Patents: interim injunctions

By Audrey Horton

07-2019

Summary

The High Court has refused to grant an interim injunction to restrain alleged patent infringement before trial where an expedited trial had been ordered, the defendant had undertaken to limit its marketing activities, and the patentee could not show irremediable damage.

Background


On an application for an interim injunction, the court will consider:

  • Whether there is a serious question to be tried.
  • If so, whether the balance of convenience is in favour of making the order (American Cyanamid Co v Ethicon Ltd [1975] AC 396).

While there is no obligation on a generic manufacturer to commence proceedings for revocation or a declaration of non-infringement of a potentially conflicting patent, if it does not clear the way to market when it must have realised that the patentee would be likely to seek an interim injunction if there was an arguable case of infringement, it risks falling on the wrong side of the balance of convenience (SmithKline Beecham Plc v Apotex Europe Ltd, www.practicallaw.com/9-203-1788).

Facts

A marketed a medical device used for treating a life-threatening heart condition. The market for the device in the UK was small compared with that in other countries, but this was due to change as a favourable decision from the NHS to fund the procedure was expected.

E was planning to launch its competing device in the UK in 2019. A had issued infringement proceedings and E counterclaimed alleging invalidity.

An expedited trial was ordered for December 2019. A applied for an interim injunction to prevent E from marketing its product in the UK before the trial.
E submitted evidence showing that it intended to roll out its device in a controlled manner to a small number of hospitals during 2019 and 2020, in order to obtain feedback from UK clinicians, and to promote its device, so as properly to compete with A's device when NHS funding was introduced. E gave an undertaking to limit its activity to ten patients at two hospitals.

A accepted that the expedited trial would limit the damage that it could suffer as there would be a court decision before E entered the market on a full commercial scale. However, A argued that irreparable harm would occur because E would bundle and cross-sell its device with other heart disease products, that E's activities would disrupt A's relationship with clinicians, and reputational damage to A.

E argued that damages would be an adequate remedy for A, whereas E would suffer irreparable harm as it would be unable to enter and compete with A in the expanding NHS-funded market if wrongly injuncted having not been able to obtain feedback from clinicians on its device.

Decision

The court refused A's application for an interim injunction.

There was a serious issue to be tried for the purposes of the American Cyanamid principles. The court did not consider the prior art and the validity of the patents or which device was clinically superior. If damages would be an adequate remedy for A, the court should not interfere with E's freedom of action by granting an injunction. Given E's undertaking to limit its activities to ten implantations in two hospitals, A would not suffer irreparable harm in the period until judgment. Quantification of A's loss would be very easy given E's acceptance that each sale of its device would be a sale lost to A. Allegations of bundling were not made out given evidence from E that bundling did not occur, nor was there any reputational damage or disruption of clinician relationships as E's device was already well known to clinicians.

If the risk of irreparable harm to both sides was evenly balanced, it might be significant that E had failed to clear the way for its product by seeking revocation of the patents or a declaration of non-infringement, but the risk of irreparable harm was not evenly balanced in light of E's undertaking to limit its activity. Although it was not clear exactly when the NHS would start to fund the procedure, E would need to be in a position to launch its device later in 2019. If E was restrained from launching, it would be unable to compete with A for the expanding market. A's device would enjoy a monopoly as the only such device available in the UK and E would face the challenge of entering the market later. In the expanding market it could not be said that every sale of A's device would have been a sale of E's device if it was on the market, and it would be therefore impossible to quantify the loss of E's sales for that period. It would also be impossible to predict the impact this would have on the market going forward, and so to quantify E's lost sales as a result of a wrongly granted injunction.

Comment

The court's refusal to grant a preliminary injunction here does not indicate a change in the law. In cases involving patents for medicines where a generic manufacturer is seeking to enter the market, the court may be more inclined to consider that damages will not be an adequate remedy for the patentee given that entry onto the market by the generic is often likely to be followed by other generic manufacturers leading to a rapid downward price spiral that might never be restored. This factor has become less relevant since the time taken to get to trial has shortened. Here, not only was there an expedited trial order, but also the circumstances were atypical in that E's product was likely to be more expensive than A's, there was no evidence of additional competition in the market, and E had undertaken to limit its activities to ten implantations in two hospitals before judgment.

The court criticised the parties for adducing extensive clinical evidence comparing E's product and A's device, which was inappropriate for an interim hearing. This evidence was put in on the assumption that, had the balance of convenience been even, an additional factor would have been the public interest since heart valve implants are potentially life-saving devices. The decision also demonstrates that "clearing the way" is only important if the balance of harms to the claimant and defendant is even.

Case: Evalve Inc and Abbott v Edwards Lifesciences Ltd [2019] EWHC 1158 (Pat).