Introduction

The case of Les Laboratoires Servier & Anor v. Apotex Inc & Ors ([2015] 1 All ER 671) adjudicated by the United Kingdom Supreme Court on October 29, 2014, centers on the defense of illegality, specifically the principle of ex turpi causa non oritur actio (from a dishonorable cause an action does not arise). This case involves a dispute between Les Laboratoires Servier, a French pharmaceutical company, and Apotex Inc, a Canadian generic pharmaceutical manufacturer, over the infringement of a UK patent for a specific crystalline form of the drug perindopril erbumine, an ACE inhibitor used in treating hypertension and cardiac insufficiency.

The crux of the appeal revolved around whether Apotex's claim for damages under a cross-undertaking was barred by the illegality defense, considering that Apotex’s manufacturing in Canada had infringed Servier's Canadian patent—raising questions about moral culpability and the public interest.

Summary of the Judgment

The United Kingdom Supreme Court dismissed the appeal by Servier, thereby upholding the Court of Appeal's decision. The Supreme Court held that the infringement of a foreign patent by Apotex did not constitute a relevant illegality sufficient to activate the defense of illegality under the ex turpi causa principle. The Court clarified that such a defense is confined to acts that engage the public interest, primarily criminal or quasi-criminal acts, and does not extend to pure civil wrongs like patent infringement when they do not pose a broader public policy concern.

Consequently, Apotex's claim for damages under the cross-undertaking in the UK was allowed to proceed, with deductions made for any damages Apotex would owe in Canadian proceedings for patent infringement. This decision reinforces the notion that the ex turpi causa defense is not a broad shield against all claims arising from wrongful acts, but is limited to specific categories that threaten public policy.

Analysis

Precedents Cited

The judgment extensively referenced foundational cases and doctrines concerning the illegality defense:

• Holman v. Johnson (1775): Established the principle that no court will assist a plaintiff whose cause of action arises from an immoral or illegal act.
• Tinsley v Milligan (1994): Clarified that the illegality defense is a rule of law, not a discretionary power, emphasizing its basis in public policy over the party's conduct.
• Gray v Thames Trains Ltd (2009): Discussed the policy foundations of ex turpi causa, indicating its basis on a group of reasons rather than a single justification.
• Hounga v Allen (2014): Reinforced that public policy considerations underpin the illegality defense and must align with established legal principles.
• Burrows v Rhodes (1899): Explored the application of illegality defense to civil wrongs but highlighted the lack of clear, consistent authority in such applications.
• Safeway Stores Ltd v Twigger (2010): Addressed personal liability arising from corporate misconduct, distinguishing between corporate and personal wrongs.

These precedents underscored the strict and limited application of the illegality defense, particularly emphasizing its alignment with public interest and policy rather than the individual merits of cases.

Legal Reasoning

The Supreme Court’s reasoning focused on maintaining the integrity and predictability of legal principles surrounding the ex turpi causa doctrine. The Court disagreed with the Court of Appeal's broader interpretation that considered factors like Apotex’s honest belief in the Canadian patent’s invalidity and the nature of the infringement's connection to public policy.

Lord Sumption, delivering the judgment, emphasized that the defense of illegality should be tightly bound to public interest violations, such as criminal or quasi-criminal acts. Patent infringement, in this context, did not inherently threaten public policy or involve moral turpitude sufficient to invoke the defense. The Court rejected the notion that infringing a foreign patent, which results in a purely private dispute over intellectual property, falls within the scope of ex turpi causa.

The judgment clarified that the defense should not hinge on subjective assessments of misconduct's severity or its broader implications but should remain a clear-cut rule aligned with established public policy considerations.

Impact

This decision has significant implications for future cases involving the illegality defense:

• Clarification of Scope: The ruling delineates the boundaries of the ex turpi causa defense, restricting its application to actions that significantly harm public interests.
• Predictability in Litigation: By affirming that patent infringement does not fall under the illegality defense absent an overriding public policy concern, the judgment provides greater predictability and stability in intellectual property disputes.
• Limitation on Defense Usage: Parties involved in civil litigation can better assess the viability of invoking the illegality defense, focusing only on cases that align with public interest violations.
• Judicial Consistency: The Supreme Court’s alignment with established doctrines reinforces consistency across jurisdictions, reducing the potential for fragmented interpretations of the defense.

Overall, the judgment reinforces the principle that the ex turpi causa defense is not a blanket protection against claims arising from wrongful acts but is reserved for specific, policy-driven scenarios.

Complex Concepts Simplified

Ex Turpi Causa Non Oritur Actio

This Latin maxim translates to "from a dishonorable cause an action does not arise." It signifies that a plaintiff cannot pursue a legal claim if it arises from their own illegal or immoral actions. The principle is rooted in public policy to prevent the courts from being complicit in unlawful activities.

Illegality Defense

The illegality defense is a legal doctrine that allows a defendant to refuse to enforce an agreement or claim if it is founded on illegal activities. It ensures that the legal system does not support or reward unlawful behavior.

Public Interest

In legal terms, public interest refers to the welfare or well-being of the general public and society. Actions or defenses that significantly affect public interest are often scrutinized more closely to maintain legal and social order.

Cross-Undertaking in Damages

A cross-undertaking in damages is a promise made by the party seeking an injunction to compensate the other party if the injunction is later found to have been wrongly granted. It serves as a safeguard against potential financial loss should the injunction not be upheld.

Conclusion

The UK Supreme Court's decision in Les Laboratoires Servier v. Apotex Inc serves as a pivotal clarification in the realm of legal defenses related to illegality. By affirming the limited scope of the ex turpi causa doctrine, the Court has reinforced the principle that the illegality defense is reserved for actions that directly impinge upon public policy and interest. This ruling delineates the boundaries within which the defense can be appropriately applied, thereby enhancing legal predictability and safeguarding the integrity of judicial processes.

For practitioners and stakeholders in intellectual property and civil litigation, this judgment underscores the importance of aligning claims with established public policy considerations when contemplating defenses based on illegality. It emphasizes a return to traditional, rule-based applications of legal doctrines over more discretionary, case-by-case assessments, ensuring that the law remains consistent and principled.