Patents are powerful monopoly rights. They can be slapped like handcuffs onto the wrists of a suspected infringer even before the full whys and wherefores of the case are looked at. The English courts often put a stop to suspected offending activity in this way by granting an interim injunction. But when a court does this, it will normally expect a promise from the patent holder to recompense the suspected infringer if the case eventually fails (a cross-undertaking in damages). French pharmaceutical company Servier has been arguing over a cross-undertaking it gave to Canadian generics group Apotex, with an interesting twist involving squabbling highwaymen.
Servier’s ACE inhibitor drug perindopril erbumine received widespread patent protection in countries including the UK and Canada. The product sold well and attracted interest from generic producers. Once of these, Apotex, obtained a marketing authorisation for UK sales of their competing product in 2006. This was promptly followed by a patent infringement suit. Servier relied on a patent protecting the crystalline form of the drug, because the UK patent protecting the main chemical substance had already expired.
Servier managed to obtain an interim injunction to stop Apotex’s sales soon after launch, giving the usual cross-undertaking. But the UK crystalline form patent was later found to be invalid and the injunction lifted. So Servier should normally have to pay Apotex for losses it had suffered through its curtailed product launch.
But, in the meantime, Servier had been busy suing Apotex in Canada. The Canadian case could make use of the original chemical compound patent; this expired much later in Canada than in Europe. The result - success for Servier! Apotex appealed, without success, and will have to pay infringement damages to Servier in Canada.
What about the cross-undertaking? Servier understandably was not keen to pay Apotex for its lost UK sales – amounting to nearly £20 million when assessed in 2009. It turned to an old law that has been used to deal with claims arising from arguments between such unsavoury characters as smugglers, highwaymen and brothel-keepers and their clients. Known as ‘ex turpi causa’ this rule prevents someone basing a claim on an illegal or immoral act.
Servier said that Apotex had made the generic product for the UK market in Canada, and that this was illegal because the patent was still valid there. Apotex’s manufacture in Canada was unlawful and it should not be able to claim damages arising from this infringing activity.
The case has gone all the way to the top, and the Supreme Court has now had the final say. And the outcome? Apotex’s claim for damages did not arise from a sufficiently wrongful or immoral act to prevent payment. Although a patent is a publicly granted monopoly, the ‘only relevant interest affected is that of the patentee’. Servier will have to pay up, although the final amount will be reduced to take account of the infringement in Canada.