An unusual decision to deny an interim injunction
We’re focusing on one of these cases: Neurim Pharamceuticals v Generics and Mylan. (Details of the others are included at the end of this article.) Neurim applied for an interim injunction to prevent Mylan from launching a generic version of Neurim’s Circadin until the patent infringement case could be completed. In an unusual move, the court refused an interim injunction on the basis that damages would be an adequate remedy. Why is this unusual? Because where a generic company is proposing to enter the market, it usually has plenty of time to prepare, and the courts expect it to take steps to remove patent infringement obstacles in advance – so called “clearing the way”.
The case highlights how strong the presumption in the pharmaceutical field is that market entry by a generic irreversibly changes the market. However, it reminds us that this kind of irreversible change to the market does not necessarily mean that the patentee will be granted an injunction.
A balancing act
When a court is asked to grant an interim injunction, it must balance several different factors. The way this is done is often frustrating to patent owners. It arose from the American Cyanamid case ( AC 396), where the House of Lords explained that an application for a preliminary injunction should not involve a mini trial to show a good case of infringement. There is a hint of exasperation in American Cyanamid: the initial hearing on the interim injunction application had lasted three days in the Patents Court and eight days in the Court of Appeal. There had already been “voluminous” evidence and the House of Lords were asked to allow further evidence and to set aside twelve days for the appeal.
The point is that a court is simply trying to best protect all of the parties’ positions pending trial. As the judge in Neurim explained, the court must consider the following steps:
- Is there a serious issue to be tried?
- Are damages an adequate remedy for the claimant?
- If damages are not an adequate remedy to the claimant, consider the adequacy of the undertaking in damages to the defendant.
- Where there is no adequate remedy for either side, the court must consider all relevant factors. This involves various considerations that will vary depending on the details of the case.
The court can consider the relative strength of the parties’ positions, but only where there is convincing evidence that one side is clearly stronger than the other is.
A serious issue
If Neurim’s patent had been invalidated in the European Patent Office there would be no serious issue to be tried in the UK. The patent had been opposed by, amongst others, Mylan, and had been invalidated. However, that EPO decision was under appeal (and unlikely to be resolved before the patent’s expiry date in a little over two years’ time!) so the EPO decision was essentially irrelevant.
Damages for the patentee if no interim injunction is granted
On this, the judge concluded that damages were an adequate remedy. A common problem in pharma patent cases is that, as soon as a generic is on the market, the price of the proprietary drug will plummet. After that it would be very difficult to restore the price even if the generic drug were taken off the market.
The problem for the judge in this case was that extensive evidence would be required from independent market experts and economists to find the right answer. Nevertheless, he concluded that restoration to the current position would not be seamless, and that he could not see how prices could be restored without alienating substantial parts of the market.
However, because of the nature of the market and Neurim’s established sales and sales price, and the relatively short time to trial during which there would be market disruption arising from any activity by Mylan, it would be possible to calculate the damages that Neurim would suffer. Even the likely entry to the market of other generic producers were discounted.
Damages for the generic company if an interim injunction is wrongly granted
The judge concluded that it would be more difficult to assess the amount of damage to Mylan if they were prevented from entering the market.
No interim injunction was granted, illustrating starkly the difference between showing that irretrievable market changes are likely to occur when a generic drug enters the market, and that those changes will make it difficult to quantify damage to the patent owner. It all depends on the facts: in this case the period before trial was short, the existing market was well quantifiable, and there was little remaining term of the patent.
Take away point
Innovative pharmaceutical companies might expect to be granted an interim injunction to preserve the market position leading up to trial, but an injunction is not always granted. The considerations often revolve around practical matters like how easily the damage to one side or the other can be calculated, rather than an assessment of the rights and wrongs of the case.
The other recent rulings mentioned above are:
- Teva v Chiesi – the court refused Teva’s application to strike out a counter-claim for an injunction for infringement, despite the fact that Teva was seeking to “clear the way” by challenging the validity of the relevant patent and had not yet obtained a marketing authorisation for the drug.
- Evalve v Edwards Life Sciences in Ireland – the court refused to strike out Evalve/Abbott’s application to fix a date for a preliminary injunction motion.