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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Celltech R&D Ltd. v Medimmune Inc [2004] EWCA Civ 1331 (21 October 2004) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2004/1331.html Cite as: [2004] EWCA Civ 1331 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION (PATENTS COURT)
Mr Justice Laddie
HC 04 C00999
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE BUXTON
and
LORD JUSTICE JACOB
____________________
Celltech R&D Limited |
Claimant/ Respondent |
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- and - |
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Defendant/ Appellant |
____________________
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
for the Appellant
David Kitchin QC and Michael Tappin (instructed by Messrs Bird & Bird)
for the Respondent
____________________
Crown Copyright ©
Jacob LJ :
(1) Does the agreement confer jurisdiction on the English courts to decide whether Synagis is covered by the claims of US Adair 2?
(2) If so, should the court nonetheless in its discretion decline jurisdiction.
The scope of the jurisdiction clause
1.10 "Valid Claim" shall mean a claim of an issued, unexpired patent included within the Adair patent Rights which has not been held invalid or unenforceable in an unappealed or unappealable decision of a court or competent body having jurisdiction thereof.
3.3 In further consideration of the licences granted in Clause 2 the Licensee shall pay to Celltech a royalty at the rate of two percent (2%) of Net Receipts from all Products sold where the manufacture or sale of the Product in a country of the Territory would, but for the licence granted hereby, infringe a Valid Claim.
13.1 The validity, construction and performance of this Agreement shall be governed by English law.
13.2 All disputes, claims or proceedings between the parties relating to the validity, construction or performance of this Agreement shall be subject to the jurisdiction of the laws of England to the jurisdiction of whose courts the parties hereto submit. Each of the parties consents to the award or grant of any relief in any such proceedings before the High Court of Justice in England. Either party shall have the right to take proceedings in any other jurisdiction for the purposes of enforcing a judgment or order obtained from a Court of Justice in England.
i) It is common ground that the question of jurisdiction does not depend on the validity or construction of the agreement. The question is whether its "performance" is involved;
ii) The clause is unusual in that it lacks a catch-all phrase such as "any claim arising out of or concerning this agreement" or the like;
iii) "Performance" must have the same meaning in each clause;
iv) So far as cl. 13.1 is concerned it is a nonsense to say that the scope of foreign patents is to be determined by English law;
v) It follows that "performance" has a restricted meaning – covering things like the administration of royalties but not the underlying question of the scope of the licensed patents which are governed by various foreign laws;
vi) This is confirmed by the consideration that is most unlikely that the parties would have wanted to allow for adjudication of a dispute about the scope of the foreign patent to take place in the UK while an adjudication on validity takes place in the country of the patent concerned – and all the more so since often questions of validity and scope are intertwined.
"24. To have all issues of infringement determined by one court gives rise to a greater chance of consistency. It will in many cases reduce the amount of litigation involved and it will mean that only one court, and perhaps in some cases only one judge, need be educated so as to understand the patented technology involved.
25. It appears to me that those considerations apply here. Although it is not strictly necessary to do so, one can see that it makes good commercial sense for the parties to have agreed that rather than have the issue of infringement determined in up to 24 different countries whereMedImmune
may sell its products, all the issues of infringement should be determined in one court which could effectively become a specialist in determining that issue."
Discretion
(a) Only the US Court can try the issue of validity of the Adair 2 patent.
(b) Since Celltech has not challenged the jurisdiction of the US Court (and could not in any event), the US Court will try the validity of the US patent whatever happens in England.
(c) In doing so the US Court will construe the claims.
(d) A US Court is plainly the best Court to construe a US patent. It is the natural forum to decide on the proper scope and validity of granted monopoly of that state. All the issues are governed by US law.
(e) It is not in the interests of justice for both the US and English Courts to construe the claims. The risk of inconsistent decisions would be extremely high.
(f) MedImmune
's case is in part a "squeeze". What this means is that if the claims are construed widely enough to cover Synagis, then they cannot at the same time be valid. Or to put it the other way, if the claims are narrow enough to distinguish the prior art on which
MedImmune
relies, those claims cannot also cover Synagis. In the circumstances of a case of this kind, it is particularly dangerous to have two different courts deciding construction: one on infringement and the other on validity. The risk of an injustice is particularly high.
(g) It is inherently undesirable for reasons of costs, labour and disruption for the same issue of construction to be litigated twice if it can be avoided.
(h) The US Court is able to try validity and infringement in a single proceeding: the English Court is not.
(i) If the English Court were to construe the claims in accordance with US law, and that decision were binding between the parties by way of issue estoppel, then when applied to validity it could lead to the conclusion that the US patent was invalid. It would be wrong for the English Court to make a decision which could have the effect of invalidating a US patent.
"But the general rule is clear: where parties have bound themselves by an exclusive jurisdiction clause effect should ordinarily be given to that obligation in the absence of strong reasons for departing from it. Whether a party can show strong reasons, sufficient to displace the other party's prima facie entitlement to enforce the contractual bargain, will depend on all the facts and circumstances of the particular case."
"The authorities show that the English court may well decline to grant an injunction or a stay, as the case may be, where the interests of parties other than the parties bound by the exclusive jurisdiction clause are involved or grounds of claim not the subject of the clause are part of the relevant dispute so that there is a risk of parallel proceedings and inconsistent decisions."
"33. Thus Mr Donohue's strong prima facie right to be sued here on claims made by the other parties to the exclusive jurisdiction clause so far as the claims made fall within that clause is matched by the clear prima facie right of the Armco companies to pursue in New York the claims mentioned in the last three paragraphs. The crucial question is whether, on the fact of this case, the Armco companies can show strong reasons why the court should displace Mr Donohue's clear prima facie entitlement. If strong reasons are to be found (and the need for strong reasons is underlined in this case by the potential injustice to Mr Donohue, already noted, if effect is not given to the exclusive jurisdiction clauses) they must lie in the prospect, if an injunction is granted, of litigation between the Armco companies on one side and Mr Donohue and the PCCs on the other continuing partly in England and partly in New York. What weight should be given to that consideration in the circumstances of this case?
34. I am driven to conclude that great weight should be given to it. The Armco companies contend that they were the victims of a fraudulent conspiracy perpetrated by Messrs Donohue, Atkins, Rossi and Stinson. Determination of the truth or falsity of that allegation lies at the heart of the dispute concerning the transfer agreements and the sale and purchase agreement. It will of course be necessary for any court making that determination to consider any contemporary documentation and any undisputed evidence of what was said, done or known. But also, and crucially, it will be necessary for any such court to form a judgment on the honesty and motives of the four alleged conspirators. It would not seem conceivable, on the Armco case, that some of the four were guilty of the nefarious conduct alleged against them and others not. It seems to me plain that in a situation of this kind the interests of justice are best served by the submission of the whole dispute to a single tribunal which is best fitted to make a reliable, comprehensive judgment on all the matters in issue. A procedure which permitted the possibility of different conclusions by different tribunals, perhaps made on different evidence, would in my view run directly counter to the interests of justice."
(a) The parties bargained to give jurisdiction to the English court concerning the scope of the licensed patents;
(b) That bargain expressly recognised that the issue of validity of the licensed patents could only be tried by the court(s) of the relevant country(ies) – that is what the definition of Valid Claim is about. What was agreed was not only foreseeable but foreseen by the very terms of the agreement. That is a highly material factor in deciding whether the court should permit a party from departing from his bargain, see e.g. per Waller J in British Aerospace v Dee Howard [1993] 1 Lloyd's Rep. 405
(c) This case, unlike Donohue or The El Amria [1981] 2 Lloyds Rep. 119, only involves the parties to the bargain.
(d) The nature of the issues in this case is very different from those in Donohue. There the case was highly fact-sensitive – at the heart of the claims were allegations of fraud. Here the case largely turns on documents. True it is that technical expert evidence may be given but it will largely, if not wholly, consist of the kind that is to instruct the court in the technology rather than a conflict of technical opinion. I can say that with some confidence having been the trial judge of the earlier first English action. I would hope the parties can simply agree a "primer", as is so often helpful in patent actions.
(e) The possibility of different constructions of the claim is in fact very remote: Mr Kitchin made it perfectly clear that his clients will not advance different constructions in each country (wide here to catch Synagis, narrow in the US to save the patent). It is, of course possible in theory, that the US court would find a narrower construction than that contended for by Celltech. But it is wholly improbable that a US court, aware of what had happened here (assuming a wide construction was reached) would depart from it, even without Mr Kitchin's assurance. Indeed, as a matter of US law (I do not know) Celltech might be estopped from contending for any other construction.
(f) There are significant time advantages in the English proceedings going ahead. As I have said trial is fixed for next March; the US case would, it seems, take a year longer. If the English court holds that Synagis does not "infringe" that would very probably be an end of the dispute; the question of validity in the US would have become academic as between the parties.
Lord Justice Buxton:
Lord Justice Potter: