Swiss Supreme Court Confirms Preliminary Injunction in Kivexa case

After the Swiss Federal Patent Court issued a preliminary injunction (PI) against Sandoz’ combination product of abacavir and lamivudine, being a generic version of ViiV’s Kivexa product for the treatment of HIV (Katpost here), the Swiss Federal Supreme Court has recently rejected Sandoz’ appeal (case 4A_575/2018 available in German). 

Before the court of first instance (the Federal Patent Court), Sandoz did not dispute that its product falls within the substantive scope of ViiV’s Swiss SPC C00817637/01, based on EP 0 817 637 B1. Rather, Sandoz disputed the validity of the SPC and the underlying patent, based both on invalid priority and lack of novelty. The Federal Patent Court sided with ViiV and prohibited the manufacture, storage, distribution, sale, import, export and possession of Sandoz’ generic product (the first instance decision is available in German). 

Irreparable harm of a feline nature

Admissibility

An appeal to the Federal Supreme Court against a PI decision is notoriously an uphill battle. The Federal Supreme Court will only examine the merits of an appeal in PI cases if the appellant can establish that the first instance decision causes irreparable harm “of a legal nature”. The threshold is high and appeals against PI decisions are examined only in truly exceptional cases.

This case turned out to be one of these exceptional ones., In a briefly reasoned decision, the Federal Supreme Court stressed that the first instance has in particular forbidden that the appellant “store or possess” the relevant products. As a result, the appellant did not have a choice but to immediately destroy its existing stock of products (“export” being also forbidden). The destruction of the appellant’s existing stock could not have been undone even if the appellant had won in the ensuing main proceedings. Therefore, the Federal Supreme Court acknowledged the “irreparable harm of a legal nature” and went on to examine the case on the merits. 

Keeping it in the Group

Once this first hurdle cleared, the appellant had to show that the first instance decision involved a breach of constitutional rights (as no other grounds of appeal are admissible in PI cases before the Federal Supreme Court).

First, the appellant claimed that the Federal Patent Court arbitrarily issued a PI to the Plaintiff, a UK company and registered owner of the SPC, whereas the only entity authorized to market Kivexa in Switzerland is another company of the same group, which is not a party to the proceedings. Hence, the plaintiff/appellee lacked a “harm difficult to repair” (one of the four conditions that must be met to issue a PI).

The Federal Supreme Court disagreed. The “harm difficult to repair” does not necessarily mean that the plaintiff is directly involved in the distribution of a competing product. It is not arbitrary to assume that a “harm difficult to repair” exists as soon as third parties get the impression that a registered intellectual property right is not being enforced. In a situation where the holder of the marketing authorization and the owner of the IP right are distinct entities, it is not arbitrary to consider that the latter also suffers a “harm difficult to repair”, even if such harm is merely indirect. 

Novelty

Second, the appellant claimed that the Federal Patent Court arbitrarily found ViiV’s SPC to be valid. The question before the Federal Supreme Court in particular was whether the underlying EP 0 817 637 was novel over WO 96/06844 (“D1” in the first instance decision). The Federal Patent Court ruled that D1 was not novelty-destroying because it involved multiple selections of features and thus did not disclose “clearly and unambiguously” the combination of abacavir and lamivudine (as per the Case Law of the Boards of Appeal, which the Swiss courts explicitly follow). The appellant claimed that D1 only contained one list of products and that thus no “multiple” selections of features were necessary.

The Federal Supreme Court again disagreed. The relevant portion of D1 lists several classes of compounds and several specific compounds in each class. It is not arbitrary to consider that if one must first choose a class of compounds and eventually a specific compound within that class, this involves “multiple selections” of features, which therefore does not destroy the novelty of the EP underlying ViiV’s SPC. 

Comment

The Swiss Federal Supreme Court building

First, it should be noted that the speed of the proceedings was rather expeditious, as the parties got through two instances in a complex SPC case and obtained a final decision from the Supreme Court in less than 10 months after the filing of the request before the first instance.

Second, this Kat finds the Supreme Court’s argument on the “irreparable harm ‘of a legal nature’” (the prerequisite to examine the merits of the appeal) based on the order to destroy the appellant’s existing stock rather surprising. There would have been other (better?) reasons to acknowledge such “irreparable harm” in this case, in particular the loss of the appellant’s first-mover advantage against other generics and the practical difficulties in proving the damage suffered if the PI is overturned in main proceedings, when not a single dose of the generic product had been sold on the market until the PI was issued.

Third, one of the side-shows of the case was language. As allowed by Swiss procedural rules, the parties used English in their briefs and pleadings before the Federal Patent Court. The Court, however, had to issue the decision in one of Switzerland’s official languages (German in this case). The appellant claimed that the Federal Patent Court mistranslated one of Plaintiff’s prayers for relief, resulting in an overbroad order. The Federal Supreme Court examined this issue carefully and ruled that this was not the case, a sign that should confirm foreign parties’ frequent preference of English before the Federal Patent Court.

Finally, it must be emphasized that the Federal Supreme Court’s standard of review on the merits in PI cases such as this one is very limited (arbitrariness). As a result, the substantive outcome of the case should not be overstated. For example, whether choosing a class of compounds and then a specific compound within that class, actually constitutes “multiple selections” has not yet been finally answered under Swiss law. 

Right picture by Roland Zumbühl provided under CC BY-SA 3.0