We have previously blogged about the dispute between Chugai and UCB concerning a declaration for non-liability of royalties due under a licence when we looked at an early stage of the action (see blog here). We now look at the latest decision from the Patents Court as to whether it, or, the US courts should have jurisdiction.
Brief recap of the dispute
The facts of the dispute are set out in detail in our earlier blog. In brief, Chugai is seeking a declaration from the court that its product "Actemra" does not infringe the remaining live patent, a US patent, and that therefore, it should no longer have to pay royalties to UCB under the original licence.
UCB however argued that to determine whether or not Chugai's products fell within the scope of the claims of the US patent, it would be necessary to determine the validity of the patent. According to UCB, the English court has no power to determine the validity of a foreign patent and it therefore brought proceedings for this aspect of the case to be struck out (or for it to be granted summary judgment in this regard).
Patents Court's decision
Mr Justice Carr, dismissing UCB's application, held that the court did have jurisdiction to deal with the issues raised by Chugai, due to the fact that:
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Chugai was not asking for the court to find that the US patent was invalid, but rather to determine if the products it sold fell within the claims of the patent.
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UCB submitted if an English Court were to determine the validity of a foreign patent this would 'infringe the territorial limited of the court's jurisdiction and constitute an affront to comity' which would be contrary to the Moçambique principle.
(The Moçambique principle is an old common law principle which states that the English court has no jurisdiction to entertain an action for the determination of the title to, or the right to the possession of, foreign land, or the recovery of damages for trespass to such land. It was considered by the Supreme Court in relation to copyright in Lucasfilm Ltd v Ainsworth [2011] UKSC 39.)
However, Mr Justice Carr found that the Moçambique principle did not apply in these circumstances as:
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Chugai did not intend to contend that the US patent was invalid nor seek any relief as to invalidity nor did it directly challenge validity;
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Chugai's case was a contractual claim for a declaration that no royalties were due as its products did not fall within the US patent, irrespective of validity; and
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The licence contained an exclusive jurisdiction clause in favour of the English courts.
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UCB also submitted that under the act of state doctrine, an English court will recognise and not question a foreign state's legislation, the effect of an act of a foreign state's executive and will refrain from adjudicating upon certain issues because they would challenge a foreign state's legal powers.
Mr Justice Carr also rejected this argument and found that act of state doctrine was not relevant in this case as the court was not attempting to challenge any legislation or acts of foreign governments.
Comment
In this decision, Mr Justice Carr was clear that the English courts had jurisdiction to determine the case as Chugai was raising issues about the scope of the claims of the US patent. However, he did concede that if Chugai had decided to challenge directly the validity of the US patent this should not be justiciable in the English courts. Although it was not necessary for him to rule on this point, the judge set out what he described as "powerful arguments" for not having jurisdiction over foreign patents when validity is the principal issue.
We will continue to keep you posted about this interesting case with the trial scheduled to take place in February 2018.
With thanks to Amelia Thomson for her assistance in writing this blog