On July 2, 2021, an extended panel of seven Justices of the UK Supreme Court handed down a unanimous judgment upholding Servier’s strike out of the Secretary of State for Health’s claim of “causing loss by unlawful means” in Secretary of State for Health and another [the Appellants] v. Servier Laboratories Ltd and others [the Respondents]  UKSC 24. Crucially, the Supreme Court rejected an attempt to expand the scope of this tort to encompass allegations of fraud on the patent office — a concept that does not exist in UK and EU law, although it may be found in other jurisdictions as the doctrine of “inequitable conduct.”
The Appellants alleged that in obtaining, defending, and enforcing a patent for its blood pressure lowering drug, perindopril, the Respondents misled the European Patent Office (EPO) and the High Court, in circumstances where, it was claimed, they knew or should have known that the patent was invalid (the validity of the patent was initially upheld before the EPO, but it was ultimately invalidated).
The “unlawful means” claim was alleged on the basis that the Respondents intentionally caused loss to the Appellants through alleged deceit (the unlawful means) practiced on the EPO and the English courts (the third parties) which caused loss to the Appellants. The key legal issue in this appeal was whether the unlawful means must affect the third party’s freedom to deal with the claimant, since at no time were there any dealings between the health authorities and the EPO or the English Courts. As a convenient shorthand, this has been referred to by the parties as “the dealing requirement.”
In its judgment, the Supreme Court came to the “firm conclusion” that the appeal should be dismissed, enumerating eight reasons why the dealing requirement was a part of the ratio of the judgment in OBG v. Allan. The Court also held that there was no good or sufficient reason to overturn OBG. Indeed, the dealing requirement performs an essential function as a control mechanism for the tort, because it ensures that there is a sufficient nexus between the parties which keeps the tort within reasonable bounds. As the Supreme Court explained, it therefore minimizes the danger of there being indeterminate liability to a wide range of claimants for pure economic loss. Had the dealing requirement been rejected, this could have inhibited future innovation, as prospective patentees would have been faced with the possibility of indeterminate liability if their patent were ultimately found to be invalid.
Marie Manley, Chris Boyle, and Victoria Kerr represented Servier Laboratories.
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