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On appeal from: [2012] EWCA Civ 593

The appellants held a number of patents for a drug called perindopril erbumine. European patent protection for the compound itself expired in June 2013, but a UK patent protecting a crystalline form continued and the appellant’s UK subsidiary was the exclusive licensee. It also held a Canadian patent for the compound itself which will expire in 2018. The respondents were a Canadian group specialising in the manufacture and marketing of generic pharmaceutical products and began importing and selling generic perindopril erbumine tablets in the UK at the end of July 2006. The appellants obtained an interim injunction against the respondents by giving a cross-undertaking in damages, therefore promising to compensate the respondents for any loss caused by the injunction if it later turned out that it should not have been granted. The respondents became entitled to compensation when the court found the UK patent to be invalid and it was calculated that an additional 3.6 million packets of the drug would have been sold if the injunction had not been granted.

The appellants challenged the award for damages on the basis of illegality as they argued it was contrary to public policy for the respondents to recover damages when the manufacture of the product in Canada would have been unlawful as it infringed their Canadian patent. The Court of Appeal held that it did not count as “turpitude” for the purposes of the illegality defence because the respondents honestly and reasonably believed the Canadian patent was invalid, the appellant’s were enjoying a monopoly it was not entitled to and the Canadian patent was limited to Canada where an injunction had not been granted.

The Supreme Court unanimously dismissed the appeal on grounds which differ to the Court of Appeal. It stated that the infringement of the Canadian patent by the respondent did not constitute “turpitude” for the purposes of the illegality defence. It stated that “turpitude” involves a breach of the public law of the state and additionally includes certain “quasi-criminal” acts such as dishonesty, certain anomalous acts and infringement of statutory rules enacted for the protection of the public interest. As the grant of patent gives rise to a private right, the infringement does not engage the public interest.

For judgment, please download: [2014] UKSC 55
For Court’s press summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII