Case No: A3/2012/3333 & 3334
Neutral Citation Number: [2013] EWCA Civ 517

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION (PATENTS COURT)
THE HON MR JUSTICE ARNOLD
[2012] EWHC 3316 (Pat)
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 21/05/2013

Before:

LORD JUSTICE LONGMORE
LORD JUSTICE LLOYD
and
LORD JUSTICE KITCHIN
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Between:

	Actavis Group hf	Respondent/Claimant	
	- and -		
	
Eli Lilly & Company

-and between-

Medis ehf

-and-

Eli Lilly & Company	
Appellant/
Defendant

Respondent/Claimant

Appellant/
Defendant	

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(Transcript of the Handed Down Judgment of
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Mr Stephen Phillips QC and Mr Roger Wyand QC (instructed by Hogan Lovells 
International LLP) for the Appellant
Mr Richard Meade QC and Mr Thomas Raphael (instructed by Bird & Bird LLP) 
for the Respondents

Hearing date: 22 April 2013
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Judgment
Lord Justice Kitchin: 
Introduction
1.	This is an appeal from the decision of Arnold J dated 27 November 2012 and his consequential order in a dispute about jurisdiction in two related patent actions.  The claimants, Actavis Group hf (“Actavis Group”) in the first action, and Medis ehf (“Medis”) in the second, are both companies in the Actavis group of companies, a well known supplier of generic pharmaceuticals. I will refer to the claimants collectively as “Actavis”.   
2.	The defendant, Eli Lilly & Company (“Lilly”), is incorporated in the State of Indiana, USA and is a major research-based pharmaceutical company.  It has operating subsidiaries in many countries, including Eli Lilly & Company Ltd (“Lilly UK”) which is incorporated in England. 
3.	One of Lilly’s important products is a cancer treatment called Alimta which contains as its active ingredient a compound called pemetrexed.  Alimta was covered by a basic patent which has now reached the end of its term but the protection it afforded to Alimta has been extended by Supplementary Protection Certificates (SPCs) which will expire in December 2015.  Lilly also owns European Patent No 1 313 508 (“the Patent”) which has designations in the UK, France, Germany, Italy and Spain and which will not expire until 2021.  Its claims are, however, directed to the use of pemetrexed in the form of its disodium salt.  
4.	Actavis Group, through its various national subsidiaries, wishes to market its own product in competition with Alimta.  It accepts that it cannot do so before December 2015 when the SPCs expire.  But it contends that it can do so thereafter because its product contains pemetrexed dipotassium and so cannot fall within the scope of the Patent. 
5.	In these proceedings Actavis therefore seek a declaration that a product containing pemetrexed dipotassium does not infringe the UK, French, German, Italian or Spanish designations of the Patent.  They do not challenge the validity of the Patent, but only want the issue of infringement determined.  They say the issue is a short one, that they need its resolution in good time before the expiry of the SPCs and that it would be far more convenient to have it determined in a single trial in England for all the national designations.
6.	Lilly does not accept that a product containing pemetrexed dipotassium does not infringe the Patent. Moreover, it maintains that the issue of infringement is not a simple one and will involve a consideration of the relevant laws of construction (including the so-called doctrine of equivalents) and contributory infringement applying to each designation.  Accordingly, although it accepts that this is the appropriate jurisdiction to determine the issue of infringement in relation to the UK designation of the Patent, it says that the issue would more conveniently be determined in relation to the other designations in each of their respective territories. 
7.	Lilly therefore challenged jurisdiction in respect of the foreign designations of the Patent, and contended that there had been no proper service of proceedings upon it. This gave rise to three separate issues: first, whether Lilly’s solicitors, Hogan Lovells International LLP, had agreed to accept service; second, whether service was properly effected on Lilly under CPR 6.9 at a place of business within the jurisdiction; and third, whether service was properly effected on Lilly under CPR 63.14 on the basis that the claims relate to the UK designation of the Patent. Lilly also raised a fourth issue, namely whether even if (contrary to its case) there had been proper service under CPR 6.9 or CPR 63.14, the court should decline to hear the claims in respect of the foreign designations on the ground of forum non conveniens.  
8.	The judge found in favour of Actavis Group in the first action on the first, second and fourth issues; and he found in favour of Medis in the second action on the second and fourth issues. He therefore dismissed Lilly’s applications, holding that the court had, and would exercise, jurisdiction to hear the claims in both actions, including the claims in respect of the foreign designations. 
9.	The judge gave Lilly permission to appeal to this court on all the issues on which it lost. Actavis have responded that the judge ought also to have found in their favour in both actions on the third issue. 
10.	The following issues therefore arise on the appeal: 
i)	whether the judge was right to hold that Lilly’s solicitors, Hogan Lovells, agreed to accept service of proceedings in the first action;
ii)	whether the judge was right to hold that service of proceedings in both actions was validly effected under CPR 6.9;
iii)	whether the judge ought also to have held that service of proceedings in both actions was validly effected under CPR 63.14;
iv)	in the event service was effected under CPR 6.9 or CPR 63.14, whether the judge ought to have granted a stay on the ground of forum non conveniens.  
11.	At the outset of the appeal we decided to hear full argument on issues (i), (ii) and (iii) before turning to issue (iv).  Having done so, we reached the conclusion that the judge’s decision on issue (i) in the first action must be upheld.  We also formed the view that this conclusion was dispositive of the whole appeal, the parties having agreed that in these circumstances the second action would become redundant. We communicated these conclusions to the parties and they agreed that our conclusion on issue (i) disposed of the appeal. We also indicated we would provide our reasons in writing in the usual way, and that I now do.  Although not necessary for the disposal of this appeal, the parties also invited us to express our conclusions on issues (ii) and (iii) because, so we were told, there is now a third action on foot in which they may be determinative and accordingly our decision upon them would likely avoid the need for a further appeal to this court in that action.  I shall therefore express my conclusion on those issues too.
The background
12.	The judge set out the background facts in his judgment from [2]-[24].  The following matters are of particular relevance to the issues with which I must deal and I have drawn them in large measure and with gratitude from the judgment.
13.	I must begin by explaining a little more about the Actavis group of companies.  Actavis Group is the parent operating company of the whole group and is incorporated in Iceland.  It has a considerable number of subsidiaries incorporated in different countries which are responsible for selling its products.  These subsidiaries include Actavis France, Actavis Deutschland GmbH & Co KG, Actavis Italy SpA, Actavis Spain SA and Actavis UK Ltd.  Actavis Group PTC ehf (“Actavis PTC”) is another subsidiary of Actavis Group and itself has a number of subsidiaries, including Actavis hf and Medis, both of which are incorporated in Iceland. But, as Lilly accepted at the hearing, Actavis PTC does not have relevant subsidiaries in each of France, Germany, Italy and Spain. The relationship between these various Actavis companies is shown below:

14.	Lilly is the parent company of the Lilly group and is the proprietor of the vast majority of European patents held by the group, including the Patent. Dr Ivan Burnside is identified on the Patent as Lilly’s representative for proceedings under the EPC and his address is given as Lilly UK, European Patent Operations, Lilly Research Centre, Erl Wood Manor, Windlesham in Surrey. Lilly has also furnished this address to the Intellectual Property Office as the address for service of proceedings in respect of the UK designation of the Patent under rule 103 of the Patent Rules 2007. 
15.	On 12 July 2012, the solicitors for the claimants, Bird & Bird LLP, wrote to Dr Burnside in his capacity as Lilly’s representative in the following terms:
“EP 1 313 508 (“the Patent”)
We represent Actavis Group PTC ehf and its relevant national subsidiaries (“Actavis”).
You are registered as the proprietor of European Patent (UK) No. 1 313 508 B1 entitled “Combination containing an antifolate and methylmalonic acid lowering agent” that is currently valid until 15 June 2021.
The purpose of this letter is to put you on notice that Actavis wishes at the expiry of SPC/GB05/011 to launch a pemetrexed product for use in the manufacture of a medicament for use in combination therapy for inhibiting tumour growth in mammals in the United Kingdom. At the same time (i.e. upon expiry of the equivalent SPCs) Actavis similarly wishes to launch such a product in other jurisdictions, including but not limited to Germany, France, Italy and Spain.
Actavis is aware of the Patent. We should be grateful if you would treat this letter as relating to the national designations of EP 1 313 508 B1 in Germany (DE60127970 (T2)), France (EP 1 313 508 B1), Italy (EP 1 313 508 B1), Spain (ES 2284660 (T3)) and the United Kingdom. Actavis has no wish to engage in litigation with you about the Patent but will do so if necessary. The purpose of this letter is to attempt to avoid such litigation. 
On this basis and in accordance with section 71 of the Patents Act 1977 and/or the inherent jurisdiction of the Court, our client hereby seeks a written acknowledgement from the proprietor of the Patent that each of the proposed acts alone set out below would not constitute an infringement of the Patent:
1.	Actavis imports, keeps, offers for disposal and disposes of medicaments in the United Kingdom containing pemetrexed dipotassium for use in combination therapy for inhibiting tumour growth in mammals wherein said medicament is to be administered in combination with vitamin B12 or a pharmaceutical derivative thereof, said pharmaceutical derivative of vitamin B 12 being ….
2.	Actavis imports, keeps, offers for disposal or disposes of medicaments in the United Kingdom containing pemetrexed dipotassium for use in combination therapy for inhibiting tumour growth in mammals wherein said medicament is to be administered in combination with vitamin B12 or a pharmaceutical derivative thereof, said pharmaceutical derivative of vitamin B 12 being …. and a folic binding protein binding agent selected from ….
We consider that the answer to the proposed acts should be the same across Europe in relation to the acts specified in the national provisions equivalent to section 60 of the Patents Act. Accordingly, we assume that if you are prepared to provide the declarations sought in accordance with section 71 of the Patents Act that you will also be willing to provide such an acknowledgement that such acts in each and all of the jurisdictions where the Patent is in force or where the national patents specified above are registered would not infringe such patents. We should be grateful if you would also provide us with such a written acknowledgement. 
For the avoidance of doubt and given other relevant constraints, Actavis is not planning an imminent launch of such a product.…”
16.	On 26 July 2012, Hogan Lovells replied requesting further details of the pharmaceutical form, posology and method of administration of the proposed products.  On the same day, Bird & Bird replied providing some, but not all, of the information requested.  The letter concluded:
“We consider that your client is, and has been since 12 July 2012, in possession of all the facts that it needs in order to provide the written acknowledgements sought by our client.  If the acknowledgments have not been provided to us by 4:00 pm on Tuesday 31 July 2012, our client intends to serve proceedings on your client seeking appropriate declarations from the Court. We should be grateful if you would inform us by return whether or not you are instructed to accept service of such proceedings.”
17.	On 31 July 2012, Hogan Lovells wrote indicating that they were not in a position to provide the acknowledgement sought but stating:
“We confirm that we are instructed to accept service on behalf of our client.”
18.	Meanwhile, on 27 July 2012, Actavis Group began the first action against Lilly seeking a declaration pursuant to s. 71 of the 1977 Patents Act (“the 1977 Act”) that dealings in pemetrexed dipotassium in the UK would not infringe the UK designation of the Patent and further, a declaration pursuant to the inherent jurisdiction of the court that such dealings in Germany, France, Italy and Spain would not infringe any claim of the corresponding foreign designations of the Patent.
19.	On 1 August 2012, Bird & Bird wrote to Hogan Lovells enclosing “by way of service”, the claim form and other relevant documents. The letter continued:
“In your letter of 31 July 2012, you confirmed that you were instructed to accept service on behalf of your client (Eli Lilly & Company). As you are aware, the proprietor of the Patent is Eli Lilly & Company. You will also be aware that the proprietor of the Related Patents is the same Eli Lilly & Company. Accordingly, upon receipt by you of this letter and the enclosures Eli Lilly & Company has been served in relation to the action as a whole and that [sic] there is no requirement for our client to go to the time and expense of serving these same proceedings on the addresses for service for the Related Patents.”
20.	On 15 August 2012, Hogan Lovells filed an acknowledgement of service on behalf of Lilly, indicating an intention to contest jurisdiction.  Lilly’s position was elaborated in a further letter from Hogan Lovells dated 23 August 2012 which explained that jurisdiction was contested on two bases:  first, Hogan Lovells were not instructed to accept service of a claim by Actavis Group; and second, in any event, the confirmation provided by the letter dated 31 July 2012 was only in respect of appropriate declarations of non-infringement, which would not include declarations in respect of the foreign designations of the Patent.  The letter continued that Lilly would also contend that this court did not have, or should not exercise, jurisdiction over the claims for declarations in respect of those foreign designations.
21.	On 29 August 2012, Lilly duly filed an application contesting the court’s jurisdiction to hear the claims made in respect of the foreign designations.  
22.	On the same day, 29 August 2012, the claim in the second action before us was issued and Bird & Bird wrote to Hogan Lovells and to Lilly at the address for service of the UK designation of the Patent enclosing “by way of service”, the claim form and other relevant documents. The second claim is identical to that in the first action save that Medis is named as claimant.
23.	 On 4 September 2012, Hogan Lovells replied, once again disputing that Bird & Bird’s letters constituted valid service of the proceedings so far as they related to the foreign designations of the Patent.  They continued, as before, that the English court did not have, or should not exercise, jurisdiction over the claims for declarations in respect of those foreign designations, and that unless this was accepted by Medis, Lilly would contest jurisdiction. 
24.	On 26 September 2012, Lilly filed an application in the second action contesting jurisdiction in respect of the foreign designations, just as it had in the first action. But this time it was in a significantly better position in one respect because, by 29 August 2012, the date of purported service on Hogan Lovells, Lilly had clearly withdrawn any consent to accept service of a claim in respect of the foreign designations.  
Issue (i): Attempted service of the first claim on Hogan Lovells
25.	This issue has two aspects. First, Lilly says it never agreed to accept service of proceedings brought by Actavis Group; rather it agreed to accept service of proceedings brought by Actavis PTC and its relevant national subsidiaries. Second, Lilly says it never agreed to accept service of proceedings brought by any Actavis company in respect of the foreign designations of the Patent; it only ever agreed to accept service of proceedings in respect of the UK designation.
26.	Before addressing each of these matters, I must say a little about the relevant principles. It was common ground that the extent of Lilly’s agreement to accept service must be determined objectively and in the same way as a commercial contract.
27.	The approach to be adopted to the interpretation of a commercial contract was recently summarised by the Supreme Court in Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900. As Lord Clarke said at [14], the ultimate aim is to determine what the parties meant by the language used, which involves ascertaining what a reasonable person would have understood the parties to have meant. The reasonable person is one who has all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract. 
28.	Lord Clarke continued (at [19]) that the mere fact that a term in a contract appears particularly unfavourable to one party or the other is irrelevant, because the term may have been agreed in exchange for some concession made elsewhere in the transaction, or it may simply have been a bad bargain. Moreover, as Lord Clarke said (at [23]), where the parties have used unambiguous language, the court must apply it.
29.	On the other hand, if the contract is susceptible to more than one interpretation, the court is entitled to prefer the interpretation which is most consistent with business common sense. Lord Clarke put it this way at [21]:
“The language used by the parties will often have more than one potential meaning. I would accept the submission made on behalf of the appellants that the exercise of construction is essentially one unitary exercise in which the court must consider the language used and ascertain what a reasonable person, that is a person who has all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract, would have understood the parties to have meant. In doing so, the court must have regard to all the relevant surrounding circumstances. If there are two possible constructions, the court is entitled to prefer the construction which is consistent with business common sense and to reject the other.”
30.	So I turn first to the background knowledge which would reasonably have been available to the parties at the time of the agreement to accept service. This was addressed by the judge from [42]-[44]. The first aspect of the background knowledge to which he referred was the knowledge reasonably available to Lilly about the structure of the Actavis group. He summarised the evidence in these terms at [42]:
“… I do not understand it to be disputed that Lilly knew that the Actavis group is a multinational supplier of generic pharmaceuticals and that companies in the group are frequent litigants in patent disputes before this Court. The evidence in support of Lilly’s application in the First Claim includes a print-out of a D&B Global Reference Solution search showing the structure of the Actavis group carried out by Hogan Lovells on 2 August 2012. It is not disputed that a search on 31 July 2012 would have yielded the same result, and accordingly this information was available to Lilly at that date. The search shows that (i) Actavis Group is (ignoring what appears to be a holding company) the parent company of the group, (ii) Actavis Group has a large number of national subsidiaries (including in Germany, Italy and the UK), (iii) Actavis PTC is a subsidiary of Actavis Group (and not vice-versa) and (iv) Actavis PTC only has active subsidiaries in Iceland (one of which is Medis).”
31.	Importantly, this shows that Actavis PTC does not have relevant national sales subsidiaries in each of France, Germany, Italy and Spain. This, I would add, is entirely consistent with the evidence before the judge that persons in the industry knew that Actavis Group was “Actavis” in commercial reality.
32.	Lilly takes issue with this evidence on two grounds. First, it says that it should not have been treated as being reasonably available because, in the context of correspondence between two law firms, the reasonable person would not think it necessary to search for further background, and to require him to do so would place an unreasonable burden upon him.
33.	I cannot accept this submission for it ignores the context in which this correspondence was written. Lilly and Actavis Group both have large and successful international pharmaceutical businesses and they were addressing potential litigation which would impact upon those businesses in many jurisdictions. In these circumstances I think it is entirely reasonable to expect them to have an understanding of each other’s corporate structures. 
34.	Second, Lilly contends that Actavis PTC does in fact have relevant subsidiaries in France. I accept that Actavis PTC does have two subsidiaries in France, namely Opening Pharma France and Medis Pharma France, but this does not take Lilly very far because neither is an Actavis sales subsidiary for France and, more importantly, it is accepted that it is only Actavis Group which has relevant sales subsidiaries in each of France, Germany, Italy and Spain.
35.	The next matter to which the judge referred was the fact that 33 out of 34 marketing authorisations granted by the Medicines and Healthcare Regulatory Agency to the Actavis group in 2012 were granted to Actavis PTC.  The judge was not persuaded this information was background knowledge which would have been available to the parties since it only emerged in Lilly’s reply evidence. Lilly criticises this finding, arguing that if the reasonable person would carry out a search for background information then he would find out everything. 
36.	I am far from satisfied that Lilly’s argument is correct, for the court is only concerned to identify the background knowledge which would reasonably have been available to the parties. Nevertheless, there is another answer to the criticism, namely that all companies in a group may benefit from a marketing authorisation granted to any one of them. It is therefore common for such authorisation to be held by a company other than the parent of the relevant sales subsidiaries, as a reasonable person would have been aware. The fact that the Actavis group therefore chooses to have its marketing authorisations granted to one particular company is neither here nor there.
37.	With these matters in mind, I come to the crucial question: what would a reasonable person have understood the parties to have meant by the language they used in the letters of 12, 26 and 31 July 2012? As I have indicated, it has two aspects and I will address them in turn.
Did Lilly agree to accept service of proceedings brought by Actavis Group?
38.	Lilly argues the terms of the letter of 12 July 2012 and, in particular, the words “We represent Actavis Group PTC ehf and its relevant national subsidiaries” are perfectly clear and unambiguous. They refer to a specific company in the Actavis group and its subsidiaries, and there was no reason to suppose that Bird & Bird (or their clients) had made a mistake. On 26 July 2012, Bird & Bird stated it was their clients’ intention to commence proceedings against Lilly seeking appropriate declarations and asking whether Hogan Lovells had instructions to accept service. Then, on 31 July 2012, Hogan Lovells replied confirming they did indeed have such instructions. In so doing they agreed to accept service of proceedings brought by the particular company Bird & Bird had named, and any of its subsidiaries, but not by any other company. Further, it was perfectly proper for Actavis PTC to commence such proceedings, as confirmed by the fact that this company is one of the claimants in the third action to which I have referred, as indeed is Medis.
39.	Attractively though these arguments have been developed before us, I have found myself unable to accept them. I begin with the opening sentence of the letter of 12 July 2012 and, in particular the words “and its relevant national subsidiaries”. The reader cannot determine from these words which particular subsidiaries are referred to because there is no indication in the opening sentence of the characteristics which render them “relevant”. So the reader must look to the rest of the letter and, upon doing so, those characteristics plainly emerge, for the letter explains that Actavis (as those represented are collectively referred to) wishes to launch its product not just in the UK but also in Germany, France, Italy and Spain. These are all territories in which Lilly has a designation of the Patent which would threaten the proposed launch. So Actavis, in an attempt to avoid litigation, was seeking an acknowledgement that the product and the proposed sales activities of the trading subsidiaries would not infringe those foreign designations. The subsidiaries must therefore be the Actavis trading subsidiaries in each of the territories to which reference is made. It necessarily follows too that the relevant Actavis parent company is the parent of those subsidiaries.
40.	This analysis presents a difficulty because Actavis PTC is not in fact the parent of those subsidiaries. So what would the reasonable person have understood the letter as a whole to mean? Would he have understood the letter to have been written on behalf of Actavis PTC and its subsidiaries, irrespective of the nature of their businesses? Or would he have understood the letter to have been written on behalf of the trading subsidiaries which would sell the proposed product and their parent? I think the answer is tolerably clear and driven by business common sense. 
41.	If (as Lilly urges, but I do not, for the reasons I have given, accept) the reasonable person in the shoes of Lilly and Hogan Lovells did not know of the Actavis group structure, he would have thought the letter had been written on behalf of the trading subsidiaries which would sell the proposed product, and also their parent, whatever its name might be. So also he would have understood Hogan Lovells were, by their letter of 31 July 2012, agreeing to accept service of proceedings brought by those companies. 
42.	If, on the other hand, the reasonable person in the shoes of Lilly and Hogan Lovells did know of the Actavis group structure, he would have realised that Bird & Bird or their clients had made a mistake in calling the group company “Actavis PTC” because this company did not have trading subsidiaries in each of the relevant territories. He would also have understood that Bird & Bird must have intended to refer to the Actavis group company which did indeed have the relevant trading subsidiaries, that is to say, Actavis Group. Furthermore, he would again have understood Hogan Lovells were, by their letter of 31 July 2012, agreeing to accept service of proceedings brought by those companies.
43.	It follows that I believe the judge was right to conclude that Lilly consented to service of proceedings brought by the parent operating company of the Actavis group and its relevant national subsidiaries, and that Actavis Group is covered by that consent.  
Did Lilly agree to accept service of proceedings in respect of the foreign designations?  
44.	Lilly argues that Bird & Bird’s letter of 12 July 2012 sought acknowledgments and declarations in accordance with s.71 of the 1977 Act or under the inherent jurisdiction of the Court that particular acts in the UK would not constitute infringement. Accordingly, it says, these acknowledgments and declarations must relate to the UK designation. The letter then continues with regard to the different national provisions across Europe:
“Accordingly, we assume that if you are prepared to provide the declarations sought in accordance with section 71 of the Patents Act that you will also be willing to provide such an acknowledgement that such acts in each and all of the jurisdictions where the Patent is in force or where the national patents specified above are registered would not infringe such patents. We should be grateful if you would also provide us with such a written acknowledgement.”
45.	 Lilly draws attention to the contrast between the request for “declarations” in respect of the UK designation and mere “acknowledgments” sought in respect of the foreign designations. Nowhere, Lilly continues, does the letter suggest that proceedings would be brought in England in respect of the foreign designations.  The reasonable person would therefore have concluded that Bird & Bird were seeking acknowledgements and declarations in respect of non-infringement of the UK designation and, if those could be given, for acknowledgements in respect of the foreign designations. If, however, the acknowledgments could not be given, Actavis PTC was threatening to launch proceedings in this jurisdiction for declarations of non-infringement of the UK designation, and in other jurisdictions for relief in respect of the foreign designations.
46.	As for the letter from Bird & Bird of 26 July 2012, Lilly submits that the nature of the “appropriate declarations” to which it refers was not explained. But reference back to the letter of 12 July shows that the declarations referred to must be those relating to the UK, these being the two enumerated declarations set out in the fifth paragraph and, indeed, the only declarations referred to anywhere in that letter.
47.	Lilly then refers to Hogan Lovell’s agreement in their letter of 31 July 2012 that they were instructed to accept service on behalf of their client and says this could only have extended to proceedings whose ambit had been set out clearly and precisely.
48.	Finally, Lilly points to the letter of 1 August 2012 from Bird & Bird which purported to effect service on Hogan Lovells and the statement it contains that because Lilly was also the proprietor of the foreign designations, there was no requirement for the proceedings to be served on the addresses for service of those designations in their respective territories. Lilly continues there would have been no requirement to do this had Bird & Bird understood that consent had been provided by Hogan Lovells in the manner for which Actavis contend.
49.	In my judgment Lilly’s submissions are based upon a wholly artificial reading of the correspondence. The letter of 12 July 2012 says in terms that it relates to the national designations of the Patent in Germany, France, Italy, Spain and the UK. It then seeks a written acknowledgement pursuant to s.71 of the 1977 Act or under the inherent jurisdiction of the English courts that the acts specified in the two enumerated sub-paragraphs would not infringe the UK designation. Turning to the foreign designations, it says that they (that is to say Bird & Bird) assume that if Lilly is prepared to provide the declarations sought in respect of the UK designation it will also be willing to provide acknowledgements that such acts would not infringe the foreign designations. The letter continues: “We require the written acknowledgements within 14 days of today’s date”. This plainly refers to the acknowledgements requested in respect of both the UK and foreign designations.
50.	On 26 July 2012, Bird & Bird wrote again stating that if the acknowledgments were not provided by 4.00pm on 31 July 2012, they intended to serve proceedings seeking appropriate declarations from “the Court”. It would have been clear to any reasonable person that this meant proceedings in England seeking declarations from the English court in respect of the subject matter of both sets of acknowledgements which had been requested, namely in respect of both the UK and foreign designations. The letter concluded with the request that Hogan Lovells inform them whether they were instructed to accept service of such proceedings. 
51.	The response from Hogan Lovells on 31 July confirmed that they were instructed to accept service on behalf of Lilly. This would have come as no surprise to a reasonable person because, as the judge himself observed, it is clear that the English court has jurisdiction to entertain claims for infringement of foreign intellectual property rights provided validity is not in issue and there is a basis for exercising jurisdiction over the defendant.        
52.	Finally, I see nothing in the letter from Bird & Bird of 1 August 2012 which bears on this. The letter simply records that, consent for service having been given, there would be no need to serve proceedings on addresses for service of the foreign designations.
53.	It follows that the judge was right to conclude as he did that the first claim was validly served under the consent for service. It also follows that the appeal in relation to the first action must be dismissed. Actavis Group is therefore entitled to have all of its claims determined in this jurisdiction. It is the company which, through its various national subsidiaries, wishes to market a product in competition with Alimta. Accordingly, as all parties accepted, the second action becomes redundant.   
Issue (ii): was service validly effected under CPR 6.9?
54.	CPR 6.9(2) permits service of proceedings on an overseas corporation at “any place in the jurisdiction where the corporation carries on its activities; or at any place of business of the company within the jurisdiction”. As the judge explained, this provision is the successor to a series of earlier provisions going back to RSC Order IX r.8, and although the CPR constitute a new procedural code, it was common ground that in this area the earlier authorities remain relevant and persuasive. 
55.	There was no dispute as to the relevant general principles established by those authorities. A place of business needs to be fixed and definite, and the activity must have been carried on there for a sufficient time for it to be characterised as a business. However, it is not necessary to establish that a substantial part of the business of the corporation is carried on from the place in question, and a corporation may have a place of business even if the activities carried on there are incidental to the main objects of the corporation: South India Shipping Corporation Ltd v Export-Import Bank of Korea [1985] 1 WLR 585 (CA). So, for example, in Aktieselskabet Dampskib “Hercules” v Grand Trunk Pacific Railway Company [1912] KB 222, the defendant was incorporated in Canada for the purpose of constructing and working a railway there, its main office being in Montreal. Four directors resident in London formed a committee to make contracts on behalf of the company for the purpose of raising loan capital. This constituted the carrying on of business in this country.
56.	As the editors of Dicey, Morris and Collins, The Conflict of Laws (15th edn), say at 11-119, the Companies Act 2006 makes provision for the service of documents on a foreign corporation whose particulars are registered, and this does, as a practical matter, deal with the majority of cases. A real problem is only likely to arise in a case such as this where the corporation’s business is said to be carried on by a representative or agent. In Adams v Cape Industries Plc [1990] 1 Ch 433, this court explained that in such a case the question whether the representative has been carrying on the business of the foreign corporation or merely his own business will necessitate an investigation of the functions the representative has been performing and all aspects of the relationship between them. It provided (at pages 530F – 531B) the following list of questions which are likely to be relevant to such an investigation:
“(a) whether or not the fixed place of business from which the representative operated was originally acquired for the purpose of enabling him to act on behalf of the corporation; (b) whether the corporation had directly reimbursed him for (i) the cost of his accommodation at the fixed place of business; (ii) the cost of his staff; (c) what other contribution, if any, the overseas corporation made to the financing of the business carried on by the representative; (d) whether the representative was remunerated by reference to transactions, e.g. by commission, or by fixed regular payments or in some other way; (e) what degree of control the corporation exercised over the running of the business conducted by the representative; (f) whether the representative reserved part of his accommodation or part of his staff for conducting business related to the corporation; (g) whether the representative displayed the corporation's name at his premises or on his stationery, and if so, whether he did so in such a way as to indicate that he was a representative of the corporation; (h) what business, if any, the representative transacted as principal exclusively on his own behalf; (i) whether the representative made contracts with customers or other third parties in the name of the corporation, or otherwise in such manner as to bind it; (j) if so, whether the representative required specific authority in advance before binding the corporation to contractual obligations.”
57.	The court emphasised that this list of questions is not exhaustive, and the answer to none of the questions is necessarily conclusive. An important factor will, however, be whether the representative has authority to enter into contracts on behalf of the foreign corporation without submitting them to the corporation for approval. So also, if the representative never makes contracts on behalf of the foreign corporation then that will be a powerful factor pointing against it having a presence here.    
58.	The case that Lilly has a place of business in the UK focused on the Lilly Research Centre in Windlesham. This is owned by Lilly UK and is the site of various activities. First, it is the home of the European Patent Operations Department; second, human health regional sales and marketing activities are carried on there for what Lilly calls the ACE (Australia-Canada-Europe) region; and third, it is Lilly UK’s research and development centre. I will deal with them in turn.
59.	Dr Burnside is operational head of the European Patent Operations Department and is a European Patent Attorney and UK chartered patent attorney. In addition to Dr Burnside, the department comprises six European Patent Attorneys and three patent administrators. As I have mentioned, the large majority of the European patents held by the Lilly group are owned by Lilly. It is therefore a reasonable inference, and one which Actavis invited the court to draw and which was not refuted by Lilly, that this department must be conducting an extensive patent management operation for Lilly, including not merely filing of patent applications and paying fees, but also the prosecution of patent applications and resisting oppositions, the engagement of lawyers and experts and interacting with the UK Intellectual Property Office.         
60.	As for Dr Burnside himself, he emphasises, entirely fairly, that he is an employee of Lilly UK. Moreover, he observes that the service addresses for the French, German, Italian and Spanish designations of the Patent are the addresses of local agents within each of those jurisdictions. He says too that although he is Lilly’s representative for many of its patents before the EPO, Lilly, as an entity incorporated in the USA, is obliged by the EPC to be represented in matters before the EPO by a professional representative who has a place of business or employment in, and is a national of, a Contracting State.
61.	Nevertheless, I think it is clear that the activities of Dr Burnside and his department on behalf of Lilly extend beyond those of an ordinary professional representative. I begin with Dr Burnside’s own description of his position and responsibilities. On his LinkedIn profile he describes himself as:
“Senior Director – Asst General Patent Counsel at Eli Lilly and Company” and “Head of IP for Europe. Leadership of the European Patent Department.”
62.	So also in a conference biography he was introduced as:
“Sr. Director-Assistant General Patent Counsel at Eli Lilly and Company ... Ivan is based in the United Kingdom and reports to Vice President-Deputy General Patent Counsel, located in the United States of America.  He is head of European Patent Operations Department covering prosecution, oppositions, appeals, defense and enforcement (litigation) of patents in the European region, IP aspects of parallel trade in Europe, customs and excise procedures and IP advocacy activities.”
63.	Dr Burnside’s business cards and email refer to Lilly UK and the Windlesham address. But they also describe him as “Senior Director – Asst General Patent Counsel/Director – European Patent Ops” and his email address is at “Lilly.com”. 
64.	All these materials show that Dr Burnside considers that both he and his department are, for practical purposes, a part of Lilly’s business and are carrying out their work, not just for Lilly UK, but also for Lilly as part of its global pharmaceutical protection programme.
65.	Actavis also rely upon Dr Burnside’s delegation of authority from Lilly which they say, and I accept, demonstrates the breadth of his responsibilities. It reads:
“Authority to approve and execute for and on behalf of the Company, documents in connection with patent matters in Europe relating to:
(i)	the institution, prosecution, and completion of proceedings directed towards the issuance of patents;
(ii) 	the amendment, restriction, renewal, reissue, revival, maintenance, restoration, cancellation, extension and  abandonment of patents and applications for patents;
(iii) 	the institution, prosecution, and termination of proceedings of opposition, revocation, and nullification, including the filing of preliminary statements, concessions of priority, disclaimers, abandonments of the contents, and abandonments of the invention, the institution of any revocation or nullification being subject to prior approval by the Senior Vice President and General Counsel of the Company;
(iv)	the institution, prosecution, and termination of proceedings of enforcement of patents, including the filing of applications for interim, interlocutory and preliminary injunctions, and all other proceedings for infringement of patents, the initiation of such proceedings being subject to prior approval by the Senior Vice President and General Counsel of the Company;
(v)	the settlement of patent proceedings of opposition, revocation, nullification and enforcement, subject to prior approval by the Senior Vice President and General Counsel of the Company;
(vi)	the filings of statutory disclaimers;
(vii)	the institution, prosecution, and termination of appellate proceedings; and 
(viii)	the granting and the revocation of powers of attorney in connection with any of the foregoing.”
66.	This is a direct delegation of authority to Dr Burnside from the Board of Lilly to do a wide range of activities on its behalf. Some require prior approval, notably the institution of any revocation or nullification proceedings; the initiation of proceedings of enforcement; and the settlement of patent proceedings of opposition, revocation, nullification and enforcement. In these cases, approval must come from Lilly. But others do not require such prior approval. These are significant matters, such as patent issuance; maintenance, amendment and abandonment of patents and applications; the institution, prosecution, and termination of proceedings of opposition; the institution, prosecution, and termination of appellate proceedings; and the granting and the revocation of powers of attorney. As the judge held, and I agree, it is clear from the evidence that Dr Burnside, assisted by the other members of the European Patent Operations Department, does all of these things in relation to Lilly’s European patent portfolio, does them for Lilly, does them in Lilly’s name and does them from Windlesham, taking both strategic and tactical decisions. Moreover, they must involve contracting with lawyers and other advisers in the course of conducting patent litigation. These, as a whole, extend beyond the activities one would expect to see delegated to an external firm of patent attorneys.
67.	Actavis have also established that Lilly interacts with various regulatory bodies out of Windlesham, quite possibly through Dr Burnside’s department. In particular, Lilly has acted in its own name and from Windlesham when dealing with the European Medicines Agency (“EMA”). In this regard Actavis put in evidence, by way of example, some recent decisions of EMA relating to applications for paediatric extensions in accordance with Regulation (EC) No 1901/2006, one of which related to pemetrexed disodium, the product covered by the Patent. The decisions are addressed to Lilly at the Windlesham address.    
68.	 I turn then to the sales and marketing activities carried on from Windlesham for the ACE region.  A press report of June 2011 indicates that the head of the ACE business unit is a Mr Andrew Hotchkiss and that Lilly had said he would “spearhead Lilly’s activities across the ACE region”. The report continues that “Bryce Carmine, executive VP and president of Lilly Bio-Medicines” had said that Mr Hotchkiss will “be a tremendous asset to the organisation in leading our efforts to maximise the value of our marketed products and prepare Lilly’s ACE region for the next wave of innovative Lilly medicines.” Other senior executives include Mr James Russell who is described as “Medical Team Leader – Neuroscience (Australia, Canada and Europe) for “Eli Lilly and Company”, and Michael Mars who is described as “Regional Brand Leader (ACE) Australia, Canada and Europe – Global Alzheimer Brands at Eli Lilly & Company”.  
69.	Mr Harper, Lilly UK’s general counsel, accepts that human health regional sales and marketing activities are carried on at Windlesham for the ACE region and that business plans for Lilly UK’s sales and marketing affiliates are set by collaborating with the regional ACE management based there. He also accepts that such plans are ultimately approved by Lilly. But such plans are, he says, prepared locally by Lilly UK. He also maintains that Lilly UK’s activities are carried out on its own behalf or on behalf of non–US subsidiaries of Lilly.
70.	Mr Harper does not explicitly say that the ACE executives are employed by Lilly UK but I accept that is a reasonable inference from the other evidence he gives. I also accept that much of the work of the ACE division will be carried on for Lilly subsidiaries in other jurisdictions. However, these are not subsidiaries of Lilly UK and I believe it is apparent from all the foregoing that the ACE executives are reporting to Lilly in the US and coordinating the development of Lilly’s business and the sale of its products across the ACE region.  
71.	Finally I come to the research and development centre. This is described by Mr Harper as Lilly UK’s facility. However, Mr Harper accepts that there are “around half a dozen floating staff that are technically employed by Lilly.” He continues that “they are on a global programme carrying out Lilly UK’s business and the local operating entity pays for these staff.” 
72.	Another perspective was given by Mr John Lechleiter, Lilly’s chief executive, who said of the Windlesham facility in a speech in 2011 that “in 1967, it became the company’s first research and development site outside the United States. Erl Wood has made truly historic contributions to Lilly research over the last four decades, and it remains still our largest R&D center apart from our corporate headquarters.” A little later, he continued “Lilly is proud to be a part of the UK’s robust pharmaceutical sector. We have more than 1,400 employees in the UK across sales, marketing and manufacturing, and R&D, including about 350 at our Erl Wood labs, where Lilly scientists are engaged today in neuroscience drug discovery for disease states including Alzheimer’s disease, sleep disorders, chronic pain and Multiple Sclerosis.”
73.	Drawing the threads together, it is, I think, clear that the various activities to which I have referred have been carried on at Windlesham for a time and on a scale such that they are all properly characterised as aspects of the business of the Lilly group. The crucial question is whether that business has been carried on solely by Lilly UK or, perhaps, its affiliates, or whether it has also been carried on by Lilly itself. This question must, I think, be answered in the light of the nature of the business of the group as a whole. Lilly has an integrated global pharmaceutical business and, as Mr Harper himself says, it operates through its ownership and control of non-US subsidiaries including Lilly UK. 
74.	Against this background, and taking first the patent department and regulatory activities, I am satisfied these are, at least in significant part, Lilly’s own business. In dealing as they do with Lilly’s own patents, Dr Burnside and his colleagues are prosecuting, managing and defending these patents on Lilly’s behalf and maintaining vital protection for Lilly’s global pharmaceutical business. So also the regulatory activities, which may also be the responsibility of Dr Burnside’s team, are also carried out for Lilly and in Lilly’s name. 
75.	That is sufficient to answer the question whether service was validly effected under CPR 6.9. In my judgment it was. 
76.	There is less evidence about the management of the ACE region and the research and development work carried on at Windlesham and consequently the position is less clear in relation to them. Nevertheless, and were it necessary to do so, I would be minded to find that these too are, at least in part, the business of Lilly. The ACE management activities plainly extend beyond the interests of Lilly UK and are carried out to further the interests of Lilly and develop its pharmaceutical business across the whole ACE region. So also the research and development facility was established by Lilly to support its global business; the work carried out there is directed at particular disease states as part of a global strategy set by Lilly; some of the researchers are Lilly employees (even if paid for by Lilly UK); and the fruits of the research and development are deployed by Lilly for the benefit of its global business.  
Issue (iii): was service validly effected under CPR 63.14?
77.	Actavis served the proceedings in both actions on Dr Burnside at the Windlesham address in addition to serving them upon Hogan Lovells. They contend that in so doing, and by operation of CPR 63.14, they validly effected service not just in respect of the UK designation but also of all other designations the subject of the proceedings too.
78.	CPR r. 63.14(1) and (2) read, so far as relevant:
“(1)  Subject to paragraph (2), Part 6 applies to service of a claim form and any document in any proceedings under this Part.
(2)    A claim form relating to a registered right may be served–
(a) on a party who has registered the right at the address for service given for that right in the United Kingdom Patent Office register, provided the address is within the United Kingdom; or
(b) in accordance with rule 6.32(1), 6.33(1) or 6.33(2) on a party who has registered the right at the address for service given for that right in the appropriate register at—
(i) the United Kingdom Patent Office;
...”
79.	It is necessary also to refer to CPR r. 63.1 which provides:
“(1)	This Part applies to all intellectual property claims including-
(a)   registered intellectual property rights such as
(i) patents;
…
(2)	In this Part –
(a)	‘the 1977 Act’ means the Patents Act 1977;
…
(e)	‘patent’ means a patent under the 1977 Act …
…”
80.	Actavis describe their argument as simple. It is that the foreign designations of the Patent are inescapably “related” to the registered right because they are all designations of the same patent and have identical wording. It necessarily follows that claims for declarations about the interpretation and non-infringement of the foreign designations are related to the Patent too.
81.	The argument is indeed simple but in my view it is also clearly wrong and the judge was right to reject it. CPR 63.14(2)(a) is intended to provide a means for service of claims concerning patents under the 1977 Act and in respect of which an address for service has been given in the UK Patent Office register, provided that address is in the UK. If the address for service is out of the jurisdiction then the claim may be served in accordance with rule 6.32(1), 6.33(1) or 6.33(2). CPR 63.14 is specific in its terms and correspondingly limited in its scope. 
82.	Foreign designations of a UK patent are not patents under the 1977 Act and CPR 63.14 does not provide a means of service in relation to them. Nor is the position any different if the claim form also includes a claim in respect of the UK designation. In such a case the claim form must be regarded as including separate claims in respect of each designation and CPR 63.14 only provides a means for its service in so far as it relates to the UK designation. Were the position otherwise, the provisions of CPR 63 could be circumvented by, as Lilly puts it, convoying claims in respect of foreign patents with a claim in respect of a corresponding UK patent. That would be an absurd result and one which cannot have been intended. 
Conclusion
83.	For the reasons I have given, I would dismiss the appeal.
Lord Justice Lloyd: 
84.	I agree.

Lord Justice Longmore: 
85.	I also agree.