Actavis Group hf v Eli Lilly & Company

An agreement by solicitors to accept service is construed objectively in the same way as a commercial contract. The court considers the correspondence as a whole and the background knowledge reasonably available to the parties. Where language permits competing interpretations, the construction consistent with business common sense may be preferred.

An overseas corporation carries on business at a fixed place within the jurisdiction where representatives conduct significant parts of its own business there with sufficient permanence and authority. By contrast, the special service provisions for registered intellectual property rights extend only to claims concerning the registered UK right. A claim concerning a corresponding foreign designation cannot be served under those provisions merely because it accompanies a claim concerning the UK designation.

Two companies in a generic pharmaceutical group sought declarations that a proposed pemetrexed dipotassium product would not infringe the UK, French, German, Italian or Spanish designations of a European patent owned by a United States corporation. The defendant accepted that the English court could determine infringement of the UK designation but challenged jurisdiction and service in relation to the foreign designations.

Arnold J dismissed the defendant's applications in [2012] EWHC 3316 (Pat). He held that solicitors had agreed to accept service in the first action, that service in both actions was valid under CPR 6.9, and that the foreign claims should not be stayed for forum non conveniens.

The appeal concerned the scope of the solicitors' consent, service at the defendant's alleged place of business under CPR 6.9, service under CPR 63.14, and forum non conveniens. The parties agreed that upholding the consent in the first action disposed of the appeal and rendered the second action redundant.

1. Appeal dismissed. The solicitors' agreement to accept service was construed objectively, applying the principles summarised in Rainy Sky SA v Kookmin Bank [2011] UKSC 50. A reasonable person would read the correspondence as referring to the operating parent and national trading subsidiaries proposing to market the product. The mistaken reference to a differently named group company did not confine the consent. The correspondence also made clear that the threatened English proceedings would concern both the UK and foreign patent designations. The first claim was therefore validly served by consent, and the claimant was entitled to have all its claims determined in England.
2. The parties agreed that this conclusion disposed of the appeal. The second action consequently became redundant. The court nevertheless addressed CPR 6.9 and CPR 63.14 at the parties' request because those issues might determine a third action. Those conclusions were unnecessary to the disposition.
3. Under CPR 6.9(2), a place of business must be fixed and definite, and activities must have continued there sufficiently long to constitute business. The business need not represent a substantial part of the corporation's operations and may be incidental to its main objects. Where a representative or agent is involved, the court examines the representative's functions and the whole relationship, including the corporation's control and the representative's authority to bind it.
4. The overseas corporation carried on its own business at the Windlesham research centre. Its European patent department prosecuted, managed and defended the corporation's patents there, acted in its name, made strategic and tactical decisions, and possessed direct delegated authority over significant matters. Service under CPR 6.9 was therefore valid.
5. CPR 63.14 provides a special means of serving claims concerning patents under the Patents Act 1977. It does not authorise service of claims concerning foreign patent designations. Where a claim form combines UK and foreign claims, each designation must be treated separately. CPR 63.14 permits service only so far as the claim form relates to the UK designation; otherwise foreign claims could improperly be conveyed into the jurisdiction alongside a UK claim.

Lloyd LJ and Longmore LJ agreed with Kitchin LJ.

1. Court of Appeal (Civil Division): The appeal was dismissed in [2013] EWCA Civ 517. The court upheld the finding that the solicitors had agreed to accept service of the first action. It also concluded, although unnecessarily to the disposition, that service was valid under CPR 6.9 but not under CPR 63.14 in relation to the foreign patent designations.
2. High Court, Patents Court: Arnold J dismissed the jurisdiction applications in [2012] EWHC 3316 (Pat). He held that service by consent was valid in the first action, that service under CPR 6.9 was valid in both actions, and that the court should exercise jurisdiction over the foreign-designation claims.