Quia timet, de minimis and Novartis v Hospira: Mr Justice Arnold speeds through Napp v Dr Reddy pain dispute

The IPKat is ready for a busy end of term
After a generally slow start to 2016 in terms of reported decisions emanating from the Patents Court, things have started to pick up in recent weeks.  Mr Justice Arnold has been particularly busy.  At the end of last month Mr Justice Arnold handed down not one, but two decisions in the Napp v Dr Reddy's and Sandoz dispute (see previous Kat report here).  In the first decision  -  [2016] EWHC 1517  - the judge held that there was no threat to infringe Napp's patent on the basis of the de minimis principle.  In the second decision - [2016] EWHC 1581 (Pat) (not yet on Bailii) -  he granted Napp an injunction pending appeal.

Talented Kat friend Amy Crouch (Simmons & Simmons) brings readers up to speed:

"First Judgment – No Threat to Infringe 

Background

Napp commenced infringement proceedings against both Sandoz and Dr Reddy’s in February 2016 for threatening to infringe its patent by preparing to launch generic buprenorphine transdermal patches. Buprenorphine is an opioid indicated for the treatment of non-malignant pain,  Napp’s buprenorphine transdermal patch, “BuTrans” is its most important product.  At the same time as commencing its actions, Napp applied for a preliminary injunction against Sandoz who had already obtained a marketing authorisation for its product. As a result, Sandoz provided undertakings not to launch pending the first instance decision.  Arnold J ordered an expedited trial for early June 2016. Validity was not challenged by either Defendant.

The Patent

The invention lay in the use of certain penetration-enhancing excipients which are solid at room temperature and were therefore thought to be of limited use in assisting diffusion out of the matrix into the skin. The patent disclosed that on melting and cooling, these excipients formed so called “supercooled melts”, which have a melting point above room temperature, but remain liquid after cooling to room temperature.

It was only necessary to consider claim 1:
“A buprenorphine transdermal delivery device comprising a polymer matrix layer containing buprenorphine or a pharmaceutically acceptable salt thereof, for use in treating pain in humans for a dosing interval of at least 7 days, wherein the transdermal delivery device comprises 10 %-wt buprenorphine base, 10 to 15 %-wt levulinic acid, about 10 %-wt oleyloleate, 55 to 70 %-wt polyacrylate, and 0 to 10 %-wt polyvinylpyrrolidone.”

buprenorphine
Construction

The main issues on construction were (i) whether the percentage values in the claim related to input or output values and (ii) the correct interpretation of the numerical ranges.

Arnold J preferred the Defendants’ arguments on both issues, finding that the skilled person would have understood the claim to mean (i) output values and (ii) values to be expressed in terms of whole numbers applying the conventional rounding approach e.g. to extend “10 %-wt” to ≥9.5 to < 10 .5 % wt. The word "about" should be taken to mean "a small degree of permitted imprecision over and above that implied by the usual rounding convention", although in Arnold J's view the inclusion of this word mean that the claim lacked clarity and he would have been tempted to find such a claim insufficient.

 Infringement - The de minimis principle in quia timet actions

The de minimis principle has been considered in previous patent authorities (Hoechst v BP [1998], Monsanto v Cargill [2007], Napp v Ratiopharm [2009], Lundbeck v Norpharma [2011]). In the present case Arnold J commented that the court was forced, as a matter of practical reality, to draw a line somewhere and referred to a hypothetical scenario in which only 0.01% of products fall within a claim as “precisely the kind of situation covered by the de minimis principle”.

In relation to quia timet actions, it was clear that if what the defendant threatens to do would only involve infringement on a de minimis scale, then that threat does not justify the commencement of proceedings by the patentee (whether to seek an injunction or a financial remedy). However, if there is a clear threat to do acts which fall within the claim sufficiently often that they cannot be discounted as de minimis then that is sufficient to justify bringing quia timet proceedings. In this case (i.e. where any infringement would be on a very small scale – see below), he concluded that even if the level of infringement cannot be discounted as de minimis, an injunction would be “both disproportionate and a barrier to legitimate trade”.

Both Defendants had served confidential PPDs which provided results of testing samples of their products. Uncertainty stemmed from the fact that the manufacturing processes for transdermal products are inherently variable and for this reason, it is not known how representative the tested samples are of future products.

Statistical evidence was put forward by experts by all parties and evaluated by Arnold J on the basis of his findings on construction. In relation to Sandoz’s product, even on Napp’s evidence, both of their figures of “1 in 69 million patches” (which was based on a confidence interval of 50%, which was accepted by Arnold J to be the correct interval for the balance of probabilities standard of proof) and “1 in 25,600 patches” (based on Napp’s argued confidence interval of 95%) would be de minimis and accordingly there was no threat by Sandoz to infringe.

Dr Reddy’s had provided a less detailed PPD but stated that to avoid infringement they would implement a testing regime based on a statistical protocol devised by its expert which would incorporate the Court’s findings as to what proportion of infringing patches amounts to de minimis. The protocol to be used by Dr Reddy’s was dependent upon the Court’s construction of the claims and required a finding of (i) the correct confidence interval and (ii) the threshold for the de minimis principle, which Arnold J found to be no more than 1 in 10,000 products falling within the claim. Arnold J concluded that Dr Reddy’s testing regime was sufficient to ensure its products would not fall within the claim other than to a de minimis extent. Accordingly, there was no threat by Dr Reddy’s to infringe either.

Second Judgment – Injunction Pending Appeal Granted 


The findings of no threat of infringement were dependent upon the findings on construction and permission to appeal was granted on construction alone.

Napp applied for an injunction pending the Court of Appeal decision. Arnold J considered the criteria set down by the Court of Appeal in Novartis v Hospira [2013], but noted that it was of concern that Lord Hoffman’s judgment in the Privy Council case National Commercial Bank Jamaica v Olint [2009] had not been cited. Whilst the Novartis guidelines state that “it will not usually be useful to attempt to form a view” on the prospects of the appeal, Lord Hoffman had stressed in Olint the need to consider “the relative strength of the parties’ cases” on appeal. Whilst this factor troubled Arnold J, and he considered Napp to have a weak case on appeal, based on Novartis this factor could not outweigh others.

The Novartis factors that persuaded Arnold J to grant an injunction in this case where:

The test for a preliminary injunction in life sciences...
i) Length of time before the appeal was likely to be heard:  

Dr Reddy’s solicitors had made enquiries to the effect that the Court of Appeal could, if it granted expedition, hear a one day appeal before the end of July 2016. On this basis, Arnold J decided to only grant an injunction until 16 August 2016. It is of note that, if such an expedited appeal does happen within this timeframe, then these proceedings will have progressed from Claim Form to Court of Appeal judgment in only 6 months!

ii) Balance of hardship to each party. 

Damages would not be an adequate remedy for Napp in respect of either Sandoz or Dr Reddy’s. This is a market where a price war is inevitable which will lead to significant price depression for Napp. Further, Sandoz had already effectively lost its first mover advantage due to the undertakings it had provided (in relation to which the correct remedy was a claim on the cross undertaking in damages).

Overall granting the injunction was the “lesser of two evils” and in such circumstances it is prudent to preserve the status quo. Echoing the Court of Appeal’s additional comments in Novartis, Arnold J provided a further warning to generic manufacturers by including in his reasoning the fact that the
 “Defendants could have avoided the problem if they had cleared the path for their products”.
Quia timet, de minimis and Novartis v Hospira: Mr Justice Arnold speeds through Napp v Dr Reddy pain dispute Quia timet, de minimis and Novartis v Hospira:  Mr Justice Arnold speeds through Napp v Dr Reddy pain dispute Reviewed by Nicola Searle on Thursday, July 21, 2016 Rating: 5

10 comments:

  1. When will these decisions be made public?

    ReplyDelete
  2. My client is planning to launch a new product in a competitive area. They are aware of the patents of their main competitors and have designed their products accordingly so as to avoid any infringement. I have reviewed their project plans and assessment of the patents and agree that they do not infringe. This is not to say that a patentee won't launch an infringement action in an attempt to cause launch delays and unnecessary expense to protect their market share.

    Non-infringement being clear, I am dismayed to hear a patent court judge denounce a party for not 'clearing the path' by taking actions against third party patents, including declarations of non-infringement. There can be no requirement in law for such demands on parties. Patent law provides for certain rights to patentees in respect of the scope of their claims, and does not provide them with absolute market exclusivity and the right to inflict undeserved restrictions and expense on others.

    I am further dismayed upon reading into the facts of the case where the judge is also of the opinion that there is no infringement. I can't see any challenge to patent validity mentioned (is there another case?) so why has the judge made this comment? No infringement: the path is clear already, is it not?

    Once non-infringement is determined by the judge, what rules has he used to decide the request for an injunction, where no appears to have pre-existed?

    ReplyDelete
  3. I can find no public record of the quoted appeal hearing. Can someone share a publicly accessible link or are UK court hearings and decisions private matters?

    ReplyDelete
  4. Apologies for my ignorance but I am finding myself unable to identify the occurrence of this hearing and the result should it now be announced. If there is now a result it should be given publicly, not held secretly. Please share if someone has knowledge of importance.

    ReplyDelete
  5. Anon - I think no-one is responding because it is not clear what "appeal hearing" or "hearing" you are looking for. Please could you specify?

    ReplyDelete
  6. "Second Judgment – Injunction Pending Appeal Granted"

    "Dr Reddy’s solicitors had made enquiries to the effect that the Court of Appeal could, if it granted expedition, hear a one day appeal before the end of July 2016"

    Could be what anon is referring to.

    ReplyDelete
  7. Ah, thanks. If is it is the appeal in this case, then a decision is not out yet. When it is, it will be posted here:
    http://www.bailii.org/recent-decisions.html#ew/cases/EWCA/Civ
    I don't know whether the appeal proceeded, and if so whether it was in fact expedited in the manner indicated to be possible.
    It is not that easy to find out whether a hearing took place, although the daily cause list:
    https://www.justice.gov.uk/courts/court-lists/list-appeal-civil
    allows you to check daily (but it only lists the current day of hearings)

    ReplyDelete
  8. http://www.pharmatimes.com/news/appeal_court_paves_way_for_launch_of_sandoz_reletrans_1090791

    ReplyDelete
  9. Quick kill. Record time? Waste of court time? Abuse of procedure?

    ReplyDelete
  10. All of the above as far as those of us working in the generics industry are concerned.

    ReplyDelete

All comments must be moderated by a member of the IPKat team before they appear on the blog. Comments will not be allowed if the contravene the IPKat policy that readers' comments should not be obscene or defamatory; they should not consist of ad hominem attacks on members of the blog team or other comment-posters and they should make a constructive contribution to the discussion of the post on which they purport to comment.

It is also the IPKat policy that comments should not be made completely anonymously, and users should use a consistent name or pseudonym (which should not itself be defamatory or obscene, or that of another real person), either in the "identity" field, or at the beginning of the comment. Current practice is to, however, allow a limited number of comments that contravene this policy, provided that the comment has a high degree of relevance and the comment chain does not become too difficult to follow.

Learn more here: http://ipkitten.blogspot.com/p/want-to-complain.html

Powered by Blogger.