Friday, July 2, 2021

U.K. Supreme Court Dimisses Health Ministry's Appeal in Wrongful Patent Enforcement Suit

I just saw this on Law360, and then looked up the decision (Secretary of State for Health and another (Appellants) v Servier Laboratories Ltd and others (Respondents) [2021] UKSC 24, on appeal from [2019] EWCA Civ 1160) on the U.K. Supreme Court's website.  Since I'm in the early stages of a new project on the comparative law and economics of wrongful patent enforcement, I will be reading this opinion closely over the next few days and may have more to say about it in the next week or so.  For now, here is a portion of the summary from the Supreme Court's website:

The respondents develop and manufacture a medicinal product named perindopril, which is used in the treatment of cardiovascular diseases including high blood pressure. In 2001, the European Patent Office ("EPO") granted a patent for the alpha crystalline form of perindopril salt in 2004. The patent was upheld by the Opposition Division of the EPO in July 2006. The respondents defended and sought to enforce the UK designation of the patent in proceedings before the English courts, in particular by obtaining injunctions. The issue of the validity of the UK designation of the patent went to trial and, in July 2005, the High Court held that it was invalid as it lacked novelty or alternatively was obvious over another existing patent. That decision was upheld by the Court of Appeal in May 2008. In 2009, the EPO Technical Board of Appeal revoked the patent.

The appellants in these proceedings fund the cost of drugs dispensed by the NHS. They allege that in obtaining, defending and enforcing the patent, Servier, the third respondent, practised deceit on the EPO and/or the courts, with the intention of profiting at the expense of the appellants. In particular, it is alleged that representations were made as to the novelty and/or lack of obviousness of the product that Servier knew to be false, or that were made with reckless indifference as to their truth. As a result of the alleged deceit, the appellants contend that manufacturers of generic perindopril did not enter the market as early as they otherwise would have done. This would have driven down the price of perindopril and meant that the appellants had to pay higher prices. This alleged conduct is said to form the basis of an unlawful means tort claim, in which damages and interest in excess of £200m are sought.

On 2 August 2017, the High Court struck out the appellants’ unlawful means tort claim. On 12 July 2019, the Court of Appeal dismissed the appellants’ appeal. Both the High Court and the Court of Appeal held that the majority of the House of Lords in OBG Ltd v Allan [2008] 1 AC 1 concluded that the dealing requirement was a necessary element of the unlawful means tort. As it was common ground that neither the EPO nor the courts had dealt with the appellants, both the High Court and the Court of Appeal considered themselves to be bound by the decision in OBG. The appellants now appeal to the Supreme Court, contending that the dealing requirement should not be treated as forming part of the ratio of OBG and thus the courts below were wrong to consider themselves bound by it ("issue 1"). Alternatively, they argue that the Supreme Court should depart from OBG and dispense with the dealing requirement ("issue 2"). . . .

The Supreme Court unanimously dismisses the appeal. Lord Hamblen delivers the lead judgment. Lord Sales gives a short concurring judgment. . . .

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