Resolution Chemicals Ltd v H. Lundbeck A/S

Privity of interest requires a sufficient degree of identification between the non-party and the earlier litigant to make it just to bind the non-party by the earlier decision. Common ownership or control within a corporate group, and a direct commercial interest in the outcome, are insufficient without a relevant legal interest in the subject matter. A person who knowingly stands by while another with the same legal interest fights that person’s battle may be bound, but this is a narrow exception.

Joint tortfeasance requires procurement of the infringing act or concert pursuant to a common design. A supplier whose responsibility ends when goods are supplied abroad is not ordinarily a joint tortfeasor merely because it benefits from the sale. Summary judgment is inappropriate where conflicting expert evidence means that a patent obviousness issue requires a full trial.

Resolution sought revocation of Lundbeck’s supplementary protection certificate for escitalopram on the basis that the underlying European patent was invalid. Lundbeck applied for summary judgment, contending that Resolution was bound by earlier escitalopram litigation involving Arrow Generics, Teva UK and Teva Pharmaceutical Industries by privity of interest or abuse of process.

Lundbeck alternatively argued that Resolution had no real prospect of establishing invalidity. Resolution sought summary judgment on the estoppel issue, permission to add Bigler as prior art, and directions for an expedited trial. The principal questions were whether Resolution was privy to the earlier litigants, whether Teva companies would be joint tortfeasors with Resolution, and whether the proposed obviousness attacks had a real prospect of success.

1. Privity of interest. The applicable test was whether, having regard to the subject matter of the dispute, there was a sufficient degree of identification between the relevant persons to make it just to bind one by a decision in proceedings to which the other was party. The mere fact that companies belonged to the same group or were under common control was insufficient. A subsequent change of ownership did not release a company already bound, but it made it especially important to identify the company’s actual interest in the earlier dispute.
2. Resolution had no relevant interest in the earlier escitalopram litigation. Its earlier work on citalopram and its involvement in unrelated marketing authorisations and experiments did not establish an interest in escitalopram. Resolution was therefore not Arrow Generics’ privy.
3. Joint tortfeasance. Joint liability required procurement of the infringing act or concert pursuant to a common design. Under the supply agreement, title passed to Resolution in Poland, and Resolution alone controlled importation, repackaging, regulatory approval and distribution in the United Kingdom. Teva Poland’s fixed-price commercial benefit and contractual protection concerning a cross-undertaking did not establish joint tortfeasance. There was no sufficient basis for liability on the part of any other Teva company.
4. Summary judgment and obviousness. The evidence concerning whether the diol route disclosed by 884 was obvious was materially conflicting. The existence of expert evidence supporting Resolution’s case meant that its prospect of success was realistic, even if statistically unlikely. The proposed Bigler attack likewise raised experimental and expert issues requiring a full trial. Lundbeck’s summary judgment application was dismissed, and Resolution was permitted to amend its grounds of invalidity.
5. The circumstances did not justify a conditional security-for-costs order. Resolution had no reason to join the earlier litigation, its case was not so weak as to warrant security, and its conduct did not justify such an order.