Celltech R & D Ltd v Medimmune Inc

Parties who choose an English court to determine infringement under a multinational patent licence will generally be held to that choice. Parallel foreign proceedings, the risk of inconsistent decisions, additional expense and the foreign court’s familiarity with its own patent law do not, without more, amount to strong reasons for a stay. The English court may determine the contractual royalty issue under English law while receiving foreign patent law as evidence. Validity remains for the national court with jurisdiction to revoke the relevant patent. Where the court has already acquired substantial knowledge of the technology, a streamlined procedure may be appropriate, including limits on evidence, cross-examination and trial duration.

Celltech and MedImmune were parties to a multinational patent licence covering patents in 24 countries. MedImmune disputed liability for royalties relating to the SYNAGIS antibody and commenced proceedings in the United States concerning infringement and validity of a United States patent. Celltech brought proceedings in England and sought a streamlined procedure. MedImmune applied for a stay pending the United States proceedings.

The central issues were whether the licence agreement required infringement and royalty disputes to be determined by the English courts, whether the parallel United States proceedings justified a stay, and whether a streamlined procedure should be adopted.

1. The stay application was dismissed. The jurisdiction provisions required the parties to submit disputes concerning the validity, construction and performance of the agreement to the English courts. The existence of parallel United States proceedings did not constitute a strong reason to override that agreement.
2. The court accepted that the United States proceedings could involve difficult questions of United States patent law, overlapping construction issues and a risk of inconsistent decisions. Those were ordinary consequences of a multinational patent licence and were matters the parties could reasonably be taken to have considered when agreeing the jurisdiction clause. They did not, without special circumstances, justify a stay.
3. Clause 13 meant that English law governed the construction of the agreement and the question whether the product fell within the scope of a valid claim for royalty purposes. The English court could determine the content of relevant United States law as a matter of fact. The contractual definition of a valid claim preserved the jurisdiction of the relevant national court to determine patent validity.
4. The commercial purpose of selecting one court to determine infringement across several territories supported this construction. It promoted consistency, reduced duplication and enabled the court to develop expertise in the relevant technology. The court distinguished the determination of infringement from the national determination of validity.
5. In principle, a streamlined procedure was appropriate. The court could consider using evidence from the earlier related proceedings, limiting further technical evidence and cross-examination, restricting the trial duration, and retaining the benefit of the judge’s existing familiarity with the technology. The parties were given a short period to agree directions, failing which the matter would return to the court.