacob J passed away some decades ago and to suggest that the report should have referred to Lord Justice Jacob, PatLit wishes to confirm that the Lawtel note really does say "Lloyd-Jacob LJ". I quote from the rubric of this case entry:
CA (Civ Div) (Lloyd-Jacob LJ, Sullivan LJ, Sir David Keene) 12/2/2010
References: LTL 12/2/2010 EXTEMPORE
Document No.: Case Law - AC9601308
There is probably something in the CPR to provide that, while deceased judges may not try matters at first instance, and are probably not required to conduct case management hearings, they may be empanelled to hear appeals so long as they constitute a minority of those judges presiding ...


Healthy skeptic said...

If you can resurrect an expired copyright, why can't you do the same to an appeal judge?

Anonymous said...

This must be an application of the ancient principle of resurrectus potest audire. But what is the rule regarding post-mortem pension contributions?

Anonymous LJ said...

To anonymous: actually this is an application of the Latin maxim post mortem omnis iudex maxime irritans est