Bristol Myers Co And Others v Beecham Group Ltd

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

CIVIL APPEAL NO. 51 OF 1967.

(ON APPEAL FROM O.J. 828 OF 1967)

-----------------

-----------------

-----------------

JUDGMENT

-----------------

1. On 24th November, 1967, Mills-Owens J. granted an interlocutory injunction restraining the defendants until judgment in this action from advertising, offering for sale, selling or supplying the antibiotic hetacillin or any preparation containing the same or otherwise infringing either or both of the plaintiff company's United Kingdom Letters Patent Nos. 870395 and 873049. The defendants appealed to this court; and in dismissing the appeal on 23rd February we indicated that we would give our reasons later. We now set them out in some detail because, in our view, to do justice to the arguments put before us it is desirable to do so though we have kept constantly in mind the fact that this is an appeal in an interlocutory matter.

2. The background to the dispute between the parties goes back to 1957 when chemists employed by the plaintiff company achieved a fundamental break-through in antibiotic research by isolating the penicillin nucleus, 6-aminopenicillanic acid (referred to during this appeal as "6-APA"). This discovery was acclaimed throughout the world as an outstanding achievement in chemotherapy because it led to the design and evolution of a whole series of new penicillins (conventionally known as semi-synthetic penicillins) formed by the addition to the nucleus of what is known to organic chemists as "side-chains".

3. One such semi-synthetic penicillin, which was discovered by the plaintiff company shortly after 6-APA had been isolated, is called ampicillin, and it is sold under the trade name "Penbritin". This compound very soon acquired a world-wide reputation as being the only antibiotic which was highly active against both Gram-positive and Gram-negative bacteria over a broad spectrum. The processes by which it is manufactured, and the product itself, are protected by the two patents (Nos. 870395 and 873049) which have been registered not only in the United Kingdom and Hong Kong, but in many other parts of the world.

4. Following these discoveries a close relationship existed between the plaintiff company and the first defendant corporation and they were of considerable assistance to one another. We shall presently refer in more detail to various licence agreements which were executed in 1959 and 1960. At this stage it is sufficient to say that the broad intention, according to the plaintiff company, was that the first defendant corporation were to have the rights of manufacture and sale of penicillin derivatives, including ampicillin, in America and Canada leaving the rest of the world, or the greater portion of it, to the plaintiffs.

5. This arrangement appears to have worked well until the plaintiff company discovered recently that the first defendant corporation were manufacturing a compound called hetacillin and causing it to be sold in many countries other than America and Canada under the trade name "Versapen". The first defendants admit that they manufacture hetacillin in America and they have stated that their intention is to market this drug in Hong Kong. They claim that it does not infringe the plaintiff's patents either as a product or with respect to the process by which it is produced. The present action is part of a world-wide dispute between the plaintiff company and the first defendant corporation. The second defendant corporation is a wholly-owned subsidiary of the first defendant corporation and it has a place of business in Hong Kong. The third defendant is a company incorporated in Hong Kong; and it is concerned in the distribution of hetacillin to the trade here.

6. It was not in dispute that if the importation into, and sale in, Hong Kong of hetacillin is an infringement of the plaintiff's patents in respect of ampicillin, the defendants are proper parties to be enjoined. In the lower court the position was that the second and third defendants were legally represented at the hearing. The first defendant corporation refused to accept service although they had solicitors in Hong Kong and they were fully aware of these proceedings. The learned judge granted an injunction against them ex parte; and, in our view, this was the proper course to adopt. As the learned judge said:-

7. We were much indebted to counsel for their explanations in regard to the basic principles on which the science of organic chemistry is founded, and for explaining the meaning of a number of technical terms occurring in the specifications and affidavits. This did not involve counsel giving evidence from the Bar on any matter which would be in issue at the trial; and we had no hesitation in accepting their assistance. As Lord Denning said in Baldwin v. Francis⁽¹⁾:-

8. It is perhaps common knowledge that a chemical compound consists of a vast number of molecules each of which is composed of the same number of atoms of the same elements arranged in space in a particular way. One of the simplest compounds is water; and, as is notorious, each molecule of water consists of two atoms of hydrogen and one atom of oxygen (H₂O). When, under suitable conditions, two chemical compounds "react" one with the other, there is a rearrangement of some, or all, of the atoms which make up the ...(illegible) of the reacting compounds; and the resulting products are qualitatively different. The compound, or compounds, produced by a chemical reaction are new compounds, although they may be closely related to the reacting compounds.

9. The plaintiff alleges that the defendants have infringed Claim I of patent 870395 and Claim 12 of patent 873049 (both process claims) and claims, 1, 2, 3 and 5 of patent 873049 (product claims). Claim I of patent 870395 reads:-

10. The essence of the claim is that it protects the process of reacting 6-aminopenicillanic (6 APA) with any chemical compound which falls withir one or other of the various groups named therein.

11. It is common ground that it protects the process by which ampicillin is manufactured. The full chemical name of this compound is alpha-aminobenzylpenicillin, or alternatively 6-alpha-aminophenylacetamido penicillanic acid. It is the product of the reaction of 6-APA with alpha-aminophenylacetyl chloride, the chloride salt of alpha-aminophenylacetic acid. This acid is "a carboxylic acid", and it is the chloride of this acid with which we are concerned.

12. A carboxylic acid is an acid in which a hydrocarbon, or radical, group is combined with the carboxyl group - COOH. Perhaps the simplest carboxylic acid is acetic acid (CH₃-COOH). Another carboxylic acid is phenylacetic acid (C₆H₅-CH₂-COOH). This is a substituted acid, the phenyl group (C₆H₅) replacing or substituting one of the hydrogen atoms of the (CH₃) methyl group of acetic acid. Another carboxylic acid is aminophenylacetic acid . Included in the molecule of this acid is an NH₂ group - known to organic chemists as an amino group. The chemical formula for the chloride of aminophenylacetic acid (i.e. aminophenylacetyl chloride) is .

13. The actual method employed by the first defendants in the commercial manufacture of hetacillin is described in an affidavit dated 8th August 1967 by one of their employees, a Mr. Sadoff. This gentleman does not claim to have any special qualifications in organic chemistry; but he claims to have a degree in "chemical engineering." He says:-