High Court of Ireland Decisions

1. The fifth, sixth and seventh named defendants, Dazzlink Limited, Prembury Limited and Madex Pharmaceuticals Limited, seek to have the plaintiff's claim struck out pursuant to the Rules of the Superior Courts and pursuant to the inherent jurisdiction of this Court. Before considering the matter I will say a word about the parties.

The plaintiff is a French company engaged in the manufacture and sale of pharmaceutical products. They are the owners of an Irish patent number 45015 dated 24 January 1977 in respect of an invention relating to new oxime derivatives of 7[ amino[thiazolyl[acetamido[cephalosporanic acid, processes for preparing them and pharmaceutical compositions containing it. They also have a patent dated the 17 August 1978 in respect of a derivative. Cefotaxime is the name of the invention.

The fifth named defendant is an Irish limited liability company having its registered office at 48, Fitzwilliam Square in the City of Dublin. The sixth named defendant is an English limited liability company having its registered office at Finsgate, 5/7 Cranworth Street, London ECI. The seventh named defendant is an Irish limited liability company having its registered office at 14/15 Parliament Street in the City of Dublin. All three companies are engaged in the sale of pharmaceutical products.

The plaintiffs claim against these defendants is made on foot of the Irish patents. An amended statement of claim was delivered on the 4 of February 1997. The relevant part of the statement of claim states as follows:

" 19. The fifth sixth seventh eighth and ninth named defendants have offered, sold, put on the market and/or used in the State the plaintiff's patented pharmaceutical Cefotaxime as more particularly set forth in the Particulars of infringement served herewith. By carrying out the acts or any of them referred to in the Particulars of Infringement the fifth sixth seventh eighth and ninth named defendants or any one or more of them have infringed the plaintiff's patents aforesaid.

20. The fifth sixth seventh eighth and ninth named defendants are operated by those having control over them with a view to systematically infringing the pharmaceutical patent rights of others in particular those of the plaintiff in their product Cefotaxime.

21. Further or in the alternative, the defendants, their respective servants or agents or any two or more of them have combined together and by unlawful means have damaged the plaintiff's business in the products claimed in the said patents (or either of them).

22. Further the defendants and each of them have unlawfully interfered with the plaintiff's economic interests.

23. In support of the aforesaid allegations, reliance will be placed, inter alia, upon the fact that the Cefotaxime which has been offered, put on the market, or used by the fifth sixth seventh eighth and ninth named defendants as alleged herein has been deliberately and systematically misdescribed in invoices and in documents by the use of misleading descriptions or alternative cover names and codes in the trade between these defendants or some or other of them while being correctly described thereafter in the documents relating to subsequent sales by the said defendants to third parties outside the State.

24. Further, the acts complained of herein and the documents generated by the said defendants in support of the said acts have been done and created deliberately and dishonestly so as to defeat the plaintiff's lawful rights."

In the Particulars of Infringement of Patents nos 45015 and 47230 referred to in the statement of claim the plaintiff alleges that:

"Subsequent to the publication of the application for the patents referred to in the Statement of Claim herein and prior to the issue of the Plenary Summons herein, the Defendants (save the second named defendant) and each of them or their servants or agents have infringed the said patents and in particular claims 1,2,3,5,8, and 9 of Irish patent number 45015 and claims 1 and 8 of Irish patent number 47230 by doing within the State without the consent of the Plaintiff, the following things:

(a) offering to supply, selling, and/or putting on the market and/or using cephotaxime and/or

(b) importing and/or stocking cephotaxime for the above purposes."

In particular as against the fifth named defendant, Dazzlink, the plaintiff complains (at paragraph B) of the following acts:

"(i) The antecedent offering to supply, sale and/or subsequent putting on the market or using of cephotaxime as evidenced by documents below.

(ii) Invoice dated 21 November 1995 in respect of the sale of 110 kg of cephotaxime (batch no 66/95) to the first defendant and the antecedent offer for sale and/or supply and/or use thereof.

(iii) Invoices relating to the sale of substantial quantities of cephotaxime during the period 1995 to mid[1996, to, inter alia, the following:[

The seventh named defendant (Madex Pharmaceuticals Ltd)

The eighth named defendant, (Montcove Trading Ltd)

The ninth named defendant, (Stragen (International) Ltd)

each of which is an Irish company and the antecedent offer for sale and supply thereof including but not limited to the following examples:

a. Invoice number 3/95 dated 15 March 1995 evidencing a sale by Dazzlink Limited to Madex Pharmaceuticals Limited of 130 kg of cephotaxime,

Invoice number 8/96 dated 7 February 1996 evidencing a sale by Dazzlink Limited to Madex Pharmaceuticals Limited of 100 kg of cephotaxime.

b. Invoice number 38/96 dated 24 May 1996 evidencing the sale of 50 kg of cephotaxime by Dazzlink Limited to Montcove Trading Limited.

Invoice number 33/95 dated 19 May 1995 evidencing the sale of 80 kg of cephotaxime by Dazzlink Limited to Montcove Trading Limited.

c. Invoice number 37/96 dated 24 May 1996 evidencing the sale of 50 kg cephotaxime by Dazzlink Limited to Stragen (International) Limited.

(iv) The putting on the market by the fifth defendant of the cephotaxime subject of the invoices identified in paragraphs (ii) and (iii) above."

As against the sixth named defendant, Prembury Limited, the plaintiff complains (at paragraph C) of the following:

"(i) The antecedent offering to supply, sale and/or subsequent putting on the market or using of cephotaxime as evidenced by invoices dated as below:

(ii) Invoices relating to the sale and supply of cephotaxime during the period 1995[mid 1996 by the sixth defendant to the fifth defendant and in particular invoice number 54/95 dated 21 November 1995 relating to the sale of 170 kg of cephotaxime (batch no 65[66/95).

(iii) Further or in the alternative, reliance will be placed upon an admission made before Mr Justice Kelly on 21 November 1996 in relation to the facts and matters alleged in paragraphs B and C above by Solicitors for the fifth and sixth defendants herein, that its clients (the said defendants) were "inextricably linked". In the circumstances, in relation to the matters of which complaint is made against those defendants, the plaintiff will say that they may in reality be treated as one."

As against the eighth named defendant, Madex Pharmaceutical Ltd, the plaintiff complains (at paragraph D) of the following:

"(i) The antecedent offering to supply, sale and/or subsequent putting on the market or using of cephotaxime as evidenced by documents dated as below:

(ii) Invoice dated the 18 September 1995 in respect of a sale of 20 kg of cephotaxime to Rim (Trading) Limited of 27/30 Merchants Quay, Dublin 8.

(iii) Invoice dated the 9 September 1996 in respect of a sale 20 kg of cephotaxime to Rim (Trading) Limited aforesaid.

(iv) Invoices evidencing the purchase by Madex Pharmaceuticals Ltd of substantial quantities of cephotaxime from the fifth named defendant during the period 1995 to late 1996 for the purpose of onward sale and/or putting on the market and/or using the said product.

Each of the foregoing entities is an Irish company. The said invoices are contained in the documents of the fifth and sixth defendants and the eighth defendants made available to the plaintiff pursuant to Orders of the High Court in these proceedings.

(v) The sale of 150 kg of cephotaxime sodium to Pol Nil Sp ZOOZ.O.O of Warsaw as evidenced by a contract number PL 012510849/9613075 dated the 21 of February 1995 and invoice number 96/28 dated the 14 March 1996."

Most of the invoices were acquired by means of discovery. Some were also obtained by means of trap orders.

The plaintiff is seeking a declaration that its Irish patent has been infringed, and also that its Italian patent has been infringed, although the latter is not claimed as against these defendants. The plaintiff seeks an injunction, damages and certain ancillary reliefs.

The plaintiff's claim is of a threefold nature: it is seeking reliefs in relation to patent infringement, damages for fraud and damages for conspiracy.

The rules of court upon which the application is based are Order 19, rules 27 and 28 which state as follows:

"27. The Court may at any stage of the proceedings order to be struck out or amended any matter in any endorsement or pleading which may be unnecessary or scandalous, or which may tend to prejudice, embarrass or delay the fair trial of the action; and may in any such case, if it shall think fit, order the costs of the application to be paid as between solicitor and client.

28. The Court may order any pleading to be struck out, on the ground that it discloses no reasonable cause of action or answer and in any such case or in case of the action or defence being shown by the pleadings to be frivolous or vexatious, the Court may order the action to be stayed or dismissed, or judgment to be entered accordingly, as may be just."

Reliance is also placed on Order 94, rule 5 which states, under the heading "actions for infringement of patent", as follows:

"Particulars of breaches shall specify which of the claims in the specification of the patent sued upon are alleged to be infringed and shall give at least one instance of each type of infringement of which complaint is made."

I propose to deal first with the application under the Rules of Court and then I will consider the application pursuant to the inherent jurisdiction of the Court.

It is said that the plaintiff has failed to sufficiently particularise its claim as per Order 94. I conclude that the defendants are incorrect in their contention: the plaintiff has complied with both the letter and the spirit of Order 94. This is obvious from a reading of the documents from which I have just quoted.

As far as the allegation of fraud is concerned, the cases of Din v Banco Ambrosiano [1991] IR 569 and Countyglen v Carway (unrep) HC Murphy J 10 Appeal 1995 make it clear that fraud must be pleaded with particularity. Having read the statement of claim and the replies to particulars I find the claim of fraud is not particularised with sufficient detail. Accordingly in the absence of an application to amend the statement of claim, the claim in so far as it relates to fraud will be struck out.

Only the seventh named defendant asked for particulars of conspiracy. Paragraph 14 of the replies to particulars delivered on the 26 February 1997 states as follows:

"14. Insofar as the Plaintiff makes a claim for conspiracy against the seventh[ named Defendant, the Plaintiff will contend that the seventh[named Defendant combined with Dazzlink Limited the fifth[named Defendant. The seventh[ named Defendant has purchased several million pounds worth of Cefotaxime from, inter alia, Dazzlink Limited as evidenced by the invoices furnished by the seventh named Defendant. The purchase of Cefotaxime by that defendant from Dazzlink Limited (which has been confirmed by Mr Vanossi on behalf of the seventh named defendant) has been conducted surreptitiously and through the use of cover names. The real nature of the transaction, namely the trade in counterfeit Cefotaxime has been deliberately concealed by Dazzlink Limited and the seventh named Defendant, inter alia, to avoid detection by the plaintiff patent[holder. The plaintiff will rely in this regard on each purchase of Cefotaxime by the seventh named Defendant from Dazzlink in respect of which invoices have already been furnished."

Having considered the matter I find that this part of the claim is sufficiently pleaded. Both the statement of claim and the replies to particulars are adequate in this respect and accordingly I refuse to strike out the conspiracy claim.

The inherent jurisdiction of the Court to strike out proceedings has often been considered since Barry v Buckley [1981] IR 306. It is clear that the Court has a discretion to strike out proceedings to stop an abuse of process, and also if it is clear that the plaintiff's claim will fail. In Sun Fat Chan v Osseous Limited [1992] 1 IR 425 McCarthy J stated as follows:

"In Barry v Buckley [1981] IR 306 Costello J held that the High Court has inherent jurisdiction in an appropriate case to dismiss an action on the basis that, on admitted facts, it cannot succeed. Counsel for the plaintiff has not challenged that decision or the ratio underlying it. The jurisdiction is different from that directly arising from Rules of the Superior Courts where a statement of claim discloses no cause of action or the proceedings constitute an abuse of the process of the court, where, pursuant to section 27, sub[s 5 of the Judicature Act (Ireland) 1877, the court may grant a stay of proceedings so far as may be necessary for the purpose of justice. In Barry v Buckley Costello J referred to the notes on that sub[section as set out in Wylie on the Judicature Acts. Since the matter has not been debated, I express no view upon the decision in Barry v Buckley save to comment that applying the underlying logic, a defendant may be denied the right to defend as action in a plenary hearing if the facts are clear and it is shown that the defence is unsustainable. This appears to have been the net effect in the decision in the High Court (Dixon J) in Dolan v Neligan (1959) reported in its second phase in [1967] IR 247. By way of qualification of the jurisdiction to dismiss an action at the statement of claim stage, I incline to the view that if the statement of claim admits of an amendment which might, so to speak, save it and the action founded on it, then the action should not be dismissed.

Generally, the High Court should be slow to entertain an application of this kind and grant the relief sought.

Experience has shown that the trial of an action will identify a variety of circumstances perhaps not entirely contemplated at earlier stages in the proceedings; often times it may appear that the facts are clear and established but the trial itself will disclose a different picture. With that qualification, however, I recognise the enforcement of a jurisdiction of this kind as a healthy development in our jurisprudence and one not to be disowned for its novelty though there may be a certain sense of disquiet at its rigour."

The plaintiff's claim will only be struck out if it is "so clearly unsustainable" as to merit such a course of action, as per DK v AK [1993] ILRM 710 O'Neill v Ryan [1990] IR 200 [KIEL 1981 ECR 1805].

It is clear that I have to assume that everything pleaded by the Plaintiff is true (per O'Flaherty J in Harrington v JVC (UK) (Unrep, Supreme Court, 21 February 1995) and Keane J in Lac Minerals Limited v Chevron Mineral Corporation of Ireland (Unrep 6 August 1993. 1993: 12.3.862. Some of the observations made in those judgments echo the jurisprudence of the Court of Appeal in Wenlock v Moloney 1965] 1 WLR 123 8 and Strix Limited v Otter Controls 1991] FSR 3 54.

In the present case there have been many affidavits which 1 have looked at in detail. The hearing has turned into what I might describe as "a mini trial on affidavit". The question I must ask myself is this: "is the Plaintiffs case on the face of it so unstateable as to preclude it from any chance of success?' If I consider that the Plaintiff s claims may ultimately fall, that does not mean that it is a case that must fail.

I will make no comment on my view of the merits of the case. Having considered the evidence on affidavit I cannot conclude that the Plaintiffs claim as against these Defendants must fall, and accordingly I will not strike it out. The case is an arguable one so cannot strike it out. The only part of the plaintiff's claim that I will strike out is that part of the claim which alleges fraud.

[Submissions by both sides on costs].

While the defendants have succeeded in having the plaintiffs fraud claim struck out, and the plaintiff withdrew its claim in relation to the Italian patent, very little time was spent arguing the fraud point. Accordingly I rule that costs should be costs in the cause.