Judgment dated 8 September 2016, Arnold J
Thomas Raphael QC and Oliver Caplin of 20 Essex Street acted for the claimant biotechnology company (“Fujifilm”) in this important case in which they successfully resisted a challenge from a Bermudan domiciled defendant to the Court’s jurisdiction to serve it out of the jurisdiction.
This jurisdiction dispute arose out of a patent dispute between Fujifilm and the two defendant Abbvie entities. When it eventually comes off-patent, Fujifilm wishes to bring to market a biosimilar equivalent of the monoclonal antibody adamlimumab (or, Humira) which is variously used to treat diseases such as rheumatoid arthritis, psoriasis, and Crohn’s disease. The first defendant, “Abbvie Bermuda” holds the patent for Humira. The drug generates sales of nearly half a billion dollars a year.
In order to safeguard itself from a potential patent infringement claim by Abbvie Bermuda once it enters the market, Fujifilm sought an Arrow declaration and supporting domestic anti-suit injunctions against both defendants. An Arrow declaration is a declaration that a party will have a good Gillette defence to a future claim for patent infringement over its products, thus allowing it to forge ahead with entering the market safe from the threat of, for example, a sizeable damages claim from a patent holder.
The case provides important guidance on, among others, the following points of principle: (i) the grant of domestic anti-suit injunctions; (ii) the scope of Article 24 of the Recast Brussels 1 Regulation; (iii) the general approach the Courts should take to applications to serve out of the jurisdiction through the gateways in CPR 6BPD, including the reference that may be had to equivalent provisions of the Recast Brussels 1 Regulation when construing them; and (iv) the scope in particular of gateways 6BPD §9 (tort) and §11 (property).
On these issues, Arnold J held that:
(i) Although it is to be exercised with caution, the Court does have the general power (outside of the classic example of winding up petitions) to grant domestic anti-suit injunctions against a defendant in respect of whom it has in personam jurisdiction on the ground that the proceedings which the defendant threatens to bring are vexatious and oppressive or an abuse of process.
(ii) A claim for an Arrow declaration does fall within Article 24 of the Recast Brussels I Regulation so as to afford the English Courts exclusive jurisdiction over the resolution of a claim for such a declaration, even if the defendant (as in this case) is domiciled outside of the EU.
(iii) The Supreme Court’s decision in Abela v Baadarani  1 WLR 2043 has signalled a change in policy towards service out of the jurisdiction. It is no longer right to consider such service the exercise of an “exorbitant jurisdiction”, as was once the case. Further, when defending a jurisdiction challenge, jurisdiction to serve out may be maintained on different grounds to those initially successfully relied upon at the ex parte stage, following NML Capital Ltd v Republic of Argentina  2 AC 495.
(iv) A claim for an Arrow declaration does fall within the “tort” claims gateway contained in CPR 6BPD §(9). Arnold J held that the gateway should be interpreted in accordance with the ECJ’s jurisprudence on Article 7(2) of the Recast Brussels 1 Regulation. Accordingly, the Judge held that the gateway was wide enough to accommodate a claim for a negative declaration such as an Arrow declaration. Conversely, a claim for an Arrow declaration does not fall within CPR 6BPD §(11), which is engaged when “the subject matter of the claim relates wholly or principally to property to the jurisdiction”. This “property” gateway only applies to property that is physically within the jurisdiction at the time the claim form is issued. It does not apply, as in this case, to property that is the subject of the claim, but that which will only be in the jurisdiction in the future (ie. in this case Fujifilm’s future biosimilar version of Humira, which is still in development).
Whilst the issues in this case arose within the context of an intellectual property dispute, many aspects of Arnold J’s decision will have a broader relevance to commercial disputes that give rise to issues concerning the Court’s jurisdiction to serve out or domestic anti-suit relief.
Alexander Layton QC acted for the defendants instructed by Herbert Smith Freehills
An in depth bulletin from Thomas and Oliver discussing the details of the issues set out above will follow in due course.