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.

Australia fine-tunes non-infringement declarations

All the way from Australia comes some news from Baker & McKenzie of the Intellectual Property Laws Amendment (Raising the Bar) Act 2011, which covers a range of IP areas. This Act, which came into force on 16 April, makes provision for a number of legislative reforms that don't take effect until 15 April 2013. One such reform will interest PatLit readers since it deals with how declarations of non-infringement are pleaded. According to our source:

"The statutory reference to a person who wishes to "exploit the invention" will be replaced with a person who "has done, is doing, or is intending to do an act". This means that a person seeking a declaration will need not have sought or been granted a patent themselves in order to make use of the provision, and clarifies that a declaration can apply to a present, current or future act. An applicant for a non-infringement declaration will also be able to challenge the validity of a patent in the same proceedings".

One out of two for Gore

Decided yesterday in the Patents Court for England and Wales was W L Gore & Associates GmbH v Geox SpA, [2008] EWHC 2311 (Pat), heard by Mr Justice Floyd. The action brough by Gore was for (i) declarations of non-infringement and (ii) invalidity against two patents belonging to arch-competitor Geox. The decision, which went largely in favour of Geox (both patents were valid and only one was not infringed), was long on facts and relatively short on law. On the issue of inventive step the judge cited the recent decision of the Court of Appeal in H. Lundbeck A/S v Generics (UK) Limited [2008] EWCA Civ 311 in which Lord Hoffmann (sitting as a member of the Court of Appeal) approved, without qualification, the following statement of principle by Kitchin J:

"The question of obviousness must be considered on the facts of each case. The court must consider the weight to be attached to any particular factor in the light of all the relevant circumstances. These may include such matters as the motive to find a solution to the problem the patent addresses, the number and extent of the possible avenues of research, the effort involved in pursuing them and the expectation of success."