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Merial Ltd v Bayer New Zealand Ltd

(2013 NZHC 2197; 28th August 2013)

In 2010 Merial commenced opposition proceedings against a patent in the name of Bayer on, amongst other grounds, the ground of obtaining. However, about 13-months later Merial commenced High Court proceedings against Bayer alledging breach of contract, breach of duty of confidence and proprietary constructive trust and later included lack of entitlement. The opposition proceedings were stayed pending the outcome of the High Court proceedings. However, in this proceeding Bayer applies to strike out the lack of entitlement claim from Merial’s High Court proceedings. In particular, it is argued that it is vexatious and / or an abuse of process given that there is a relevant statutory procedure under the Patents Act 1953 to resolve that issue, and it would be unwarrented to duplicate the opposition proceedings.
The Judge agreed that the High Court lack of entitlement pleading is abuse of process since there is a clear procedure provided under the Act which cannot be circumvented by invoking the original jurisdiction of the Court. The Judge also noted that the special High Court Rules relating to revocation proceedings are consistent with the statutory procedure under the Patents Act 1953, rather than allowing separate proceedings. It is not a matter where the Court has residual discretion or where the pleading can be amended to avoid the strike out application.
In a later decision between the parties ([2013] NZHC 2418) Merial applied for a stay of the residual High Court proceedings until the opposition proceedings were determined. However, the Judge declined the stay on the basis that to do so would not be in the interests of justice. In particular, the Judge held that it is not necessary for the opposition proceedings to be determined before the High Court proceedings can be resolved.