Teva UK Limited & Anor v Novartis AG

An English court should not grant a declaration solely to influence a foreign court’s determination of an issue governed by that country’s law. Substantial harmonisation between the applicable foreign and domestic laws does not alter that principle.

The legitimate spin-off value of a judgment concerning UK rights must be distinguished from an advisory opinion sought for foreign proceedings. Comity, institutional competence and the avoidance of forum shopping require restraint where the parties have full access to the foreign court. A consequential effect on a UK supply chain does not supply the necessary domestic purpose.

Teva sought an Arrow declaration that its proposed use of generic fingolimod would have been obvious at the priority date of Novartis’ European patent applications. After Novartis removed the UK designations, no relevant UK patent protection remained. The technical issue of obviousness was assumed in Teva’s favour for the preliminary discretionary trial.

Bacon J dismissed the claim in [2022] EWHC 2779 (Pat). She found no continuing uncertainty in the UK market and considered that the declaration’s remaining purposes were to assist Teva in resisting injunctions in Germany and another country through which its UK supplies passed.

The central issue on appeal was whether declaratory relief could properly be granted solely to influence foreign courts deciding questions under their own laws.

1. Appeal dismissed unanimously. The judge was correct to refuse the Arrow declaration, although her approach had been more favourable to Teva than the governing principle permitted (per Arnold LJ, Nugee LJ and Sir Christopher Floyd agreeing).

2. The High Court’s power to grant declarations is discretionary. Ordinarily the court considers justice to each party, whether the declaration would serve a useful purpose and whether special reasons favour or oppose relief. An appellate court may interfere with that exercise only for an error of law or principle, consideration of an irrelevant factor, omission of a relevant factor or a plainly wrong conclusion.

3. It is wrong in principle for an English court to make a declaration solely to influence a foreign court’s decision on an issue governed by that foreign country’s law. The English courts do not provide advisory opinions on such questions and possess no special competence to decide them. Substantial harmonisation of the governing laws makes no difference. Comity requires restraint and the avoidance of jurisdictional imperialism and forum shopping. The court left open the possibility of a different position where a party lacked full and unimpeded access to the foreign court.

4. The legitimate spin-off value of a Patents Court judgment must be distinguished from a declaration sought solely for foreign use. A judgment deciding UK patent rights may properly assist settlement or persuade courts dealing with equivalent foreign designations. Likewise, an English court may decide foreign patent infringement where it substantively determines the dispute by applying foreign law. Neither situation justified Teva’s claim because no UK patent right or market uncertainty remained.

5. The possible effect of an injunction in another country on supplies to the UK was merely a consequential effect of that country applying its own law within its territory. It did not create a legitimate domestic purpose for the declaration. Novartis’ earlier application for a UK injunction and subsequent abandonment of UK protection also did not independently justify declaratory relief. Any consequences of that conduct were appropriately addressed through enforcement of cross-undertakings in damages and costs.

1. Court of Appeal (Civil Division): The Court dismissed Teva’s appeal unanimously in [2022] EWCA Civ 1617 and upheld the refusal of declaratory relief.
2. High Court, Patents Court: Bacon J dismissed Teva’s claim for an Arrow declaration in [2022] EWHC 2779 (Pat), finding no continuing uncertainty in the UK market and no sufficiently compelling justification for relief sought to influence foreign proceedings.