Generics (UK) Ltd v H Lundbeck A/S Rev 1

LORD JUSTICE JACOB: Lundbeck own European Patent UK 0347066. It has six product claims and a single process claim, claim 6. For present purposes it is sufficient to say that the product claims cover the (+) enantiomer of a pharmaceutical compound called citalopram. The enantiomer is escitalopram. The process claim covers a way of making citalopram.

Generics started an action against Lundbeck for revocation of the patent. Lundbeck responded by denying invalidity. A defence was filed. Part of that defence is an allegation that it was obvious to separate out the (+) enantiomer from the racemic mixture.

Lundbeck applied to amend the defence to add a counterclaim for infringement against Generics. The proposed amendment includes a claim for infringement of process claim 6 on the basis that the product which Generics intends to deal is “a product obtained directly from” that process (see section 60(1)(c) of the Patents Act 1977). The proposed amendment also includes bringing in as second defendants to the counterclaim the Indian company (“X”) from which Generics intends to buy its product. The proposed pleading claims that X is a joint tortfeasor along with Generics.

Pumfrey J refused to allow the amendment to the extent that it alleged infringement of the process claim or to allow service out of the jurisdiction upon X as a second defendant. He allowed the amendment solely so far as it alleged infringement of certain of the product claims; the judgment is [2006] EWHC 804 (Ch).

Lundbeck appeal. They say they have reasonable prospects of success on two points:

In their proposed pleading Lundbeck simply say this:

“In support of the allegation that escitalopram was obtained directly from a process claimed in claim 6 of the Patent the Part 20 Claimant [i.e. Lundbeck] will aver that escitalopram is a new product and rely upon s.100(1) of the Patents Act 1977.”

S.100(1) says this:

“If the invention from which a patent is granted is a process for obtaining a new product, the same product produced by a person other than the proprietor of the patent or a licensee of his shall, unless the contrary is proved, be taken in any proceedings to have been obtained by that process.”

Thus, submits Mr Waugh QC for Lundbeck, escitalopram is new. So the burden shifts to Generics and X to prove the claim process is not being used. That burden has not been discharged to the point where one can say there are no reasonable prospects of success. In effect, Mr Waugh is saying that the only way in which the presumption of section 100 can be rebutted is by a full trial. That cannot be right. All the section does is to provide a presumption. It may be that that presumption can be rebutted only by a full trial or it may be that it can be rebutted to the standards for strike out or refusal or permission to serve out of the jurisdiction. It is only a presumption.

The defendants answer Mr Waugh in this way. First they say there is powerful evidence rebutting it, so powerful that there is no reasonable prospect of it being overcome. The judge accepted this. A second point was taken by the respondent’s notice to the effect that the presumption did not arise in the first place because the product was not new. Mr Tappin wisely did not pursue that rather difficult area.

Before a medicinal product can be sold in the United Kingdom, regulatory approval must be given. For this purpose the regulatory authorities require information as to the process by which the product will be made. It is a criminal offence to supply false information; more than that, perhaps, is that it will be commercial suicide to do so. Information was supplied to the regulatory authorities in two parts. A general reaction scheme was supplied by Generics. That does not contain any of the details of the reaction used to make the product. It does contain some detail as to the impurities. By another document some detail as to their amounts was also supplied. X also supplied direct to the regulatory authorities the details of its process. That has not been supplied to Generics or anyone else so far as I know. It is common ground that the disclosed process, if carried out, is not that covered by claim 6.

Lundbeck suggest that X has or may have seriously misled the regulatory authorities. It suggests that in reality X will not be using the disclosed process but the process of claim 6; or at least if it is not using the disclosed process the presumption would bite so that there will be a presumption that claim 6 was used. Lundbeck has not of course seen X’s process being carried out; one of its avowed objectives is, indeed, to obtain an order for inspection one way or another. Nor have Lundbeck had a sample of X’s products. What Lundbeck rely upon is indirect evidence by inference, not so much that the claim 6 process is in fact being used but that the process disclosed to the authorities cannot be the one that is being used. The idea is to cast doubt on what has been disclosed to the regulatory authorities such that, somehow or other, the presumption comes back into play.

What was done was to conduct some experiments broadly in accordance with X’s process as disclosed to the authorities, which has been disclosed in its general form but not in detailed form under conditions of confidence to Lundbeck. The impurities in the resulting product were analysed as to their presence and as to their amounts. The suggestion is that these are inconsistent with the impurities and their amounts as disclosed to the authorities.

Even in chief the evidence was thin. Dr Petersen said no more than that:

“The description of these impurities in the written process X description makes me doubt whether the process described is the process which X either have or intend to carry out.”

Of that statement the Judge said this:

“That is a remarkable piece of logic since he accepts that not all of the possible impurities need in fact appear in any performance of the reaction scheme. He also accepts that the substance of his objection comes down to an impurity which he labels elsewhere as ‘impurity B’. From his discussion of his own repetition of the process carried out by X, it is clear that successive purification steps are removing large quantities of this material. Dr Petersen does not suggest that the impurities stated in the DMF [i.e. the materials supplied to the Regulator] are in fact in any way indicative of infringement.”

Astonishingly, Lundbeck would not allow Dr Peterson’s evidence to be put to X. So X, accused of dishonesty, have had no opportunity of commenting on the accusation. Lundbeck’s reason, advanced by its solicitor, for its extraordinary and, to my mind, unreasonable stance is that if X is told of the details in advance of any inspection “it is possible that steps could be taken to obscure the discrepancies”. There is no material to suggest that X is in any way dishonest or that they would take such steps. Be that as it may, the value of the evidence in the absence of any chance to comment on it is at best considerably diminished.

On top of that, however, Generics have provided the comments of an independent expert, Dr Latham, on what Dr Petersen says. He has a number of criticisms. Perhaps of most importance is the fact that Dr Petersen necessarily could not reproduce the precise conditions in fact used by X. His answer, “I have done my best to select reasonable conditions”, implicitly accepts this is so. In reply Dr Latham answered the points made by Dr Petersen. I do not go through them all here. It is sufficient to refer to paragraph 8 where Dr Latham says:

“In my opinion Impurity 4 could not be derived from the cyano-route [i.e. that of claim 6]. Its presence is a likely impurity from X’s … route.”

The upshot of all this is the experimental evidence provided to support the suggestion that X will not use the process it told the regulators it will use is weightless. We have therefore this position, that there is the presumption of section 100 and compelling evidence rebutting it. It is compelling because of both legal and commercial reasons why the evidence should be true.

Lundbeck did advance an alternative suggestion – that the process described could not be carried out economically. But no attempt was made to address the fact that the process will be carried out in India where costs are very different. The point is hopeless.

The judge dealt with it this way:

“In my judgment there is implicit in the contention advanced by Lundbeck in this case a serious allegation that the regulatory submission and, less importantly perhaps, the application for a declaration of non-infringement [I think the judge may have been mistaken about the existence of such an application] simply bear no relationship to the process which is in fact being followed by Lundbeck [X that must be]. An allegation of this sort must be supported by cogent evidence. I do not see the evidence of Dr Petersen satisfies this requirement.”

I can see no fault with this.

A slightly different point was made, and received perhaps more emphasis here than below, that there was no direct evidence from X or Generics that the process description upon which Dr Petersen did his work had been proved by X or exhibited by X or Generics “purporting to prove their contents”. However, a witness statement on behalf of X was supplied to this court without objection. It was said:

“I can confirm that the process that X uses to manufacture escitalopram in its plant follows the reactions sequences set out in the Process Description that is exhibited to this statement [which is the same as which was worked on throughout the case] and that X intends to continue to use only that process to manufacture escitalopram.”

There was also some suggestion that it had not been proved that the process description was the one that was supplied to the regulatory authorities, but it is quite clear that is so, from the evidence of Dr Rosenberg.

Accordingly I think the judge was right to hold that there was no reasonable prospect of success on the process claim. One can equally treat it as though the claim had already been made and there was an application to strike it out under part 24. The fact is that the presumption of section 100(1) was completely displaced by the material supplied to the regulator and the experimental evidence did nothing to alter that.

The facts pleaded to raise a case or joint tortfeasorship are set out in the particulars of infringement in paragraph 5, it is alleged that:

“The First and Second Part 20 Defendants are jointly and severally liable for the acts referred to in paragraph 2 above as joint tortfeasors by reason of the fact that such acts are carried out pursuant to a common design between the First and Second Part 20 defendants to import and dispose of excitalopram in the United Kingdom. In particular, the First and Second Part 20 Defendants have combined together to secure the doing of acts which are infringements of the Patent. Pending disclosure and/or the provision of further information, the Part 20 Claimants rely upon the following facts and matters:

“(a)

the product complained of is the infringing product and is not capable of various uses, some infringing and some not;

“(b)

the product complained of is not an item of ordinary commerce;

“(c)

the Second Part 20 Defendant has knowledge of the Patent and is aware that the importation of the product complained of into the United Kingdom would infringe the Patent (if valid). Such knowledge is evidenced by the provision of the Process Description in these proceedings and from the subsequent correspondence between the Part 20 Claimant and the First Part 20 Defendant and the matters raised therein;

“(d)

the escitalopram is manufactured by the Second Part 20 Defendant solely for the First Part 20 Defendant. By letter dated 13^th February the solicitors for the First Part 20 Defendant stated that the escitalopram is not available on the open market.

“(e)

the product may not be imported or disposed of in the United Kingdom without a licence from the Regulatory Authorities. To secure that licence, as part of the First Part 20 Defendant’s licence application, the Second Part 20 Defendant has provided direct to the regulatory authorities the closed part of the Drug Master File (DMF). By their letter of 13^th February the solicitors for the First Part 20 Defendant stated that details of the Second Part 20 Defendant’s process would have been provided direct by the Second Par 20 Defendant to the regulatory authorities as part of the closed part of the DMF.

“(f)

The Second Part 20 Defendant will have supplied such information knowing that the purpose was to enable escitalopram made by the Second Part 20 Defendant to be sold in the United Kingdom by the First Part 20 Defendant and that without such cooperation the Second Part 20 Defendant’s product could not be imported, sold or disposed of in the United Kingdom by the First Part 20 Defendant. The provision of such information evidences the fact that the Second Part 20 Defendant shared a common purpose with the First Part 20 Defendant to sell and dispose of escitalopram in the United Kingdom and has committed acts in furtherance of a common design with the First Part 20 Defendant to commit such acts.”

As the judge observed quite a lot of this is conclusory in nature. Asserting that the defendants have combined together does not mean in itself that they have combined together. What really matters is the detail which has been supplied to show the combination. That detail boils down to the following: X is Generic’s proposed supplier. X makes the product abroad. X supply a key part of the required data to get a licence to sell the product in this country direct to the UK regulatory authorities. The product, if sold here, clearly would infringe; there is no other purpose for it.

It is perhaps also worth stating some of the acts which are not alleged:

Some play is made of the fact that Generics want the name of X kept quiet. But there is a perfectly good reason why that is so; namely, they do not other Generics’ suppliers to go to their source. The desire to keep X anonymous is in no way indicative that the parties are acting in concert one way or the other.

There is no real dispute as to the principles by which a party is made liable as a joint tort feasor with another for patent infringement. There is no need to go to any authority other than the last in point, Sabaf v Meneghetti [2002] EWCA Civ 976 [2003] RPC 264. Peter Gibson LJ, giving the judge of the court said this at paragraph 59:

“The underlying concept for joint tortfeasance must be that the joint tortfeasor has been so involved in the commission of the tort as to make himself liable for the tort. Unless he has made the infringing act his own, he has not himself committed the tort. That notional seems to us what underlies all the decisions to which we were referred. If there is a common design or concerted action or otherwise a combination to secure the doing of the infringing acts, then each of the combiners has made the act his own and will be liable. Like the judge, we do not think that what was done by Meneghetti was sufficient. It was merely acting as a supplier of goods to a purchaser which was free to do what it wanted with the goods. Meneghetti did not thereby make MFI’s infringing acts its own.”

It is accepted that merely supplying outside the jurisdiction goods to a party who later sells them within the jurisdiction is not enough for joint tortfeasorship, even if the supplier knows his customer intends so to sell. What is said to make all the difference here is the direct supply of information to the regulatory authorities by X. But that is to misunderstand the nature of that activity. It does no more than make the sales of the product in this country lawful. It is not an act in any way directed at the actual sales. The complaint is that Generics intended to sell. Giving information to regulatory authorities does not make X a party to Generics’ acts of sale or importation. X has not become part of Generics’ commercial venture. The judge was right to refuse to allow service out of the jurisdiction on X because there was no arguable case against X as a joint tortfeasor.

I should perhaps mention the Unilever case, upon which Mr Waugh hung rather a lot. The facts were very different. The alleged joint tortfeasorship was between a parent and subsidiary, or parent and grand subsidiary, of part of the Gillette group of companies. There was a much, much closer association between the parent and the subsidiary than anything that is suggested here. Mustill LJ did say:

“I suggest that little is to be gained by matching the circumstances of each case against each of the allegations in the draft amended statement of claim. For my part I prefer to take the relevant part of the amendment as a whole, and to ask whether, if the allegations therein are proved to be true (and there seems no dispute that they will be), and if they are set in the context of the relationship between the companies in the Gillette Group, when that has emerged at the trial, a judge directing himself correctly could reasonably come to the conclusion that - (a) there was a common design between Boston and G.U.K. to do acts which, if the patent is upheld, amounted to infringements, and (b) Boston has acted in furtherance of that design.”

If I ask a similar question here, I cannot see any reasonable prospect of a court coming to the conclusion that X and Generics acted pursuant to a common desire. Mr Waugh’s reliance on Unilever is misplaced.

I would therefore dismiss this appeal.

LORD JUSTICE NEUBERGER: I agree.

LORD JUSTICE CHADWICK: I also agree. The appeal is dismissed.