Secretary of State for Health & Ors v Servier Laboratories Ltd & Ors [2012] EWHC 2761 (Ch)

Case No HC11C01423

[2012] EWHC 2761 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Venue Royal Courts of Justice, Rolls Building

Date 12/10/2012

London, EC4A 1NL

Before

MR JUSTICE HENDERSON

Between

The Secretary of State for Health and OthersClaimants

Servier Laboratories LimitedDefendants

Servier Research and Development LimitedDefendant

Les Laboratoires Servier SASDefendant

Servier SASDefendant

Mr Christopher Vajda QC, Mr David Drake and Mr Philip Woolfe (instructed by Peters & Peters Solicitors LLP) for Claimants

Mr Nicholas Green QC and Ms Kelyn Bacon (instructed by Bristows) for Defendants

Hearing Hearing dates: 18 and 19 April 2012

Judgment

Judgment on Application for a stay

Introduction

[1]This is my judgment on the application by the defendants (collectively “Servier”) for a stay of the present proceedings which I heard at the second case management conference on 18 April 2012. The application was first made as long ago as 22 December 2011, shortly after the basic pleadings in the action had closed with service of the claimants’ reply to the defence of all four defendants on 13 December 2011. The reason given for the application, in the application notice of 22 December 2011, was the existence of a “substantial overlap” between the claim in the action and an ongoing investigation conducted by the European Commission (“the Commission”) against the defendants. In particular, it was said that both the claim and the Commission’s investigation concerned alleged infringements of Articles 101 and/or 102 TFEU in relation to the same product, Perindopril, and the same conduct in relation to that product, namely the enforcement of Perindopril patents and the conclusion of patent settlement agreements with generic companies.

[2]The claimants (who are the Secretary of State for Health and other bodies within the English National Health Service which between them are responsible for the provision of drugs and other pharmaceutical products within the NHS) do not dispute that there is at least a degree of overlap between the claim and the Commission’s investigation. They also accept that the trial of the present action cannot take place until after the conclusion of the investigation and any litigation in the Court of Justice of the European Union (the “CJEU”) to which it may give rise, which may be several years hence. They submit, however, that there is no justification for the imposition of an immediate stay, and that directions should be given for the initial stages of what will inevitably be a complex and lengthy disclosure exercise. Those stages would comprise the service, and discussion between the parties, of statements of the disclosure they propose to give, followed by resolution by the court of any disclosure issues which cannot be agreed, and then disclosure by list on the basis thus agreed or determined. A further case management conference should be listed to review the position when those steps have been taken.

[3]At the first case management conference, which was held before me on 24 January 2012, it was agreed that the application for a stay should be adjourned until the court had transmitted a request to the Commission pursuant to Article 15.1 of Council Regulation (EC) No 1/2003 (“the 2003 Regulation”), which enables courts of a Member State to ask the Commission to transmit to them information in its possession or its opinion on questions concerning the application of the EU Competition Rules.

[4]The underlying principle, which is laid down in Article 16.1 of the 2003 Regulation, states that:

“When national courts rule on agreements, decisions or practices under Article 81 or Article 82 of the Treaty [the predecessors of Articles 101 and 102 TFEU] which are already the subject of a Commission decision, they cannot take decisions running counter to the decision adopted by the Commission. They must also avoid giving decisions which would conflict with a decision contemplated by the Commission in proceedings it has initiated. To that effect, the national court may assess whether it is necessary to stay its proceedings.”

In the present case, the Commission has not yet taken a “decision”, but it is common ground that the investigation against Servier, which the Commission opened on 8 July 2009, constitutes proceedings initiated by the Commission within the meaning of Article 16.1, and that the investigation may in due course lead to a decision. The second sentence of Article 16.1 is therefore engaged, and the English court is obliged not to make any decisions which would conflict with a decision contemplated by the Commission.

[5]In addition, paragraph 12 of the Commission Notice on the co-operation between the Commission and the courts of the EU Member States in the application of Articles 81 and 82 EC (OJ C 101, 27.4.2004, pp.54-64, “the Notice on Co-operation”) provides that:

“Where a national court comes to a decision before the Commission does, it must avoid adopting a decision that would conflict with a decision contemplated by the Commission. To that effect, the national court may ask the Commission whether it has initiated proceedings regarding the same agreements, decisions or practices and if so, about the progress of proceedings and the likelihood of a decision in that case. The national court may, for reasons of legal certainty, also consider staying its proceedings until the Commission has reached a decision. The Commission, for its part, will endeavour to give priority to cases for which it has decided to initiate proceedings within the meaning of Article 2(1) of Commission Regulation (EC) No 773/2004 and that are the subject of national proceedings stayed in this way, in particular when the outcome of a civil dispute depends on them.”

It can be seen, therefore, that the Notice on Co-operation reflects and re-inforces the procedure envisaged by Article 15.1 of the 2003 Regulation, and it in effect encourages the national court to ask the Commission to explain the nature and likely timetable of any proceedings which it has initiated in order to help the national court to decide whether there is a risk of it adopting a conflicting decision, and (if so) whether it should stay the national proceedings until the Commission has reached its decision.

[6]At the hearing on 24 January 2012 there was some debate about the precise wording and scope of the questions which the court should put to the Commission, but there was no disagreement about the object of the exercise, which was to ascertain as far as possible the extent of any overlap between the allegations of infringement of Articles 101 and/or 102 in the present action and the Commission’s investigation. To that end, the form of the questions which I approved after hearing argument, as scheduled to my order of 24 January 2012, set out the factual and legal background in agreed terms and asked, in summary: a) whether the Commission’s investigation concerned the same product, patent, agreements and parties as are the subject of the present claim; b) whether any (and if so which) of the activities and agreements included in the present claim fell outside the scope of the Commission’s investigation; c) if the court decided to stay the present proceedings, whether the Commission intended to give priority to the investigation as envisaged by paragraph 12 of the Notice on Co-operation; d) whether the Commission was working on a statement of objections to be served on Servier; and, if so, e) when the statement of objections was likely to be issued, and what timetable the Commission would be likely to adopt, including in particular for the submission of written replies, an oral hearing and the adoption of a final decision.

[7]I wrote to the Commission on 17 February 2012, enclosing the order of 24 January 2012 and inviting a response to the questions, if possible, by the end of March. The Commission then raised concerns about confidentiality, which were the subject of further correspondence with myself which was copied to the parties. In my letter to the Commission of 26 March 2012, I suggested a possible way forward as follows:

“In the first instance, I would invite the Commission to provide such information (if any) as it is prepared to release without a confidentiality ring having been established, but on the basis that the information released would be used only for the purposes of the forthcoming case management conference, the relevant part of which would be held in private. None of this information would be disclosed to the public, or referred to in any public judgment, without the consent of the Commission, or unless such disclosure was required by law or a Court order.”

I went on to say that, if the Commission were prepared to release information on such a basis, it might prove sufficient to enable the court to determine the application for a stay without the need for a confidentiality ring to be established.

[8]Fortunately, that hope proved well-founded, and both parties have been content to proceed on the basis of the substantive response to my letter provided by the Commission on 2 April 2012 and the annex thereto. The answers to the questions in the order of 24 January 2012 were as follows (for convenience I use the same lettering as in paragraph 6 above):

“Reply to question (a) The Commission has investigated behaviour which may infringe Article 101 and/or 102 of the TFEU. The Article 101 aspect of the Commission’s investigation relates to agreements concluded between Servier and a number of generic companies (namely, Niche/Unichem, Matrix, Teva, Krka and Lupin). As to the Article 102 aspect of the Commission’s investigation, we are currently examining the elements to establish a possible abuse of a dominant position (i.e market definition, dominance, abusive practices). The Servier investigation concerns the same product as the claim before this honourable Court (namely, perindopril). It differs however, as to the exact scope of the patent, agreements and parties covered, at the present stage, although there is a significant overlap. Reply to question (b) The claim before this honourable Court (i) includes the Servier-Merck agreement under Article 101 TFEU and (ii) examines the patent abuse system under Article 102 TFEU. Hitherto, the Commission has not investigated these practices as possible separate infringements, although they may fall within the scope of our investigation. Reply to question (c) DG Competition already granted priority status to this case when it opened proceedings against Servier on 8 July 2009 as it considers this to be an investigation of importance and the Commission will of course maintain the priority status of the case, consistent with paragraph 12 of the Notice on Co-operation. Reply to question (d) DG Competition is working on a SO [i.e Statement of Objections] within the meaning of Article 27.1 of Council Regulation 1/2003. The priority treatment of the case should permit the adoption of the SO possibly during the first half of this year. This objective assumes however that in formulating the Commission’s objections, no unexpected legal or factual issues emerge that delay finalisation of the SO. Reply to question (e) The Commission’s best estimate at the present time is that it may be possible to take a final decision 1-2 years after the date the SO is issued. The Commission regrets that it cannot be any more precise in this respect. However, a number of procedural steps need to be taken subsequent to the SO and the timing of these steps cannot be predicted with accuracy. With respect to the reply to the SO, and given the breadth and complexity of the issues in the case, as well as the size of the file, we currently consider that the addressees of the SO would be given at least two months to respond. This is without prejudice to Servier’s right to seek a decision of the hearing officer in this regard which may lead to an extension of the deadline. Also, in these kinds of cases, the addressees tend to exercise their right to have an oral hearing which further prolongs the decision-making process. Moreover, the Commission services will need to review, assess and address the addressee’s submissions, in particular as contained in the reply to the SO and also as presented at the oral hearing. It is very difficult to predict exactly how much time this would take in the present case, but previous experience shows that, in a case of this size, considerable time and effort is spent addressing arguments raised in the reply to the SO. If DG Competition decides to prepare a draft decision pursuant to Chapter III of Council Regulation 1/2003, then the draft will have to be submitted to internal consultation within the Commission, which can take some months. At the end of that process, the Commission would also need to consult the Advisory Committee under Article 14 of Regulation 1/2003 before the draft decision could be put before the College of Commissioners for adoption. Therefore, unless unforeseen additional procedural steps prove necessary as stated above, we consider that a final decision could be adopted within 1-2 years from the date the SO is issued.”

Reply to question (b) Reply to question (c) Reply to question (d)

Reply to question (e)

[9]In their skeleton argument for the second CMC counsel for Servier (Nicholas Green QC and Kelyn Bacon) helpfully summarised the main points which emerge from the Commission’s response: a) the Commission’s investigation concerns the same product, Perindopril, as is in issue in the present proceedings; b) as in the present proceedings, the Article 101 aspect of the investigation relates to agreements concluded between Servier and a number of generic companies; c) the Commission is also investigating a possible abuse of dominant position contrary to Article 102; d) the investigation at present differs in its exact scope from the present proceedings, but there is a “significant overlap”, and the two specific aspects of the present proceedings that have not hitherto been investigated by the Commission as separate infringements “may fall within the scope of [its] investigation; and e) the Commission is working on a Statement of Objections which may be issued during the first half of this year, and it would expect to take a final decision between one and two years later.

[10]For their part, counsel for the claimants (Christopher Vajda QC, leading David Drake and Philip Woolfe) naturally lay emphasis on the aspects of the present claim which do not overlap with the Commission’s investigation, including in particular the allegations of tortious interference with the claimants’ economic interests by unlawful means which are based exclusively on the principles of English domestic law. I will return to this point in the next section of this judgment when I give a fuller description of the proceedings.

[11]I have now set out the position as it was at the time of the hearing on 18 April 2012. I had originally intended to give my decision on the question of a stay fairly soon thereafter, but unfortunately this judgment was delayed by the pressure of other work. One consequence of that, however, is that an important element of uncertainty has now been removed. On 30 July 2012 the Commission sent a Statement of Objections to Servier and a number of other companies in relation to Perindopril. The Statement of Objections itself, in accordance with the usual practice, is confidential to the parties involved; but the Commission also issued a press release which gives a useful indication of its nature and scope. I quote the following extracts from it:

“The European Commission has informed the French pharmaceutical company Servier and several of its generic competitors of its objections against practices potentially delaying the generic entry of perindopril, a cardio-vascular medicine. At this stage, the Commission takes the view that the patent settlement agreements concluded by Servier with Niche/Unichem, Matrix (today Mylan Laboratories Limited), Teba, Krka and Lupin, as well as Servier’s acquisition of key competing technologies were aimed at delaying or preventing the market entry of cheap generic versions of perindopril, in violation of EU antitrust rules. The sending of a statement of objections does not prejudge the final outcome of the investigation. In its statement of objections, the Commission takes the preliminary view that Servier and generic competitors had agreed to limit competition to perindopril and that, as part of a comprehensive strategy, Servier had acquired competing technologies. These practices could have aimed at preserving Servier’s position with regard to perindopril, which was about to reach the end of its patent protection. The Commission formed objections against two specific sets of practices by Servier, which appears to be dominant in the market for perindopril. Firstly, Servier acquired scarce competing technologies to produce perindopril, rendering generic market entry more difficult or delayed. Secondly, Servier unduly protected its market exclusivity by inducing its generic challengers to conclude patent settlements. This behaviour, if established, infringes EU Antitrust rules that prohibit restrictive business practices and the abuse of a dominant market position (respectively Articles 102 and 102…TFEU). … A Statement of Objections is a formal step in Commission investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned in writing of the objections raised against them and the companies can examine the documents on the Commission’s investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities. The duration of antitrust investigations varies according to the complexity of the case, the number of markets and companies involved and whether they cooperate with the Commission. If, after the parties have exercised their rights of defence, the Commission concludes that there is sufficient evidence of an infringement, it can issue a decision prohibiting the conduct and impose a fine of up to 10% of a company’s annual worldwide turnover.”

[12]It will be noted that the Statement of Objections involves allegations of breach of both Articles 101 and 102 TFEU. At the hearing before me there was some debate about the possible novelty of some of the potential issues involving abuse of a dominant market position under Article 102, and it was suggested that much would probably depend, in this context, on the pending decision of the CJEU in

Case C-457/10

P, AstraZeneca AB and AstraZeneca plc v European Commission (“AstraZeneca”). At that date the opinion of Advocate General Mazák was still awaited, but it was subsequently delivered on 15 May 2012.

[13]In his opinion, the Advocate General substantially upheld the approach to Article 102 which had been adopted by the General Court in its decision under appeal, dismissing AstraZeneca’s action for annulment of the Commission’s decision to impose a fine of €60 million on them for having abused the patents system and the procedures for marketing pharmaceutical products in order to prevent or delay the arrival of competing generic medicinal products on the market and to impede parallel trade: see paragraph 1 of the opinion. In particular, the Advocate General rejected AstraZeneca’s argument that deliberate fraud or deceit should be a requirement for a finding of abuse of dominant position, and relied on previous case law to the effect that abuse of dominance is an objective concept which does not require proof of either the deliberate nature of the conduct or the bad faith of the undertaking in a dominant position: see paragraphs 47 to 53. If these conclusions are upheld by the CJEU, which will presumably give its judgment later this year, they are likely to provide significant legal support for the allegations of breach of Article 102 levelled against Servier in the present case. Equally, all of this adds fuel to Servier’s argument that the degree of overlap between the present proceedings and the Commission’s investigation is indeed very substantial.

The issues in the present action

[14]It is convenient at this stage to give a rather fuller description than I have so far of the issues in the present action. What follows is largely based on the helpful summary in the claimants’ skeleton argument dated 13 April 2012.

[15]Servier are the suppliers of the original, branded version of Perindopril, which was supplied in the UK under the brand name “Coversyl”. Perindopril is an angiotensin-converting enzyme inhibitor (“ACE inhibitor”) which is used in the treatment of hypertension and congestive heart failure. It was first commercialised in the late 1980s. Patent EP 1 296 947 is a patent for a particular crystalline form of Perindopril – the alpha crystalline form - which Servier applied for in 2001, and which was in 2007 held to be invalid for lack of novelty and obviousness: see Les Laboratories Servier v Apotex Inc

[2007] EWHC 1538 (Pat)

, upheld by the Court of Appeal

[2008] EWCA Civ 445

. In those proceedings it was held, among other matters, that one of Servier’s pre-existing process patents, EP 0 308 341, led to the production of the alpha form as its inevitable result.

[16]The allegations of fact made in support of the present claim are fully set out in the re-amended particulars of claim dated 3 August 2012. They can be grouped under three main headings:(1) The Article 102 Claim: Servier was, at material times, dominant on a market for the supply of Perindopril or for the supply of ACE inhibitors in the United Kingdom, and between 2001 and 2007 abused that dominant position, in particular in that: i) it supplied misleading information to the EPO and the English Courts in the course of applying for, defending and enforcing patent EP 1 296 947; ii) it was not transparent in its provision of information and/or it failed to make prompt and/or comprehensive disclosure of information relevant to the grant of patent EP 1 296 947; and iii) it concluded the agreements mentioned at

(2) below. In relation to (i) and (ii) above, the claimants allege that Servier had information about the crystalline form of Perindopril produced by following its process patent EP 0 308 341 and/or historically supplied by it on a commercial basis, which belied or cast doubt on Servier’s claims to novelty and lack of obviousness in respect of the alpha form. (2) The Article 101 claim: in 2005 and 2006 Servier concluded agreements with at least five other pharmaceutical companies which precluded them from challenging patent EP 1 296 947 and/or from manufacturing, marketing, selling or supplying generic Perindopril in the United Kingdom. The claimants learnt of five such agreements from the judgment given by Norris J in Laboratoires Servier v Apotex Inc

[2008] EWHC 2347 (Ch)

on 9 October 2008: see in particular paragraphs [17] to [24]. For reasons of confidentiality, the companies concerned were identified in Norris J’s judgment only as “TG1”, “AG1”, “AG2”, “G3” and “G4”, and in the original version of the particulars of claim in the present action the details of the agreements were pleaded on the basis of the information contained in that earlier judgment. At the first CMC on 24 January 2012, however, Servier were ordered to give specific disclosure of the agreements, and they did so on 9 February 2012. On the basis of this fuller information the particulars of claim were amended by consent to name the five companies involved. Following disclosure by Servier of a further agreement, pursuant to an order made at the second CMC on 18 April 2012, the claimants filed re-amended particulars of claim by consent on 3 August 2012.

(3) English tort claims: it is also alleged that Servier tortiously interfered with the claimants’ economic interests by unlawful means, on the basis of factual allegations relating to Servier’s conduct that are a subset of those relied on in support of the Article 102 claim (including, in particular, the alleged deceit practice on the EPO). These claims do not, however, require the claimants to establish any dominance on the part of Servier.

[17]These allegations are all denied by Servier, whose response is set out in their amended defence dated 3 August 2012.

[18]In relation to the Article 102 claim, Servier say that the relevant market is that for ACE inhibitors together with angiotensin receptor blockers, alternatively ACE inhibitors alone; and that they were not dominant on either of those markets in the United Kingdom for reasons which include, but are not limited to, the fact that certain other ACE inhibitors, such as Ramipril and Lisinopril, had market shares larger than Perindopril. Servier say that their actions before the EPO and the English courts in respect of patent EP 1 296 947 were both lawful and reasonable, and this is illustrated by the facts that the validity of the patent was upheld before the Opposition Division of the EPO, that a summary revocation application before the English Patents Court failed, and that the Patents Court granted Servier interim injunctions against two companies.

[19]In relation to the Article 101 claim, Servier admit concluding agreements with the five other drug companies, but assert that the object of those agreements was the settlement and avoidance of litigation in respect of patent EP 1 296 947. In any event, other reasons existed why the relevant companies could not have supplied generic Perindopril in the United Kingdom, including the absence of the necessary marketing authorisations and the existence of other relevant patents. For similar reasons, the allegations of tortious interference with the claimants’ economic interests are also denied. The Submissions of the parties (1). The defendants’ submissions in support of a stay

[20]The starting point of Servier’s submissions in support of stay is not in dispute, namely that a national court must avoid giving a ruling on an alleged breach of Articles 101 or 102 where that ruling might conflict with a decision contemplated by the Commission in relation to the same conduct, or where a Commission decision in relation to an infringement of either Article is under appeal in the General Court or the CJEU. This principle was first enunciated by the European Court of Justice in

case C-344/98

, Masterfoods Limited v HB Ice Cream Ltd

[2000] ECR I-11369

, and is now reflected in the provisions of the 2003 Regulation and the Notice on Co-operation to which I have already referred.

[21]In the English courts, the principal recent case in which Masterfoods has been considered and applied is National Grid Electricity Transmission Plc v ABB Limited and Others

[2009] EWHC 1326 (Ch)

(“National Grid I”), a case concerning a follow-on damages claim brought on the back of a Commission decision finding that various undertakings had infringed Article 101 by participating in a cartel in relation to the sale of gas insulated switch gear. In National Grid I Sir Andrew Morritt C ruled that, applying Masterfoods, the “minimum requirement” was that the court should not fix the trial before three months after the exhaustion of all rights of appeal from the Commission’s decision: see paragraph [23]. Whether the action should be stayed before that point depended on all the relevant circumstances, bearing in mind in particular the overriding objective under the CPR to deal with the action justly, including saving expense and dealing with the case proportionately, expeditiously and fairly: paragraphs [32] and [35].

[22]In National Grid I the Chancellor did not order an immediate stay, but directed the parties’ advisers to meet to consider the scope of disclosure, with further directions to follow at a subsequent CMC. In so ordering, the Chancellor took account of the fact that, for various reasons, the follow-on action in the High Court was very likely to proceed in some form, whatever the outcome of the various appeals against the Commission’s decision. Having weighed up the competing considerations, the Chancellor expressed his conclusions as follows at paragraph [44]:

“In these circumstances the proper balance, in my judgment, requires me to allow this action to proceed at least to the close of pleadings. In addition I consider that it is premature to decide that no disclosure should take place before the conclusion of the applications and appeals to the CFI [the Court of First Instance] and the ECJ. In principle, therefore, I accept the submissions of Counsel for [the claimant] that the action should proceed to the stage of the close of pleadings, the parties’ advisers should meet to consider the scope and basis for proceeding with disclosure and that that topic and the need or desirability for other directions should be reconsidered at a case management conference to be held in October 2009. I reach this conclusion because I consider that in the circumstances of this case, in particular the time which has already elapsed since the occurrence of the relevant events, the need for the follow-on action to be processed so as to be as ready for trial as soon after the conclusion of the proceedings before the CFI and ECJ are concluded as is reasonably possible outweighs the need to avoid expenditure which may be wasted if and to the extent that it is not compensated for by an award of costs. Unless the preparation of the follow on action continues then the parties will not be on an equal footing because [the claimant] will not know what are the relevant issues or what documents relevant to those issues, particularly causation, are available.”

[23]In the present case, the defendants submit that the relevant circumstances are the following: a) The degree of overlap between the present action and the Commission’s investigation is such that the outcome of that investigation will inevitably have a direct impact on the cases advanced by the claimants under both Article 101 and Article 102. b) The Commission has not yet made any decision against Servier (and at the date of the hearing in April it had not even issued a Statement of Objections). c) The alleged infringements of Articles 101 and 102 are vigorously contested by Servier, and there is no question of Servier making an application for leniency. d) The Commission’s investigation does not involve an allegation of a classic infringement such as a cartel, but rather involves novel allegations of infringements arising from what would ordinarily be regarded as the normal exercise of intellectual property rights. Similar issues of law are currently pending in AstraZeneca, and when the CJEU gives its ruling later this year that ruling is likely to have a profound effect on the law relevant to the present case. e) In those circumstances, the outcome of the Commission’s investigation cannot be predicted with any confidence. By contrast, in National Grid I the Commission had already adopted a decision, and one of the domestic defendants had not appealed against it. Even in that case it was common ground that a full standard disclosure exercise would be premature; the present case is a fortiori. f) Proceeding with any sort of disclosure exercise at this stage would put Servier to enormous expense and involve significant management time. This will all be entirely wasted if the Commission finds that Servier’s exercise of their intellectual property rights did not involve any infringement of Articles 101 or 102. g) Furthermore, if the present action continues without a stay, Servier will simultaneously be defending proceedings both in the High Court and before the Commission. As is explained in Servier’s evidence in support of the application, Servier have a small in-house legal team, and the same individuals at their external solicitors (Bristows) are engaged on both the Commission proceedings and the present claim. Following service of the Statement of Objections, both Servier and Bristows will now be very heavily engaged in responding to it. This process is likely to include reviewing tens of thousands of pages of documents on the Commission’s file, to which Servier will then have a right of access, and the preparation of both factual and expert evidence. It will be necessary for Servier to prepare and serve a full reply on all relevant issues, factual, economic and legal, within the short time afforded by the Commission; and it will then be necessary to make preparations for the oral hearing at which Servier can present its case to the Commission and the Member States.

[24]In MTV Europe v BMG Records (UK) Ltd

[1995] 1 CMLR 437

Evans-Lombe J recognised the need, in similar circumstances, to avoid placing on the defendants “the unfair burden of contesting the same issue in two different fora simultaneously” (see paragraph [45] of his judgment) and decided to order a stay of the domestic proceedings until a date by which it was expected that the oral hearing before the Commission would have been concluded. As

the judge said at [48]:

“I have come to the conclusion that the possible burden of division of effort is something which I should recognise in my order. Both parties say that they will be ready for an oral hearing in July. I will grant a stay of proceedings until 1 September. Thereafter the parties’ advisers should be free to concentrate on getting this case ready for trial.”

[25]This approach was approved on appeal by the Court of Appeal: see MTV Europe v BMG Record (UK) Ltd

[1997] 1 CMLR 1867

, where Sir Thomas Bingham MR said at [30], with the agreement of Millett and Schiemann LJJ:

“Mr Beloff relied on the general undesirability of embroiling a party in parallel proceedings, particularly when the result of one may render the other unnecessary. He relied on that as a reason why the Court of Justice might have wished to rule as he submitted it did rule. There are, in my judgment, two answers to that. First, it is for the national court and not for the Court of Justice to ensure that litigants before it are not unfairly treated; the second answer is that this was essentially a matter for the learned Judge to assess, and he did assess it. He recognised that the defendants’ lawyers could not be in two places at once and hence ordered a stay until 1 September 1994. He, however, judged that the potential injustice of prolonged delay before the plaintiff could recover damages to which (if successful) it was entitled outweighed the potential prejudice to the defendants if they had to do a lot of unnecessary work for which, if they were successful, they could be compensated in costs.”

[26]Apart from the matters canvassed above, Servier rely on three other features of the present case which, it is said, would complicate the proceedings and add to the potential for wasted costs if a stay were not now ordered.

[27]The first problem is the alleged existence of a specific legal obstacle to the provision of any information, evidence or documentation by the two French defendants, namely the third and fourth defendants, in the form of French Statute No 68-678 of 26 July 1968, as amended by Statute No 80-538 of 16 July 1980 (conveniently referred to as the “French Blocking Statute”). Article 1 bis of the statute provides, in translation, that:

“Subject to international treaties or agreements and applicable laws and regulations, any individual is prohibited from requesting, seeking or disclosing, in writing, orally, or in any other form, documents or information of an economic, commercial, industrial, financial or technical nature, with a view to establishing evidence in foreign judicial or administrative proceedings or in relation thereto.”

[28]It is claimed, with the support of advice from two members of a firm of French Avocats, Viguié Schmidt Peltier Juvigny AARPI, contained in a letter dated 12 January 2012 exhibited to the third witness statement of Maria Manley of Bristows, that this provision prohibits the third and fourth defendants from responding to any requests for specific information in the present proceedings, and would also prevent them from making any more general disclosure of documents. It is accepted that the obstacle may not be insuperable, because the prohibition takes effect “subject to international treaties or agreements and applicable laws and regulations”, which include the Hague Convention as well as Council Regulation (EC) No 1206/2001 of 28 May 2001 on Co-operation between the courts of the Member States in the taking of evidence in civil or commercial matters (“Regulation 1206/2001”). Furthermore, as explained by the French lawyers in a further letter dated 11 April 2012, a bill to narrow and clarify the scope of the French Blocking Statute was presented to the French Parliament, and was adopted by the National Assembly on 23 January 2012, although it still required adoption by the Senate before it could enter into force. If the bill were to come into force with the amendments approved by the National Assembly, it would be possible for Servier to provide at least some information, and make some disclosure, without being subject to criminal sanctions; but the bill was still subject to change, and in view of the then forthcoming presidential and legislative elections in France it was unlikely to be adopted before the end of June 2012 at the earliest.

[29]In the light of these uncertainties, Servier submit that any disclosure or provision of specific information by the third and forth defendants should be deferred until after the conclusion of the Commission’s investigation.

[30]The second problem is that, if disclosure takes place now, issues will arise regarding documents obtained by the defendants through access to the Commission’s file. Many such documents are likely to be relevant in some way to the present proceedings, but they will be subject to obligations of confidentiality imposed by the Commission. Difficulties of this nature arose recently in the National Grid proceedings, and resulted in a third round of litigation before Roth J in which the court sought observations from the Commission which were then considered at a hearing together with submissions from the parties: see

[2012] EWHC 869 (Ch)

[31]Finally, there is the complicating factor of the likely joinder of further parties to the litigation. This could happen in two different ways. First, Servier submit that in view of the allegations of dishonesty on the part of third parties pleaded in the amended particulars of claim, it is hard to see how the claimants could properly invite the court to make findings of dishonesty against such parties without joining them so that they can defend themselves. Secondly, there is in any event the likelihood that additional claimants will be joined. In this connection, I was informed shortly before the hearing in April that similar proceedings against Servier were likely to be started in the near future by the public health authorities in Scotland, Northern Ireland and Wales; and at the hearing on 18 April leading counsel instructed on behalf of the Scottish and Northern Irish authorities appeared before me to make some preliminary submissions and draw my attention to a draft of the particulars of claim which they intended to issue in the Chancery Division of the High Court, presumably on the assumption that England is the appropriate forum for resolution of their parallel claims against Servier. For present purposes, the point made by Servier is simply that the addition of a significant number of further parties and/or claims will add further expense and complication to the conduct of the proceedings unless they are stayed at this point. (2). The submissions of the claimants

[32]Like Servier, the claimants rely on the decision of Sir Andrew Morritt C in National Grid I. They point out that the only obligation recognised by the court was to postpone the trial date until after the conclusion of the European appeals procedure, and that otherwise case management was recognised as being a matter for the national court which in England should be conducted in accordance with the overriding objective. If that approach is followed, say the claimants, there is no risk of the court reaching a judgment which is inconsistent with a decision of the Commission. All that the claimants are currently proposing is that a start should be made on the exercise of standard disclosure.

[33]The claimants next submit that the imposition of an immediate stay would not only cause a substantial, if temporary, delay, but would also cause permanent prejudice to the fair determination of the proceedings. They rely on the fact that it will be at least another one to two years before the Commission is in a position to take a decision, and that it may take even longer in the event of “unforeseen additional procedural steps”. Still further delay will be occasioned if there is an appeal against any Commission decision (or the conduct of the procedure) to the General Court, or subsequently on a question of law to the CJEU. In those circumstances, it is not appropriate for disclosure to be postponed for what may be a period of several years. The obligation of disclosure under the CPR requires reasonable searches to be made. The quality and integrity of the documentary picture which can be uncovered by such searches will decline as relevant staff leave the organisations in question or move to different posts, or simply as their memories fade. The quality and integrity of the documentary picture that can be reconstructed may be crucial in the present case, especially in relation to the Article 102 and tortious interference claims, because of the central relevance of the state of knowledge of particular individuals in relation to particular documents at particular points in time.

[34]The same considerations are said to apply with even more force to the preparation of witness evidence, which cannot be prepared (at any rate in any detail) in advance of disclosure. Furthermore, the potential prejudice to the quality and availability of disclosure and witness evidence must be judged in the light of the long period of time which has already elapsed since the facts in issue in these proceedings occurred. Servier’s application to the EPO for patent EP 1 296 947 was filed more than a decade ago, in July 2001, and the agreements with other pharmaceutical companies pleaded in the particulars of claim were entered into between 2005 and 2007. Servier’s solicitors have themselves said, in a letter to Peters & Peters dated 13June 2011, that “Only a small number of people within Servier have knowledge of the facts relevant to [the claimants’] case. Most have left the company”. The relevant knowledge should therefore be captured without further undue delay, and the claimants should have the opportunity to seek the co-operation of witnesses and prepare their case more generally on the basis of the relevant documentary records. This will be possible if the action proceeds for the time being in the normal way; if Servier are ordered to identify the relevant individuals who (on Servier’s case) were responsible for their application for, defence of and enforcement of patent EP 1 296 947; and if disclosure is given of all relevant documents. Conversely, if the proceedings are stayed before any of these steps have been taken, considerable further delay is likely to ensue, in addition to the significant time that has already passed since the events in question took place.

[35]Nor can it safely be assumed that critical areas of disclosure and witness evidence will inevitably be made irrelevant by the results of the Commission investigation. The precise degree of overlap between the action and the investigation remains unclear, particularly in relation to some of the claimants’ key Article 102 allegations. Furthermore, even though a Statement of Objections has now been issued, an eventual decision by the Commission will not necessarily address the issues of causation and quantum that would arise in the present proceedings.

[36]A further point is that it may be necessary for the claimants to seek disclosure from third parties (including, in particular, other drug companies with whom Servier had agreements in relation to the supply of Perindopril in the UK, and Servier’s licensee in the US, Abbott) in relation to material that cannot be obtained from Servier. In order to be effective, such disclosure should be sought as soon as possible.

[37]Given that the claimants’ case is based in significant part upon Servier’s state of knowledge, the claimants say they have much to lose (and Servier potentially much to gain) by delay and the consequent prejudice to the quality of disclosure and evidence. The Court would therefore be failing in its duty to ensure that the parties are on an equal footing if it were to order an immediate stay. As to the alleged burden upon Servier of having to deal in parallel with the Commission investigation and the present proceedings, Servier are a substantial corporate group which according to their own website had a turnover for 2010/2011 of €3.9bn and they employ 20,000 people worldwide. They have shown themselves to be perfectly capable of conducting substantial litigation, including dealing with multiple claims at the same time. In any event, it is by no means clear that costs would not be saved, rather than wasted, by dealing with the Commission investigation and the present proceedings in parallel.

[38]In relation to the French Blocking Statute, the claimants submit that there is no real and significant risk of the French defendants facing a criminal sanction in France if they were ordered to provide standard disclosure or to give further particulars of their pleaded case. There is only one known case in which a prosecution has been brought in France under the French Blocking Statute in the last 30 years, the case of Christopher X, but that case involved an attempt to obtain information by deception and is readily distinguishable on its facts. Accordingly, there is no substance to the fears expressed by Servier on behalf of the third and fourth defendants, and the existence of the French Blocking Statute in its current form is not a factor which tells in favour of a stay. Furthermore, any force which the point might otherwise have is reduced by the fact that the statute is currently under review by the French legislature. The purpose of the proposed amendments, according to Servier’s French lawyers, is “to narrow down the scope” of the statute so that the prohibition applies only to the communication of material “which is likely to impair the sovereignty, security, essential economic interests of France or public order”, or material “disclosure of which is likely to seriously undermine the interests of a company, affecting its scientific and technical potential, its strategic positions, its business or financial interests or its competitive capacity…”. The wording of those proposed amendments was not definitive when the French lawyers gave their advice on 11 April 2012, and was liable to further change in the course of the parliamentary process; but they give a good indication of the real mischief at which the statute is aimed, which is far removed from the circumstances of the present case.

[39]The provisions of the French Blocking Statute have been considered by the English courts on at least three occasions, and I was referred by the claimants to each of those cases. The first, in 1993, was a decision of Cresswell J: Partenreederei M/S “Heidberg” v Grosvenor Grain & Feed Co Ltd, “The Heidberg” [1993] I.L.Pr.718. The proceedings arose out of the collision of a ship owned, managed and chartered in Germany with a jetty in France. The court dismissed an application by two French defendants for relief from an order for discovery based on the French Blocking Statute. It heard conflicting evidence as to French law, including an affidavit by M. Jules-Marc Baudel, an avocat at the Paris Bar with extensive practical experience of acting for French clients in court proceedings in the United States and England where discovery had been ordered and given. His evidence included this passage:

“I have never heard in all my career of a case involving litigation in England in which the French law was invoked to avoid complying with an order of an English Court. There are currently many international cases involving French parties before the English courts in which production of evidence located in France is involved and in which discovery orders are being complied with without any difficulty…In my experience litigation is regularly conducted in England according to English rules of civil procedures with French parties involved either as defendants or as plaintiffs who supply before the court the documents and evidence ordered without being in any way prevented from doing so by the French blocking statute.”

[40]The evidence of M. Baudel was preferred by Cresswell J, who considered that there was “no risk of [the relevant defendants] being charged with any criminal offence in France”: see paragraph [36] of the judgment. Cresswell J found support for his conclusion in a number of matters, including: a) neither side had found any English decision where it had been submitted that the court should not order discovery against a French party in view of the French Blocking Statute; b) French companies had in the past regularly given discovery in legal proceedings in England; and c) there was no evidence that any person had ever been prosecuted for breach of the statute (see paragraphs [38] to [40]).

[41]The second case was a decision of Neuberger J, as he then was, in 1999, Christopher Morris v Banque Arabe et Internationale d’Investissement SA [2001] I.L.Pr.37. In this case the claimant liquidators of BCCI commenced proceedings against the defendant French bank under section 213 of the Insolvency Act 1986, alleging that the defendant had knowingly participated in certain illegal and fraudulent actions by BCCI. Directions given in the proceedings included orders for disclosure and inspection of documents located in France, which the defendant resisted on the basis of the French Blocking Statute. It argued that the claimants should instead seek the evidence in question by a letter of request under the Hague Convention. Neuberger J held that the order for inspection should stand, having received written and oral evidence on the effect of the blocking statute from “two very distinguished and experienced French lawyers, Le Bâtonnier (i.e. sometime president of the Bar) Guy Danet, and Professor Jean Louis Rives-Lange, a Professor of the University of Paris Dauphine”: see paragraph [25]. According to the evidence of both experts, there had been no court decision convicting any French citizen for a breach of the blocking statute since it came into force, and neither of them even knew of any case where a prosecution had been brought: paragraph [28].

[42]Neuberger J went on to hold, at paragraphs [60] and following:(a) that the court had a discretion under the CPR whether or not to order inspection of documents;

(b) that, in the absence of the Hague Convention applying, he would have had little hesitation in holding that inspection should be ordered for a number of reasons, including the obvious relevance of the documents, the fact that the defendant had itself taken advantage of the provisions relating to disclosure and inspection on more than one occasion, and the fact that the risk of prosecution under the French Blocking Statute was “little more, and indeed is probably no more, than purely hypothetical” (see paragraph [71]); and

(c) that the application should not be refused or adjourned in order to allow an application to be made to the French court under the Hague Convention. On this last point, Neuberger J observed at paragraph [79] that, in the light of Article 3 of the Hague Convention, the liquidators would not have been able to make any such application until they had “some sort of list” of the documents. One of the matters that has to be specified in a letter of request under Article 3 is “the documents or other property, real or personal, to be inspected”.

[43]The third case is the recent decision of Lewison J, as he then was, in Elmo-Tech Limited v Guidance Limited

[2011] EWHC 98 (Pat)

[2011] FSR 24

. The defendant, which was an English company operating in England, was a member of a consortium which had been awarded a contract to supply the French Ministry of Justice with a system for tagging convicted offenders. The claimant, which was another manufacturer of tagging devices, alleged that the defendant had infringed its patent. Following a case management conference in May 2010, the defendant was given the option of serving a product or process description (“PPD”) in lieu of making standard disclosure. The PPD had to contain “full particulars of all products alleged to infringe the patent in the United Kingdom, complete with relevant drawings or other illustrations where appropriate”. The Defendant served a document in purported compliance with this direction, but failed to disclose how its product or system worked, contending that it was precluded from doing so by the terms of its contract with the French Ministry of Justice and also by the French Blocking Statute.

[44]The defendant’s objections were dismissed by Lewison J, who held (among other matters) that the French Blocking Statute was not an impediment to an order for disclosure, although it was a relevant discretionary consideration in deciding whether or not to order inspection of documents. In reaching his conclusion, Lewison J referred to The Heidberg and Morris v Banque Arabe and said at paragraph [48]:

“In both the previous cases one of the factors which led the judges to their respective conclusions was that there was no evidence of anyone having been prosecuted for contravention of art.1 bis. That position has now changed. There has been one successful prosecution for a violation of art.1 bis in 2007. The person convicted was a French lawyer. Nevertheless, that is only one prosecution in the 30 years that art.1 bis has been in operation. In addition, in both the previous cases the application for discovery or disclosure was made against a French company, whereas in the present case, as I have said more than once, the PPD is sought from an English company.”

[45]The one successful prosecution referred to by Lewison J was the case of Christopher X, to which I have already alluded. This case was described as follows by Servier’s French lawyers in their letter of 12 January 2012: “In the Christopher X decision, the Cour de Cassation (French Supreme Court) affirmed a lower court’s ruling that fined a French lawyer €10,000 for a violation of the French Blocking Statute (decision of the Cour de Cassation dated 12 December 2007, Criminal chamber, 07-83228).

[46]The main facts of the Christopher X case may be summarised as follows. At the end of the 1990s, a French banker was accused by the Insurance Commissioner of the State of California of having organised the illegal buy-out of a Californian insurance company, Executive Life, via a French insurance company. In 1999, the Federal Court of California issued civil and international letters rogatory for the communication of documents from the French insurance company. A French lawyer, acting on behalf of the American lawyer representing the Insurance Commissioner, then attempted to obtain information by telephone in France from a former administrator of the insurance company regarding the decisions relating to the buy-out of Executive Life. The French court considered that the information was of an economic, financial or commercial nature, and that it had been sought with a view to obtaining evidence for use in foreign judicial or administrative proceedings. The lawyer had thus attempted to obtain information covered by the French Blocking Statute, without an authorised mandate as provided by the Hague Convention. Accordingly, he was fined 10,000 Euros.

[47]I have been supplied with a copy, and an English translation, of the decision of the Cour de Cassation in the Christopher X case, from which it appears that he had been acting without the authority of any court order when he attempted to obtain the relevant information, and that he did so by deception (“having told a lie to get at the truth”). Attention was drawn to these features of the case by the United States District Court for the Eastern District of New York in In re Air Cargo Shipping Services Antitrust Litigation (EDNY, MDL No 1775, 29.3.2010), when granting a motion to compel the defendant, Air France, to produce documents which had been withheld in reliance on the French Blocking Statute. Giving judgement, Judge Viktor V. Pohorelsky referred to “the now-familiar French “Blocking Statute”, which prohibits the parties from producing documents or information for use as evidence in foreign judicial or administrative proceedings other than pursuant to treaties such as the Hague Convention”. He cited a number of US decisions which had discounted the risk of criminal prosecution when considering the French Blocking Statute, and continued:

“To counter these persuasive observations, the defendant points to but one prosecution that has ever been brought for violation of the blocking statute, involving a defendant and circumstances readily distinguishable from those before this court. The prosecution, as reported in an opinion by the Criminal Division of the French Superior Court of Appeals, involved a French attorney who sought to obtain testimonial evidence for a case pending in a California court by making false statements to a potential witness in France… Notably, the case did not involve discovery responsive to any requests made by the parties in the California case or ordered by the court there. It thus furnishes little proof that the defendant here, who unlike the prosecuted attorney above has not sought to circumvent the blocking statute through deceptive means, would be prosecuted for complying with a court order compelling disclosure of the documents at issue. That the documents at issue have already been disclosed in American proceedings pursuant to the MLAT request [i.e. a request in parallel criminal proceedings pursuant to the Treaty between the Government of the United States of America and the Government of France on Mutual Legal Assistance in Criminal Matters]further undercuts any reason to believe that French authorities would seek to prosecute Air France for disclosing the same documents here. The court thus discounts significantly the hardship proposed by the prospect of criminal sanctions.”

The judge also aptly observed that:

“The interest in prohibiting price-fixing of the type alleged here is shared by France, given its membership in the European Economic Community which has also adopted prohibitions against price-fixing.”

[48]The claimants submit that I should regard the Christopher X case as limited to its particular facts in much the same way as the New York District Court did in the Air Cargo case. They also point out that Servier have been ready, when it suited their purposes, to disclose information within the apparent scope of the French Blocking Statute to an English court, for example in the Apotex proceedings. This is admitted by Ms Manley in her third witness statement on behalf of Servier, but she says that this happened before the conviction of Christopher X which made it clear that the French authorities were prepared to enforce the French Blocking Statute. It is for that reason, she says, that the defendants now feel they cannot risk a breach of the statute in this case.

[49]The claimants invite me to discount these fears as ill-founded, not least because Servier’s statements of case already volunteer some information which is apparently within the scope of the statute. For example, it is pleaded in paragraph 53(a) of the defence that US sales of Perindopril were 4% of global sales in 2004. I am also invited to infer that Servier’s reliance on the statute is opportunistic, as there is no reference to it either in the application notice of 18 December 2011 or in Ms. Manley’s second witness statement in support of the application made on 22 December 2011. The force of this latter point is, however, much reduced by the fact that Servier’s reliance on the statute had been clearly stated in the preceding inter-solicitor correspondence between June and December 2011.

[50]Quite apart from the absence of any real risk of prosecution, the claimants also submit that neither the machinery of the Hague Convention nor that of Regulation 1206/2001 is at all suitable for dealing with disclosure issues or the provision of replies to requests for further information. Such machinery is appropriate for obtaining depositions from identified individual witnesses, or for securing the inspection of documents that can be specified in advance; but at this early stage in the litigation, the claimants are unable to make any requests of that nature, because Servier have so far refused to provide any information about how relevant information or documents were organised and managed in the Servier group, or by which individuals and on what basis they were held. In these circumstances, say the claimants, they would anyway be unable to specify “the documents… to be inspected” in a letter of request under Article 3 of the Hague Convention, nor could they give details of “the documents… to be inspected” pursuant to Article 4 of the Regulation 1206/2001.

Discussion and conclusions

[51]Having reviewed the arguments and authorities at some length, I can now state my conclusions quite briefly. In the first place, now that the Commission has issued its Statement of Objections, I am satisfied that Servier will be very heavily engaged in responding to it and in making preparations for the oral hearing which they will undoubtedly request. Any speculation that the Statement of Objections would be more limited in scope than the preliminary indications given to me by the Commission in April might have suggested can now be seen to be groundless. It is clear from the Commission’s press release of 30 July 2012 that patent settlement agreements with five different groups of generic manufacturers of Perindopril are in issue, and that reliance is placed on allegations of abuse of a dominant market position under Article 102 as well as on alleged breaches of Article 101. In deciding to proceed on this broad front, the Commission may well have been influenced by the favourable opinion of the Advocate General in AstraZeneca: see paragraphs 12 to 13 above. I do not think it would be fair to require Servier to fight simultaneously on two fronts when the time and energies of its existing team of lawyers will necessarily be devoted to the procedure before the Commission, the early stages of which have to be completed within a timetable that is far from generous. I was informed by Mr. Green QC in the course of his oral submissions that Servier were unlikely to be given much more that three or four months within which to file their response to the Statement of Objections, and that an oral hearing would probably then be convened within two or three months thereafter.

[52]In these circumstances, I think the right course is to order an immediate stay of the present proceedings at least down to the conclusion of the oral hearing before the Commission. I share the view of Evans-Lombe J in MTV Europe that “the possible burden of division of effort” is something which the court should recognise in its order, and I note that the Court of Appeal endorsed his view on this point: see paragraph 25 above. It is no doubt true that a group of Servier’s size and wealth could, if driven to it, reinforce its existing legal team so as to deal with disclosure in the present proceedings at the same time. But that, in my view, is not the point. In the absence of a compelling justification, I would regard it as wrong in principle to require Servier to take emergency measures of that nature during the relatively short period of intensive activity which is triggered by the service of a Statement of Objections and by the right of access to the Commission’s files which it occasions. I fully understand the desire of the claimants to press on with the action, and I recognise the public interest that is also involved; but the fact remains that no trial of the action can take place until all European proceedings have been exhausted, probably several years hence, and in that context a delay of perhaps six months in the commencement of disclosure, although regrettable, would be of comparative insignificance.

[53]I am not persuaded, however, that it would be appropriate to order the stay to continue for more than a short period (say fourteen days) after the end of the oral hearing before the Commission. At that point, the period of intensive activity should be at an end, and it seems to me that the interests of justice will then be best served by making a start on the process of standard disclosure in the way proposed by the claimants. In taking this view I am particularly influenced by the length of time which has already elapsed since the relevant events took place (between 2001 and 2007), and by the admission by Servier’s own solicitors in correspondence that “only a small number of people within Servier” have knowledge of the facts relevant to the claim, most of whom have left the company. I am also influenced by the fact that a substantial part of the claim, namely the deceit-based economic tort claims, does not depend on breaches of Articles 101 or 102, or on the need to establish that Servier enjoyed a position of dominance in the relevant market. Although there is a considerable factual overlap with the Article 102 claims, they are legally independent of them, and their resolution will be exclusively a matter for English law. There is therefore everything to be said for disclosure and the preparation of relevant witness statements proceeding as soon as reasonably possible. Whatever decision the Commission may eventually come to on the EU aspects of the case, this important part of the claim will always be potentially separate.

[54]I accept that the question of relevance, in relation to the EU issues, will necessarily remain something of a moving target until after the Commission has reached its decision. I have taken that point into consideration, but I do not consider it weighty enough to justify continuing the stay until the decision is made, which may not be until July 2014, or even later if the Commission’s “best estimate” that “it may be possible” to take a final decision one to two years after the issue of the Statement of Objections proves unduly optimistic. Nevertheless, although I am satisfied that the stay should not be continued down to the date of the decision, the element of uncertainty before that date about the precise nature and scope of the EU issues is a matter that I would expect the parties to take into account in formulating their proposals for standard disclosure, and in trying to reach agreement on how matters in dispute should be dealt with. For example, it may well be sensible to postpone any ruling by the court on questions of disclosure of confidential Commission documents which come into the hands of Servier until after the date of the decision. On the other hand, it seems to me that early attention should be given to securing the prompt and comprehensive disclosure of all documents relevant to the establishment of the events which actually took place, even if the precise legal relevance of those events is not yet clear. I remind the parties in this connection of their duty under CPR rule 1.3 to help the court to further the overriding objective of enabling the court to deal with the case justly. The best way to fulfil that duty will often be by sensible co-operation in relation to matters such as disclosure: compare CPR rule 1.4(2)(a).

[55]I have carefully considered the potential impact of the French Blocking Statute, but in common with the three English courts which have so far had to consider the issue I am not persuaded that the risk of prosecution to which it might expose the French defendants or their officers is more than theoretical. The absence of any successful prosecution in France for breach of the statute, over a period of more than thirty years, with the single exception of the Christopher X case, in my judgment speaks for itself. The facts in that case were exceptional, involving as they did the use of deception by a French lawyer who was acting unilaterally and without the protection of a court order. I cannot believe that the French authorities would even contemplate prosecuting Servier for complying with a standard set of directions for disclosure in litigation brought in the public interest by the English health authorities alleging serious breaches of EU competition law.

[56]I take due note of the fact that a contrary view has been expressed by Servier’s French lawyers, but the weight which I can attach to their views is in my judgment limited. They do not purport to be independent experts whose overriding duty is owed to the court, and their evidence (in contrast to that adduced in the earlier English cases which I have reviewed) is informal in nature, being contained in correspondence without any statement of the relevant experience or expertise of the joint writers, and without any expert witness’s declaration. I do not for a moment doubt that the advice contained in the letters was given in good faith, and with the intention of assisting the court; but the deficiencies to which I have drawn attention do mean, in my view, that it carries considerably less weight than the formal evidence of a properly instructed independent expert. It is also relevant to bear in mind that, by the time when the oral hearing has taken place and the disclosure exercise begins, probably some time early next year, the French Blocking Statute may well have been materially amended in a way which will eliminate even the theoretical risk which I have described.

[57]As to the likely or possible joinder of further parties, I consider, in agreement with the submissions of Mr. Vajda QC for the claimants, that this is something of a red herring. If and when further parties are joined, their individual positions will have to be considered, but none of that has any impact, so far as I can see, on the question whether there should be a stay of the present claim brought by the present claimants against Servier, and if so for how long. There will of course be a general liberty to apply in the order which I make when this judgment has been handed down, and any problems can be dealt with if and when they arise.

[58]For these reasons, I propose to direct that the present action be stayed until shortly after the conclusion of the oral hearing before the Commission, but that the parties should then embark upon standard disclosure in the manner proposed by the claimants with a suitably adjusted timetable and any other modifications agreed by the parties or directed by the court when this judgment is handed down. For the avoidance of doubt, the stay will not affect procedural steps, such as the service by Servier on 3 August 2012 of an amended defence in response to the amended particulars of claim, which were already in contemplation at the date of the hearing in April. Nor will it affect the provision of further information pursuant to the outstanding requests which were debated before me at the hearing, and upon which I will now give my ruling.

The claimants’ Part 18 application

[59]On 23 September 2011 the claimants served a request for further information on Servier pursuant to CPR Part 18, to which Servier provided a partial response on 21 October 2011. The claimants were dissatisfied with Servier’s responses to several of the requests, for reasons which were set out in a schedule sent to Servier’s solicitors on 20 December 2011. Further correspondence ensued, and on 4 April 2012 the claimants issued an application notice seeking an order for the defendants to provide a response within fourteen days to requests 11.1, 11.2, 37.1-37.8, 38, 45, 52 and 56. By the date of the hearing on 18 and 19 April 2012, the areas of dispute had been further narrowed down to six questions, at least two of which appeared to be no longer live in the light of admissions and explanations contained in Ms. Manley’s third witness statement of 13 April. Still further progress in narrowing the area of controversy was made during the hearing itself. As a result, very little remained in issue by the end of the hearing, and I can therefore deal with the outstanding points very briefly. (a) Requests 37.1 to 37.8.

[60]The purpose of these requests was to seek clarification of paragraph 51 of the defence, in which Servier admitted that the English courts and the EPO ultimately found that the alpha form of Perindopril was not novel and/or was obvious, and admitted paragraph 68.1 to 68.3 of the particulars of claim “insofar as they describe the ultimate conclusions of the English courts in the Apotex proceedings”, but denied those paragraphs “if and insofar as they allege knowledge and/or belief on the part of any of the Defendants…”. The claimants had not themselves been parties to the Apotex proceedings, so the conclusions then reached by the English courts and the EPO were technically not res judicata as between the claimants and Servier for the purposes of the present proceedings. What was missing from paragraph 51 of the defence, in my judgment, was any clear statement by Servier that it accepted the validity of those conclusions in the context of the present action. This was one of the principal matters of which clarification was sought by the paragraph 37 requests.

[61]In her third statement Ms. Manley made it clear for the first time that Servier did not seek to challenge those conclusions in the present action, stating explicitly that “the factual conclusions of the English courts in the Apotex proceedings and the EPO are not in dispute”. In the light of that confirmation, it became clear that there was no longer any substantive issue about requests 37.1 to 37.8, and the only question was whether Servier should be ordered to provide a formal response to them. In my view Servier should be ordered to provide a formal response, so that the answers are on the record and to lessen any risk of misunderstanding. I would add that Servier do not suggest that the French Blocking Statute causes any problems in relation to these requests.

(b) Requests 38, 45 and 52

[62]I can take these three requests together, because following an open offer made by Mr. Green QC on behalf of Servier on the second day of the hearing there was no longer any dispute whether Servier should provide answers to the questions. The only disagreement was whether the answers should be provided by means of answers to the claimants’ Part 18 requests, or whether (because of the French Blocking Statute) the requests should be made pursuant to Article 4 of Regulation 1206/2001.

[63]The nature of the requests is briefly as follows. Request 38 asks Servier to identify (by name, job description, employer and tenure) all the individuals who were responsible for drafting and prosecuting the applications for patent EP 1296 947 (“the 947 patent”) before the EPO, defending that patent in the EPO opposition proceedings, and conducting the patent infringement and validity proceedings in relation to it before the English courts. In a similar way, request 52 asks Servier to identify the individuals upon whose state of mind Servier relies to substantiate the allegation in paragraph 53(g) of the defence that at all material times the third defendant believed the 947 patent to be valid. Finally, request 45 asks Servier to “clarify the value of US sales of Perindopril in absolute US dollar terms, in particular in and around 2000.”

[64]It is clear that much of the information needed to answer these requests will fall within the apparent scope of the French Blocking Statute. Accordingly, if I felt that there were any real risk of the third or fourth defendants being exposed to prosecution by compliance with an order of the English court to answer those requests, or by voluntarily providing the answers to them, I would have been disposed to direct the claimants in the first instance to attempt to use the procedure of Regulation 1206/2001, despite the extra time and expense which would be involved. I say “attempt to use” because I agree with the claimants that it is very far from clear whether the procedure under the regulation extends to requests for particulars of an opponent’s statement of case, and it is only with some linguistic contortion that the provision of answers to such requests could be described as the taking of evidence. Since, however, I am satisfied that the French Blocking Statute does not pose any real threat to Servier, for the reasons which I have already given, I see no reason to depart from the normal practice of the English court. I will therefore direct Servier to answer these requests in the usual way.

[65]I also add, for the avoidance of doubt, that the individuals whose names Servier must provide in answer to requests 38 and 52 are the names of those who had operational responsibility in relation to the relevant decisions or activities, and whose conduct might reasonably be regarded as attributable to Servier.

The confidentiality of this judgment

[66]By way of postscript, I should record that following the hearing in April I wrote to the Commission on 24 April 2012 seeking clarification of the degree of confidentiality which the Commission intended to attach to the “non-confidential response” contained in the annex to the Commission’s letter of 2 April. On 30 April 2012 I received a reply to my letter, explaining that the material was intended to be “non-confidential to the parties but confidential vis-à-vis the general public”. I was therefore asked to ensure that the information in the question was not disclosed to the public, and that my written judgment would remain confidential to the parties. That remains the position today, so my judgment on the application for a stay must continue to be treated as confidential to the parties and their legal advisers even after it has been handed down. The question whether the Commission should be invited to relax the existing requirement of confidentiality, in the light of developments since April, is one that can be discussed at hand down.

Addendum (14 January 2013)

[67]The requirement of confidentiality to which I have referred was removed by the Commission on 21 November 2012, in response to a request which I had sent to the Commission (following discussion with the parties) on 22 October 2012. The whole of this judgment is therefore now in the public domain and it may be cited without restriction.