The team is joined by Guest Kats Rosie Burbidge, Stephen Jones, Mathilde Pavis, and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Hayleigh Bosher, Tian Lu and Cecilia Sbrolli.

Thursday, 24 August 2017

Is there a role for the tort of unlawful means in patent law?

Can a patentee be liable to a public health authority for the tort of causing loss by unlawful means, as a result of making misleading or dishonest representations to the EPO/Court as to the validity of a patent?  This was the subject of an interim decision of Roth J. earlier this month in the Competition Appeal Tribunal:  Secretary of State for Health and Others v Servier Laboratories Limited and Others [2017] EWHC 2006 (Ch) (available here).   

A torte of lawful means
Background

This is the latest instalment in the fall-out from Servier's actions in relation to its pharmaceutical product perindopril (branded as Coversyl), an ACE inhibitor used in the treatment of hypertension and cardiac insufficiency, which has been the subject of a number of reports on this blog dating back to 2008 (see here).

Servier's perindopril product was launched in the UK in 1990, and was protected by a patent for the process for the industrial synthesis of perindopril: EP 0,308, 341.  The present action relates to a later patent granted for the alpha crystalline form of the perindopril salt: EP 1,296,947. It consists primarily of an antitrust claim by various health authorities (in the form of a follow on claim for damages following a finding of infringement of Art 101 and 102 by the Commission, on the basis of various agreements made by the Defendants with generic manufacturers and suppliers involving patent settlements and technology acquisitions, and also as a stand-alone claim for abuse of dominant position based on the Defendants' conduct before the EPO/English Court).  The English health authorities also brought a free-standing claim for the tort of unlawful means, and the present application concerned an application by Servier to strike out this element of the claim.

Claimants' case

The Particulars of Claim alleged that Servier's patent application for what would become the '947 patent "contained express and implied representations that the alpha form was novel and implied representations that the alpha form was not obvious".  These representations were repeated in opposition proceedings before the EPO, and in proceedings before the English Court where Servier successfully obtained an interim injunction (this was subsequently overturned when the '947 patent was held to be invalid).

The claim alleged that the representations were untrue, in that the alpha form was not novel and/or not obvious, in particular because:
  • Servier's earlier '341 Patent led to the production of the alpha form as its inevitable result; 
  • the perindopril marketed by Servier in the UK both before and after the time of filing of the '947 patent was in alpha form; 
  • Therefore, the alpha form was part of the state of the art and/or would have been obvious to the skilled person.  
It was further alleged that Servier's agents either knew or were reckless as to these matters, and that Servier "obtained, defended and enforced" statutory patent rights in the UK in relation to the '947 Patent "by deceit: that is, by means of misrepresentations made dishonestly or recklessly to the EPO and/or the English Court" - the  result being that generic entry to the market was delayed, meaning that Servier was able to charge higher prices and maintain larger volumes of the market, resulting in an interference with Claimants (as payers). 

Court's analysis

Servier applied to strike out the claim for tort of unlawful means on the basis that it disclosed no cause of action.  Roth J. observed that it may be challenging for the claimants to establish the express or implied representations that are said to found the allegation of deceit, given that there is no doctrine of "fraud on the patent office" (unlike the US), but for the purpose of this strike out application, he assumed that the allegation of deceit was made out.  
A job for parliament - not the Courts
The Court analysed the House of Lords authority of OBG Ltd v Allen [2007] UKHL 21 in detail, and concluded that the tort of unlawful means comprises 3 elements:

(a) the use of unlawful means towards a third party
(b) which is actionable by that third party, or would be if they suffered loss, and
(c) intention to injure the claimant. 

Servier's strike out application focussed on limb (a) above.  The Claimants' response was that limb (a) should not be interpreted restrictively and that the tort is still in the process of development and so should not be struck out before all the facts are found at trial.  While Roth J. agreed that some aspects of the tort of unlawful means may require refinement (e.g. what constitutes "unlawful" means), he concluded that the only legal issue on application has been determined by Lord Hoffmann in OBG v Allen (with whom the majority agreed):

"Unlawful means therefore consists of acts intended to cause loss to the claimant by interfering with the freedom of a third party in a way which is unlawful as against that third party and which is intended to cause loss to the claimant.  It does not in my opinion include acts which may be unlawful against a third party but which do not affect his freedom to deal with the claimant."

The tort of unlawful means requires that the third party's freedom to deal with the claimant is affected.  This could not be satisfied on the facts, because the 'third party' is the EPO/English Court, and there was no question of their "freedom to deal" with the English health authorities being affected. 

Further, four members of the House of Lords in OBG Ltd v Allen had emphasized the need to confine the tort within careful limits.  There was a public policy in confining remedies in this area to the field of competition law which has legislative basis, rather than upsetting the balance between the Courts and legislature. In summary, the claim for the tort of unlawful means was struck out, and the case proceeds on the basis of competition law only.

9 comments:

Anonymous said...

Wow, someone was really mad. It appears to be quite a stretch to argue that stating to the patent office that a patent claim is new and inventive in light of the prior art is "deceit". What is next: the public prosecutor suing a convicted defendant for damages because of deceit in her trial when she did not immediately confess but maintained to be innocent?

MaxDrei said...

From above, I read this:

Servier "obtained, defended and enforced" statutory patent rights in the UK in relation to the '947 Patent "by deceit: that is, by means of misrepresentations made dishonestly or recklessly to the EPO and/or the English Court" - the  result being that generic entry to the market was delayed, meaning that Servier was able to charge higher prices and maintain larger volumes of the market, resulting in an interference with Claimants (as payers). 

Note the word deceit! Does anybody say that Servier is any more deceitful than any other corporation? If allowed to get away with it, they are all full of it. Some say that corporations are ever more likely to be led by a sociopath.

Consider VW (with a Supervisory Board on which sit representatives of local Government and the employee Union) and the scandal of their diesel engines for cars. Only the US American discovery procedures got to the truth of the matter.

What's to stop the corporations? As I see it, only the forensic fact-finding procedures of English law. Three cheers for the Rule of English Law.

Athelstan said...

"What's to stop the corporations? As I see it, only the forensic fact-finding procedures of English law. Three cheers for the Rule of English Law." - which, despite Brexit, is to be done away with in patents matters by the backdoor mechanism of the UPC and the ECJ.

THE US anon said...

The juristic person of corporations needs to be better tuned (read that as more scrutinized and constrained).

Especially juristic persons having NO single allegiance to any one single sovereign. Take a gander at the tax games that Trans-nationals (with no allegiance) employ as a matter of course.

When the notion that patent law is sovereign-centric law is let to drift away, capture and abuse of innovation promoting rules of law by the juristic persons who have the means to (and desire to) compete on NON-innovative grounds is a certainty.

Reilly J said...

What is a "juristic person of corporations"? A very fat judge?

"I am the judge, the very fat judge, that waters the patent law!
Oh, I am the judge, the very fat man, that waters the patent law!
And what do I care about freedom to work, or the honest prior us-or?
For I am the judge, the very fat judge, that waters the patent law!"

Anonymous said...

What are the facts? Did they make deceitful statements or did they make reasonable arguments?

Facts are important.

If Servier did not make such deceitful statements, then the English Health authorities are themselves doing so in order to obtain undeserved damages.

THE US anon said...

Reilly J,

I am unfamiliar with the ditty that you propose, but to even get there with your question of "what is a juristic person" tells me that you lack the legal understanding to even begin understanding the larger concepts here.

Rather than pen anything purporting to be amusing then, your time would be better spent teaching yourself the meaning of the legal terms involved in the conversation.

Citius Minds said...

I am thankful to you for creating this resource and it shows how passionate you are about this topic.
patent validity search

Anonymous said...

MaxDrei: Note the word deceit! Does anybody say that Servier is any more deceitful than any other corporation? If allowed to get away with it, they are all full of it. Some say that corporations are ever more likely to be led by a sociopath.

Well, in comparison with other corporations such as Eli Lilly (e.g. Zyprexa/Olanzapine, known for ghostwriting fraud, aggressive off-label promotion, and huge side-effects), Purdue Pharma (OxyContin a.k.a. "hillbilly heroin", and their pushing of opioid prescribing to GPs), Servier is a rank amateur, but they still have quite a bit to answer for.

Citius Minds: that looks like spam.

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