Does the defence of illegality bar the recovery of damages under a cross-undertaking?

Alasdhair McDonald

In Les Laboratoires Servier v Apotex, the Supreme Court has ruled on the availability of the defence of illegality (“ex turpi causa non oritur actio”; from a dishonourable cause an action does not arise) in the context of a patent dispute, and in particular whether it barred the recovery of damages under a cross-undertaking where an injunction was found to have been wrongly granted.

Servier obtained an injunction against Apotex, preventing Apotex from importing perindopril erbumine manufactured in Canada into the UK.  The injunction was based upon Servier’s patent for a perindopril erbumine compound – a patent which was subsequently found to be invalid.  Accordingly, the injunction was overturned and Apotex was entitled to damages under a cross-undertaking given by Servier as a condition to obtaining the injunction.  Meanwhile, the Canadian Courts found the manufacture by Apotex of perindopril erbumine in Canada to infringe a Canadian patent.  Servier, therefore, contested that Apotex’s right to damages was barred on the grounds of illegality: it sought damages on the basis that it could not import a product that it manufactured unlawfully.

The Supreme Court held that the infringement of the Canadian patent did not constitute “turpitude” (an illegal act which engages the interest of the public) and so did not engage the defence of illegality.  Apotex was, therefore, entitled to damages.

A full Olswang case comment is available here.

Les Laboratoires Servier and another v Apotex Inc and others [2014] UKSC 55

Post By Alasdhair McDonald (3 Posts)

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