NHS v Servier: unlawful means tort claim fails, but the long-running saga continues
In this article, we summarise the Supreme Court’s judgment which upholds the lower courts’ decisions in refusing to allow the NHS to avail itself of the tort of unlawful means against Servier, and we comment on the reasoning of the Supreme Court.
Background
Servier, a pharmaceutical company headquartered in France, develops and manufactures perindopril, which is used in the treatment of cardiovascular diseases. In 2001, Servier applied to the European Patent Office (EPO) for a patent for the alpha crystalline form of perindopril (European Patent UK 1,296,947). The patent was granted by the EPO in 2004 and upheld by the Opposition Division of the European Patent Office (EPO) in 2006.
Servier vigorously defended and enforced the UK designation of the patent in proceedings before the English courts against several generics. Eventually, Canadian pharmaceutical company Apotex contested the validity of the patent in the UK and, in 2005, following a six-day trial, the UK High Court held the patent to be invalid for lack of novelty and inventive step.
This decision was upheld by the Court of Appeal in 2008 and the patent was revoked by the EPO Technical Board of Appeal in 2009.
The current proceedings, commenced in 2011 by the Secretary of State for Health and NHS Business Services Authority (referred to as ‘the NHS’), are an attempt to find a legal recourse for what the NHS perceives as the wrongful acts of Servier. The NHS alleges damages and interest in excess of £220 million for Servier’s breaches of competition law and for the unlawful means tort.
Servier sought to have the freestanding unlawful means claim struck out; a claim in which the NHS alleged that Servier had deceived EPO and the courts in obtaining, defending and enforcing the patent. This included making representations as to the novelty and/or lack of obviousness of the product that Servier either knew to be false, or that Servier made with reckless indifference as to their truth.
As a result of Servier’s conduct, the NHS alleged that generic manufacturers of perindopril did not enter the market as early as they otherwise would have done, and this inevitably led to the NHS having to pay a higher price for perindopril.
Summary of strike-out proceedings
In 2007, Servier was successful at first instance in seeking to have the NHS’s unlawful means claim struck out, a decision affirmed by the Court of Appeal in 2019.
The High Court and Court of Appeal both considered themselves to be bound by the House of Lords 2007 decision in OBG v Allan, which concluded that a necessary element of the unlawful means tort was that the defendant’s (in this case, Servier’s) unlawful means should have affected the third party’s (the EPO’s and the English courts’ in this case) freedom to deal with the claimant (the NHS). This was referred to as “the dealing requirement”.
As it was common ground that neither the EPO nor the courts had dealt with the NHS, the NHS’s unlawful means tort claim failed.
