Neutral Citation Number: [2018] EWHC 615 (Pat)

Case No: HP-2017-000054 / HP-2017-000075

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

INTELLECTUAL PROPERTY LIST (ChD)

PATENTS COURT

The Rolls Building
7 Rolls Buildings
Fetter Lane
London EC4A 1NL

Date: 19/03/2018

Before:

MR. JUSTICE HENRY CARR

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Between:

(1) ILLUMINA, INC.
(a company incorporated in the state of Delaware, USA)
(2) SEQUENOM, INC
(a company incorporated in the state of Delaware, USA) / Claimants
- and -
(1)PREMAITHA HEALTH PLC
(2) PREMAITHA LIMITED
- - - - -
(1) TDL GENETICS LIMITED
(2) THE DOCTORS LABORATORY LIMITED
(3) ARIOSA DIAGNOSTICS, INC. / Defendants in Claim No. HP2017000054
Defendants in Claim No. HP2017000075

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MR. IAIN PURVIS QC, DR. PIERS ACLAND QC(instructed byPowell Gilbert LLP) for theClaimants.

MR. THOMAS HINCHLIFFE QC and MS. GEORGINA MESSENGER (instructed by HGF Law LLP) for the Defendants Premaitha Health Plc and Premaitha Limited.

DR. MICHAEL TAPPIN QC and MR. JOE DELANEY (instructed by Herbert Smith Freehills LLP) appeared for the Defendant Ariosa Diagnostics, Inc. and (instructed by Clyde & Co LLP) appeared for the Defendants TDL Genetics Limited and The Doctors Laboratory Limited.

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APPROVED JUDGMENT

Transcript of the Stenograph Notes of Marten Walsh Cherer Ltd.,

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Mr Justice Henry Carr
Approved Judgment / Illumina v Premaitha Health
19.03.18

MR. JUSTICE HENRY CARR:

Introduction

  1. This judgment concerns the following applications: (1) an application by Premaitha that the claimants' claim number HP2017000054, be struck out in its entirety as an abuse of process or, alternatively, be subject to summary judgment as against the first claimant, Illumina, on the basis that Illumina has no cause of action, because it is not the exclusive licensee of the patent in suit; and (2) similar applications brought by Ariosa and TDL in claim number HP2017000075.
  2. The actions concern alleged infringement of EP (UK) 1 524 321 B2 entitled "Noninvasive detection of fetal genetic traits" by the supply and offer to supply of Premaitha's IONA noninvasive prenatal diagnostic test ("NIPT"), and TDL/Ariosa's Harmony NIPT..
  3. The application raises two issues: first, alleged abuse of process by each of the claimants. The defendants contend that the commencement of the actions in respect of EP '321, which Iwill call the '321 actions, constitute an abuse of the court's process and should be struck out, because they could and should have been brought in one or other of two earlier sets of proceedings which were brought by the claimants for patent infringement in relation to the IONA test, and in an earlier set of proceedings, brought against TDL and Ariosa in respect of the Harmony test. Those proceedings were all decided by me following a trial in July 2017; secondly, issue estoppel as against Illumina. The defendants contend that the issue of whether Illumina is an exclusive licensee of the '321 patent has already been decided against it in the earlier actions and that, therefore, summary judgment ought to be entered against Illumina.
  4. Ineed now to set out some of the history of these various proceedings. In March 2015 the claimants commenced proceedings against Premaitha in relation to infringement by Premaitha's IONA test of two patents known as Lo1 and Quake 1 (the first Premaitha action). In September 2015 the claimants commenced further infringement proceedings against Premaitha in relation to infringement by Premaitha's IONA test of a third patent known as Lo 2 (the second Premaitha action). Subsequently, a further patent, which was a divisional of the Quake 1 patent, known as Quake 2, was introduced into the first Premaitha action and another patent known as Lo 3, which was a divisional of Lo 2, was introduced into the second Premaitha action. In January 2016, the claimants commenced proceedings against TDL/Ariosa in relation to infringement by Ariosa's Harmony test of Lo1 (the first Ariosa action).

Legal Principles – Abuse of Process

  1. Iwill now turn to the legal principles concerning HendersonvHenderson and abuse of process. In JohnsonvGoreWood [2002] 2 AC 1, Lord Bingham set out the basis of abuse of process in a frequently cited and very wellknown passage at page 31:

"But Henderson v Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole."

  1. He then went on to say:

"The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party."

  1. He then concluded:

"It is, however, wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, meritsbased judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before."

  1. In a less wellknown but nonetheless important passage in the judgment of Lord Millett at page 59, it was stated as follows:

"It is one thing to refuse to allow a party to relitigate a question which has already been decided; it is quite another to deny him the opportunity of litigating for the first time a question which has not previously been adjudicated upon. This latter (though not the former) is prima facie a denial of the citizen's right of access to the court conferred by the common law and guaranteed by Article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms (1953). While, therefore, the doctrine of res judicata in all its branches may properly be regarded as a rule of substantive law, applicable in all save exceptional circumstances, the doctrine now under consideration can be no more than a procedural rule based on the need to protect the process of the Court from abuse and the defendant from oppression."

  1. The principles identified by Lord Bingham in JohnsonvGoreWood were summarised by ClarkeLJ in DextervVlielandBoddy [2003] EWCA Civ 14 at [49][53]. At [49] ClarkeLJ said:

"(i)Where A has brought an action against B, a later action against B or C may be struck out where the second action is an abuse of process.

(ii)A later action against B is much more likely to be held to be an abuse of process than a later action against C.

(iii) The burden of establishing abuse of process is on B or C as the case may be.

(iv)It is wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive.

(v)The question in every case is whether, applying a broad meritsbased approach, A's conduct is in all the circumstances an abuse of process.

(vi)The court will rarely find that the later action is an abuse of process unless the later action involves unjust harassment or oppression of B or C.”

  1. Ihave already referred to the observations of Lord Millett concerning Article 6 of the European Convention on Human Rights. Whilst it is undesirable to cite numerous authorities in support of the same proposition, in this particular case this principle is of great importance. Therefore, Iwill refer to certain other authorities where judges have articulated, in slightly different words, a similar principle.
  2. In StuartvGoldberg Linde [2008] EWCA Civ 2, [2008] 1 WLR 823 at [65], Lloyd LJ cautioned against the striking out of genuine causes of action. He said:

"The cases on this aspect of abuse of process include many reminders that a party is not likely to be shut out from bringing before the court a genuine cause of action. That point is now underwritten by Article 6 of the European Convention on Human Rights, but I do not think that this Article changes English domestic law at all. It is consistent with the Article to allow the court to strike out a claim which is an abuse of process, but at common law it must be clearly shown to be an abuse before it can be struck out. The court must consider, critically, any suggestion that a particular cause of action should not be allowed to be asserted because of the bringing of another proceeding based on a different claim.”

  1. In Clutterbuck& Others v Cleghorn [2017] EWCA Civ 137, KitchinLJ summarised the position at [39]. He said:

"The deputy judge was clearly conscious that he had to be jealous to ensure that a genuine claim could be brought and it would only be appropriate to strike out the claim as a HendersonvHenderson abuse in a rare or exceptional case."

  1. In OtkritieCapital International Limited & Others v Threadneedle Asset Management Limited & Others [2017] EWCA Civ 274, Arden LJ cited at 29 a summary by Lord Neuberger in Henley v Bloom at paragraphs 25 and 26, in support of the proposition that the starting point is that a litigant can decide whom to sue and when unless an abuse of process is shown. Lord Neuberger said:

"25 …However desirable it may be for a party to bring all his claims forward in one go, the abuse principle, as the judgments in Stuart [2008] 1 WLR 823 underline, does not bar a claim simply because someone fails to raise a claim when he could have done so. The facts must be such that the second action amounts to an abuse of process before it can be struck out.

26 The importance of the general principle that every person with an arguable claim should be able to pursue it in court is enshrined in Article 6 of the European Convention. As Sir Anthony Clarke MR indicated in Stuart [2008] 1 WLR 823, paragraph 98, if the court is not satisfied that a claimant’s attempt to raise his claim is actually abusive in the light of his previous failure to raise it, the claim cannot be barred from proceeding however desirable it might have been for the claimant to have raised it earlier."

  1. With these principles in mind Iturn to the StuartvGoldberg case, in particular at paragraphs 5859. In these passages, Lloyd LJ considered the relevance of delay and failure to use reasonable diligence to the bringing of a second cause of action. In relation to delay, he said at paragraph 58:

"…I consider that delay of itself is not relevant to whether the second claim is an abuse of process. Delay may be met with a defence under the Limitation Act 1980, or an equitable defence such as laches. Absent any such factor, the mere fact that the claimant has brought his second claim late, but in time, is not relevant to the question whether bringing the new claim in a second set of proceedings is an abuse of process. Of course, things may have happened during the period of delay which are relevant, but nothing of that kind is relied on in the present case."

  1. In relation to failure to use reasonable diligence, he said as follows at paragraph 59:

"As for the relevance of a claimant’s failure to use what the court might consider to be reasonable diligence in finding out facts relevant to whether he has a possible claim, it may be that this could possibly be relevant to the inquiry described by Lord Bingham, depending on the circumstances. On the other hand, it does not seem to me that there can be a general principle that a potential claimant is under a duty to exercise reasonable diligence, not yet having brought proceedings asserting a particular claim, to find out the facts relevant to whether he has or may have such a claim. Moreover, I do not see how it can be relevant at all that the claimant may have failed to use due diligence in attending to his own interests at the time of the transaction or the events giving rise to the claims asserted. Unless, on the merits, that is a complete and inevitable defence to the claim, it seems to me to be entirely irrelevant to the inquiry which is necessary under Johnson v Gore Wood &Co [2002] 2 AC 1. Nothing in Wigram VC’s observations in Henderson v Henderson 3 Hare 100 supports that. That, however, is the context of the master’s comments on lack of reasonable diligence. If relevant at all, an inquiry as to any suggested lack of diligence on the part of the claimant would have to involve considering the circumstances of the particular claimant, including what knowledge he did have of the facts at any relevant stage, in order to decide whether he knew enough to put him on inquiry so as to try to find out more. In this context, as generally, it is also relevant that the onus is always on the defendant to show that the claimant’s conduct is an abuse of process."

  1. Infringement of EP '321 is a different cause of action to those asserted in the first and second Premaitha actions and the first Ariosa action. This is not a case where the claimants have failed in their claims in previous proceedings, indeed they had a very considerable measure of success in those actions. It is not a case where the claimants are seeking to relitigate claims which they lost based upon new information. In those circumstances, where there is an attempt to relitigate, reasonable diligence in finding evidence and in raising arguments is, of course, of very considerable importance. Raising late a different cause of action can be an abuse of process. The Aldi guidelines to which I shall refer make clear that such a case is possible. However, there is clearly an arguable cause of action for infringement of the '321 patent and, in the words of KitchinLJ, it would take a rare or exceptional case to deny the claimants their Article 6 rights in those circumstances.
  2. The defendants relied on what has become known as the Aldi guidelines, as set out by Thomas LJ in AldiStores Limited v WSP Group Plc [2017] EWCA Civ 260, [2008] 1 WLR 748. Although the Court of Appeal allowed an appeal from a striking out on the basis of abuse of process by Jackson J, nonetheless it went on to consider the correct approach that should be adopted in future by a party who, during the course of a first set of proceedings, became aware of a cause of action which could be brought as part of those proceedings.
  3. Thomas LJ said at paragraphs 29 to 31:

"29. I also wish to add a word as to the approach that should be adopted if a similar problem arises in the future. In circumstances such as those that arose in this case, the proper course is to raise the issue with the court. Aldi did write to the court, as I have set out at paragraph 2(xiii), but not in terms that made it clear what the court was being invited to do. WSP and Aspinwall knew of Aldi's position and were before the court on numerous occasions; they did nothing to raise it.

30. Parties are sometimes faced with the issue of wishing to pursue other proceedings whilst reserving a right in existing proceedings. Often, no problem arises; in this case, Aldi, WSP and Aspinwall each in truth knew at one time or another between August 2003 and the settlement of the original action in January 2004 that there was a potential problem, but it was never raised with the court. I have already expressed the view that it should have been. The court would, at the very least, have been able to express its view as to the proper use of its resources and on the efficient and economical conduct of the litigation. It may have seen if a way could have been found to determine the issues applicable to Aldi in a manner proportionate to the size of Aldi's claim and without the very large expenditure that would have been necessary if Aldi had to participate in the trial of the actions. It may be that the court would have said that it was for Aldi to elect whether it wished to pursue its claim in the proceedings, but if it did not, that would be the end of the matter. It might have enquired whether the action against excess underwriters could have been expedited. Whatever might have happened in this case is a matter of speculation.

31. However, for the future, if a similar issue arises in complex commercial multiparty litigation, it must be referred to the court seised of the proceedings. It is plainly not only in the interest of the parties, but also in the public interest and in the interest of the efficient use of court resources that this is done. There can be no excuse for failure to do so in the future."

  1. Wall LJ and Longmore LJ both gave short concurring judgments in which they expressly agreed with what Thomas LJ had said and these have become known as the Aldi guidelines. These guidelines have been considered in a number of subsequent cases which affirm their general applicability and their mandatory nature as well as elaborating on what is required in order to comply with the guidance. However, subsequent cases made clear that the Aldi guidelines are not to be applied mechanistically. In StuartvGoldberg Linde, Sir Anthony Clarke MR cited a passage from Thomas LJ's comments in Aldi to which Ihave referred and stated that he agreed with those views. He went on to say at [96]:

"For my part, I do not think that parties should keep future claims secret merely because a second claim might involve other issues. The proper course is for parties to put their cards on the table so that no one is taken by surprise and the appropriate course in case management terms can be considered by the judge. In particular parties should not keep quiet in the hope of improving their position in respect of a claim arising out of similar facts or evidence in the future. Nor should they do so simply because a second claim may involve other complex issues. On the contrary they should come clean so that the court can decide whether one or more trials is required and when. The time for such a decision to be taken is before there is a trial of any of the issues. In this way the underlying approach of the CPR, namely that of cooperation between the parties, robust case management and disposing of cases, including particular issues, justly can be forwarded and not frustrated."