Fujifilm Kyowa Kirin Biologics Company Ltd v Abbvie Biotechnology Ltd & Anor [2016] EWHC 2204 (Pat)

[2016] EWHC 2204 (Pat)Case No HP-2016-000025
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Venue Rolls Building, Fetter Lane, London EC4A 1NLDate 8 September 2016
Before
MR JUSTICE ARNOLD
Between
fujifilm kyowa kirin biologics company limitedClaimantabbvie biotechnology limitedDefendantsabbvie limitedDefendant
Thomas Raphael QC, Richard Miller QC, Miles Copeland and Oliver Caplin (instructed by Gowling WLG (UK) LLP) for ClaimantsAlexander Layton QC and Mark Chacksfield (instructed by Herbert Smith Freehills LLP) for DefendantsHearing Hearing dates: 21-22 July 2016
Approved JudgmentI direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic..............................MR JUSTICE ARNOLD

AbbVie’s application for summary judgment 18-68

[1]The First Defendant (“AbbVie Bermuda”), which is a company incorporated in Bermuda, is the proprietor of European Patent (UK) No 0 929 579 (“the Basic Adalimumab Patent”), which protects the monoclonal antibody adalimumab, and of SPC/GB/04/002 (“the SPC”), which extends the protection conferred by the Basic Adalimumab Patent in respect of adalimumab. Adalimumab is a monoclonal antibody specific for human tumour necrosis factor α, which is a cell signalling protein the misregulation of which is implicated in several human inflammatory diseases including rheumatoid arthritis, psoriatic arthritis, psoriasis, Crohn’s disease and ulcerative colitis. The SPC will expire on 15 October 2018.[2]Adalimumab is marketed by companies in the group of companies headed by AbbVie Inc. under the trade mark Humira. Humira is the highest selling prescription drug in the word, achieving net sales in 2014 in excess of US$12.5 billion. In the United Kingdom Humira is marketed by the Second Defendant (“AbbVie UK”), a company incorporated in England. AbbVie UK achieved a turnover of £438.6 million in Humira in 2014 i.e. some £1.2 million a day.[3]AbbVie Bermuda has filed applications for numerous secondary patents protecting dosing regimens, formulations and uses of adalimumab (“the Secondary Applications”). As at 19 April 2016, the Claimant (“FKB”), a company incorporated in Japan, was aware of over 50 European patent applications in 17 families filed by AbbVie Bermuda. More have been discovered subsequently.[4]AbbVie Inc. has indicated its intention vigorously to enforce its adalimumab patent portfolio and to seek injunctive relief. During AbbVie Inc.’s Q3 2015 Earnings Report Conference Call for investors on 30 October 2015, AbbVie Inc.’s Chairman and Chief Executive Officer Rick Gonzalez said in relation to its US patent portfolio:
“Any company seeking to market a biosimilar version of Humira will have to contend with this extensive patent estate which AbbVie intends to enforce vigorously. … … in the event a biosimilar attempts to launch at-risk, AbbVie will seek injunctive relief.”
FKB contends that it is to be inferred from other statements made by Mr Gonzalez that the AbbVie group has the same intention in relation to its European patent portfolio. … in the event a biosimilar attempts to launch at-risk, AbbVie will seek injunctive relief.”[5]FKB intends to launch a product code-named FKB327 which is biosimilar to adalimumab in the UK when the SPC expires. Accordingly, FKB is desirous of clearing the way of any patents granted pursuant to the Secondary Applications which it might infringe prior to then in order to avoid the risks of(i) an interim injunction being granted to prevent its launch and(ii) being ordered to pay damages or account for its profits (including pursuant to section 69 of the Patents Act 1977, which confers rights on a patentee dating back to the date of publication of the application for the patent). FKB faces the difficulty, however, that it cannot apply to revoke a patent under section 72 of the 1977 Act until the patent has been granted. Furthermore, section 74(1) and (2) of the 1977 Act provide that the validity of a patent may only be “put in issue” in certain specified types of proceedings, such as a claim for revocation under section 72, and prohibit the institution of proceedings seeking only a declaration as to the validity or invalidity of a patent.[6]On 29 October 2015 FKB commenced proceedings in this Court (“the First Action”) against AbbVie Bermuda seeking inter alia revocation of European Patents (UK) Nos. 1 406 656 (“EP656”) and 1 944 322 (“EP322”), which are due to expire in June 2022 and July 2023 respectively. In addition, FKB sought a so-called Arrow declaration, following the precedent set by the decision of Kitchin J (as he then was) in Arrow Generics Ltd v Merck & Co Inc [2007] EWHC 1900 (Pat), [2007] FSR 39 (“Arrow”). The claim for an Arrow declaration is designed to provide FKB with protection against subsequent claims for infringement of any patents within families 2, 3, 6, 8 and 12 of the Secondary Applications. As subsequently refined, the declaration sought is that:
“importing into the United Kingdom and offering to sell and dispose of, and to sell and dispose, and to keep for such sale or disposal in the United Kingdom, the Claimant’s products containing their biosimilar monoclonal antibody to the antibody adalimumab (Humira) for the treatment of rheumatoid arthritis, psoriatic arthritis and/or psoriasis by the administration of 40 mg every other week by subcutaneous injection for (a) rheumatoid arthritis would have been obvious and/or anticipated at the date from which [EP656] is entitled to claim priority, whether or not co-administered with methotrexate (as would administration every week in the case of monotherapy in rheumatoid arthritis); and (b) psoriasis and/or psoriatic arthritis would have been obvious at the date from which [EP322] is entitled to claim priority (whether as an initial or continuing dosing regimen).”
[7]On 4 November 2015 AbbVie Bermuda’s representatives wrote to the European Patent Office disapproving the text of EP656, which FKB and 14 other opponents had been opposing and which AbbVie Bermuda had filed no less than 19 witness statements and experts’ reports in support of, but stating that AbbVie Bermuda would instead pursue the same subject matter by means of its existing divisional applications and in particular European Patent Application No. 2 490 044 (“EPA044”). FKB alleges in the First Action that AbbVie Bermuda abandoned EP656 in order to prevent its validity being scrutinised by this Court in good time before expiry of the SPC, and thus in order to prolong the uncertainty as to whether the subject matter of EP656 is capable of founding a valid patent.[8]FKB subsequently applied to amend its Claim Form and Particulars of Claim in the First Action and AbbVie Bermuda applied to strike out the claim for an Arrow declaration. On 1 March 2016 Henry Carr J dismissed AbbVie Bermuda’s application and granted FKB permission to make amendments for the reasons given in his judgment of that date ([2016] EWHC 425 (Pat), “FKB1”). In particular, Henry Carr J rejected the submission advanced by AbbVie Bermuda that Arrow was wrongly decided and that the court had no jurisdiction (in the sense of power) to make such a declaration. The First Action was subsequently listed for trial in January 2017.[9]On 21 June 2016 Kitchin LJ granted AbbVie Bermuda permission to appeal against the decision of Henry Carr J in FKB1 on the ground that it was arguable that the declaration sought by FKB was inconsistent with section 74 of the 1977 Act. The appeal has been fixed for 29-30 November 2016. AbbVie Bermuda and AbbVie UK (collectively “AbbVie”) accept, however, that, unless and until the Court of Appeal decides otherwise, this Court should proceed on the basis that Arrow and FKB1 were correctly decided.[10]On 9 May 2016 FKB commenced these proceedings (“the Second Action”) against AbbVie Bermuda and AbbVie UK seeking an Arrow declaration that:
“importing into the United Kingdom and offering to sell and dispose of, and to sell and dispose, and to keep for such sale or disposal in the United Kingdom, the Claimant’s products containing their biosimilar antibody to … adalimumab (Humira) would insofar as the Higher Initial Dosing Regimens are concerned have been obvious and/or anticipated at the date from which EP (UK) 1,737,491 is entitled to claim priority. Such Higher Initial Dosing Regimens are dosing regiments for each of psoriasis, Crohn’s disease and ulcerative colitis in the Humira SmPC comprising higher initial doses (as multiple initial doses of 40 mg via subcutaneous injection) as follows: a. 80 mg for psoriasis; b. 80 mg, or 160 mg then 80 mg, for Crohn’s disease; and c. 160 mg then 80 mg for ulcerative colitis each of which is followed by one or more doses of 40 mg.” each of which is followed by one or more doses of 40 mg.”
[11]In the Second Action FKB also seeks an injunction against AbbVie Bermuda and AbbVie UK to restrain them from threatening or commencing proceedings for patent infringement in respect of acts covered by the declaration.[12]The Second Action is designed to provide FKB with protection against subsequent claims for infringement of any patents within family 5 of the Secondary Applications. It is particularly focused upon the subject matter of European Patent Application No 1 737 491 (“EPA491”). EPA491 has not yet proceeded to grant for the reasons explained below. FKB considers that the Second Action needs to be tried separately from the First Action because it is concerned with different indications and dosing regimens, and therefore requires different experts.[13]On 18 May 2016 Master Bowles granted FKB permission to serve the Claim Form in the Second Action on AbbVie Bermuda outside the jurisdiction relying on the gateways in Practice Direction 6B paragraphs 3.1(2) and 3.1(3). On 20 June 2016 AbbVie applied(i) to set aside the order of Master Bowles and(ii) to strike out, alternatively for summary judgment dismissing, the claim against AbbVie UK. On 5 July 2016 FKB applied for an order that permission to serve outside the jurisdiction be upheld under the gateways in Practice Direction 6B paragraphs 3.1(4A), 3.1(9) and/or 3.1(11), alternatively that this Court has jurisdiction under Article 24(4) of European Parliament and Council Regulation 1215/2012/EU of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) (“the Recast Brussels I Regulation”). On 8 July 2016 FKB applied for permission to amend its Particulars of Claim to particularise its claim for an injunction. In the meantime the Second Action has been provisionally listed for trial in a window of May to July 2017.

Arrow declarations

[14]In order to shorten this judgment, I will assume that the reader is familiar with Arrow and FKB1. Nevertheless, it will be convenient if I briefly explain the basis for Arrow declarations as the law presently stands. This can, I think, be summarised in three propositions.[15]First, the court has power to grant a declaration, including a negative declaration, whenever it is useful to do so: see Messier-Dowty Ltd v Sabena SA [2001] 1 All ER 275 at [41]-[42] (Lord Woolf MR), Financial Services Authority v Rourke [2002] CP Rep 14 (Neuberger J, as he then was) and Nokia Corp v InterDigital Technology Corp [2006] EWCA Civ, [2007] FSR 23 at [15] and [20] (Jacob LJ).[16]Secondly, an Arrow declaration serves a useful purpose because it is in effect a declaration that the claimant will have a Gillette defence to a subsequent claim for patent infringement in relation to its product.The expression “Gillette defence” comes from the case of Gillette Safety Razor Co v Anglo-American Trading Co Ltd (1913) 30 RPC 465, where Lord Moulton said at 480-481:
“I am, therefore, of opinion that in this case the Defendants’ right to succeed can be established without an examination of the terms of the Specification of the Plaintiffs’ Letters Patent. I am aware that such a mode of deciding a Patent case is unusual, but from the point of view of the public it is important that this method of viewing their rights should not be overlooked. In practical life it is often the only safeguard to the manufacturer. It is impossible for an ordinary member of the public to keep watch on all the numerous Patents which are taken out and to ascertain the validity and scope of their claims. But he is entitled to feel secure if he knows that that which he is doing differs from that which has been done of old only in non-patentable variations, such as the substitution of mechanical equivalents or changes of material shape or size. The defence that ‘the alleged infringement was not novel at the date of the plaintiff's Letters Patent’ is a good defence in law, and it would sometimes obviate the great length and expense of Patent cases if the defendant could and would put forth his case in this form, and thus spare himself the trouble of demonstrating on which horn of the well-known dilemma the plaintiff had impaled himself, invalidity or non-infringement.”
It can be seen from this passage that, when Lord Moulton said “not novel”, he meant “either not novel or obvious”.[17]Thirdly, a claim for an Arrow declaration does not contravene section 74(1) of the 1977 Act because it does not involve the validity of a patent being put in issue. Rather, it enables the court pre-emptively to determine a patent infringement case before the patent has even been granted without having to decide whether the patent would be invalid, or not infringed because the claimant’s product will not fall within the claims, when granted.

AbbVie’s application for summary judgment

[18]As explained above, FKB claims(i) an Arrow declaration and(ii) an injunction. AbbVie contends that the claims against AbbVie UK should be struck out on the basis that the Particulars of Claim discloses no reasonable basis for bringing them, alternatively that there should be summary judgment dismissing them. Although AbbVie have not formally made the same application in respect of FKB’s claims against AbbVie Bermuda, because AbbVie Bermuda is challenging the court’s jurisdiction, two of AbbVie’s arguments apply equally to those claims. Since the summary judgment test is more favourable to AbbVie than the striking out test, it is only necessary for me to apply that test.

Principles applicable to summary judgment applications

[19]Lewison J (as he then was) summarised the principles which apply to an application for summary judgment under CPR 24 in a much-cited passage in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15] which was approved by the Court of Appeal in AC Ward & Sons v Catlin (Five) Ltd [2009] EWCA Civ 1098 at [24].

The general merits of FKB’s claim for an Arrow declaration

[20]AbbVie contend that, even assuming that the law was correctly stated in Arrow and FKB1, FKB has no real prospect of claiming an Arrow declaration in the present case. Counsel for AbbVie pointed out that in Arrow Kitchin J had described the circumstances at [14] as “most unusual”. Arrow had successfully cleared the way in both the UK and EPO, revoking the parent patent at first instance and on appeal in both jurisdictions. In reliance on these decisions, Arrow had launched a product onto the market and was potentially exposed to a very substantial claim in damages. Yet, notwithstanding those earlier decisions, Merck was seeking to obtain the same protection again by way of four further divisional applications.[21]In FKB1 Henry Carr J concluded at [61] that the facts of the First Action were “sufficiently unusual” that there were a real prospect that the trial judge would exercise his or her discretion to grant a declaration. He referred to six factors in particular which he considered supported this conclusion. The first three of these concerned the allegations that AbbVie Bermuda had abandoned EP656 in order to avoid a timely determination of its validity by this Court after FKB had expended significant resources in opposing it and that AbbVie Bermuda intended thereby to prolong the uncertainty as to whether the subject matter of EP656 would found a valid a patent. The last three were factors that would apply to any claim for an Arrow declaration.[22]In the present case FKB relies upon what it contends is similar conduct by AbbVie Bermuda in relation to EPA491. Counsel for AbbVie submitted that FKB’s case was a phantasm and unsupportable. Accordingly, it is necessary for me to consider the evidence on this point.[23]The claims of EPA491 are directed to Crohn’s disease and ulcerative colitis. The prosecution of EPA491 has involved substantial third party observations by a number of “straw men” acting for undisclosed parties. (FKB has said that one of these was acting on its behalf, although it has not said which.) Following consideration of these observations, on 18 November 2015 the Examining Division of the European Patent Office issued a communication under rule 71(3) of the Implementing Regulations to the European Patent Convention giving notice of intention to grant EPA491. Such a notice gives the applicant four months from the deemed date of receipt either to approve the text proposed for grant and verify the bibliographic data or to request reasoned amendments or corrections to the text.[24]On 14 March 2016 a new set of third party observations were filed by a firm of patent attorneys acting, it would appear, as a further straw man for an undisclosed principal. These observations purported to introduce new prior art said to render the claims of EPA491 invalid for lack of novelty and inventive step.[25]On 29 March 2016 (the last day allowed), AbbVie Bermuda notified the Examining Division that it did not approve the text proposed for grant and submitted amendments to the claims which narrowed the scope of the claims by combining claims 1 and 2 and deleting claims 5, 6 and 10. AbbVie Bermuda did not provide any reasons for making these amendments, other than stating that the new claims met the requirements of the EPC. It requested the issuance of a further notice of intention to grant. Importantly, it also expressly reserved the right to pursue the deleted subject matter by way of one or more further divisional applications.[26]On 6 May 2016 the Examining Division issued a further rule 71(3) communication giving notice of intention to grant. The four month period for AbbVie Bermuda to respond to this notice has yet to expire.[27]AbbVie contends that there is nothing in this course of events to suggest that AbbVie Bermuda was acting other than entirely properly and routinely. FKB contends otherwise. In summary, FKB makes the following points: i) AbbVie Bermuda has not explained why it had already waited for four months to respond to the original rule 71(3) communication when, apparently by chance, a new third party observation was introduced. ii) Although the new observations introduced some new documents, they related to a prior art clinical trial of the claimed dosing regimen in psoriasis which had already been considered by the Examining Division and by AbbVie Bermuda in formulating the claims the subject of the original rule 71(3) communication. iii) Neither in its letter dated 31 March 2016 nor in its evidence on this application has AbbVie Bermuda actually said that the amendments were prompted by the new observations. Moreover, some of the amendments cannot be explained by the contents of the observations. For example, claim 6 has been deleted when the observations do not mention the subject matter of that claim. iv) AbbVie Bermuda has not explained why it did not waive the requirement for a further rule 71(3) communication which it might have been expected to do given the limiting nature of the amendments.[28]In my judgment these points are sufficient to show that FKB has a real prospect of establishing that AbbVie Bermuda’s purpose in filing the amendments to EPA491, requesting a further rule 71(3) communication and reserving the right to pursue the deleted subject matter by way of one or more further divisional applications was to shield some or all of the subject matter of EPA491 from timely scrutiny by this Court, or least to prolong the uncertainty as to whether such subject matter founds a valid patent.[29]In addition to AbbVie Bermuda’s conduct in relation to EPA491, FKB also relies upon AbbVie Bermuda’s conduct in relation to EP656 by way of similar fact evidence. As I have explained, Henry Carr J was satisfied that that FKB had a real prospect of successfully contending that, by that conduct, AbbVie Bermuda had sought to shield the subject matter of EP656 from timely scrutiny by this Court and to prolong the uncertainty as to whether such subject matter founds a valid patent. In my judgment this supports FKB’s case in relation to EPA491.[30]Furthermore, FKB also relies upon AbbVie Bermuda’s conduct in relation to EPA044. It is not necessary to go into details concerning this. It suffices to say that AbbVie Bermuda has refused to approve the text which the Examining Division proposed to grant in a rule 71(3) communication and has requested a further rule 71(3) communication despite merely making amendments to correct typographical errors. On its own, this would be a minor matter, but in my judgment it provides some modest further support for FKB’s case in relation to EPA491 and EP656.[31]Counsel for AbbVie also submitted that there was no causal nexus between the pleaded actions of AbbVie Bermuda and FKB’s claim for an Arrow declaration, because FKB’s evidence showed that it had always intended to bring a claim for an Arrow declaration in respect of EPA491, and that it followed that the need for a declaration was not triggered by the matters relied upon by FKB. I accept the premise of this argument, but not the conclusion which AbbVie seek to draw from it. In the absence of the acts of AbbVie Bermuda relating to EPA491 which FKB now relies upon, a question may well have arisen as to whether the other matters relied upon by FKB could possibly have justified a claim for an Arrow declaration in relation to the subject matter of EPA491. Given that AbbVie Bermuda has committed those acts, however, FKB is entitled to rely upon them in support of its claim.[32]Finally, counsel for AbbVie submitted that FKB’s pleaded case did not justify its claim for a declaration in respect of the treatment of psoriasis, as opposed to Crohn’s disease and ulcerative colitis, since the claims of EPA491 did not cover psoriasis. This point was not addressed by either side in oral argument. As I understand the position, however, one of the divisional applications from EPA491 in family 5 of the Secondary Applications would cover psoriasis. Accordingly, I do not accept this submission.[33]For the reasons given above, I conclude that FKB has a real prospect of success in its claim for an Arrow declaration against AbbVie Bermuda in the present case.

The merits of FKB’s claim for an Arrow declaration against AbbVie UK

[34]AbbVie contend that, even if FKB’s claim for an Arrow declaration against AbbVie Bermuda has a real prospect of success, its claim for an Arrow declaration against AbbVie UK does not. The basis for this contention is that, whereas AbbVie Bermuda is the applicant for EP491 and has committed the acts in the EPO which FKB relies upon, AbbVie UK has no interest in the subject-matter of EPA491 and has no involvement in the proceedings before the EPO. Thus AbbVie UK is not an exclusive licensee of any rights under EPA491. Moreover, AbbVie Bermuda has stated in evidence that it “will not grant to AbbVie UK an exclusive licence under [EPA491] or any potential future divisional patents or patent applications arising therefrom”. It follows that AbbVie UK could not bring, or be party to, a claim for infringement of any patent granted pursuant to EPA491 (or any divisional application deriving from it) under section 67(1) of the 1977 Act. Accordingly, granting a declaration against AbbVie UK would serve no useful purpose.[35]FKB contends that granting a declaration against AbbVie UK would serve a useful purpose for two reasons. The first is that it is probable that AbbVie Bermuda will grant AbbVie UK an exclusive licence in respect of the subject matter of EPA491 at some point in the future. In this regard, counsel for FKB submitted that the evidence of AbbVie Bermuda quoted in the preceding paragraph can only be a statement of its present intention, given that AbbVie Bermuda has not offered any undertaking not to do so. Absent an exclusive licence to AbbVie UK, the only financial remedy which the AbbVie group would be able to claim for infringement of patents in family 5 would be a reasonable royalty payable to AbbVie Bermuda. To disable itself from claiming the lost profits suffered by AbbVie UK would not be acceptable to the AbbVie group’s shareholders. Accordingly, at some point, AbbVie Bermuda would change its intention.[36]The second reason is that, even if AbbVie Bermuda does not grant AbbVie UK an exclusive licence, it remains the case that it is AbbVie UK which exploits the inventions in family 5 in the UK and which therefore has a substantial financial interest in maintaining the monopoly which would be conferred by valid patents in that family. FKB contends that in those circumstances it has a legitimate interest in obtaining a declaration which is binding on AbbVie UK, in particular so as to forestall the possibility of AbbVie making threats to its customers or making statements that its product infringed.[37]So far as the first reason is concerned, counsel for AbbVie made two points, First, he submitted that no reason had been given for disbelieving AbbVie Bermuda’s evidence. I accept this, but it is beside the point. Even accepting AbbVie Bermuda’s evidence that it has no present intention of granting AbbVie UK an exclusive licence, that does not rule out the prospect of AbbVie Bermuda deciding to do so in the future. Secondly, he submitted FKB’s reliance upon the absence of any undertaking from AbbVie Bermuda was illegitimate for two reasons. The first was that AbbVie Bermuda had not offered an undertaking to the Court because it wanted to avoid submitting to the jurisdiction. As counsel for FKB pointed out, however, AbbVie Bermuda has not offered a contractual undertaking either. More fundamentally, the second reason relied upon by counsel for AbbVie is that it is not possible to establish a threat merely by relying upon the absence of an undertaking (see Canada v Ritchie [1919] AC 999 at 1005 (Lord Dunedin) and KS Paul (Printing Machinery) Ltd v Southern Instruments (Communications) Ltd [1964] RPC 118 at 122 (Harman LJ)). As counsel for FKB submitted, however, FKB does not rely solely upon the absence of an undertaking from AbbVie Bermuda. Rather, it relies upon the absence of an undertaking as supporting its case based on the financial realities of the situation.[38]As to FKB’s second reason, counsel for AbbVie submitted that an Arrow declaration, if it could be granted at all, could only be granted against a defendant with a legally enforceable interest in the prospective patents. In my judgment, however, it is arguable that this is not the law. It is now well-established that it is not necessary in a claim for positive declaratory relief for the claimant to have a cause of action against the defendant. In particular, in a claim for a declaration concerning the interpretation of a contract, it is not necessary for the claimant to be party to the contract. It is sufficient for the claimant to be affected by the court’s determination: see Rolls-Royce plc v Unite the Union [2009] EWCA Civ 387, [2010] 1 WLR 318 at [120] (Aikens LJ), Feetum v Levy [2005] EWCA Civ 1601, [2006] Ch 585 at [82] (Jonathan Parker LJ) and Milebush Properties Ltd v Tameside Metropolitan Borough Council [2011] EWCA Civ 270, [2012] 1 P&CR 3 at [44] (Mummery LJ). Accordingly, I consider that it is arguable that, in a claim for negative declaratory relief, it is not necessary for the claimant to show that the defendant would be a necessary party to any claim against the claimant, and it is sufficient for the claimant to show that it has a legitimate interest in ensuring that the defendant is bound by the declaration.[39]Counsel for AbbVie also submitted that there was no evidence that AbbVie UK intended to threaten FKB’s customers. He could have added that, if it did, FKB would have a remedy under section 70 of the 1977 Act, although that would potentially give rise to an issue as to whether it would be open to AbbVie UK to rely upon infringement of a patent owned by AbbVie Bermuda and not the subject of an exclusive licence to justify such a threat (cf. Global Flood Defence Systems Ltd v Johan van den Noort Beheer BV [2016] EWHC 1851 (Pat)). I accept that there is no evidence that AbbVie UK intends to threaten FKB’s customers. I do not accept that it necessarily follows that FKB has no legitimate interest in obtaining a declaration binding on AbbVie UK given that AbbVie UK is the party with the most direct financial interest in FKB’s proposed acts in relation to FKB327. Whether such a declaration would be justified would be a matter for argument based on all the relevant circumstances.[40]For the reasons given above, I conclude that FKB has a real prospect of success in obtaining a declaration against AbbVie UK. My reasoning in relation to the question of an exclusive licence is also relevant to the next issue.

The merits of FKB’s claim for an injunction

[41]AbbVie contend that, even if FKB’s claim for an Arrow declaration has a real prospect of success, its claim for an injunction does not. In response to this contention, FKB has applied to amend its Particulars of Claim to add the following paragraph particularising the basis for this claim:
“Further, the claimant is entitled to an injunction to retrain the defendants from threatening, commencing or pursing in the United Kingdom any action for infringement of a patent against the Claimant (or its customers and agents) in respect of any act to which the declaration in paragraph 29 above pertains. By way of particulars of the Claimant’s cause of action for the injunction, the defendant’s present and threatened future conduct has been and will be objectively (and it can be inferred subjectively) vexatious and oppressive. (1) If the declaration is granted, it would be vexatious and oppressive for the Defendants to threaten, commence or pursue in the United Kingdom proceedings for infringement of a patent against the Claimants (or its customers or agents) in respect of any act to which the said declaration pertains. It is to be inferred that the Defendants would commence such proceedings (and they have not undertaken that they would not). (2) Further, independent of the declaration, the Defendants’ conduct as set out above is vexatious and oppressive and an abuse of process insofar as it illegitimately manipulates a persisting threat of patent infringement proceedings and shields from potential examination any patent which the Defendants may be able to obtain pursuant to [EPA491]. Such vexation and oppression presently exists because of the threat of patent infringement proceedings and would be realised by eventual patent infringement proceedings or further threats thereof in respect of the Claimant’s products.”
[42]It can be seen from this that FKB seeks an injunction against both AbbVie Bermuda and AbbVie UK. For the reasons explained above, the focus of counsel for AbbVie’s attack was on the claim against AbbVie UK, but his arguments also apply to the claim against AbbVie Bermuda.[43]It can also be seen that FKB seeks an injunction which restrains AbbVie Bermuda and AbbVie UK from(i) threatening proceedings for patent infringement and(ii) commencing or pursuing proceedings for patent infringement. So far as the first limb is concerned, in principle there is no legal difficulty with this, since section 70 of the 1977 Act enables such a claim to be brought. The second limb is less straightforward for the reasons discussed below. Both sides focussed on the second limb in argument.[44]Finally, it can also be seen that FKB seeks the injunction on two different bases: first, to enforce the declaration; and secondly, as a free-standing remedy independently of the declaration. These require separate consideration. Before I do so, however, I must address the questions of whether this Court has jurisdiction (in the sense of power) to grant an injunction to restrain the commencement or pursuit of proceedings in this Court (i.e. a domestic anti-suit injunction) in the absence of a contractual bar (such as an arbitration clause or an exclusive jurisdiction clause in favour of another court), and if so, on what principled basis it should do so.[45]Jurisdiction to grant a domestic anti-suit injunction. Counsel for AbbVie did not dispute that this Court had power to grant a domestic anti-suit injunction where the Court had in personam jurisdiction over the defendant. In my judgment he was right not to do so. The Court’s power to grant an injunction, the existence of which is recognised by section 37(1) of the Senior Courts Act 1981, is unfettered: see Fourie v Le Roux [2007] UKHL 1, [2007] 1 WLR 320 and Cartier International AG v British Sky Broadcasting Ltd [2016] EWCA Civ 658 at [40]-[54] (Kitchin LJ).[46]As counsel for AbbVie rightly submitted, however, the Court’s power to grant an injunction can only be exercised where there is a principled basis for it. Counsel for AbbVie went on to submit that: i) an anti-suit injunction could only be granted to restrain conduct, or threatened conduct, that was unconscionable, which included conduct which was oppressive or vexatious or an abuse of the process of the court (see Glencore International AG v Exeter Shipping Ltd [2002] EWCA Civ 524, [2002] CLC 190 at [42] (Rix LJ)); ii) in the case of a domestic anti-suit injunction, this was a high threshold to cross; iii) the power would only be exercised where there were existing proceedings in which the relevant issue could be determined; and iv) in any event a domestic anti-suit injunction had to be qualified so as only to prevent the bringing of proceedings without first obtaining the permission of the court, since otherwise such an injunction would be contrary to the defendant’s right of access to the court under Article 6 of the European Convention on Human Rights.[47]Counsel for FKB did not seriously dispute propositions (i) and (ii), but he did take issue with propositions (iii) and (iv). He pointed out that there has been a series of cases in which domestic anti-suit injunctions have been granted, and submitted that they could not all be categorised in the manner contended for by counsel for AbbVie. The cases he relied upon were Landi den Hartog BV v Sea Bird (Clean Air Fuel Systems) Ltd [1976] FSR 489, Jacey (Printers) v. Norton & Wright Group [1977] FSR 475, Austria Tabakwerke AG v Port (unreported, Court of Appeal, 8 September 1989) and Essex Electric (Pte) Ltd v IPC Computers (UK) Ltd [1991] FSR 690.[48]In Landi den Hartog the defendant (Sea Bird) had brought claims for patent infringement against the plaintiff (Landi den Hartog) and its distributor (Yorkshire). The plaintiff sought an injunction to restrain the defendant from bringing proceedings against the plaintiff’s customers in relation to the plaintiff’s products without the leave of one of the judges assigned to hear patent matters. The defendant did not challenge the jurisdiction of the court to make such an order, but submitted that it should be refused in the exercise of the court’s discretion. Whitford J granted the injunction. He identified the basis for the order at 493 as follows:
“Landi Den Hartog assert, and I think they are fully justified in so asserting, that the course of conduct pursued by Sea Bird shows that they have really been concerned not genuinely to assert their rights under the patents, but to harass Landi Den Hartog and, through the action against Yorkshire, the present distributors of Landi Den Hartog.”
[49]Counsel for AbbVie emphasised that there was no dispute as to the court’s jurisdiction. He also pointed out that the issue as to whether the plaintiff’s product infringed the defendant’s patent would be determined in the existing proceedings and that the injunction only required the defendant to obtain the court’s permission before starting further proceedings. As counsel for FKB pointed out, however, the existing proceedings would not have determined the question of the defendant’s entitlement to relief against the plaintiff’s customers.[50]In Jacey the defendants had brought proceedings for patent infringement against the plaintiff. The defendants had written to some of the plaintiff’s customers in terms which the plaintiff alleged threatened proceedings for patent infringement and had subsequently given undertakings not to threaten the plaintiff’s customers or known potential customers in future. The defendants then instituted proceedings against two of the plaintiff’s customers. The plaintiff sought an injunction to restrain the defendant from bringing proceedings against the plaintiff’s customers in relation to the plaintiff’s products without obtaining the leave of the court. Whitford J granted an injunction restraining the defendant from issuing proceedings against the plaintiff’s customers without obtaining the leave of the court unless the plaintiff was joined as defendant, the plaintiff having made it clear that its principal concern was to ensure that it could defend any such claims.[51]Curiously, there is no reference in the judgment of Whitford J to Landi den Hartog. Rather, the two authorities he discussed were Thames Launches Ltd v Trinity House Corp [1961] Ch 197 and Goldsmith v Sperrings Ltd [1977] 1 WLR 478. He held that both those cases were distinguishable, but he appears to have applied the principle stated by Buckley J in Thames Launches at 209 that “no man should be allowed to institute proceedings in any court if the circumstances are such that to do so would really be vexatious”. On the facts, Whitford J considered that the threatened proceedings would be vexatious unless the plaintiff was joined because their purpose was to obtain an improper collateral advantage.[52]Counsel for AbbVie again pointed out that the issue as to whether the plaintiff’s product infringed the defendants’ patent would be determined in the existing proceedings and that the injunction only required the defendant to obtain the court’s permission before starting further proceedings. Counsel for FKB again pointed out that the existing proceedings would not have determined the question of the defendant’s entitlement to relief against all the plaintiff’s customers.[53]Austria Tabakwerke was a complicated dispute involving the registered trade mark RONSON for cigarettes. The plaintiffs had been exploiting the trade mark pursuant to a licence agreement which had been terminated. They contended that the registration was invalid and that they had acquired goodwill in the trade mark. The first and second defendants claimed to be acting in the interests of members of their family who were said to have a beneficial interest in the company which owned the registration. It was common ground that the first and second defendants had made, and intended to continue to make, damaging statements about the plaintiffs and their business to their customers and had threatened to bring proceedings against such customers. The plaintiffs applied for an interim injunction which inter alia restrained the first and second defendants from threatening or commencing proceedings against any person other than the parties to the existing proceedings in respect of dealings in the cigarettes marketed by the plaintiffs under the trade mark. Warner J granted the injunction. The first defendant appealed. The Court of Appeal dismissed the appeal, holding on the authority of Landi den Hartog that such an injunction could be granted. The Court of Appeal also held, however, that it was implicit that the injunction only prevented the first and second defendants from commencing proceedings without the leave of the court.[54]Counsel for AbbVie pointed out that the first defendant had represented himself and that Parker LJ, who gave the only reasoned judgment, had not mentioned the fact that the issue as to jurisdiction had been conceded in Landi den Hartog. Again, he also pointed out the issues regarding the trade mark would be determined in the existing proceedings and that the injunction only required the defendants to obtain the court’s permission before starting further proceedings. Furthermore, the injunction was an interim injunction, not final. Counsel for FKB again pointed out that the existing proceedings would not have determined the question of the trade mark owner’s entitlement to relief against the plaintiffs’ customers. On the other hand, as the Court of Appeal held, on the first and second defendants’ own case they had no standing to bring such proceedings.[55]Essex Electric was a dispute involving the unregistered trade mark IPC. The first plaintiff brought proceedings for passing off against the defendants and the defendants counterclaimed for passing off against the first and third plaintiffs. The second defendant subsequently threatened customers of the third plaintiffs with proceedings for passing off. The plaintiffs applied for an interim injunction to restrain the second defendant from threatening or commencing such proceedings against the third plaintiff’s customers. One of the grounds relied upon by the plaintiff for the grant of the injunction was that such proceedings would be an abuse of the process of the court. Ferris J reviewed Thames Launches, Goldsmith v Sperrings, Landi den Hartog and Jacey and concluded at 701:
“It appears from these authorities that there is jurisdiction in the court to restrain, either completely or partially, the commencement of proceedings which the court would regard as an abuse of its process and I think if there is jurisdiction to restrain the commencement or prosecution of the proceedings, there must likewise be jurisdiction to restrain the making of threats to commence proceedings.”
[56]Ferris J went on to hold that it was arguable that the proceedings which the second defendant threatened to bring would constitute an abuse of process, and granted the injunction subject to the qualification that the second defendant was not to commence proceedings without the leave of the court.[57]Counsel for AbbVie pointed out that the second defendant had represented himself and that Ferris J had not mentioned the fact that the issue as to jurisdiction had been conceded in Landi den Hartog. Again, he also pointed out the issues regarding the trade mark would be determined in the existing proceedings and that the injunction only required the second defendant to obtain the court’s permission before starting further proceedings. Furthermore, the injunction was an interim injunction, not final. Counsel for FKB again pointed out the existing proceedings would not have determined the question of the second defendant’s entitlement to relief against the third plaintiff’s customers.[58]Counsel for AbbVie very properly drew to my attention the judgment of Floyd J (as he then was) in Hospira UK Ltd v Eli Lilly & Co [2008] EWHC 1862 (Pat). In that case Lilly had acknowledged that Hospira would not infringe Lilly’s patent if Hospira manufactured gemcitabine in accordance with Hospira’s process description. Hospira was nevertheless concerned that Lilly would commence infringement proceedings. Hospira applied to amend its statement of case to claim an injunction to prevent Lilly bringing proceedings for infringement of the patent against Hospira except proceedings based on material facts not known to Lilly at the date of the order. There was no dispute that the Court had jurisdiction to grant such an injunction, but Floyd J held that the proposed claim had no real prospect of success since there was no evidence of any threat by Lilly to bring vexatious or abusive proceedings.[59]Floyd J briefly referred in his judgment at [9] to two examples of the Court’s jurisdiction to grant domestic anti-suit injunctions. The first is the Court’s jurisdiction to grant civil restraint orders against vexatious litigants. This has two bases. There is a statutory basis in section 42 of the Senior Courts Act 1981, but in addition the court can exercise its inherent jurisdiction to control its own procedure. The latter basis is now regulated by Practice Direction 3C which effectively codifies the judgment of the Court of Appeal in Bhamjee v Forsdick [2003] EWCA Civ 1113, [2004] 1 WLR 888. Extended and general civil restraint orders prevent the respondent from inter alia commencing proceedings without the permission of a judge identified in the order. An extended civil restraint order prevents the respondent from commencing proceedings concerning any matter involving or relating to or touching upon or leading to the proceedings in which the order is made, while a general civil restraint order prevents the respondent from commencing proceedings of any kind in specified courts.[60]The second example, which is a very common one, is an injunction to restrain the presentation of a winding up petition against a company. Injunctions to restrain presentation of winding up petitions are commonly granted upon a final basis, and without any qualification permitting presentation with the permission of the court. The jurisprudential basis for the grant of such an injunction is that it would be an abuse of the process of the court for the defendant to present a winding up petition because it is not a creditor of the company and therefore does not having standing to do so. Such an injunction goes beyond safeguarding the integrity of existing proceedings. Moreover, although it is common for such an injunction to be granted on the ground that the alleged debt upon which the defendant threatens to base the petition is disputed bona fide on substantial grounds, which leaves it open to the defendant to a pursue an ordinary debt or breach of contract claim against the plaintiff in an appropriate court, such an injunction could be based on a finding that the alleged debt was definitely not owed, in which case a subsequent claim would be met with a plea of res judicata.[61]The conclusion I draw from this review of the law is that the court has power to grant a domestic anti-suit injunction against a defendant in respect of whom it has in personam jurisdiction on the ground that the proceedings which the defendant threatens to bring are vexatious or oppressive or an abuse of process. This power must be exercised with considerable caution. In particular, it will rarely be justified to grant an injunction which restrains the commencement of proceedings other than the presentation of a winding up petition without the qualification that the restraint only applies if the defendant does not obtain the permission of the court first. But I do not accept that the power should only be exercised in circumstances where there are existing proceedings in which the relevant issue can be determined (even if only as against different parties to those against whom the proceedings are threatened).[62]It follows, in my view, that FKB is unlikely to obtain an injunction which is not qualified so as to permit AbbVie to commence proceedings with the permission of the Court. But that in itself would not be a fatal obstacle to FKB’s claim for an injunction.[63]Enforcement of the declaration. Counsel for AbbVie submitted that, if the declaration was granted, then there would be no justification for an injunction. He made two main points in support of this submission. First, he submitted that the point of a declaration was formally to declare what the legal position was. Once that was done, AbbVie Bermuda and AbbVie UK as members of a respectable multinational group could be expected to abide by the declaration. Indeed, he pointed out that it was FKB’s own evidence that obtaining an Arrow declaration would “realistically practically prevent” AbbVie UK from making threats to FKB’s customers or making statements that FKB’s product infringed. Furthermore, he submitted that none of the matters relied upon by FKB demonstrated a threat on the part of AbbVie Bermuda or AbbVie UK not to abide by the declaration.[64]Secondly, counsel for AbbVie submitted that the injunction did not follow from the declaration. In this regard, he argued that the injunction would prevent AbbVie Bermuda from bringing proceedings for patent infringement which did not conflict with the declaration, for example where the claims contained additional limitations.[65]So far as the first point is concerned, counsel for FKB submitted that the mere fact that AbbVie Bermuda and AbbVie were respectable companies was not a sufficient reason not to grant injunctions against them. As he pointed out, this court regularly grants injunctions against respectable companies to restrain patent infringement. As for FKB’s evidence, he pointed out that the same witness statement went on to address the need for an injunction. In that regard, he argued the evidence established a sufficient case of a threat by AbbVie Bermuda and AbbVie UK because AbbVie’s conduct to date strongly suggested that it was likely to pursue infringement proceedings, or make threats thereof, in any way it could, such as pending an appeal against the declaration.[66]As to the second point, counsel for FKB accepted that the scope of the injunction would need to be carefully considered at trial, but submitted that this did not mean there was no real prospect of FKB obtaining an injunction at all.[67]In my judgment FKB has a real prospect of obtaining an injunction for the reasons given by counsel for FKB.[68]Independently of the declaration. I can deal with this briefly. If FKB fails in its claim for a declaration, then I do not see how FKB could have a real prospect of obtaining an injunction, since FKB relies upon essentially the same matters as justifying the grant of a declaration and the grant of an injunction. Moreover, the scope of the injunction is tied to the scope of the declaration.

Jurisdiction under Article 24(4) of the Recast Brussels I Regulation

[69]FKB contends that the UK courts have exclusive jurisdiction over FKB’s claim for an Arrow declaration by virtue of Article 24(4) of the Recast Brussels I Regulation. It is common ground that, if FKB is correct, then FKB does not require the permission of the Court to serve the proceedings on AbbVie Bermuda outside the jurisdiction, but can do so without permission pursuant to CPR rule 6.33(2)(b)(iv).[70]Articles 24(4) and 27 of the Recast Brussels I Regulation provide as follows:
“Article 24 The following courts of a Member State shall have exclusive jurisdiction, regardless of the domicile of the parties: … (4) in proceedings concerned with the registration or validity of patents, trade marks, designs, or other similar rights required to be deposited or registered, irrespective of whether the issue is raised by way of an action or as a defence, the courts of the Member State in which the deposit or registration has been applied for, has taken place or is under the terms of an instrument of the Union or an international convention deemed to have taken place. Without prejudice to the jurisdiction of the European Patent Office under the Convention on the Grant of European Patents, signed at Munich on 5 October 1973, the courts of each Member State shall have exclusive jurisdiction in proceedings concerned with the registration or validity of any European patent granted for that Member State; … Article 27 Where a court of a Member State is seised of a claim which is principally concerned with a matter over which the courts of another Member State have exclusive jurisdiction by virtue of Article 24, it shall declare of its own motion that it has no jurisdiction.”
Without prejudice to the jurisdiction of the European Patent Office under the Convention on the Grant of European Patents, signed at Munich on 5 October 1973, the courts of each Member State shall have exclusive jurisdiction in proceedings concerned with the registration or validity of any European patent granted for that Member State;

Article 27

[71]I recently reviewed the law with respect to Articles 24(4) and 27 in Anan Kasei Co., Ltd v Molycorp Chemicals & Oxides (Europe) Ltd[2016] EWHC 1922 (Pat). In order to shorten this judgment, I shall take that review as read. Although it does not affect the substance of my reasoning or my conclusions in that case, counsel in the present case drew to my attention two points about the drafting of Articles 24(4) and 27 which had not been drawn to my attention in that case.[72]First, in the English version of Article 24, the expression “proceedings which have as their object” is used in Article 24(1), (2) and (3), while the expression “proceedings concerned with” is used in Article 24(4) and (5). In other language versions of Article 24, the same expression is used in all five paragraphs. For example, the French version uses the expression “en matière de” and the German version uses the expression “welche … zum Gegestand haben” in each paragraph.[73]Secondly, the English version of Article 27 uses the expression “principally concerned with”, which differs from the expression “concerned with” that is used in the English version of Article 24(4) and (5). There is a similar difference in the French version. In other language versions of Article 27, however, no such distinction appears. Thus the German version reads:
“Das Gericht eines Mitgliedstaats hat sich von Amts wegen für unzuständig zu erklären, wenn es wegen einer Streitigkeit angerufen wird, für die das Gericht eines anderen Mitgliedstaats aufgrund des Artikels 24 ausschließlich zuständig ist.”
[74]As I explained in Anan v Molycorp, the Court of Justice of the European Union has held that Article 24(4) should be given a wide interpretation, and it has implicitly endorsed the reasoning of Laddie J in Coin Controls Ltd v Suzo International (UK) Ltd [1999] Ch 33 to the effect that the issues of validity and infringement are inseparable in patent cases because there is in the end only one question: has the defendant infringed a valid claim? Accordingly, I held that this court had no jurisdiction over Rhodia’s claim in respect of the German designation of the Patent because, although framed exclusively as a claim for infringement, it implicitly asserted that the German designation was valid when, as the claim itself acknowledged, the validity of the German designation had been challenged by Molycorp and had to be determined by the German courts.[75]Before turning to consider the issue between the parties, it is convenient to identify a point that is not in issue. The first sentence of Article 24(4) refers to the courts of the Member States “in which the deposit or registration has been applied for [or] has taken place” having jurisdiction, whereas the second sentence refers to the courts of each Member State having jurisdiction in proceedings concerned with “the registration or validity of any European patent granted for that Member State”. Counsel for AbbVie did not argue that the second sentence only conferred jurisdiction in respect of granted European patents, whereas the first sentence conferred jurisdiction in respect of pending national patent applications. Albeit without the benefit of argument, I have to say that I consider that there may well be good reasons for concluding that this distinction between the first and second sentences is deliberate. For reasons that will appear, however, I have concluded that it would make no difference if the second sentence was indeed limited to granted European patents.[76]Counsel for AbbVie submitted that FKB’s claim for an Arrow declaration did not fall within Article 24(4) because it was not “concerned with … the validity of” any European patent (UK). If it were, the claim would be precluded by section 74 of the 1977 Act. Counsel for FKB submitted that FKB’s claim for an Arrow declaration did fall within Article 24(4) because it was “concerned with … the validity of” one or more European Patents (UK) even though it did not “put in issue” the validity of those patents within section 74.[77]In resolving this issue, it is vital to focus upon the substance, rather than the form, of the Arrow declaration sought by FKB. As explained above, in substance, what FKB claims is a declaration that it will have a Gillette defence to any claim infringement of a granted patent in family 5 of the Secondary Applications, and in particular any European Patent (UK) which may be granted pursuant to EPA491 or any divisional application stemming from EPA491. Thus it will enable the Court, if necessary, pre-emptively to determine claims for infringement of such European Patents (UK) before they have even been granted. But the effect of the declaration (particularly if reinforced by the injunction sought by FKB) will be to preclude AbbVie Bermuda from bringing infringement proceedings when such European Patents (UK) are granted, because it will already have been determined that FKB has a defence to such claims.[78]In my judgment FKB’s claim for an Arrow declaration is “concerned with” the validity of such prospective European Patents (UK) because it will require the Court to determine the single question of whether FKB has infringed a valid claim of such patents. The fact that it will enable the Court to do so pre-emptively before the patents have been granted is neither here nor there. Nor does it matter that the Court will not have to decide whether any or all of the claims of the patents will be invalid or whether FKB’s product will not infringe any or all of the claims of the patents because it will fall outside them. If the Court grants the declaration, it will mean that the claims will either be invalid or not infringed, and it does not matter which. But FKB’s claim cannot be characterised as purely concerned with infringement of the patents (contrast the claim in Actavis Group hf v Eli Lilly & Co [2012] EWHC 3316 (Pat) affd [2013] EWCA Civ 517, [2013] RPC 37).[79]I would add that this analysis makes sense if one considers the possibility of the courts of another Member State making an Arrow declaration (as Henry Carr J noted in FKB1, the courts of the Netherlands have done so). If the courts of the UK did not have exclusive jurisdiction over claims for Arrow declarations affecting future European Patents (UK), then there could be cases in which the courts of other Member States had jurisdiction to make such declarations under Article 2 of the Recast Brussels I Regulation. That would lead to the possibilities of more than one forum having jurisdiction and conflicting decisions. In those circumstances the second and third reasons which led the CJEU to conclude in Gesellschaft für Antriebstechnik mbH & Co. KG v Lamellen und Kupplungsbau Beteiligungs KG [2006] ECR I-6509 (“GAT v LuK”) that Article 24(4) was applicable where invalidity was raised by way of defence also apply here.[80]For the reasons given above, I conclude that the UK courts have exclusive jurisdiction over FKB’s claim for an Arrow declaration against AbbVie Bermuda. In case I am wrong about that, I shall go on to consider whether FKB should have permission to serve its claim on AbbVie Bermuda outside the jurisdiction. Permission to serve the claim on AbbVie Bermuda outside the jurisdiction The tests which FKB must satisfy

Permission to serve the claim on AbbVie Bermuda outside the jurisdiction

[81]By virtue of Article 6 of the Recast Brussels I Regulation, if a defendant is domiciled outside the Brussels-Lugano zone, jurisdiction over him is determined by national jurisdictional law, save where Articles 24 or 25 give exclusive jurisdiction to a court.[82]The relevant national law is CPR rules 6.36 and 6.37, under which the Court has power to give permission to serve proceedings out of the jurisdiction if one of the gateways in Practice Direction 6B paragraph 3.1 applies, and if the claimant can show that England is clearly or distinctly the appropriate forum to hear the claim: see VTB Capital plc v Nutritek International Corp [2013] UKSC 5, [2013] 2 AC 337 at [12]-[13] and [18] (Lord Mance).[83]In the past, it was often said that the Court’s power to grant service out of the jurisdiction should be exercised cautiously, on the basis that it was an exercise of its “exorbitant” extraterritorial jurisdiction. This is no longer the law. As Lord Sumption explained in Abela v Baadarani [2013] UKSC 44, [2013] 1 WLR 2043 at [53]:
“Longmore LJ described the service of the English court’s process out of the jurisdiction as an ‘exorbitant’ jurisdiction … This characterisation of the jurisdiction to allow service out is traditional, and was originally based on the notion that the service of proceedings abroad was an assertion of sovereign power over the defendant and a corresponding interference with the sovereignty of the state in which process was served. This is no longer a realistic view of the situation. The adoption in English law of the doctrine of forum non conveniens … means that in the overwhelming majority of cases where service out is authorised there will have been … a substantial connection between the dispute and this country … It should no longer be necessary to resort to the kind of muscular presumptions against service out which are implicit in adjectives like ‘exorbitant’. The decision is generally a pragmatic one in the interests of the efficient conduct of litigation in an appropriate forum.”
[84]It is common ground that, if jurisdiction is challenged, it may be upheld on the basis of gateways not originally relied on at the time of the application to serve out of the jurisdiction: see NML Capital Ltd v Republic of Argentina [2011] UKSC 31, [2011] 2 AC 495 at [75] (Lord Phillips of Worth Matravers), [83] (Lord Mance) and [137] (Lord Collins of Mapesbury).[85]If there is a dispute about the applicability of a gateway, the claimant must show that it has a “good arguable case” that the gateway applies. In this context, that means the claimant must show it has more than a real prospect of success on the question, but need not prove matters on the balance of probabilities: see Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1994] 1 AC 439 at 453D–G and 454C–D (Lord Goff of Chieveley). The test has been glossed as meaning “a much better argument on the material available” having regard to the limitations of the interlocutory process: see Canada Trust Co v Stolzenberg (No (2) [1998] 1 WLR 547 at 555-556 (Waller LJ) and AK Investment CJSC v Kyrgz Mobile Tel Ltd [2011] UKPC 7, [2012] 1 WLR 1804 at [71] (Lord Collins of Mapesbury). If an issue of law arises in this context, then the court should decide the issue unless the issue is one of great difficulty: see AK v Kyrgyz at [86].[86]So far as the merits of the substantive claim are concerned, a claimant need only show for jurisdictional purposes under CPR 6.36 that there is a “serious issue to be tried”: see Seaconsar at 456G–457C and 456G-457A. This test is now equated with the test of a real prospect of success: see AK v Kyrgz at [71][87]The “good arguable case” test does not apply to proof of the merits of the claim, but only to proof of the jurisdictional elements necessary to come within the gateways. As FKB accepts, however, a jurisdictional element of the gateways needs to be established to a “good arguable case” level even if that matter is also relevant to the merits.[88]AbbVie contend that, in relation to gateway (2) (“a claim is made for an injunction ordering the defendant to do or refrain from doing an act within the jurisdiction”), it is necessary to show a good arguable case that an injunction will be granted. In support of this contention counsel for AbbVie relied upon Watson & Sons v Daily Record (Glasgow) Ltd [1907] 1 KB 853 at 859-860 (Cozens Hardy LJ). FKB contends that all that it is necessary for the claimant to show is that there is a good arguable case that the claim is one which would found an injunction ordering the defendant to do, or to refrain from doing, an act within the jurisdiction. The question of whether the claimant is likely to prevail on that claim needs only be proven to the threshold of a serious issue to be tried. In support of this contention counsel for FKB relied upon Chemische Fabrik Vormals Sandoz v Badische Anilin und Soda Fabrik [1904] RPC 533 at 539 (Lord Davey) and Seaconsar at 455C. I agree with FKB on this point.[89]I would add that counsel for AbbVie suggested that the note in Civil Procedure (2016 ed) at 6.37.27 supported his submission, but I disagree with this. What the note says is that the claimant must show that “there is a reasonable prospect of an injunction … being granted”. I interpret “reasonable prospect” to mean “real prospect”, and read in that way I consider that the note is accurate. I do not understand Birss J to have said anything different in Magnesium Elektron Ltd v Molycorp Chemicals & Oxides (Europe) Ltd [2015] EWHC 3596 (Pat) at [38].[90]Finally, the Court has a discretion to permit or decline service out. If England is the most appropriate forum, however, that usually subsumes all questions of discretion (leaving aside separate issues, like failure of full and frank disclosure): see VTB v Nutritek at [12]-[13].[91]AbbVie contend that, in relation to gateway (2), even if the claimant does not have to show a good arguable case on the claim for an injunction, the weakness of the claim is relevant to the exercise of the Court’s discretion. In support of this contention counsel for AbbVie relied upon Rosler v Hilbery [1925] 1 Ch 250. FKB contends that, if the merits passes the threshold of a “serious issue to be tried”, then it is not relevant to consider, with respect to the discretion to serve out, whether the case is strong or weak. In support of this contention counsel for FKB relied upon Seaconsar at 455H–456D. Again, I agree with FKB on this point.[92]I will consider the individual gateways in approximately the order in which they were argued by counsel for FKB. I do so having already concluded that FKB has a real prospect of success in its claims for an Arrow declaration and an injunction against both AbbVie Bermuda and AbbVie UK. Gateway (11): Property within the

jurisdiction

[93]Gateway (11) applies where:

Gateway (11): Property within the jurisdiction

“The subject matter of the claim relates wholly or principally to property within the jurisdiction …”
[94]FKB contends that its claim for an Arrow declaration against AbbVie Bermuda falls within this head because it is a claim about FKB’s products in the UK. Specifically, it is a claim about the application of the concepts of lack of novelty and obviousness to FKB’s products (i.e. property) when those products are dealt in within the UK (i.e. within the jurisdiction).[95]In support of this contention counsel for FKB relied on the judgment of Lightman J in In re Banco Nacional de Cuba [2001] 1 WLR 2039 at [33], holding that what is now gateway (11) gives the court a wide jurisdiction which extends to “any claim for relief, whether for damages or otherwise, so long as it is related to property located within the jurisdiction”, including personal property.[96]AbbVie contend that the claim does not fall within gateway (11) for two reasons: first, because the gateway can only apply to property which is now within the jurisdiction; and secondly, because the claim does not relate wholly or principally to property anyway.[97]In support of the contention that the gateway can only apply to property which is within the jurisdiction at the time when permission to serve out is sought, counsel for AbbVie relied upon the commentary in Cheshire, North & Fawcett, Private International Law (14th ed) at 393. Counsel for FKB submitted that the editors were in error and that it was sufficient that the claim concerned property which would be in the jurisdiction when the declaration took effect. This is an ingenious argument, but I do not accept it. Whatever might be the position if a claim was made in respect of property which, at the time permission to serve out was sought, was in existence and was in transit to this jurisdiction, in the present case FKB’s claim is designed to obtain a declaration before the property comes into existence, let alone comes into the jurisdiction. FKB’s objective is to obtain a declaration before 15 October 2018, in order that it can safely commence importing or manufacturing, and then dealing in, FKB327 in the UK after that date. As I have explained, one reason why FKB wants to obtain the declaration is to forestall the possibility of AbbVie Bermuda obtaining an interim injunction, including on a quia timet basis, to prevent FKB from launching its product. Accordingly, I do not consider that the claim relates to “property within the jurisdiction”.[98]Turning to AbbVie’s second contention, counsel for AbbVie argued that the claim did not relate wholly or mainly to property because it was not concerned with property as such, but rather with whether certain acts would be not new or obvious as at a certain date. I do not accept this argument. FKB’s claim is concerned with establishing its freedom to do certain acts in relation to its future property. It is true that the applicable legal criteria will be lack of novelty or obviousness, but those criteria will be applied to FKB’s intended product. Thus it will be necessary for FKB to define with sufficient precision the nature of that product. Accordingly, if the claim did concern property within the jurisdiction, I consider that it would relate wholly or mainly to such property.[99]For the reasons given above, I conclude that FKB cannot rely upon gateway (11).

Gateway (9): Tort

[100]Gateway (9) applies where:
“A claim is made in tort, where– (a) damage was sustained, or will be sustained, within the jurisdiction; or (b) damage which has been or will be sustained results from an act committed, or likely to be committed, within the jurisdiction.”
[101]AbbVie contend that the claim does not fall within gateway (9) for two reasons: first, because the gateway only applies to claims that torts have been, or will be, committed, and does not extend to claims for negative declarations that no tort has been, or will be, committed; and secondly, because the declaration claimed by FKB is not a declaration that no tort will be committed anyway.[102]So far as the first issue is concerned, it is established that Article 7(2) of the Recast Brussels I Regulation, which confers jurisdiction on the courts “for the place where the harmful event occurred or may occur” (which may be either the place where the damage occurred or the place where the event giving rise to the damage occurred), applies to claims for negative declarations that the clamant has no liability to the defendant in tort: see Case C-133/11 Folien Fischer AG v Ritrama SpA [EU:C:2012:664], [2013] QB 523. The Court of Justice’s reasoning was that the rationale for conferring jurisdiction on the courts of the place where the harmful event occurred or might occur was not affected by the question of which party was the claimant and which the defendant. As the Court stated:
“45. The objectives, pursued by that provision and repeatedly stressed in case-law (see Case C-292/10 G [2012] ECR, paragraph 39, and Wintersteiger, paragraph 23), of ensuring that the court with jurisdiction is foreseeable and of preserving legal certainty are not connected either to the allocation of the respective roles of claimant and defendant or to the protection of either. … 48. Admittedly, there is a difference between, on the one hand, the interests of the applicant in an action for a negative declaration and, on the other, the interests of the applicant in proceedings seeking to have the defendant held liable for causing loss and ordered to pay damages. In both cases, however, the examination undertaken by the court seised essentially relates to the same matters of law and fact. … 50. It should further be stated that, during the stage at which jurisdiction is verified, the court seised does not examine either the admissibility or the substance of the application for a negative declaration in the light of national law, but identifies only the points of connection with the State in which that court is sitting, which support its claim to jurisdiction under point (3) of Article 5 of Regulation No 44/2001. 51. In those circumstances, the special nature of the action for a negative declaration, referred to in paragraph 42 above, has no bearing on the examination that the national court must carry out in order to determine whether it has jurisdiction in matters relating to tort, delict or quasi-delict, since the only matter to be established is whether there is a point of connection with the Member State in which the court seised is sitting. 52. If, therefore, the relevant elements in the action for a negative declaration can either show a connection with the State in which the damage occurred or may occur or show a connection with the State in which the causal event giving rise to that damage took place, in accordance with the case-law set out in paragraph 39 above, then the court in one of those two places, as the case may be, can claim jurisdiction to hear such an action, pursuant to point (3) of Article 5 of Regulation No 44/2001, irrespective of whether the action in question has been brought by a party whom a tort or delict may have adversely affected or by a party against whom a claim based on that tort or delict might be made.”
[103]Counsel for FKB submitted that gateway (9) should be interpreted in the same way. In support of this submission, he pointed out that what is now Article 7(2) of the Recast Brussels I Regulation was the historical antecedent of the modern tort head of jurisdiction in what is now PD6B paragraph 3.1(9). A narrower tort head existed under the RSC before the UK’s accession to the Brussels Convention, but as David Steel J stated in Newsat Holdings Ltd v Zani [2006] EWHC 342 (Comm), [2006] 1 All ER (Comm) 607 at [31] “in 1987, the rules as regards claims in tort were amended to adopt an equivalent jurisdiction to that conferred by Article 5(3) of the Brussels Convention as interpreted by the European Court”. Accordingly, he submitted, aside from points of difference which do not matter here, the case law of the CJEU on Article 7(2) and its predecessors provided guidance as to the interpretation of PB6B paragraph 3.1(9). Furthermore, he argued that the reasons given by the CJEU for holding that Article 7(2) should be interpreted as extending to negative declarations were persuasive and should be followed.[104]Counsel for AbbVie submitted that PD6B paragraph 3.1(9) was a domestic provision which should not be interpreted in the same manner as Article 7(2) because of the difference between the two legislative contexts. In support of this submission, he relied upon observations to that effect by Tugendhat J in Cooley v Ramsey [2008] EWHC 129 (QB), [2008] ILPr 27 at [35]-[43] and Haddon-Cave J in Wink v Croatia Osiguranje DD [2013] EWHC 1118 (QB) at [41].[105]Counsel for FKB pointed out, however, that Newsat v Zani had not been cited in either of those cases. Furthermore, he submitted that the observations of Tugendhat J in Cooley were confined to an issue with respect to indirect damage, and accordingly did not bear the weight which Haddon-Cave J subsequently placed upon them in Wink. More importantly, he submitted that Cooley and Wink had subsequently been first doubted, and then overruled, by the Court of Appeal. In this regard he relied upon Erste Group Bank AG v JSC VMZ Red October [2015] EWCA Civ 379, [2015] 1 CLC 706 at [103]-[105] (Gloster LJ giving the judgment of the Court of Appeal) and Lady Brownlie v Four Seasons Holdings Inc [2015] EWCA Civ 665, [2016] 1 WLR 1814 at [71]-[84] (Arden LJ, with whom Bean and King LJJ agreed).[106]I do not consider that it is necessary to consider all these decisions in detail. The conclusion I draw from them is that the balance of authority favours interpreting gateway (9) consistently with Article 7(2) where it is possible to do so. But in any event, there is no authority binding upon me which holds that gateway (9) should not be interpreted in the same way as Article 7(2) with respect to negative declarations. In my judgment it makes sense to do so given the apparent policy behind the introduction of gateway (9) and given the desirability of a consistent approach. Moreover, while it is true that domestic regime is more flexible than the Brussels I regime, which does not allow for the application of the doctrine of forum non conveniens, that consideration favours a broader interpretation of gateway (9) rather than a narrower one. Above all, I find the reasoning of the Court of Justice in Folien Fisher persuasive and I consider that it is equally applicable to gateway (9). Accordingly, I conclude that a claim for a negative declaration that no tort has been, or will be, committed falls within gateway (9).[107]Turning to the second issue raised by AbbVie, counsel for AbbVie submitted that the Arrow declaration claimed by FKB was not in terms a declaration that no tort would be committed by FKB. Moreover, he argued that, if it were formulated in that way, it would fall foul of section 74(1) of the 1977 Act. I do not accept this argument. As I have already said, it is important to focus upon the substance of the Arrow declaration sought by FKB rather than its form. In substance, it is a declaration that FKB will not commit any tort so far as patents in family 5 are concerned because it will have a Gillette defence to any claim for infringement. It has already been established at this level of the judicial hierarchy that such a claim does not contravene section 74(1).[108]Accordingly, I conclude that FKB has a good arguable case that its claim for an Arrow declaration against AbbVie Bermuda falls within gateway (9).

Gateway (3): Necessary or proper party

[109]Gateway (3) applies where:
“A claim is made against a person (‘the defendant’) on whom the claim form has been or will be served (otherwise than in reliance on this paragraph) and– (a) there is between the claimant and the defendant a real issue which it is reasonable for the court to try; and (b) the claimant wishes to serve the claim form on another person who is a necessary or proper party to that claim.”
[110]It is common ground that: i) the claim form was properly served on AbbVie UK within the jurisdiction; ii) FKB’s primary motive in suing AbbVie UK was in order to assist it to secure jurisdiction over AbbVie Bermuda; and iii) the fact that that was FKB’s motive does not in itself prevent FKB from relying upon gateway (3), and is at most a consideration to be taken into account in whether to exercise of discretion in favour of service out of the jurisdiction under 3.1(3): see AK v Kyrgyz at [76]–[79].[111]So far as paragraph 3.1(3)(a) is concerned, as explained above, FKB seeks(i) an Arrow declaration and(ii) an injunction against AbbVie UK. I have already concluded that FKB has a real prospect of success in both of those claims. On that basis, it follows that there is a real issue between FKB and AbbVie UK that it is reasonable to ask this Court to try.[112]As to paragraph 3.1(3)(b), FKB contends that AbbVie Bermuda is a necessary or proper party because it is(i) a member of the same corporate group whose behaviour is linked with that of AbbVie UK and(ii) the owner of the relevant rights under the patent applications. AbbVie do not dispute this.[113]Accordingly, I conclude that FKB has a good arguable case that its claim against AbbVie Bermuda falls within gateway (3).

Gateway (4A): Same or closely connected facts

[114]Gateway (4A) applies where:
“A claim is made against the defendant in reliance on one or more of paragraphs (2), (6) to (16), (19) or (21) and a further claim is made against the same defendant which arises out of the same or closely connected facts.”
[115]FKB relies upon this gateway in conjunction with gateway (2). It contends that, if this Court has jurisdiction in relation to its claim for an injunction against AbbVie Bermuda under gateway (2), then its claim for the Arrow declaration falls within gateway (4A). In view of my other conclusions, I shall deal with this briefly. I agree with AbbVie that FKB’s reliance upon this head is circular because FKB’s claim for an injunction is parasitic on its claim for a declaration.

Gateway (2): Injunction

[116]Gateway (2) applies where:
"A claim is made for an injunction ordering the defendant to do or refrain from doing an act within the jurisdiction."
[117]FKB relies on its claim for an anti-suit injunction against AbbVie Bermuda as founding jurisdiction within gateway (2) since it is a claim to restrain the pursuit of proceedings in England and Wales by injunction.[118]AbbVie do not dispute that the claim is for an injunction to refrain from doing acts within the jurisdiction, but they nevertheless contend that FKB’s reliance upon gateway (2) is impermissible, because the claim for an injunction has only been made in order to enable FKB to rely upon this gateway. In support of this contention counsel for AbbVie relied upon Rosler v Hilbery at 258 (Pollock MR), 261-262 (Warrington LJ) and 262-263 (Sargant LJ).[119]Counsel for FKB submitted that the true ratio of Rosler v Hilbery was that that the claim for an injunction must be (as Sargant LJ put it at 262) “part of the substantive relief claimed” rather than (as Warrington LJ put it at 261-262) “incidental only to the relief claimed to keep things in statu quo until the nature of that relief can be determined and given effect to by an order of the court”.[120]I agree with counsel for FKB that the fact that the claimant’s motive in claiming an injunction is in order to rely upon gateway (2) is not fatal to an application to serve out. Just as with the claimant’s motive for suing an anchor defendant in order to rely upon gateway (3), this is merely a factor in the exercise of the Court’s discretion. Accordingly, I agree with counsel for FKB’s characterisation of the true ratio of Rosler v Hilbery (see also GAF Corp v Amchem Products Inc [1975] 1 Lloyds Rep 601).[121]In the present case, FKB claims an injunction to enforce the Arrow declaration that it seeks. In my judgment the injunction does form part of the substantive relief claimed, and is not merely incidental. Accordingly, I conclude that FKB has a good arguable case that its claim against AbbVie Bermuda falls within gateway (2).

Is England clearly or distinctly the appropriate forum?

[122]Counsel for AbbVie rightly conceded that there was no alternative forum for FKB’s claims against AbbVie Bermuda. In my judgment it is clear that England is the appropriate forum for these claims. In short, the claims are concerned to establish FKB’s freedom to market its product in the UK under UK patent law.

Discretion

[123]AbbVie contends that the Court should exercise its discretion to refuse FKB permission to serve the proceedings on AbbVie Bermuda outside the jurisdiction. This contention is primarily founded upon the assumption that gateway (2) is the only gateway available to FKB. On that assumption, AbbVie contends that the weakness of FKB’s claim for an injunction militates against discretion being exercised in FKB’s favour. In the light of my previous conclusions, however, gateway (2) is not the only gateway available to FKB. Furthermore, for the reasons given above, I do not accept that the strength or weakness of FKB’s claim for an injunction is relevant to the exercise of my discretion. Given that England is clearly the appropriate forum, I see no reason to exercise my discretion otherwise than by giving FKB permission.

Result

[124]For the reasons given above, AbbVie’s applications are dismissed and I shall give FKB permission to amend the Particulars of Claim as requested.

Cited in 8 later judgments