The UK Supreme Court today ruled that Servier cannot be held liable for economic loss because of its actions before the EPO and the English courts.
Background
This dispute relates to Servier’s perindopril drug patent, which it defended and enforced some years ago. The UK courts and the EPO later revoked the patent. NHS England and the Secretary of State for Heath (the claimants) sued Servier and its subsidiaries arguing that their actions before the EPO and the English courts delayed a cheaper generic version of its perindopril drug entering the market, which meant that they had to pay a higher price for the drug. They brought claims under competition law and the common law of unlawful means tort.
In the tort claim, they alleged that Servier knew certain representations in those actions were either ‘false’ or made with ‘reckless indifference as to their truth’ and therefore unlawfully interfered with their economic interests. The High Court and Court of Appeal rejected the tort claim on the basis that the House of Lords’ decision in OBG Ltd v Allen (OBG) also established a test known as the ‘dealing requirement’. The claimants appealed to the Supreme Court, seeking a departure from the OBG decision.
OBG is still good for unlawful means
In a unanimous decision delivered by Lord Hamblen, the Supreme Court upheld the decision of the lower courts and refused to depart from or expand the OBG decision. “A fundamental difficulty for the appellants is that they need to show that this is an appropriate case for the Supreme Court to depart from OBG,” Hamblen said.
The claimants could not convince the judges that Servier’s actions or alleged unlawful means affected the freedom of the EPO and English courts to deal with them nor did they show any dealing. “At no time, however, were there any dealings between the appellants and the EPO or the English courts,” Hamblen observed.
The Supreme Court endorsed the House of Lords’ caution to maintain a restrictive approach in this area of law. The court held: “[T]he dealing requirement is consistent with and reflects Lord Hoffmann’s concern that the tort be kept within reasonable bounds and that a narrow meaning be given to unlawful means.” Hamblen explained: “[E]xtending liability to claimants, such as public authorities, who have no dealings with the third party creates a risk of indeterminate liability, as the facts of the present case illustrate.”
The claimants also failed to demonstrate that the loss or damage due to the alleged unlawful means was not remote. Hamblen noted: “The alleged lie is about the respondents’ own purported invention and does not in any way relate to the appellants. In such circumstances any damage to the appellants would be “remote”, the term used by Lord Lindley in Quinn v Leathem.”
Commentary
Had the decision gone the other way, in favour of the claimants, its impact would have been far-reaching in terms of liability as well as patent law and practice. The High Court judge, Mr Justice Roth, provided an apt summary of the concerns at paragraphs [43] – [44] of his judgment here.
Patentees will welcome this judgment. Read it here.
Legal representatives
Peters & Peters Solicitors acted for NHS England and the Secretary of State for Heath
Sidley Austin acted for Servier