Can a court make a declaration of non-infringement of a foreign patent?

Actavis UK Ltd v Eli Lilly and Co [2014] EWHC 1511 (Pat) is a Patents Court, England and Wales, ruling of Mr Justice Arnold on 15 May, which you can read on BAILII here. In a characteristically long, carefully articulated and analytical judgment, Arnold J sought to deal with a number issues arising from  an application by Actavis for a declaration of non-infringement (DNI) to cover not only the United Kingdom but also for the French, German, Italian, Spanish and United Kingdom designations of the same European patent. A full analysis of this case has already been posted on the IPKat by Darren Smyth, here.

Of particular interest here is the court's approach to Regulation 864/2007 on the law applicable to non-contractual obligations (Rome II), of which Articles 1 and 15 are reproduced here:

Article 1 

Scope

1. This Regulation shall apply, in situations involving a conflict of laws, to non-contractual obligations in civil and commercial matters. …

3. This Regulation shall not apply to evidence and procedure, without prejudice to Articles 21 and 22.

Article 15 

Scope of the law applicable

The law applicable to non-contractual obligations under this Regulation shall govern in particular:

(a) the basis and extent of liability, including the determination of persons who may be held liable for acts performed by them;

(b) the grounds for exemption from liability, any limitation of liability and any division of liability;

(c) the existence, the nature and the assessment of damage or the remedy claimed;

(d) within the limits of powers conferred on the court by its procedural law, the measures which a court may take to prevent or terminate injury or damage or to ensure the provision of compensation;

(e) the question whether a right to claim damages or a remedy may be transferred, including by inheritance;

(f) persons entitled to compensation for damage sustained personally;

(g) liability for the acts of another person;

(h) the manner in which an obligation may be extinguished and rules of prescription and limitation, including rules relating to the commencement, interruption and suspension of a period of prescription or limitation.

On a proper construction of this Regulation, said Arnold J, the court's power to grant a DNI in respect of the non-United Kingdom designations of a European patent was governed by English law. On that basis, he concluded that the intended launch by Actavis of a generic pharmaceutical product using pemetrexed diacid, pemetrexed dipotassium or pemetrexed ditromethamine as a treatment for cancer would not infringe the United Kingdom, French, Italian or Spanish designations of Lilly's patent for a cancer treatment using pemetrexed disodium; it was thus appropriate to grant declarations of non-infringement in relation to all designations of the patent.

According to Arnold J, on the proper construction of Article 15 of the Regulation, by which a "remedy" was to be determined by the substantive law of the relevant country, a "remedy" could not extend to any remedy. Under English law, a DNI was little more than a formal record of the court's decision on the substantive issue, but the rules for obtaining negative declaratory relief were regarded as being procedural. Accordingly it was doubtful whether a DNI amounted to a "remedy" within Article 15 at all. Applications for DNIs were matters of procedure within Article 1 of the Regulation and were not therefore governed by the law applicable to a non-contractual obligation in accordance with Article 15.  On this basis It followed that Actavis's claim was governed by English law.

Under its inherent jurisdiction, the court had a broad discretionary power to grant a negative declaration if it was in the interests of justice to do so because the claimant had a real commercial interest in the relief sought or there was a real commercial reason for it to be granted. Since Actavis had established that dealings in its product would not amount to patent infringement, it was appropriate to grant the DNIs sought.