Patents - Teva UK Ltd v Chiesi Farmaceutici SpA

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Jane Lambert

Patents Court (Mr Justice Birss) Teva UK Ltd v Chiesi Farmaceutici SpA [2020] EWHC 1311 (Pat) (2 June 2020)

This was an application by the claimant, Teva UK Ltd ("Teva") to strike out or stay a counterclaim by the defendant, Chiesi Farmaceutici SpA ("Chiesi") for an injunction to restrain the infringement of certain patents that Teva had sought to revoke. Teva argued that the counterclaim had no real prospect of success because there was no evidence that Teva threatened or intended to infringe any of the patents in suit.  Alternatively, Teva argued that the counterclaim should be stayed on the ground that the disclosure of a product description for the purpose of the litigation would mount to a concerted practice within the meaning of art 101 of the Treaty on the Functioning of the European Union ("TFEU") and/or s,2 of the Competition Act 1998.  The action and counterclaim are listed for trial in October 2020.

The Application
The strikeout application together with a cross-application by Chiesi for a product description came on before Mr Justice Birss who heard the application and cross-application on 18 May 2020.

The Decision
In Teva UK Ltd v Chiesi Farmaceutici SpA [2020] EWHC 1311 (Pat) which his lordship delivered at 22:30 on 2 June 2020, Mr Justice Birss dismissed Teva's application and allowed Chiesi's cross-application for disclosure.

Whether there was a Real Prospect of Success
At paragraph [11] of his judgment,  his lordship directed himself that as this was an application to strike out the question was not whether the pleaded material proves that the claimant threatens and/or intends to infringe, but only whether, based on the material pleaded, there is a real prospect of success of establishing that at trial.

Citing Mr Justice Birss's own dicta at paragraphs [353] and [356] of his judgment in Actavis and others v ICOS Corp and another [2016] EWHC 1955 (Pat) Teva submitted than an intention to infringe cannot be inferred simply from the bringing of an application to revoke a patent because there could be all sorts of reasons for seeking such revocation.   In particular, an intention to infringe should not be inferred unless the alleged infringer had obtained marketing authorization for a drug that might infringe the patent for which revocation was sought.   The judge rejected that submission at paragraph [30] of his judgment

"I am quite sure that there is no legal principle of the kind advanced by the claimant that a quia timet action cannot even be advanced without a marketing authorisation being pleaded. It cannot be derived from Actavis v ICOS. Moreover I note that in Generics v Sandoz [2017] EWHC 2276 (Pat) in which Arnold J gave permission to allow a quia timet infringement claim to be added by amendment, there was no marketing authorisation in place at the time the decision was made."

He added in the next paragraph:

"To commence a quia timet action in the first place the patentee has to show it has at that initial stage a real prospect of establishing that at trial – which may be months or years in the future – there is a sufficiently strong probability that an injunction would be required to prevent harm to the claimant occurring after trial. The question is not concerned with whether the rival may about to launch the product at the start of the action. So the fact there is no marketing authorisation in place when the claim form is issued, or otherwise when action begins, is not relevant. It is the existence of a threat and intention to start selling product sometime within the lifetime of the patent which justifies a quia timet infringement action. The material available at the start of the action may well not justify an interlocutory injunction at that early stage but that is not the question. A different question may be what to do if at trial, no marketing authorisation has been granted. That may or may not indicate that there will never be a launch in future, but it is a matter for trial."

It followed that each case falls to be decided on its own facts.

Chiesi's statement of case relied on four factors in support of its contention that Teva threatened and intended to infringe its patents:  first, the action to revoke those patents, secondly, their expiry date. thirdly the issue of equivalent revocation proceedings in the Republic of Ireland where Teva has manufacturing facilities that could supply the UK and. fourthly. the refusal of Teva's solicitors to give Chiesi 2 months notice of any intention to launch a competing product in the UK.

At paragraph [34] the judge said:

"I start with the same simple inference mentioned already. In this case the earliest expiry date for the patents is in 2027. The inference from the fact that the claimant has issued proceedings to revoke the patents is that the claimant intends to sell a product protected by the patent before 2027. It is not irrebuttable, but that is not the question at this stage. To fulfil that intention, the claimant will need to obtain a marketing authorisation. But all we know now is that the claimant does not have a marketing authorisation today. The claimant may already have applied. But in any event it follows from the simple inference that the claimant intends to launch before 2027, that it also intends to obtain a suitable marketing authorisation in that time frame. The absence of a marketing authorisation today does not mean that there is no real prospect at trial of establishing a threat and intention to infringe. The claimant may have obtained a marketing authorisation by then."

If Teva had no immediate intention of launching a competing product once Chiesi's patents had been swept away it could have said so but it did not do so.  The judge concluded that counterclaim had a real prospect of success.

Abuse of Process
Teva argued that the purpose of the counterclaim was to obtain disclosure of the product description and was, therefore, an abuse of the process of the court.   Mr Justice Birss described that contention as hopeless.   He said at [43]:

"No doubt the defendant, as someone selling the patented product, would very much like to know what a rival's plans were. That applies in most patent cases. But it is quite another thing to infer that the true reason a patentee has brought a claim for infringement is not for its own sake, but is in order to find out the rival's plans. Even assuming that really is one of the defendant's motives, I am quite satisfied that the defendant has another purpose in bringing the infringement claim, namely to sue the claimant for infringement and obtain appropriate remedies such as an injunction if the claim is made out. Also relevant is the fact that it was not the defendant which started the proceedings. The infringement claim is a counterclaim to an action started by the claimant. Applying the legal principles identified, the infringement claim is not an abuse."

Concerted Practice
Teva put its cases as follows.  As a result of the very recent decision of the Court of Justice of the European Union in C‑307/18, Generics (UK) Ltd. and others v Competition and Markets Authority  [2020] WLR(D) 69, EU:C:2020:52, [2020] EUECJ C-307/18, ECLI:EU:C:2020:52, the parties were competitors. Disclosure of a product description would amount to a "concerted practice" within the meaning of art 101 and s.2.  Any remedy resulting from the proceedings would be an ancillary restraint that would fall within the article and section.

It was common ground that the parties were competitors though not ss a result of the CJEU's judgment.  The judge agreed that the provision of information could constitute a concerted practice as a result of collusion but not when made in response to an order of a court in a patent litigation action.  As for the ancillary restraint point, patent law promotes competition.   It does not stymie it.

Teva had offered Chiesi 14 days notice of any intention to launch a competing generic and asked the court to stay the counterclaim until such time as it might give such notice.  The judge rejected that offer.  At paragraph [23] of his judgment, he had said:

"Patent disputes are best decided with both validity and infringement before the court at the same time. This is not just for the sake of procedural economy, it is also important so as to ensure that the claims are construed the same way when deciding both issues"

He added at [62] that an offer of 14 days notice was "no substitute for resolving any issues of infringement, on their merits, at the trial in October."

Further Information
Anyone wishing to discuss this case or patent litigation generally should call my clerk, Stephen on 07986 948267 or send me a message through my contact page, I shall gladly respond by phone, VoIP or email,


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