Actavis Group PTC EHF v Pharmacia LLC

On an application to stay national patent proceedings pending opposition proceedings before the European Patent Office, the court must balance justice having regard to all relevant circumstances. A stay is the default where there are concurrent validity proceedings, but it may be refused where the national proceedings are likely to provide materially earlier commercial certainty. The court may consider the prospects of settlement, the public interest in resolving patent validity, and wasted costs. Commercial uncertainty caused by a possible later injunction and damages may outweigh the substantial saving in litigation costs, particularly where expedition of the EPO proceedings is uncertain.

Actavis sought revocation of the UK designation of a European patent concerning sustained-release pramipexole. Pharmacia applied for a stay pending parallel opposition proceedings before the European Patent Office. Pharmacia offered undertakings concerning expedition, interim relief and the level of damages during the EPO proceedings.

The central issue was whether, applying the principles restated in IPCom GmbH & Co KG v HTC Europe Co Ltd [2013] EWCA Civ 1496, the balance of justice favoured allowing the English proceedings to continue.

1. The application for a stay was refused. The court applied the principles recently reviewed by the Court of Appeal in IPCom GmbH & Co KG v HTC Europe Co Ltd [2013] EWCA Civ 1496, including that a stay is the default option where there are concurrent EPO and national proceedings, but that the ultimate question is where the balance of justice lies.

2. The English proceedings were likely to reach judgment in about two years. Even if expedited, the EPO proceedings were likely to take at least three years and might take substantially longer, particularly if the Board of Appeal remitted the case. The court therefore treated the prospect of earlier UK commercial certainty as a significant factor against a stay.

3. Pharmacia’s undertakings would allow Actavis to enter the UK market during the stay and would substantially reduce the immediate commercial risk. They did not remove the uncertainty that Actavis might later be excluded from the market by an injunction and exposed to ordinary damages or an account of profits. That continuing uncertainty could have a chilling effect on investment decisions.

4. The possibility that an English judgment might promote settlement and the public interest in determining patent validity also favoured refusing a stay. The risk of wasted costs favoured a stay, because the English proceedings were much more expensive than the EPO proceedings, but that factor was outweighed by the commercial uncertainty.

5. The proceedings were accordingly not stayed on the undertakings offered. After circulation of the draft judgment, Pharmacia proposed further undertakings. The court directed that further argument and costs be heard on that proposal.

First-instance decision. The judgment does not state any prior appellate decision in the same proceedings.