Actavis v Boehringer [2013] EWHC 2927 related to a dispute over the combination of telmisartan and hydrochlorothiazide, which was marketed by Boehringer and protected by an SPC.  Actavis wanted to sell the combination product and believed the SPC to be invalid, but agreed to give an interim undertaking not to sell the combination product, pending the resolution of the dispute.  In return, Boehringer agreed to give a cross-undertaking.  However, there was a dispute over how far the cross-undertaking should extend.

Actavis sought a cross-undertaking that allowed (i) any company in the Actavis group and (ii) any customer or potential customer of any company in the Actavis group to obtain compensation for any loss it may have suffered as a result of the interim undertaking.  Actavis argued that this was appropriate as it covered a clearly defined class of persons and allowed for future corporate restructuring.

Boehringer objected that the scope was too wide, as it did not identify the persons to whom the cross-undertaking would extend.  It was argued that Actavis must have known which companies in their group were involved and the reference to "customers or potential customers" was said to be unclear.

Birss J held that any cross-undertaking can extend to any class of persons who may justly obtain compensation.  However, the relevant persons must be defined in some suitable way, as must the potential loss or harm that may arise.  A cross-undertaking was said to be the "price of an injunction" and so it is important that the party paying the price knows with reasonable certainty what it may be.

Regarding the first group of persons, it was held that the relevant tasks (i.e., selling the product) carried out by the Actavis group were clear and that these tasks defined the persons affected by the undertaking, as well as the loss they would suffer.  It was therefore deemed unnecessary to define exactly which persons in the Actavis group would carry out these tasks.  Birss J also agreed with Actavis' argument that the proposed wording would save Actavis having to reapply to the court each time they are involved in a corporate restructuring.  The court was therefore happy that the cross-undertaking should cover the first group of persons.

However, reference to the customers and potential customers in the second group was held to be unclear, not least because the combination product had not yet been put on the market by Actavis and so there were no customers.  Further, "potential customers" was said to be extremely vague with no real definition of who these could be or what loss they may suffer.  The cross-undertaking should therefore not cover the second group of persons.

Birss J also highlighted that third parties, such as customers or potential customers, are able to apply to the court to be joined in proceedings such that they can benefit from the cross-undertaking.  Allowing the cross-undertaking to extend to the second group of persons would prejudge any such application and would unfairly extend the scope of the cross-undertaking for the benefit of a few, specific third parties.

It is therefore clear that a cross-undertaking does not have to specifically define the exact persons to which it extends.  However, its scope must be defined in some way to allow the persons covered and the loss that they could suffer to be identified, as the party making the cross-undertaking must know the potential "price of the injunction."

This report comes from European Patent Attorneys at WP Thompson & Co., 55 Drury Lane, London UK.  Further details and commentary can be obtained from Gill Smaggasgale, a partner at the firm.