In Abbott Laboratories[i] the court considered whether a patent which was vulnerable to a number of attacks on its validity could be revoked on summary judgment. The court granted summary judgment on two of the five allegations of invalidity. However, where evidence could be bought by the patentee that the patent was valid the patentee was entitled to a hearing.
The court also considered whether the defendants should be injuncted pending trial. If summary judgment had not been given the court would have granted an injunction primarily due to the unquantifiable damage which would be caused to the patentee by price erosion. The court did not agree that the general weakness of the patent would have tipped the balance of convenience so that an injunction should not be granted.
Abbott Laboratories and Abbott Laboratories Limited (together “Abbott”) are the proprietors of European Patent (UK) 0 915 899 for “Preparation of Crystal Form II of Clarithromycin”. Clarithromycin is an antibiotic which is particularly useful in the treatment of upper respiratory tract infections. Until 26 May 2001 clarithromycin was protected by EP (UK) 0 041 355, a patent which was licensed to Abbott. The protection of this patent was extended by a supplementary protection certificate which expired on 19 November 2004 (the date judgment was given in this application).
Each of the defendants is a generic pharmaceutical company and each was ready to launch a number of preparations of clarithromycin onto the market in the UK. Relying on Claims 17, 18 and 19 of the Form II patent, Abbott sought interim relief to stop each of the defendants from entering the market until a hearing of the actions for infringement which it had launched against each of the defendants. Claim 17 of the Form II patent is for solvent-free clarithromycin Form II however made. Claims 18 and 19 are use claims covering the therapeutic use of solvent-free clarithromycin Form II.
The defendants accepted that there were triable issues as to infringement however, they contended that the Form II patent was so hopelessly invalid that injunctive relief should be refused. In addition Ranbaxy (supported by the other defendants) sought summary judgment on certain of the grounds of invalidity.
The defendants argued the following five bases for the allegation of invalidity:
- Prior to the priority date of the Form II patent the clarithromycin pills sold by Abbott contained solvent-free clarithromycin Form II. Accordingly, a claim to crystal Form II clarithromycin cannot be valid because it lacks novelty.
- Publication of the ‘355 patent for clarithromycin anticipates claim 17 of the Form II patent.
- Claim 17, and therefore claims 18 and 19, are not entitled to priority from the filing of the first priority document. The claim is therefore anticipated by a further patent application for crystal Form I of clarithromycin (Patent Application WO 98/04573) which is entitled to an earlier priority but was published after the application of the Form II patent.
- Matter was added during prosecution of the Form II patent.
- In the particular circumstances of the case claim 17 must either lack novelty or inventive step.
In order for the application for summary judgment to succeed the defendants were required to show that Abbott had no real prospect of succeeding in its claim[ii]. A claim with no real prospect of success is one where it is clear beyond question that the respondent will not be able at trial to establish the facts on which he relies, however, if his case is more than fanciful or merely arguable then the respondent has a real prospect of success and summary judgment should not be given.
The court recognised that the attacks on the patent were formidable and granted summary judgment to the defendants on the basis that the Form II patent was invalid for added matter and for anticipation by the Form I application. Summary judgment could not be given on the other bases since the court is not entitled on a summary judgment application to conduct a trial on the documents without disclosure and cross examination. Where Abbott could bring evidence to argue that the Form II patent was valid, even if that evidence contradicted representations to the EPO during prosecution[iii], it was entitled to do so and summary judgment could not be given where there were arguments which were more than fanciful that the patent was valid.
Abbott argued that irreparable damage would be done to it if the defendants were not kept off the market until the expected trial of the actions against each of the defendants.
The predominant issue in this case was Abbott’s assertion that it would suffer irremediable price erosion. Abbott argued that as soon as the three generic companies launched their clarithromycin preparations there was a serious danger that it would suffer price depression which could not be restored. There was no doubt that the generic price of clarithromycin was intended to be substantially lower than that charged by Abbott and the generic companies would be in competition with each other in respect of the part if the market which is not covered by forward contracts in respect of which the defendants and Abbott have already tendered. Abbott argued that the effect of this would be to lower both the market price and the drug tariff price substantially, even between November and the expected trial in April 2005.
If Abbott are successful at trial the court agreed that it would be difficult for Abbott to subsequently raise the price without causing harm to its goodwill among pharmacists and wholesalers. The court did not accept APS’ argument that Abbott could “manage expectations” by warning their customers that the price may rise again after trial without also causing damage to its goodwill and held that the warning itself would cause damage which was not quantifiable.
The defendants suggested that the drug tariff price may not fall at all during the period to trial and that Abbott should sell at a stated discount in the intervening period, thus leaving list prices unaffected. However, the court held that this would not affect the damage to Abbott’s goodwill among its customers even if the PPA were to leave the drug tariff price unaltered.
The court accepted that the unquantifiable loss did not lie completely with Abbott. Pumfrey J accepted that the defendants faced the risk that other generic manufacturers would be ready to enter the market by the time a trial had taken place and they will have lost the advantage of being the first to market. In addition, each of the defendants had its own special reasons for not being injuncted and each would have preferred that it alone should have been able to launch its products on expiry of the ‘355 patent.
The court held that the defendants should be dealt with even-handedly and that the unquantifiable losses to the defendants represented by 5 months advantage in market were outweighed by the unquantifiable loss to the patentee of irredeemable price erosion and subsequent damage to goodwill.
Finally, the court considered that, whilst not decisive, the status quo was that the defendants were not, as yet, on the market. Pumfrey J stated that if he had not given summary judgment he would have granted an interlocutory injunction.
It appears that it will now be extremely difficult for generic companies to avoid being injuncted pending trial where the patentee can show that there will be irredeemable price erosion. The court found that price erosion was the predominant issue to consider on the interim injunction and although this was an extremely vulnerable patent which was invalid on summary judgment the court still stated that it would have granted an interim injunction. The defendants had argued that the general weakness of the patent tipped the balance of convenience so that the interim injunction should not be granted however, this argument did not find favour with the court.
Also published in January 2005 issue of WIPR.
[i] (1) Abbott Laboratories and (2)Abbott Laboratories Limited v (1) Ranbaxy Europe Limited and (2) Ranbaxy (UK) Limited; (1) Abbott Laboratories and (2)Abbott Laboratories Limited v Approved Prescription Services Limited; (1) Abbott Laboratories and (2)Abbott Laboratories Limited v Generics (UK) Limited; (1) Abbott Laboratories and (2)Abbott Laboratories Limited v Sandoz  EWHC 2723 (Pat)
[ii] Celador Productions v Melville  EWHC 2362 (Ch)
[iii] Gerber v Lectra  FSR 492