In the matter of Irish Patent No €77480.

And in the matter of the Patents Act 1992.

Merck and Co Inc and Mercke Sharpe and Dohme (Ireland) Limited (petitioners) v G. D. Searle & Company and the Monsantao Company (respondents).

Commercial Law - European law - Intellectual property - Application to stay proceedings for revocation - Opposition proceedings in being before European Patent Office - Parallel proceedings - Whether in interests of justice to grant stay of proceedings before Irish court - Patents Act 1992.

The High Court (before Mr Justice McCracken); judgment delivered 14 March 2001.

In assessing whether or not to stay patent proceedings in this jurisdiction in respect of which there are parallel proceedings in being before the European Patents Office there are a number of factors to be considered. Primarily, as previous case law has demonstrated, the courts must consider whether the imposition of a stay would be unjust. In addition it was undesirable to have proceedings concerning a patent being resolved in a national court while at the same time corresponding European proceedings had still to be determined by the European Patent Office.

Mr Justice McCracken so held in acceding to the motion brought by the respondents in granting a stay on the present revocation proceedings pending the final decision of the European Patent Office.

Donal O'Donnell SC and Denis McDonald SC for the respondents; Michael Fysh QC and Paul Coughlan BL for the petitioners.

Mr Justice McCracken outlined the background to the present application. A motion had been brought by G.D. Searle & Company and the Monsanto Company (the respondents) for an order staying a petition by Merck and Co Inc, and Merck Sharpe and Dohme (Ireland) Limited (the petitioners). The petitioners had sought the revocation of Irish patent No €77480 ("the Irish patent") pursuant to the provisions of the Patents Act 1992. The Irish patent was derived from a European patent and the stay was sought by the respondents pending the final determination of opposition proceedings in relation to the European patent before the European Patent Office.

Mr Justice McCracken said that the European patent was granted on 19 November 1997 and Ireland was one of the designated countries under this patent. However, subsequently the petitioner filed opposition proceedings in the European Patent Office seeking to revoke the European patent. The decision by European Patent Office permitted certain amendments to the patent and refused to revoke the patent as amended. This decision was appealed and this appeal was at present pending. The petitioners commenced proceedings on 30 July 1998 to have the Irish patent revoked. On 19 July 1999 the respondents applied to amend the Irish patent.

In addition the respondents had commenced infringement proceedings in the United Kingdom, which was also one of the designated countries under the European patent. However the petitioners in the UK proceedings had counterclaimed and were successful in that the court revoked the patent. This decision was also currently under appeal.

Mr Justice McCracken noted that no application had been made in the United Kingdom for a stay pending the determination of the European Patent Office opposition.

Mr Justice McCracken, referring to the outstanding matters in relation to discovery and the possibility of an appeal to the Supreme Court, stated that the Irish proceedings could take some two and a half to three years to achieve finality and that it may take three to four years for the appeal in the European Patent Office to he heard. Mr Justice McCracken then made reference to the situation whereby there may be proceedings in relation to a patent pending at the same time both before a national court and the European Patent Office. In this regard Mr Justice McCracken quoted from the judgments of Lord Justice Aldous in the cases of Beloit Technologies Inc v Valmet Paper Machinery Inc [1997] RPC 489 and Kimberly-Clarke Worldwide v Procter and Gamble [2000] FSR 235. In the latter case Lord Justice Aldous had stated: "It is not sensible for a Court in this country to allow proceedings to be heard in this country which duplicate those in the EPO unless justice requires that to happen.

At the time that the 1977 Act was enacted, it was envisaged that proceedings before the EPO would be concluded with reasonable expedition. The consequences would be that any overlap between EPO proceedings and national actions could be prevented by staying the proceedings in this country for a short period."

Mr Justice McCracken also quoted from the judgment of Mr Justice Laddie in Unilever plc v Frisa NV [2000] FSR 708 where the learned judge had stated "I have to consider whether injustice will be caused by a stay and I have to bear in mind that there are at least some cases where the preferred option should be that the duplication of proceedings should be avoided and so a stay should be granted."

Mr Justice McCracken referred to the similar position surrounding the operation of Articles 81 and 82 (formerly 85 and 86) of the EC Treaty and in this regard quoted a passage from the judgment of the European Court delivered on 14 December 2000 in Master Foods Limited v HB Ice Cream Ltd in which it was stated that "it follows from the obligation of sincere co-operation that the National Court should, in order to avoid reaching a decision that runs counter to that of the Commission, stay the proceedings pending final judgment in the action for annulment by the Community Courts".

Mr Justice McCracken was satisfied that prima facie a stay should be granted in cases such as the present case. While he was aware that the European Patent Convention was not a treaty concerned with a harmonisation of substantive patent law nonetheless it was an international convention which established a patents office the decisions of which could determine the grant of a patent in this jurisdiction. Furthermore it would seem somewhat illogical, unless there was very good reason, for revocation proceedings to be heard in this country before the final determination of the existence and form of the patent by the European Patent Office.

In assessing whether or not to grant a stay Mr Justice McCracken held that there were a number of factors to be considered. In this instance the respondents were not in fact using the patent at all in this jurisdiction while the petitioners had a product on the Irish market which allegedly infringed the respondents' patent. However the respondents had furnished an undertaking to the court in the following terms - "An undertaking, pending final determination of the EPO, not, without leave of the court, to enforce patent number €77480 by way of injunction in this jurisdiction against the petitioners. This is without prejudice to the position in other jurisdictions."

However Mr Justice McCracken stated that the petitioners were of the view that such an undertaking was of little practical use as the respondents had instituted infringement proceedings in the Netherlands and could enforce an order obtained there in this jurisdiction under the Brussels Convention. However Mr Justice McCracken remarked that it would probably be some time before the proceedings in the Netherlands would be resolved.

The petitioners had also argued that if their present proceedings in Ireland were stayed there would be a patent in force in Ireland in an unamended form including claims perhaps wider than those which are likely to be allowed by the European Patent Office. In this regard Mr Justice McCracken remarked that if this scenario were to occur the respondents would then have the benefit of a monopoly for 3 or 4 more years to which they almost certainly were not entitled. Mr Justice McCracken stated that this last point was quite rightly put forward as being a matter of public interest rather than simply an inter partes matter. In addition the petitioners pointed out it would be commercially undesirable for them to manufacture a product in their plant in this country which might infringe the patent as long as the question was in doubt and therefore the stay should be refused so that there could be the earliest possible determination of the validity of the patent.

Mr Justice McCracken stated that against these arguments of the petitioner must be weighed the costs of duplication and the undesirability of conflicting decisions. If both proceedings continued in parallel and the ultimate decision was the same in both proceedings then there would have been a considerable waste of time and money. If the European Patent Office ultimately allowed the opposition and rejected the patent then as that decision would be binding in this jurisdiction the Irish proceedings would have been a waste of time and money. If the European Patent Office decided to grant the patent and the Irish Court revoked it the patent would not be in force in Ireland but would be in force in the other nominated countries under the convention.

Mr Justice McCracken held that the arguments put forward by the petitioners were not sufficient to outweigh the basic preference for granting a stay. Accordingly, subject to the undertaking which was being proposed, a stay on these proceedings would be granted pending the ultimate decision of the European Patent Office. Mr Justice McCracken added that as future events could have a bearing on the matters in hand the petitioners would be granted liberty to apply to lift the stay in the event of some material alteration in the circumstances.

Solicitors: McCann Fitzgerald (Dublin) for the respondents; Whitney, Moore & Keller (Dublin) for the petitioners.