Time to add more defendants?

Background

Glaxo issued proceedings against Sandoz for passing off in relation to one of its asthma inhalers. The Claimant sought to join additional companies in the Sandoz corporate group into the action on the basis that the alleged acts of passing off were all done in pursuance of a common design, and therefore these additional companies were jointly liable with Sandoz. The other companies were involved in obtaining the marketing authorisations which allowed Sandoz to place its product on the UK market, in November 2015.

These initial acts were completed by the end of 2009, and on that basis the first instance judge decided that there was insufficient evidence to establish a claim for the joint liability of the additional companies and in any event the claims against the additional companies would be outside the six year limitation period provided for in section 2 of the Limitation Act 1980. Glaxo appealed that decision.

Decision

The alleged liability of the additional companies arose out of the primary infringing acts carried out by Sandoz, in pursuance of a common design. As the Supreme Court has stated in relation to accessory liability, in such circumstances the law treats the accessory as being liable for the acts of primary infringement (in this case commenced by Sandoz in late 2015). It did not matter that Sandoz was not involved in the initial planning phases, if that were the case, it may mean that organisations with complicated corporate structures may avoid accessory liability. It was sufficient if only some of the parties committed acts and others committed other acts.

Therefore, there was a sufficient basis to join the additional companies as being potentially jointly liable for Sandoz’s passing off. The cause of action against the additional defendants could not accrue until the acts of passing off had occurred. On the timelines in the current case, the claims against the additional companies had not accrued to late 2015 and were not time barred, and Glaxo’s appeal was allowed.

Comment

This decision provides further guidance on the application of the principles of joint liability across different members of a corporate group, even if not all of the relevant acts have been carried out by all the entities. Furthermore, the time-period on any claim will not start until the infringing act, not the preparatory act, has been carried out.

A link to the judgment is here.