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Monday, 19 March 2012

“[T]he issue of principle . . . is that there is no issue of principle.”

Judge Birss QC assures us that his decision in Merck Sharp Dohme Corp & Anor v Teva Pharma BV & Anor [2012] EWHC 627 (Pat), relating to an application by Bristol-Myers Squibb for an interim injunction pending trial, raises no issue of principle, but he does provide an enlightening discussion of how to address some issues of fact that are common in an application for a quia timet injunction, including a review of the European case law. (Merpel wonders if this amounts to an issue of principle after all.)

BMS brought the application to prevent Teva from launching a generic version of efavirenz. The factual basis for the claim was (i) Teva had obtained a Europe wide marketing authorisation for generic efavirenz around the turn of the new year; (ii) Teva refused to provide an undertaking to BMS that it would not launch while BMS’s patent remained in force, nor would it provide any information regarding the date on which it intended to launch; (iii) Teva has previously launched a different drug, atorvastatin, on a large scale prior to expiry of the relevant patent, without notice to the patentee (Warner-Lambert), and after having informed Warner-Lambert that it intended to launch after the expiry of the relevant SPC.

On the question of the inferences that might be drawn from the marketing authorisation, Judge Birss accepted that merely obtaining a marketing authorisation is not an infringement. He also accepted that obtaining such an authorisation prior to the expiry of the patent would not in itself give rise to an inference of an intent to infringe. For example, it would be natural for a generic to obtain marketing authorisation prior to the expiry of the patent in order to put itself in a position to launch immediately on expiry. But in this case “[t]he key is the length of time between the marketing authorisation and expiry and the absence of any specific factor about this market which might explain it” [51]. Obtaining marketing authorisation almost two years before the expiry of any rights anywhere in Europe supports a natural inference that Teva intended to infringe.

Moreover, even though the evidence showed that Teva held many unused marketing authorisations, this does not mean that the authorisation is irrelevant to Teva’s intent; it means only that it is not determinative. Judge Birss also noted that Teva’s evidence was only that it held hundreds of marketing authorisations that were not currently in use; “[t]hat does not mean that Teva has ever acquired a marketing authorisation with no intention of using it” [70]. This cautious appreciation of Teva’s evidence was no doubt related to its prior conduct in the atorvastatin episode: “In my judgment atorvastatin does not lead to an inference that Teva has a policy of always launching at risk of infringement in the face of a compound patent. However it does show that Teva are prepared to do it if they choose to and it does place into context any prior assurances they may have given” [61].

On the third point, Teva argued that they were entitled to remain silent about their intentions “because to answer it involves divulging a valuable commercial secret which will harm Teva” [66]. Judge Birss indicated that Teva was in a squeeze, because if Teva intended to launch prior to expiry, the application was well founded [68], and on the other hand it would not be news to anyone that they intended to launch after expiry [70]. This comes close to the argument rejected by Harman LJ in K.S. Paul v Southern [1964] RPC 118 at 122:

You cannot get an injunction against a man unless you can say he is threatening and intended to do this and unless restrained by injunction will do it? It is exactly as if Mr Aldous in a sworn affidavit had said ‘I am fearful that unless restrained by the court Sir Lionel Heald will hit me on the head with a volume of the Patent Reports’. He then goes on and says ‘if he is not going to do it, it will not hurt him, so you may as well grant an injunction’. I have heard that argument before.

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The difference in this case is that the threat was not fanciful. In response to BMS's application, Teva had applied to have the cause of action struck entirely as being premature. Judge Birss had refused, based primarily on the timing of the marketing authorisation. Thus the odds of a launch prior to expiry were not comparable to the odds of being attacked by Lord Justice Aldous. Further, if Teva chose to defend on the basis that it did not intend an early launch, disclosure would be given: consequently, “At this interim stage it is entirely fair to draw inferences from silence” [65]. On this point also Judge Birss was “struck” by the atorvastatin episode [72].

Finally, Judge Birss considered a number of Euorpean cases in which a preliminary injunction had been refused in similar situations. However, he noted, persuasively, in this Kat’s view, that those decisions were generally distinguishable on their facts. This led to the dictum that “there is no issue of principle. The cases do no more than show that courts throughout Europe require evidence on which to base an assessment of a threat to infringe. At the end of the day each case turns on its particular facts” [82].

It is an interesting question as to whether the early authorisation and silence as to its intentions alone would have been sufficient to justify the grant of an interim injunction. Judge Birss referred several times to the atorvastatin episode, and while that was clearly not determinative in itself, it did affect the inferences he was willing to draw from the evidence on both sides. The law of defamation recognizes that a reputation is an important commodity; that is true of a poor reputation, as well as a good one.

2 comments:

Anonymous said...

Teva have been particularly aggressive in their actions in recent years, while challenging other's IP and defending their own. Nothing wrong with that. What is amusing to me as a pharmaceutical attorney is how laughable some of their actions have been. In a chess analogy, they have been beaten by fools mate on several high profile occasions.

I can understand high-risk challenges, but Teva need to be a little more realistic. The recent Pfizer case and a previous case of alleged infringement against AstraZeneca in the US demonstrate that the company could do with a lot more experience in their IP teams. Attorneys have an obligation to the people who own the company not to be frivolous with their money.

Ranbaxy used to be more aggressive also, but at least some of their more incredulous actions had a worryingly good argument behind them that relied on the judge being awake.

Almost Emeritus said...

I remember attending a lecture many years ago where the speaker recounted his experience in industrial practice [not pharmaceuticals] where the company had a policy of running hopeless cases, not with any real hope of success, but as a means of diverting the other side's senior management away from growing their business. It was considered money well spent.

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