INTELLECTUAL PROPERTY
Inventive step - novelty - patents - pharmaceuticals

H Lundbeck a/s v (1) Generics (UK) Ltd & ors (2) Arrow Generics Ltd (3) Teva UK Ltd & Teva Pharmaceutical Ltd: CA (Civ Div) (Lord Hoffmann, Lords Justice Smith, Jacob): 10 April 2008

The appellant patentee (L) appealed against a decision that claims 1 and 3 of its European patent were invalid for insufficiency.



The respondent drug manufacturers (G) cross-appealed against findings that claims 1 and 3 did not lack novelty, and that claims 1, 3 and 6 were not invalid for obviousness.



L had previously held the patent relating to the antidepressant drug citalopram. That patent had since expired and citalopram was sold in its generic form by a number of manufacturers.



Citalopram was a racemate, consisting of equal numbers of two molecules called enantiomers. L had spent several years trying to resolve the racemate by separating it into its enantiomers. The patent in suit related to one enantiomer called escitalopram.



Claim 1 in the patent was to escitalopram itself, along with non-toxic addition salts. Claim 3 was to a pharmaceutical composition in unit dosage form comprising an active ingredient of the compound described in claim 1. Claim 6 was to a method for the preparation of such a compound. G claimed revocation of the patent.



The judge held that claims 1 and 3 were insufficient. His reasoning was that claim 1, being a claim to escitalopram as a product, was a claim to a monopoly of that product however made; but L's inventive idea was not to discover that the enantiomer existed and had a medicinal effect, as everyone knew that the two enantiomers existed and one or the other (or both) had a medicinal effect. The judge held that what L had discovered was one way of making escitalopram, and that did not entitle them to a monopoly over every way of making it.



G argued that: (1) claim 1 was not only for the isolated enantiomer, it was also for the enantiomer as an unresolved moiety of the racemate. To that extent it was anticipated in the prior art which disclosed the racemate and enabled it to be made; (2) one method for resolving the racemate, namely the amino diol route, would have been obvious to a skilled person at the priority date. The judge had failed to consider whether it was obvious for the skilled man to try the reaction to see if it worked.



Held: (1) There was no doubt that the judge was correct in finding that, whatever claim 1 meant, it did not include an unresolved part of the racemate. It was therefore not anticipated.



(2) It could not be argued that the judge was unaware that the whole of G's case on obviousness could be summed up by saying that it was obvious to try the amino diol route. The judge rejected evidence from G's expert witness that, in his opinion, there was a high expectation that trying the amino diol route would work. Once he had done so, his conclusion that the amino diol route was not obvious was unassailable.



(3) The judge's reasoning was not justified by the Patents Act 1977 or the authorities. In an ordinary product claim the product was the invention. It was sufficiently enabled if the specification and common general knowledge enabled the skilled person to make it. One method of making it was enough. The judge had founded his decision on Biogen Inc v Medeva Plc [1997] RPC 1 HL. The House of Lords in that case was considering a claim to a class of products which satisfied the specified conditions. The decision in Biogen could not be extended to an ordinary product claim in which the product was not defined by a class of processes of manufacture. The judge had treated the relevant 'technical contribution to the art' as being the inventive step, namely a way of making the enantiomer. That was a mistake: when a product claim satisfied the requirements of section 1 of the act, the technical contribution to the art was the product and not the process by which it was made, even if that process was the only inventive step, KAWASAKI/Grain oriented silicon sheet (T595/90) (1995) EPOR 36 EPO (Technical Bd App) considered. Biogen should not be read as casting any doubt upon the proposition that an inventor who found a way to make a new product was entitled to make a product claim, even if its properties could have been fully specified in advance and the desirability of making it was obvious. Parliament had chosen to allow product claims: it was too late to have regrets about the breadth of the monopoly which such claims conferred.



Appeal allowed, cross-appeal dismissed.



Andrew Waugh QC, Justin Turner (instructed by Simmons & Simmons) for the appellant; Simon Thorley QC, Michael Tappin (instructed by Taylor Wessing) for the first respondent; Simon Thorley QC, Mark Chacksfield (instructed by Forsyth Simpson) for the second respondent; Simon Thorley QC, Thomas Hinchliffe (instructed by Roiter Zucker) for the third respondent.





INSOLVENCY

Assets - Australia - corporate insolvency - cross-border insolvency - pari passu

McGrath & anor & ors v Riddell & ors: HL (Lord Hoffmann, Lord Phillips of Worth Matravers, Lord Scott of Foscote, Lord Walker of Gestingthorpe, Lord Neuberger of Abbotsbury): 9 April 2008
 The appellant Australian liquidators (C) appealed against a decision ([2006] EWCA Civ 732, [2007] Bus LR 250) that the court should not accede to a request by an Australian judge asking that provisional liquidators in England be directed to remit the English assets of four insolvent Australian insurance companies to C for distribution in accordance with the Australian statutory scheme. The alternative was for the assets to be retained in England and distributed in accordance with the English statutory scheme.



Australian law had certain statutory provisions relating to insurance companies which departed from the insolvency principle of a pari passu distribution of assets among unsecured creditors. It was common ground that, if the English assets were sent to Australia, insurance and reinsurance creditors would be paid in priority to ordinary creditors. The courts below held that it would not be right to direct a remission of assets in circumstances where the remission would reduce the dividends that would have been recovered under the English scheme of insolvency distribution by those creditors who were not insurance creditors.



Held: (1) Sections 426(4) and 426(5) of the Insolvency Act 1986 gave the court jurisdiction to accede to the request of the Australian court and, on the facts of the case, the court ought to accede to that request. The exercise of the section 426 power so as to direct the remission of the assets to Australia would not constitute the disapplication of the English insolvency scheme. To hold that the power under the section, to direct the remission of assets from the country where an ancillary liquidation was being conducted to the country where the principal liquidation was being conducted, could not be exercised if the effect would be to reduce the amount of dividends receivable in England by any class of creditors or by any individual creditor would be to deprive the section of much of its intended potential to enable a single universal scheme for insolvency distribution to be achieved.



The English courts had a statutory obligation in an English winding up to apply the English statutory scheme. There was no inherent jurisdiction to deprive creditors proving in an English liquidation of their statutory rights under that scheme, Bank of Credit and Commerce International SA (In Liquidation) (No11), Re [1997] Ch 213 Ch D considered.



If the country of the principal winding up was a 'relevant country or territory' for section 426 purposes, and the liquidators in that country had requested English liquidators to remit to them the assets collected in England so that they could, pursuant to the insolvency law of that country, implement a universal scheme of pari passu distribution to ordinary unsecured creditors, the request was one to which, in principle, the English liquidators ought to accede. The English liquidators should first discharge the debts of those creditors who, under the English insolvency scheme, were entitled to preferential payment.



(2) There might be circumstances in which a refusal to remit assets pursuant to such a request might be justified. Reliance simply on the fact that, under the insolvency scheme applicable to the principal winding up, there would be a significant class or classes of preferential creditors whose debts would not have priority under the English insolvency scheme was not sufficient to justify a refusal. There was nothing unacceptably discriminatory or otherwise contrary to public policy in the Australian statutory provisions. The fact that Australia had been designated a 'relevant country or territory' for section 426 purposes indicated that, in general terms, the Australian insolvency scheme was acceptable in this jurisdiction.



(3) (Per Lord Hoffmann) The court had jurisdiction at common law, under its established practice, of giving directions to ancillary liquidators, to direct remittal of the English assets, notwithstanding any differences between the English and foreign systems of distribution. Those differences were relevant only to the question of whether to exercise discretion to do so.



Appeal allowed.



Jonathan Sumption QC, Simon Mortimore QC, Tom Smith, Geoffrey Vos QC, Peter Arden QC (instructed by Norton Rose, Clifford Chance) for the appellants; William Trower QC, Jeremy Goldring (instructed by Freshfields Bruckhaus Deringer) for the respondents.





IMMIGRATION

Human rights - appeals - asylum seekers - Palestine - persecution - statelessness

MA (Palestinian territories) v Secretary of State for the Home Department: CA (Civ Div) (Lords Justice Maurice Kay, Lawrence Collins, Sir William Aldous): 9 April 2008
 The appellant asylum seeker (M) appealed against a decision of the Asylum and Immigration Tribunal (AIT) upholding the respondent secretary of state's refusal of his asylum and human rights claim.



M, a Palestinian Arab from the West Bank, had entered the UK and claimed asylum on the basis that he would be persecuted if returned. The secretary of state refused his application on asylum and human rights grounds, and he appealed. The adjudicator dismissed his asylum appeal but allowed the human rights appeal. The adjudicator held that, while on return M would be subjected to controls and restrictions by the Israelis, that treatment was not such that it could amount to persecution, but it would amount to degrading treatment for the purpose of article 3 of the European Convention on Human Rights.



The secretary of state appealed and the AIT concluded that the adjudicator's determination contained an error of law in that, if restrictions on M engaged article 3 of the convention, M was also at risk of persecution.



The matter was referred for a second-stage reconsideration, where the AIT dismissed M's appeal and held that, as a Palestinian being forcibly returned from abroad, M would not be allowed to re-enter the West Bank but would have to turn back to Jordan, and he would not be persecuted.



M contended that: (1) the secretary of state's grounds of appeal had not contained an arguable error of law on the part of the adjudicator; (2) the AIT at the first-stage reconsideration had not found a material error of law, only an arguable one; (3) the AIT's finding that the denial of re-entry to M as a stateless person would not amount to persecution was erroneous.



Held: (1) While a point of law had to be apparent on the face of the grounds of appeal, a stringent process of construing the document would be inappropriate, Miftari v Secretary of State for the Home Department [2005] EWCA Civ 481 applied. What was required was a fair and reasonable examination of the grounds of appeal to ascertain whether a point of law was identifiable. The grounds of appeal, fairly and reasonably construed, disclosed a perversity challenge to the adjudicator's decision.



(2) Read as a whole, the reasoning of the AIT at the first-stage reconsideration amounted to a finding of an actual, and not just an arguable, error of law. There was a logical inconsistency between the findings of the adjudicator on degrading treatment and his findings on persecution, torture and inhuman treatment, notwithstanding that the threshold test of the requisite level of severity was the same in each case.



(3) At the second-stage reconsideration the AIT had not erred in holding that the denial of re-entry to a stateless person was not, in itself, persecutory under the convention relating to the Status of Refugees 1951 (United Nations). It was not persecutory to deny a stateless person re-entry to the country of his former habitual residence. There was a fundamental distinction between nationals and stateless persons, and the denial did not interfere with a stateless person's rights in the way it did with the rights of a national, AK v Secretary of State for the Home Department [2006] EWCA Civ 1117, [2007] Imm AR 81 considered.



Appeal dismissed.



Jane Collier (instructed by The Refugee Legal Centre) for the appellant; Jeremy Johnson (instructed by the Treasury Solicitor) for the respondent.





HUMAN RIGHTS

Armed forces - inquiries - Iraq - military intervention - right to life - service personnel

R (on the application of Gentle & anor) v Prime Minister & ors: HL (Lord Bingham of Cornhill, Lord Hoffmann, Lord Hope of Craighead, Lord Scott of Foscote, Lord Rodger of Earlsferry, Baroness Hale of Richmond, Lord Carswell, Lord Brown of Eaton-under-Heywood, Lord Mance): 9 April 2008
 The appellants (G) appealed against the refusal of their application for judicial review of the government's decision to refuse to hold an independent inquiry into the circumstances that led to the invasion of Iraq.



G were the mothers of two soldiers killed while serving in the British army in Iraq. G submitted that they had an enforceable legal right to require the government to establish an independent inquiry due to the government's breach of the right to life under article 2 of the European Convention on Human Rights. G argued that the government had a duty to obtain reliable legal advice before committing its troops to armed conflict and, had the government done so, it would not have invaded Iraq and G's sons would not have died.



Held: (1) G's underlying complaint was that the UK went to war to achieve an unlawful aim, without proper UN sanction and on the strength of legal advice that was adverse or equivocal until very shortly before the invasion. The correctness of that complaint was not a matter that fell for decision in the present case. The question was not whether a better inquiry might have led to a different conclusion, but whether article 2 created a legal duty to the soldiers to undertake such an inquiry.



(2) It was well-established that article 2 placed upon the state, in certain circumstances, a duty to take reasonable steps to safeguard the lives of citizens and, if there had arguably been a breach of that duty, a procedural obligation to conduct an independent inquiry into whether it had been breached or not, R (on the application of Middleton) v HM Coroner for Western Somerset [2004] UKHL 10, [2004] 2 AC 182 applied. However, it was clear that the procedural obligation under article 2 was parasitic upon the existence of the substantive right, and could not exist independently, Middleton, Jordan v UK (24746/94) [2003] 37 EHRR 2 ECHR, Edwards v UK (46477/99) [2002] 35 EHRR 19 ECHR and McKerr's Application for Judicial Review, Re [2004] UKHL 12, [2004] 1 WLR 807 considered. Therefore, to make good their procedural right to an inquiry, G had to show at least an arguable case that the substantive right arose on the facts, or their case would fail.



(3) The question whether the state unjustifiably took life or failed to protect it would arise in respect of a particular deceased person. There was no warrant for reading article 2 as a generalised provision protective of life, irrespective of any specific death or threat. In the present case, G had tragically lost their sons, but the right and duty they sought to assert did not depend on their sons' deaths. If it existed it would have arisen before either young man was killed and would exist had both men survived.



(4) Unfortunately, G's submissions did not stand up to examination. Crucially, the issue as to the legality of the invasion in international law had nothing to do with the state's obligations under article 2 to protect the servicemen and women in its jurisdiction. The issue of legality of conflict under international law belonged to the area of relations between states. It was not part of domestic law reviewable either in the UK or, under the convention, in the European Court at Strasbourg, Bankovic v Belgium (Admissibility) (52207/99) 11 BHRC 435 ECHR considered.



(5) In addition, the risk to soldiers' lives was not affected by whether a military operation was lawful or unlawful under international law. Indeed, an unlawful surprise attack might actually be safer for invading forces. While there were moral and political reasons for taking care to ensure that military operations were lawful under international law, reducing the risk to the lives of soldiers was not one of them. There was, accordingly, no basis for implying into article 2 an obligation on the government to take reasonable steps to satisfy itself on the legality of the invasion under international law.



(6) Even if G were able to establish an arguable substantive right under article 2, they would still fail to establish a right to the wide-ranging enquiry which they sought. Nothing in the Strasbourg case law appeared to contemplate such an enquiry. The procedural right relied upon by G was a product of implication and, while the implication of terms may be both necessary and desirable, it was a task to be carried out by any court, particularly a national court, with extreme caution. States ordinarily expressed the terms on which they agreed; terms not expressed may have been deliberately omitted and terms once implied were binding on all member states and may be terms they would not have been willing to accept, Brown v Stott [2003] 1 AC 681 PC (Sc) applied.



(7) Despite great sympathy for G, they had not established a substantive right under article 2 and their claim must therefore fail.



Appeal dismissed.



Rabinder Singh QC, Michael Fordham QC, Alex Bailin (instructed by Public Interest Lawyers) for the appellants; Jonathan Sumption QC, Philip Sales QC, Jemima Stratford (instructed by the Treasury Solicitors) for the respondents.





TAX

Mistake of law - overpayments - remedies - repayments

Angus Monro v Revenue & Customs Commissioners: CA (Civ Div) (Lords Justice Mummery, Longmore, Lady Justice Arden): 9 April 2008
 The appellant (M) appealed against a decision of the chancellor ([2007] EWHC 114 (Ch), [2007] STC 1182) dismissing his claim against the respondent Revenue & Customs for repayment of overpaid tax.



M had declared a gain on the sale of some shares using a computation later declared wrong in law, which resulted in his paying £846,000 more in tax than was properly due. It was common ground that he could not recover the admitted overpayment under the Taxes Management Act 1970, that it was too late to amend his tax return, and that a claim for repayment under section 33(1) of the act was precluded by section 33(2A) because the return was based on the practice generally used when it was made.



M argued that section 33 should not be treated as excluding the common law remedy of restitution for recovery of money paid under a mistake of law, and that the level of tax shown as due on his return was excessive and unlawful to the extent of £846,000.



The chancellor held that it would be inconsistent with section 33 to recognise a common law remedy in the precise circumstances postulated in section 33(1), but free of the limitation in section 33(2A), and rejected M's claim so far as it was based on a restitutionary claim to recover tax paid under a mistake of law.



M submitted that: (1) the chancellor had erred in law, in that there was nothing in section 33 to suggest that the common law remedies were excluded, and that section 33(1) and section 33(2A) had to be read together, and when they were it could be seen that section 33 did not apply at all; (2) section 33(2A) only applied to exclude claims 'under this section', which made it clear that section 33 was not dealing comprehensively with all claims for recovery of tax paid under a mistake, but only those brought under section 33, and that section 33 did not affect claims at common law.



Held: (1) Section 33 created its own code for repayments and was a parallel universe to the common law remedy. There was no express provision taking away common law rights, but it was a corollary of the parallel universe that there would have been a remedy at common law but for section 33. Parliament had, therefore, taken away a right that M would otherwise have had.



The conclusion of the court below had been correct, particularly in holding that judges, in developing the law, had to have regard to the policies expressed in legislation, and that, subject to fundamental human rights, the point where the various interests at issue should be balanced was a matter for democratic decision, Johnson v Unisys Ltd [2001] UKHL 13, [2003] 1 AC 518 applied. That principle had been specifically applied to section 33 of the act, Deutsche Morgan Grenfell Group Plc v Inland Revenue Commissioners [2006] UKHL 49, (2007) 1 AC 558 applied.



The authorities gave clear guidance that, if Parliament created a right that was inconsistent with a right given by the common law, the latter was displaced. By 'inconsistent' was meant that the statutory remedy had some restriction in it reflecting a policy rule of the statute that was a cardinal feature of the statute, and in those circumstances the likely implication of the statute, in the absence of contrary provision, was that the statutory remedy was an exclusive one.



(2) The obvious purpose of section 33(2A) was to protect public finances; if there was no control over claims for repayment, there would always be the risk that a very substantial amount of tax would become repayable as a result of developments in case law, possibly many years after it had been spent, creating understandable difficulty. It would make nonsense of that purpose if it was possible to bring an action at common law for the recovery of money in circumstances where section 33 applied. M's claim was within section 33(1) and the Revenue had a statutory obligation to consider it; it was not open to the court to rewrite the structure of section 33 and treat it as not covering his case. Thus, the present conclusion was not confined to a case where the claim led to no relief because of section 33(2A); the same would apply whenever a case that could have been brought under section 33 could not succeed because of some restriction on such claims that reflected a policy rule of the statute and constituted an important feature of it. Further, the court agreed with the chancellor that his conclusion on the inconsistency of the common law remedy with section 33 would apply also if the claim were reformulated as one for repayment of tax as a result of an ultra vires demand under the principle in Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 70 HL, Woolwich considered.



Appeal dismissed.



Michael Sherry (instructed by Reynolds Porter Chamberlain) for the appellant; Bruce Carr, Maya Lester (instructed by the in-house solicitor) for the respondents.