Actavis UK Ltd v Eli Lilly & Company

An alleged abuse of process cannot ordinarily be established on a contingency which may or may not arise after determination of other proceedings. Abuse is assessed through a broad, merits-based judgment, having regard to the public and private interests, all the circumstances, and the overriding objective. The categories of abuse are not closed and may include improper use of process, relitigation, and pointless or wasteful litigation. Properly constituted proceedings are not abusive merely because their lis pendens consequences create difficulties for a party under foreign procedural law. A stay is inappropriate where it would merely postpone consideration of whether the proceedings are abusive and would not remove their procedural effects.

Lilly sought a stay of Actavis’s Fourth and Fifth Actions, which sought declarations concerning non-infringement of European patent designations in France, Germany, Italy, Spain and the United Kingdom. Lilly argued that the later actions were an abuse because they were intended to overcome alleged French and Spanish procedural requirements requiring periods of time after a request for an acknowledgement of non-infringement.

The First and Third Actions were already pending and had been held to be properly constituted. The Court of Appeal had dismissed Lilly’s appeal from the earlier jurisdiction decision in [2013] EWCA Civ 515. The central issue was whether the later actions should be stayed as a contingent or procedural abuse pending judgment in the earlier actions.

1. The application for a stay of the Fourth and Fifth Actions was dismissed. Lilly was ordered to pay the costs of both applications, assessed on the standard basis.

2. Abuse of process is governed by a broad, merits-based assessment. The court must consider the public and private interests, all the facts, whether the process is being misused, and the requirements of the overriding objective. The categories of abuse are not closed. They may include an improper or collateral purpose, relitigation of matters which could and should have been litigated earlier, and litigation which is pointless or wasteful. These principles were drawn from Hunter v Chief Constable of the West Midlands, Johnson v Gore Wood & Co and Jameel v Dow Jones & Co Inc.

3. The alleged abuse was contingent. It would arise only if the First and Third Actions were ultimately found to be ill-founded because Actavis had failed to comply with French or Spanish procedural requirements. The court should not stigmatise proceedings as abusive on that contingent basis.

4. Any adverse lis pendens consequences flowed from the properly constituted First and Third Actions, rather than from the Fourth and Fifth Actions. The later actions represented ordinary procedural steps taken to address obstacles raised by Lilly. The court expressed no view on the correctness of Lilly’s foreign-law arguments.

5. The proposed stay was logically incoherent. It would leave the later actions alive, preserve their lis pendens priority, and merely postpone the question whether they were abusive. Since abuse could not be established at the hearing, there was no proper basis for preventing the actions from proceeding to trial.

The judgment describes an earlier jurisdiction decision in the same litigation. The Court of Appeal dismissed Lilly’s appeal and made consequential orders, including dismissal of the redundant Second Action: [2013] EWCA Civ 515. The present decision determined Lilly’s subsequent stay application at first instance.