Eli Lilly And Company v Genentech, Inc

Issue estoppel requires a final determination between the same parties of an issue fundamental to the earlier decision, where the later issue is the same. Finality does not require all appeals to be exhausted. Findings that are legally indispensable to alternative grounds of decision may each support an estoppel where reliance on both grounds causes no injustice.

The doctrine remains subject to the overriding requirement that it work justice. Special circumstances may justify disapplication where strict application would cause injustice. Henderson v Henderson abuse of process requires a broad merits-based assessment of whether raising a point later would misuse the court’s process, with unjust harassment being a strong indicator. A refused amendment is a factor in that assessment, not an automatic bar.

The claimant sought revocation of a divisional European patent and summary judgment on the basis that issues had already been determined in earlier proceedings concerning the parent patent. In those proceedings Arnold J had held the parent patent invalid for obviousness and, in relation to psoriasis claims, insufficient plausibility at the priority date. He also stated that, if valid, the claims would have been infringed.

The parent-patent judgment was under appeal, and the parent patent had subsequently been revoked by the Technical Board of Appeal. The defendant sought to defend the divisional patent and to introduce amended claims, including claims relying on plausibility at the filing date. The central issues were whether issue estoppel or Henderson v Henderson abuse of process prevented relitigation, and whether summary judgment should follow.

1. Preliminary issue and summary judgment. The court held that issue estoppel applied to the findings concerning obviousness and to the finding that the psoriasis claims lacked plausibility at the priority date. Claims 1 to 8 of the divisional patent and proposed claim 9 were therefore invalid. The court refused summary judgment on proposed claims 10 and 11 insofar as the defendant relied on plausibility at the filing date, and stood over the amendment application to trial.
2. Issue estoppel. The requirements were: a final decision in earlier proceedings between the same parties; an issue fundamental to that decision; and the same issue arising later. A decision remained final although an appeal was pending. The estoppel extended to findings legally indispensable to the earlier conclusion, including necessary groundwork findings.
3. The existence of alternative grounds did not automatically prevent estoppel. Where the claimant relied on both grounds of invalidity, and no injustice resulted, the findings fundamental to each ground could be treated as giving rise to issue estoppel. The court rejected an absolute rule to the contrary.
4. Injustice. The exception to strict application was not confined to cases involving newly discovered material. The question was whether strict application would cause injustice. Avoiding a second trial on substantially identical issues, at very substantial cost, was a powerful public-interest consideration.
5. Henderson v Henderson abuse. The court had to make a broad, merits-based assessment of all the circumstances and ask whether the later reliance on a point that could and should have been raised earlier amounted to misuse of the process. A finding of abuse would ordinarily require conduct properly characterised as unjust harassment. The defendant was not barred from arguing plausibility at the filing date merely because it had unsuccessfully sought a late amendment in the earlier action. Evidence showed an arguable development in common general knowledge between the priority and filing dates.