For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Sunday, 28 July 2013

Generics behaving badly? BMS v Teva illustrates UK judicial mood towards generic launch plans (Part II)

Mr Justice Birss 

The decision

After a trot through the case law on quia timet ("because he fears") actions, the Birss J formulated the test before him as follows:
"Whether, in all the relevant circumstances, there was a sufficiently strong probability that an injunction would be required to prevent the harm to the claimant to justify bringing the proceedings"
The use of the word "sufficiently" intended to "encapsulate the idea that the degree of probability required will vary from case to case depending on all the circumstances but that mere possibilities are never enough.  To justify coming to court requires there to be a concrete, strong and tangible risk that an injunction is required in order to do justice in all the circumstances."

At the date of the proceedings being issued in this case, there was a sufficiently strong probability that an injunction would be required to prevent Teva from infringing.  Objectively, as at February 2012, the UK market for efavirenz was significant.  A generic company would be prepared to launch at risk as the benefits in doing so would likely outweigh the risk.  The judge, again, highlighted Teva's previous reputation in being
"demonstrably prepared to launch products without notice and at risk of infringing an originator's patent if it chooses to do so.  Atorvastatin is a sufficient example but there are others.  Teva is demonstrably prepared to launch surreptitiously if it chooses to do so.  Again atorvastatin is an example. "
Pfizers's atorvastatin aka, Lipitor
Again, the judge emphasized that the mere obtaining of a marketing authorization before the expiry of the patentee's relevant rights did not mean that there was an intention to launch at risk, merely that such a launch was feasible.  The objective position was, therefore, that an at-risk launch was a credible possibility, but no more than that.

Subjectively, however, Teva's intentions as of 9 February 2012 were "tolerably clear".  The possibility of launching at risk in the UK before that date was under active consideration and made sense commercially as "the reward could be worth the risk and practically in that it was feasible".  If, in response, to BMS's request regarding its launch plans Teva disclosed its actual state of mind then the judge considered it would have said that "it had no plans to launch efavirnez before expiry but was actively considering the option of doing so".

On that basis, the only thing that would prevent Teva from infringing would be an injunction or Teva's agreement to give BMS advance notice of a decision to launch in order to afford BMS time to obtain an injunction.  Teva, the court found, had the opportunity to agree to give BMS such advance warning but refused to do so.  In those circumstances, BMS had no other option but to initiate proceedings.  With that conclusion, Birss J granted a permanent injunction to restrain Teva from infringing the patent until the expiry of the SPC.

Conclusion
The lesson for generics is pretty clear - engage in correspondence with the innovators as to your launch plans or risk raising suspicions that you are going to, or are at least actively considering, launching at risk.  A generic disclosing to an innovator that it has no plans to launch at risk but is actively considering the option and will give them notice before it does would seemingly assist a generic, but what is the point for a generic?  The benefit of a launching at risk would be lost as an innovator would have time to obtain an injunction.

The AmeriKat calculated the risk of being caught
scratching the door, but the benefit of far outweighed
the risk....aaahhhh....
The AmeriKat cannot help but liken the launching at-risk conduct as to the conduct of what was seen in the press a few years ago when some newspapers chose to publish, at-risk, stories about an individual's private life without notice because they knew that the sales they could make before an injunction was in force was higher than any costs or damages they would ultimately have to pay. It was a calculated risk and one that paid handsomely.

However, they heyday of such behavior has, for the most part, come to a close.  Indeed, following the atorvastatin experience in 2010 and in light of this decision and the decision in the recent Court of Appeal case of Novartis v Hospira, the judicial mood in respect of generics' launch plans does not accommodate such behavior.  Generics must be transparent as to their launch plans.  If they intend to launch before they have sufficiently cleared a path by invalidating the patentees' rights prior to launch (including on appeal), they better brace themselves for an injunction.

Oh, and another lesson, like the AmeriKat's mom, UK judges never forget bad behavior.

2 comments:

Anonymous said...

"... Indeed, ... in light of ... the decision in the recent Court of Appeal case of Novartis v Hospira, the judicial mood in respect of generics' launch plans does not accommodate such behavior."

By which you mean a generic company getting injuncted under a patent which was held to be invalid at first instance? I would suggest that the judicial mood has swung far in favour against the genrics.

The current state of affairs could mean that generics are going be getting injucted and having to bear the responsibility of "clearing the way" all the way up to the Supreme Court. Seems like a disproportionately heavy burden to me.

Anonymous said...

Teva took the Michael too often and they are losing a higher percentage of cases than they probably expected (sufficiently to make them think twice, possibly)

Subscribe to the IPKat's posts by email here

Just pop your email address into the box and click 'Subscribe':