Neurim Pharmaceuticals (1991) Limited & Anor. Generics (UK) Limited T/A Viatris & Anor.

Issue estoppel did not prevent a party that had ultimately won earlier proceedings from challenging validity in later proceedings where the earlier judgment had been superseded by a European Patent Office decision and the party could not appeal the result. The relevant question was whether the earlier determination remained fundamental to the eventual outcome, not merely whether it had been essential at an earlier stage.

The proposed use of a divisional patent was not an abuse of process. The court declined to determine complex competition-law issues as preliminary issues where they had no practical effect on the result and the pleadings and legal framework were insufficiently settled.

The claimants sued the defendants for infringement of a divisional European patent concerning melatonin treatment for insomnia. In earlier proceedings, Marcus Smith J had held the parent patent valid and infringed. The European Patent Office subsequently revoked the parent patent after the claimants withdrew their appeal from an Opposition Division decision.

The claimants sought to amend the divisional patent into substantially the same form as the parent patent and relied on issue estoppel. The defendants alleged issue estoppel, abuse of process and abuse of a dominant position under Competition Act 1998, section 18. The preliminary issues concerned whether the defendants could challenge validity, whether the amendment application was abusive, and whether the competition issues should be determined.

1. Issue estoppel. The basic requirements were that the earlier decision determined an issue as an essential step in the reasoning, that an issue which could and should have been raised may also be estopped, and that the determination must have been fundamental rather than collateral. The doctrine remains subject to special circumstances where fresh material makes its application unjust.
2. The defendants could not appeal the validity findings after the European Patent Office had revoked the parent patent and the defendants had become the winners of the earlier action. An appeal requires a challenge to the result or outcome, not merely dissatisfaction with reasons. The absence of a possible appeal was a useful indicator that the earlier findings were not fundamental to the eventual result, although the ultimate question remained whether the result could stand without them.
3. The earlier orders were provisional and had been revoked after the European Patent Office decision. The only truly fundamental event was the revocation of the patent following withdrawal of the European Patent Office appeal. The findings in the earlier judgment were therefore not fundamental to the eventual result, and the necessary finality was also lacking. The issue-estoppel arguments failed.
4. Abuse of process. The pleaded case concerned the form of the proposed amendment, not a general challenge to the use of divisional patents as back-up rights or to bringing successive proceedings. The claimants’ withdrawal of the European Patent Office appeal did not amount to an acceptance that the parent patent was invalid. On the pleaded case, and applying the broad merits-based approach required by Johnson v Gore Wood, the amendment application was not abusive.
5. The court declined to decide the competition-law issues. They raised complex and developing questions, including the meaning of competition on the merits, and their practical significance depended on the rejected issue-estoppel case. The action was to be managed by Marcus Smith J on the materials and arguments before him, with the defendants given an opportunity to apply for permission to appeal.

First-instance preliminary-issue decision. The judgment describes earlier proceedings before Marcus Smith J, including the Main Judgment and Consequentials Judgment, but those decisions formed part of the same litigation and were not appealed decisions under consideration in this judgment.