Apotex Europe Ltd & Ors v Beecham Group Plc & Anor

There is only one live issue before me today, namely an application by claimants, who I will refer to as Apotex, to have the trial of an application for declarations of non-infringement heard at the same time as the trial of two other proceedings. The declarations are sought under the provisions of section 71 of the Patents Act 1977.

To understand how this application comes about it is necessary, first of all, to explain the nature and status of the other two actions. The first action was commenced by claim form on 9 October 2002. In it the Apotex group of claimants are seeking revocation of two United Kingdom patents. The defendants in that action I shall refer to, as they were referred to before me, as GSK. One of those patents is GB2297550, in respect of an invention entitled “paroxetine hydrochloride anhydrate substantially free of bound organic solvent”.

The second action was brought by GSK (in fact different companies within the GSK family) against the Apotex parties. It was commenced by claim form dated 22 October 2002. In it GSK sought injunctive and other relief for alleged infringement of the ‘550 patent.

Those two actions are due to be tried together in a few weeks. The action with which I am concerned was commenced by claim form dated 28 May 2003. The application is to have the action for declaration of non-infringement heard together with the other two actions.

In the infringement action GSK sought interim injunctive relief. That application came before Jacob J in November of last year and was successful. An appeal was dismissed by the Court of Appeal. The present position is that the Apotex companies wish to market in this country paroxetine hydrochloride, an important pharmaceutical, but are restrained from doing so because of the injunction granted. GSK is anxious to keep in place the injunction already obtained because, so I am told, paroxetine hydrochloride is one of the most important pharmaceuticals in GSK’s product line.

Because of the grant of the interim injunction and in view of the great commercial importance of these proceedings to the parties, an order for a speedy trial was made. That trial is due to commence on 24 June of this year before Pumfrey J. It has a time estimate of 10 days.

Another interlocutory order had been made in the first two actions concerning the other patent. In substance what has happened is that the other patent has been hived off and the issues relating to the validity of that will be considered in 2004. Issues relating to that patent are not relevant to the application before me today. This application is only concerned with the application for declarations of non-infringement of the ‘550 patent and the first two actions insofar as they concern the latter patent.

The ‘550 patent is concerned with the level of propan-2-ol, otherwise known as isopropanol, in paroxetine hydrochloride. In substance what is said is that it is impossible by normal techniques to reduce the amount of isopropanol to a pharmaceutically acceptable level in paroxetine hydrochloride by any conventional drying techniques. The invention is centred upon the discovery that the isopropanol can be displaced by other agents. The ‘550 patent has, in fact, been the subject of litigation in other proceedings involving other parties beside Apotex. It has been held by Pumfrey J to be valid as to some claims and invalid as to others. That judgment has been the subject of an appeal and I understand a judgment on that appeal is awaited, although neither of the parties before me today are confident that a judgment will be given before the hearing of the expedited trial on 24 June. I should also mention that there are on foot applications to amend some of the claims.

As far as the proposed declarations of non-infringement are concerned, three claims in the ‘550 patent are in issue, namely claims 3, 10(i) and 11. For present purposes I only need to refer to the latter two claims which are in the following terms:

“10(i): A process for the preparation of paroxetine hydrochloride anhydrate substantially free of propan-2-ol which comprises crystallising paroxetine hydrochloride in an organic solvent or mixture of organic solvents which form the solvate with the paroxetine hydrochloride and which are not removable by conventional drying techniques; thereafter displacing the solvated solvent or solvents using a displacing agent.

11: A process for the preparation of paroxetine hydrochloride anhydrate substantially free of bound organic solvent which comprises displacing and solvated solvent or solvents from a paroxetine hydrochloride solvate using a displacing agent.”

On 2 May of this year the solicitors acting on behalf of Apotex sent a letter to the solicitors acting on behalf of GSK asking for an acknowledgement of non-infringement in relation to the ‘550 patent. By this time certain understandings as to the characteristics of the Apotex’s process and product, which are the subject of the infringement proceedings, had changed. Apotex appears to have concluded that it was possible that they might be held to infringe with the product which was the subject of 22 October action. They wanted clarification that alternative products would not infringe.

In any event, by the letter of 2 May confirmation of non-infringement was sought in respect of products made by processes in which the intermediate product, that is the product before the use of displacing agent, contained differing quantities of isopropanol. The letter sets out eighth different percentage weights of isopropanol in the intermediary product. The top end being less than 3% by weight and the bottom end being less than 0.1% by weight. Then it referred to each those being measured by one of three methods. In substance, there were 24 alternatives in respect of each of which confirmation of non-infringement was sought from GSK. Correspondence passed between the solicitors. In the end by a letter of 28 May the solicitors for Apotex came down to the three types of intermediate which now are at the centre of the applications for declarations of non-infringement. What was sought from GSK was a confirmation that processes using an intermediate where the isopropanol content was less than 1.9%, less than 1.5% or less than 1% were not infringements of the ‘550 patent. The GSK companies were not prepared to give that declaration. Indeed, they said that the declarations were not within the scope of section 71 of the 1977 Act for reasons I will touch upon in a moment. The result was the commencement of the third set of proceedings, to which I have referred already. This has led to a considerable dispute between the parties.

First of all, there has been a significant dispute between Mr. Mitcheson, appearing on behalf of Apotex, and Mr. Turner, appearing on behalf of GSK, as to whether under section 71 it is appropriate or possible to seek the answer to what are called hypothetical questions. Secondly, whether, as an issue of fact, the declarations sought by Apotex are hypothetical. In relation to these issues I have been taken carefully by both counsel through section 71 and my attention has been drawn to a number of authorities, including in particular Biogen v Medeva [1993] RPC 475, Filhol v Fairfax [1999] RPC 293 and Minnesota Mining [1999] RPC 135. In particular, emphasis is placed by Mr. Mitcheson on the Minnesota Mining case and by Mr. Turner on the Biogen v Medeva case. Suffice to say there is an interesting point of law as to whether the court should ever entertain applications for declarations of non-infringement which are hypothetical.

That leads on to the second issue, namely what is meant by “hypothetical”. The reason that is important in this case is because there is a major dispute between the parties as to whether or not any of the three processes, the subject of the application for declarations of non-infringement, can in fact be made to operate at all. In other words, there is a dispute whether, with the process details which have now been supplied by Apotex, those processes could be operated in a manner which would give rise to the intermediates in the production of anhydrous paroxetine hydrochloride containing less than 1.9%, 1.5% or 1% of isopropanol. Mr. Turner says that if, as his clients believe is the case, all or some of these cannot be produced by use of the processes described by Apotex, it must follow that they are not processes which either have been or could be operated by Apotex. In the words of section 71(1), Apotex cannot be said to be a person “doing or proposing to do” those processes.

Furthermore, Mr. Turner says that the underlying philosophy of the declarations being sought is that there is a cut off point for the level of isopropanol in the intermediate product, below which there cannot be infringement. As to that, he says that, even if, contrary to his clients’ position, there is such a cut off point, no such cut off point is expressly stated in the claims. He says there would be Improver type questions which would need to be answered for the purpose of deciding whether or not a process utilising an intermediate below that cut off point nevertheless can be said to infringe the ‘550 claims bearing in mind the provisions on the protocol of construction.

Apotex makes it clear that it wants to know what are the limits of the claim because, if it fails to win the infringement proceedings commenced by GSK on 22 October last year, it wants to be able with great speed to put on the market an alternative product that clearly falls outside the scope of GSK’s monopoly rights. Furthermore, Mr. Mitcheson argues that the points to be raised on the applications for declarations of non-infringement are not entirely novel to the dispute between the parties. He says that many, if not all, of the fundamental issues which are highlighted by the declarations for non-infringement which his client seeks are already in issue in the actions and therefore, they will add nothing of significance to the trial commencing on 24 June. They will act as a “guide” to Pumfrey J so that he can concentrate on some particular markers when considering the scope of the claims.

In my view, it is not really necessary to analyse all of these interesting and, in some cases, quite complicated points for the following reason: First, the GSK parties have put in evidence that they cannot practicably be ready for trial of the declarations of non-infringement by the end of this month. They say that they would need to inspect the processes, which are the subject of the declarations. More important than that, they say they will need to consider Improver questions and the like. Second, both sides have agreed that whatever else happens, they do not want to vacate the 24 June trial date.

Mr. Mitcheson submits that GSK’s protestation that it cannot be ready to deal with the declaration of non-infringement by that date should not be taken at face value. He says that there is no evidence to support that suggestion. I do not agree with him on the latter point. In particular, at paragraph 19 of the confidential 5th witness statement of Mr. Paul Inman, served on behalf of GSK, the following is said:

“Even when full particulars of the three unidentified manufacturing processes are provided, then I do not believe it would be practicable for GSK’s experts to deal with the matters raised in advance of the trial on 24th June.”

The matter was the subject of evidence and I do not think I am in a position today to go behind what Mr. Inman has said and what Mr. Turner has confirmed to me on instructions, namely that his clients do not believe that they will be able to be ready to deal with the issues raised on the applications for declarations of non-infringement by the time of the commencement of the conjoined trials at the end of this month.

Both parties agree that this particular product is of immense commercial significance. Fairness to the Apotex parties must be matched by fairness to GSK. I do not think it would be fair to force GSK into an action which may give rise to a finding of non-infringement on a timetable which, on the evidence, they cannot manage. The position was made worse from GSK’s points of view because, according to Mr. Mitcheson, the declarations of non-infringement also give rise to what he describes as an important argument on validity: See paragraph 24 of his skeleton argument. It follows that making the order sought by Apotex now would run a real risk of causing unfairness to GSK. In my view, that is sufficient reason for refusing to exercise my discretion to make the order sought by Apotex.

That outcome does not leave me with a feeling of disquiet. Since this is a matter of discretion, it is incumbent upon the party seeking its exercise in its favour to put before the court all relevant material. One thing that has been apparent to the parties throughout is the extreme speed with which the first two actions have come on. The necessity for that is related to the existence of the interlocutory injunction, as I have already mentioned. The current application was made about four weeks before the date fixed for the conjoined trial, yet Apotex have served no evidence explaining why this application could not have been made and was not made earlier. According to Mr. Mitcheson, it was at least by the end of March of this year, that is to say two months before the launch of this application, that Apotex realised that they might wish to clarify issues in the way in which the declarations for non-infringement are intended to achieve. Particularly where it is apparent, as in my view it is, that the application sought is likely to put an immense burden on, if not be outright unfair to, the other side if made late, it is incumbent upon a party seeking the exercise of discretion in its favour to explain why the application was not made earlier. Apotex have not addressed that issue.

Furthermore, I am by no means convinced that any of this is necessary. As I have mentioned already, Mr. Mitcheson argues that most if not all of the issues are already to be found inherent in the issues which are to be determined by Pumfrey J in the trial to commence in three weeks time. At one point during his submissions, he said that the real purpose of the application for declarations of non-infringement was to put in, formally, that which was already inherent in the issues which the learned judge will have to decide. On that basis, one might categorise the applications as a belt and braces exercise. Mr. Mitcheson does not accept that. He says that he wants to make sure that in the judgment Pumfrey J gives, a clear delineation of the boundaries of the relevant claims is set out. He says that there is a risk that Pumfrey J will not do so.

This argument is not persuasive. It is quite clear that the learned judge will have to consider competing arguments as to the construction of the claim. It is also clear that he will have to consider the relevance, if any, of the level of isopropanol in the intermediate for the purposes of determining the issues already before him. I can see no basis for assuming that Pumfrey J will not give a judgment which makes it perfectly clear where the boundaries of these claims are, assuming, of course, as the declarations for non-infringement assume, that a precise boundary exists.

Finally, I should say that Mr. Turned raises one additional point. He says there is no real urgency for the declaration of non-infringement. None of the processes described in the three declarations have been put into operation. They have never been tried out, as I understand it, even on a bench scale. He says that if the Apotex parties want absolute clarity as to whether or not they will infringe if they operate one or another of these three alternatives -- assuming of course that any of them can be operated either at all or on a commercial scale, and also assuming that Pumfrey J’s judgment in the forthcoming trial does not make the position perfectly clear -- there is plenty of time for them to get their applications for declarations of non-infringement before the court well before they will be in a position to put any of the posited processes into operation. I think there is substance in that argument too.

For all these reasons, I refuse the application.