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UK's Supreme Court refuses to open door to claims for damages against owners of invalidated patents

Posted on 9 August 2021

The UK's Supreme Court has rejected an attempt to widen the tort of causing loss by unlawful means. Had it not done so, patent owners could potentially commit the tort if they made wrongful assertions as to the validity of patents which were subsequently found to be invalid.

Background

Servier Laboratories owned a European patent for the alpha crystalline form of the tert-butylamine salt of the drug perindopril. It relied upon the UK designation of that patent to obtain interim injunctions (i.e. injunctions granted before a full trial) to prevent other pharmaceutical companies from selling generic versions of the drug in the UK. The patent was later found to be invalid by the English High Court (a decision upheld on appeal), and was also centrally revoked by the European Patent Office.

The Secretary of State for Health and the authority responsible for reimbursing pharmacists for prescriptions then brought a damages claim for more than £200 million (including interest) against Servier for anti-competitive behaviour and for the tort of causing loss by unlawful means. The Supreme Court's decision focussed on the latter claim, and an argument that the law relating to this issue should be "re-fashioned".

Causing Loss by Unlawful Means

The tort of causing loss by unlawful means involves:

  1. the defendant committing some unlawful act against a third party;
  2. which affects the third party's freedom to deal with the claimant;
  3. with the intention of causing loss to the claimant (or being reckless as to whether this loss is caused).

The health authorities alleged that Servier had obtained the patent by making false representations to the European Patent Office ("EPO") as to its novelty and inventive step, and that it had repeated those false representations to the courts when enforcing the patent. These alleged false representations were the "unlawful means" – i.e. step (i) above.

It was also contended that, as a result of Servier's alleged deceit of the EPO and courts, manufacturers of generic versions of the drug were deterred from entering the UK market. The lack of generic alternatives meant that the NHS had to pay higher prices for the drug. The difference between the price that the NHS had to pay, and what the price would have been had cheaper generic drugs been available, was the loss the health authorities alleged they had suffered. This was step (iii) above.

However, the health authorities could not show step (ii) above – i.e. Servier's alleged unlawful act had not affected the ability of the EPO or the courts to deal with the health authorities– indeed, they had not dealt with them at all. They therefore asked the Supreme Court to change the law on causing loss by unlawful means to dispense with this "dealing" requirement, which it refused to do. The claim has therefore been struck out – no findings were ever made as to whether Servier did make false representations about the patent's validity, or whether it intended to cause loss to the health authorities.

Impact

Had the Supreme Court re-fashioned the law in the way sought, and dispensed with the "dealing" requirement, it could have led to other claims against patent owners (as well as owners of other IP rights) following a finding of invalidity. Given that there is always a risk of a patent being found invalid during an infringement action, such a decision could have had a chilling effect on IP protection and enforcement.

 

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