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The Court of Appeal has handed down judgment in a case that discusses English law’s approach to a Settlement Agreement containing a general release clause, entered into by pharmaceutical companies following proceedings in Portugal concerning intellectual property rights in a patented compound called rosuvastatin, the active ingredient in certain statins drugs.

Though the patent had expired, the Respondents, AstraZeneca, had been granted a Supplementary Protection Certificate (“SPC”) to last until 3 July 2017.  Later, but after the Settlement Agreement, it was granted a Paediatric Extension which extended the term of the SPC to 29 December 2017.

The appellants (“Teva”) contended that the general release entitled it to market and sell their generic product after 3 July 2017 and that, on the correct construction of the Settlement Agreement, AstraZeneca was not entitled to prevent such activity by Teva.  AstraZeneca commenced arbitration proceedings against Teva in Portugal to enforce rights arising under SPC 156 as extended by the Paediatric Extension, seeking to prevent Teva from selling their generic product before 29 December 2017. In response, Teva commenced proceedings in London and sought declaratory relief by way of summary judgment.  

At first instance Leggatt J dismissed the summary judgment application ([2017] EWHC 1852 (Comm)).  Today, the Court of Appeal (Rupert Jackson LJ, Flaux LJ and Sales LJ) unanimously allowed Teva’s appeal and granted the summary judgment declaration sought ([2017] EWCA Civ 2135). The Court considered the limits of the role of ‘commercial common sense’ in construing the agreement, and also the line of cases on general releases stemming from BCCI v Ali.

Alan Maclean QC appeared for the Appellant; Ian Mill QC and Andrew Scott appeared for the Respondents. 

The judgment of the Court of Appeal is here.

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