Supreme Court: Interlocutory injunction should have been granted to pharma company in patent infringement case
The Supreme Court has held that a pharmaceutical company should have been granted an interlocutory injunction restraining a generic competitor from infringing its (now expired) Supplementary Protection Certificate (SPC) for a combined treatment for cholesterol.
Outlining the factors which a court should consider in deciding on finely balanced cases such as the present, where the balance of irreparable harm did not favour either party decisively, Mr Justice Donal O’Donnell, said it would have been appropriate to take into consideration the merits of pending case regarding the validity of the SPC.
Merck Sharp & Dohme Corporation was the holder of a European Patent, filed in 1981, relating to simvastatin (a statin for the treatment of cholesterol). Merck obtained an SPC, extending the term of the patent monopoly, which expired in May 2003.
Merck also held a European Patent which covered the active ingredient ezetimibe (also used for the treatment of cholesterol). This patent expired in September 2014. The SPC in respect of ezetimibe was granted in 2003 and expired in April 2018.
Inegy, which is a combination of simvastatin and ezetimibe, was also marketed by Merck, and covered by EP 0 720 599. Merck obtained a separate SPC for Inegy which expired in April 2019.
Clonmel Healthcare Limited argued that this separate Inegy SPC was invalid, and therefore launched a generic competitor to Inegy the day after the ezetimibe SPC expired in April 2018.
Merck sought an interlocutory injunction, restraining Clonmel from infringing the Inegy SPC. In the High Court in April 2018, Mr Justice Robert Haughton refused to grant the interlocutory injunction. He considered damages to be an adequate remedy for Merck in the event that it succeeded in establishing (i) the validity of the Inegy SPC and (ii) infringement by Clonmel. Therefore, he said it was not necessary to consider any question of the balance of convenience.
The Court of Appeal upheld the High Court’s decision. Mr Justice Michael Peart considered that damages would be an adequate remedy for Merck, and Ms Justice Máire Whelan agreed that damages that would not adequately compensate Clonmel (if it was restrained by an injunction pending trial, but nevertheless succeeded at the trial) if it lost its first mover advantage and an opportunity to become the “incumbent generic” on the expiry of the monopoly. Dissenting, Mr Justice Gerard Hogan considered that Clonmel’s claim of invalidity was not likely to succeed, and that accordingly an injunction should be granted.
The Inegy SPC expired before the Supreme Court hearing, however, Mr Justice O’Donnell said the appeal raised important questions as to the proper approach to the application for an interlocutory injunction. The net issue was confined to whether or not an interlocutory injunction should have been granted in the circumstances before the High Court in April 2018.
Mr Justice O’Donnell said the assessment of the balance of convenience is more difficult and finely balanced, in my view, than the judgments in the High Court and the majority judgment in the Court of Appeal would allow. He said there was “something of an inconsistency… in considering that any damage to Merck would be met by an award of monetary damages, whereas any damages Clonmel might suffer if wrongly restrained would not”. Mr Justice O’Donnell said that in principle, “monetary damages would go a considerable distance to compensate Merck if Clonmel was wrongly permitted to launch its product, or to compensate Clonmel if they were wrongly restrained from doing so”.
Mr Justice O’Donnell said that the balance of potential irreparable harm did not favour either party decisively. He said that in a closely balanced case such as this, a feature to which weight should be given is the fact that Merck holds an SPC which was granted pursuant to an authorisation process provided for by law – as such the SPC is, as a matter of law, valid until declared invalid by a court of competent jurisdiction. He said it was not unreasonable to give this greater weight in the balance than the interests of Clonmel, which can only arise after a determination that the SPC is invalid.
He added that it may also be appropriate to consider the strength of the rival arguments – as such, if it appeared that Clonmel’s case for invalidity was strong, and success in similar litigation in other jurisdictions, this might tip the balance in favour of Clonmel.
“[A]t the risk of perhaps creating a further rule that will require subsequent qualification and correction”, Mr Justice O’Donnell outlined the steps which might be followed in a case a finely balanced case such as this:
- First, consider whether, if the plaintiff succeeded at the trial, a permanent injunction might be granted. If not, then it is extremely unlikely that an interlocutory injunction seeking the same relief upon ending the trial could be granted;
- Then consider if it has been established that there is a fair question to be tried, which may also involve a consideration of whether the case will probably go to trial. In many cases, the straightforward application of the American Cyanimidand Campus Oil approach will yield the correct outcome. However, the qualification of that approach should be kept in mind. Even then, if the claim is of a nature that could be tried, the court, in considering the balance of convenience or balance of justice, should do so with an awareness that cases may not go to trial, and that the presence or absence of an injunction may be a significant tactical benefit;
- If there is a fair issue to be tried (and it probably will be tried), the court should consider how best the matter should be arranged pending the trial, which involves a consideration of the balance of convenience and the balance of justice;
- The most important element in that balance is, in most cases, the question of adequacy of damages;
- In commercial cases where breach of contract is claimed, courts should be robustly sceptical of a claim that damages are not an adequate remedy;
- Nevertheless, difficulty in assessing damages may be a factor which can be taken account of and lead to the grant of an interlocutory injunction, particularly where the difficulty in calculation and assessment makes it more likely that any damages awarded will not be a precise and perfect remedy. In such cases, it maybe just and convenient to grant an interlocutory injunction, even though damages are an available remedy at trial.
- While the adequacy of damages is the most important component of any assessment of the balance of convenience or balance of justice, a number of other factors may come into play and may properly be considered and weighed in the balance in considering how matters are to be held most fairly pending a trial, and recognising the possibility that there may be no trial;
- While a structured approach facilitates analysis and, if necessary, review, any application should be approached with a recognition of the essential flexibility of the remedy and the fundamental objective in seeking to minimise injustice, in circumstances where the legal rights of the parties have yet to be determined.
If the matter was still live, Mr Justice O’Donnell said he would have allowed the appeal and granted an interlocutory injunction pending the hearing.
- by Seosamh Gráinséir for Irish Legal News
© Irish Legal News Ltd 2020