Les Laboratoires Servier & Anor v Apotex Inc & Ors , United Kingdom Supreme Court, Judgment, Law, casemine.com

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Attorney(S)

Appellants Iain Purvis QC Andrew Lykiardopoulos QC (Instructed by Bristows LLP)
Respondents Daniel Toledano QC Thomas Mitcheson QC Harris Bor (Instructed by Taylor Wessing LLP)

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Les Laboratoires Servier & Anor v. Apotex Inc & Ors (Rev 1)

Smart Summary

Factual and Procedural Background

The Appellant, a pharmaceutical research company (“Appellant”), held a United Kingdom patent over a specific crystalline form of perindopril erbumine. The Respondent, a group of generic drug manufacturers (“Respondent”), began selling generic perindopril in the UK in July 2006. On 7 August 2006 Judge Mann granted an interlocutory injunction restraining the Respondent from importing or selling the product in the UK, the injunction being supported by the usual cross-undertaking in damages.

In July 2007 the patent was held invalid and the injunction discharged. Meanwhile, Canadian proceedings concerning a different patent (covering the compound itself) resulted in a final injunction against the Respondent in July 2008. When damages on the UK cross-undertaking came before Judge Norris, both sides agreed that, but for the UK injunction, the Respondent would have sold an additional 3.6 million packs in the UK.

After the Canadian judgment, the Appellant sought to amend its defence to rely on two new points: (i) that the Respondent’s claim was barred by illegality because the additional product would have been manufactured in Canada in breach of the Canadian patent (“illegality point”); and (ii) that Canadian damages should be treated as an added cost of manufacture (“cost-of-manufacture point”). Judge Norris refused the amendment and awarded the Respondent approximately £17.5 million plus interest. The Court of Appeal later allowed the amendment and remitted the illegality issue, staying the cost-of-manufacture point.

Judge Arnold subsequently upheld the illegality defence, but the Court of Appeal reversed him. The present appeal by the Appellant to the Supreme Court concerns only the illegality point.

Legal Issues Presented

Whether infringement of a foreign patent constitutes “turpitude” sufficient to engage the defence of ex turpi causa non oritur actio.
If so, whether the Respondent’s claim on the cross-undertaking is founded upon, or so closely connected to, that illegality as to be barred.
Whether raising the public-policy/illegality defence is inconsistent with the Appellant’s own undertaking in damages.

Arguments of the Parties

Appellant's Arguments

Infringing a foreign patent is a serious wrong that engages public policy; therefore the Respondent seeks to profit from its own illegal act.
The Respondent cannot quantify its loss without affirming that it would have acted illegally in Canada; consequently the claim is barred.
Raising the illegality defence is not inconsistent with the cross-undertaking because public-policy considerations override the undertaking.

Respondent's Arguments

Patent infringement is a private, strict-liability matter, not “turpitude” attracting the illegality defence.
Even if illegality were relevant, any Canadian liability will be fully reflected by deducting Canadian damages from the cross-undertaking recovery; no further bar is justified.
The Appellant, having enjoyed an interim monopoly through the injunction, should compensate the Respondent for losses caused by that injunction.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Holman v Johnson (1775) 1 Cowp 341	Foundational statement of the illegality doctrine (ex turpi causa).	Cited as the starting point showing the defence is a rule of law, not discretion.
Roberts v Roberts (1818) Dan 143	Early equity application of ex turpi causa.	Referenced to demonstrate long-standing reach of the principle.
Ayerst v Jenkins (1873) LR 16 Eq 275	Extension of the doctrine to equity courts.	Quoted to support non-discretionary nature of the rule.
Taylor v Chester (1869) LR 4 QB 309	Maxim in pari delicto; both parties equally at fault.	Used to illustrate historical rigidity of the defence.
Euro-Diam v Bathurst Ltd [1990] 1 QB 1	“Public conscience” test proposed by Court of Appeal.	Discussed and rejected as inconsistent with established authority.
Tinsley v Milligan [1994] 1 AC 340	House of Lords’ leading modern authority; rejects “public conscience” test; endorses reliance/connection tests.	Treated as binding law limiting scope for discretionary balancing.
Bowmakers Ltd v Barnet Instruments Ltd [1945] KB 65	Origin of the “reliance test”.	Referred to explain one limb of the Tinsley reasoning.
Palaniappa Chettiar v Arunasalam Chettiar [1962] AC 294	Further support for reliance test.	Referenced alongside Bowmakers.
Gray v Thames Trains Ltd [2009] 1 AC 1339	Differentiates “narrow” and “wider” illegality rules; emphasises policy foundations.	Cited; court notes it does not authorise discretionary proportionality analysis.
Stone & Rolls Ltd v Moore Stephens [2009] AC 1391	Confirms current law follows Tinsley; discusses strict-liability exceptions.	Used to rebut suggestions that lower courts have eroded Tinsley.
Safeway Stores Ltd v Twigger [2010] 3 All ER 577	Illegality where conduct breaches penal competition statutes.	Cited as an example of “quasi-criminal” wrongdoing that may constitute turpitude.
Hall v Hebert (1993) 101 DLR (4th) 129	Integrity and consistency of the legal system rationale.	Quoted to frame public-interest considerations.
Burrows v Rhodes [1899] 1 QB 816	Exception where claimant unaware of facts making act unlawful (strict liability).	Illustrates limits on what counts as turpitude.
Shackell v Rosier (1836) 2 Bing NC 634	Contract to indemnify against damages for criminal libel.	Mentioned in historical survey of civil wrongs and illegality.
Weld-Blundell v Stephens [1920] AC 956	Unclear ratio on civil wrongs and illegality.	Discussed to show ambiguity in older authority.
Columbia Pictures v Robinson [1987] Ch 38	Illegality defence raised where business involved dishonest copyright piracy.	Referenced as an isolated example; not adopted.
United Project Consultants v Leong Kwok Ong [2005] 4 SLR 214	Strict-liability tax penalty not turpitude.	Used to illustrate exceptions for innocent strict-liability offences.
Askey v Golden Wine Co [1948] 2 All ER 35	Consequences of criminal sentence and damages claims.	Cited in discussion of Lord Hoffmann’s “narrower rule”.
State Railway Authority v Wiegold (1991) 25 NSWLR 500	Loss flowing from claimant’s own crime.	Referenced in same context as Askey.
Brown Jenkinson & Co Ltd v Percy Dalton [1957] 2 QB 621	Illegality where contract’s object was deceit.	Noted as instance involving fraudulent intent.
Hoffmann-La Roche v Secretary of State for Trade & Industry [1975] AC 295	Principles governing assessment of damages on a cross-undertaking.	Relied upon in the Court of Appeal for calculating Respondent’s loss.
Vita Food Products v Unus Shipping [1939] AC 277	Public-policy nullity assessed case-by-case.	Quoted to justify cautious, policy-based analysis where no direct authority exists.
Hounga v Allen [2014] 1 WLR 2889	Need to balance competing aspects of public policy when applying illegality.	Cited to support examination of policy aims behind the defence.
Maxim Nordenfelt Guns & Ammunition Co v Nordenfelt [1893] 1 Ch 630	Rules based on public policy may evolve.	Referenced in discussion of flexibility versus certainty.

Court's Reasoning and Analysis

The Supreme Court affirmed that the illegality defence is a rule of law, not a discretionary doctrine dependent on proportionality. It drew a clear distinction between:

Criminal or “quasi-criminal” conduct that engages the public interest (constituting “turpitude”).
Private wrongs, including breaches of patents that are enforceable only by the patentee.

Foreign patent infringement, although actionable, was categorised as a private, strict-liability matter. The Court reasoned that:

The only interest affected is the patentee’s private interest, fully vindicated by damages in the foreign jurisdiction.
Labeling such infringement as turpitude would transform the ex turpi rule into an unpredictable, discretionary tool—contrary to Tinsley v Milligan.
Existing authority shows no precedent for barring claims merely because they stem from a strict-liability civil wrong.
The Respondent’s concession that Canadian damages will be deducted already eliminates any unjust enrichment; further forfeiture would impose an unwarranted penalty.

Because foreign patent infringement is not “turpitude”, issues concerning causal connection and consistency with the cross-undertaking did not arise. The Court therefore rejected the Appellant’s illegality defence.

Holding and Implications

APPEAL DISMISSED.

The Respondent may enforce the cross-undertaking in damages, subject to giving credit for any damages awarded against it in Canada. The decision clarifies that infringement of a foreign patent, being a private strict-liability wrong, does not constitute the kind of illegality (“turpitude”) that bars a civil claim under English law. The ruling reinforces the authority of Tinsley v Milligan and limits the scope of the illegality defence, ensuring predictability for parties relying on cross-undertakings in interim injunctions. No new precedent was created regarding discretionary balancing; instead, the Court reaffirmed a rule-based approach.