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Saturday, 8 March 2008

Drug dealers' details: court orders disclosure

Some curious issues of discretion and convenience are raised in Eli Lilly & Co Ltd v Neopharma Ltd and another [2008] EWHC 415 (Pat), a Patents Court (England and Wales) decision on 6 March from Roger Wyand QC, sitting as a Deputy Judge. The IPKat found this case noted on the LexisNexis Butterworths subscription-only service; it is not yet available on BAILII.

Eli Lilly owned a patent for olanzapine, which it made and sold as Zyprexa. An anti-psychotic drug, it was used for the treatment of schizophrenia, bipolar disorder and acute mania. This was a profitable drug: by 2006 its annual global sales were around£2.2 billion, of which £140 million came from the UK (where it totalled half Eli Lilly's annual revenue).

Neopharma, a non-trading British company, held a variety of EU marketing authorisations, including an authorisation for Olanzapine Neopharma. The exclusive distributor of the product in the UK was another company, which had the same address and had a commercial relationship, with Neopharma -- though they were under different ownership, that company being a privately owned UK-based marketer of generic pharmaceuticals in the domestic market through its own distribution outlets and in major EU markets through selected major national generic companies. The second defendant also had a strategic alliance with Cipla, the largest pharmaceutical company on the domestic Indian market.

In May 2006 Eli Lilly's patent was revoked in Germany, in a decision that was under appeal at all material times. Two other companies later launched UK revocation actions against the patent, the hearing of which is scheduled for July 2008. Neither defendant in this case was involved in those proceedings. Various other actions in respect of equivalent patents had also been filed in other countries.

In November 2007 Eli Lilly wrote to Neopharma, asking for information including "full details of when (by individual country) you intend to launch Olanzapine Neopharma in Europe" and seeking an undertaking not to take any steps to market Olanzapine Neopharma in any European country in which the patent remained in force. Neopharma in response asked for information about Eli Lilly's portfolio of olanzapine patents in Europe and asked for a cross-undertaking in damages for losses incurred in respect of jurisdictions in which the patent was revoked. This inspired Eli Lilly to ask the defendants for evidence that, in the absence of the patent rights, they would be proceeding with the marketing of Olanzapine Neopharma. The defendants refused, stating that the information relatingto its customers was highly confidential.

At this point Eli Lilly sought an interim injunction to stop Neopharma infringing the patent and to make it disclose the names and addresses of all persons to whom it had supplied Olanzapine Neopharma and any other products containing olanzapine, plus dates and quantities of each supply. The second defendant was later joined by consent and the two defendants gave undertakings substantially in the form requested for the injunctive relief, withg Eli Lilly giving the usual cross-undertaking in damages. The defendants however resisted the disclosure action. They conceded that the court had power to order disclosure of customer names, but maintained that it should be cautious in ordering such liability where, as here, it would not help a claimant establish its pleaded case on liability. It was accepted both that there was an arguable case of patent infringement and an arguable defence based on the alleged invalidity of the patent. However, Eli Lilly said it would suffer irreparable loss if the requested relief were not granted, while the defendants said that they would suffer irreparable loss if it were.

Roger Wynd QC ordered the disclosure, He did so on the following basis:

* the court had power to order disclosure of the names of customers where (i) those customers were arguably wrong-doers, (ii) the order was necessary to enable action to be taken against the wrong-doers and (iii) the defendant was both involved in the wrong-doing and in a position to give the necessary information.

* even if those requirements were all met, the court still retained a discretion as to whether to order disclosure. The question had to be approached in a similar fashion to considering the grant of an interim injunction.

* in this case the requirements for making the order were fulfilled and the balance of convenience was in favour of granting the order for disclosure. The fact that the defendants gave undertakings after proceedings were issued amounted to an acceptance at that stage that the balance of convenience was in Eli Lilly's favour.

* in any event, the damage that the defendants said they would suffer if ordered to give disclosure would not be as great as they alleged.
The IPKat wishes that he could see the text of this judgment, since he is currently unconvinced that an application for disclosure of the names and details of customers has very much in common with an application for interim injunctive relief to stop the continued alleged infringement of an intellectual property right. The former is essentially evidential in nature, while the other affects the operation of a vulnerable and often time-limited IP right in a competitive market place.


Above: Pickles was in two minds about whether olanzapine was helping with his schizophrenia


Merpel doesn't see what bearing the fact that the defendants gave undertakings not to sell has upon the issue of whether they had conceded that the balance of convenience on the disclosure issue was in Eli Lilly's favour.

2 comments:

Anonymous said...

Are you sure you mean "Neopharma's patent"?

Jeremy said...

Whoops -- should have read "Eli Lilly's patent". Will amend forthwith. Thanks!

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