Christopher Thornham and Paul England of Taylor Wessing take an in-depth look at recent uses of discretion when ordering injunctions in the UK and the spectrum of injunction options available to the Court.
"The judges in the Patents Court (and the junior IP Enterprise Court) and the Court of Appeal have discretion regarding the remedies they may order following trial and the past 12 months have seen creative use of this discretion when ordering injunctions."
The Court in London is a well-established forum for patent litigation, with decisions on the merits well reported. However, the relief that is then ordered is sometimes overlooked by commentators. The judges in the Patents Court (and the junior IP Enterprise Court) and the Court of Appeal have discretion regarding the remedies they may order following trial and the past 12 months have seen creative use of this discretion when ordering injunctions. This article discusses some recent decisions.
Quia timet injunctions made permanent
It is well-established law that a patent owner can apply to court for an interim injunction to restrain acts alleged to be infringing that are threatened or imminent, but which have not yet commenced (quia timet, meaning “because he fears”). In the pharmaceutical sector quia timet orders can arise where a patent owner fears imminent launch of a generic product, which could cause considerable loss and damage to the patent owner (often argued to be unquantifiable and/or irreparable in money alone) before a trial on the merits. Merck Sharp Dohme Corp & Anor v Teva Pharma BV  EWHC 1958 (Pat) was one such case. There, the judge ordered a quia timet injunction in 2012 to prevent Teva launching its generic efavirenz product “at risk”, before trial of infringement/validity. At the interim injunction hearing stage, the judge found that there was a threat of launch due to a combination of Teva having launched at risk in the recent past (on the drug atorvastatin); a refusal to state in correspondence what their launch plans were; and it having obtained a marketing authorisation for efavirenz some two years before expiry of the supplementary protection certificate (SPC) for the product. By the time of the trial in 2013, Teva accepted for the purpose of the UK case only that the SPC covered its product and it did not challenge the validity of the SPC. The evidence at trial was that Teva had not decided whether it wanted to launch. However, it also refused to provide assurances that it would give advance notice of launch so that the patent owner could make a court application if necessary to deal with the matter in an orderly fashion. On that basis, the court in its discretion made the interim quia timet injunction a permanent injunction. It concluded there was a risk of launch otherwise. As a result of this decision, generic pharmaceutical manufacturers now know that they risk being injuncted, possibly permanently, if they refuse to state their position clearly in pre-action correspondence with patent owners. This may deter attempts to launch at risk and may lead generics to focus more on clearing their patent positions through the court in good time before planned launch dates – possibly having to allow time not just for a trial, but also an appeal (see discussion below regarding injunctions between trial and appeal).
In some cases, a party may gain a commercial advantage in the period after the patent expires by infringing before expiry - sometimes referred to as a “springboard”. One example is importing a pharmaceutical product before expiry of the relevant patent or SPC so that the product can be launched immediately upon expiry. Merck Canada v Sigma (No2)  RPC 2 (upheld by the Court of Appeal  EWCA Civ 326) was such a case. Though the SPC had expired by the time the matter came before court and generic versions of the pharmaceutical product could be put on the market, the court nevertheless required Sigma to deliver up and destroy product imported into the UK before expiry.
For medicines and medical devices, ordinarily it is necessary to do testing work to generate data for regulatory approval and if a product is to be launched immediately after patent or SPC expiry this means work pre-expiry. There is EU legislation providing a defence to patent infringement for work to obtain regulatory approval of generic medicines, though some EU states have implemented the legislation differently; there was a reference from the German courts to the Court of Justice of the EU regarding interpretation of this legislation and the breadth of this safe harbour, but it settled. In contrast to pharmaceuticals, and unlike the US, there is no safe harbour at all in the EU in respect of tests for regulatory purposes on medical devices prior to patent expiry. Such work pre-expiry, if infringing, may put a party at risk of being injuncted not solely before expiry, but also for a period after expiry if that pre-expiry infringing activity provides an unfair springboard. Smith & Nephew Plc v Convatec Technologies Inc  EWHC 3955 considered such a situation. The commercial process used by S&N to make “Durafiber Ag” used in its wound dressing medical devices was held not to infringe Convatec’s patent. However, work done by S&N pre-expiry in 2009/10 to generate data for regulatory purposes was held infringing. The court held that this infringing activity would have given S&N an unwarranted advantage if it had launched immediately after patent expiry. In fact, S&N held back its product until after the trial judgment, by which time the advantage had passed and, though the court confirmed its power to order a “springboard” injunction post-expiry, it was not necessary on the specific facts.
Injunctions between trial and appeal
In pharmaceutical patent cases, the court commonly grants interim injunctions to restrain generic product launches until trial of the merits. At the interim injunction hearing, once satisfied that there is a “real issue to be tried” on the merits (a low threshold) the court looks at the “balance of convenience” and typically the court favours preserving the market by restraining generic launch until the merits have been decided, so long as the patent-owner undertakes to pay the generic company compensation for damages caused by the interim injunction if it should later prove unjustified. The question arises though, whether the generic can launch after winning at trial. In Novartis AG v Hospira UK Limited  EWHC 1285 (Pat), the Novartis patent relating to zoledronic acid was held invalid by the trial court, but Novartis sought an extension of the interim injunction to preserve the market until determination of the appeal. Though the trial judge refused to extend the interim injunction, his decision was overturned by the Court of Appeal ( EWCA Civ 583), which decided that once permission to appeal has been granted, the “balance of convenience” should be assessed in the normal way, ie, as if before the first instance decision. The injunction was therefore maintained, in return for the patent owner undertaking to pay compensation for damages should the injunction later prove unjustified. In future brand/generic pharmaceutical cases the point may arise again but, if it becomes the new “norm”, practices may adjust with generics having to allow time to get through trial and appeal before product launch.
The outcome, favouring a patentee between trial and appeal in the pharmaceutical sector (see Novartis, above) may be contrasted with the outcome for the patentee in the mobile phone sector in HTC Corporation v Nokia Corporation  EWHC 3778 (Pat). There, the Court had found HTC’s “the One” and “the One Mini” handset infringed a Nokia patent. This was not a case relating to a standard essential patent, so there was no suggestion that Nokia was obliged to license it on fair, reasonable and non-discriminatory terms. The court emphasised that the grant of injunctions is discretionary in light of English law and the EU Intellectual Property Enforcement Directive. On the facts, an injunction was ordered against HTC’s “the One” and “the One Mini” products, but the court then went on to hear an application that the injunctions be stayed, deciding this on the “balance of convenience”. A stay of the injunction was granted regarding the HTC’s “the One” product, taking into account the potential harm to HTC of its flagship product being removed from the market just before Christmas, versus the harm to Nokia, which was considered lower (as there had already been infringement for some time and there were other alleged infringers on the market too anyway). On appeal, the injunction was stayed on both products pending determination of the substantive appeal ( EWCA Civ 1759).
The above cases demonstrate that the exercise of the court’s discretion according to the balance of convenience can lead to a preliminary injunction being ordered to remain in place until determination of the appeal (despite there being no finding of any valid and infringed claim) and, in another case, a final injunction being stayed pending the determination of the appeal (where there was a finding of infringement of a valid claim).
In 2013 the Patents Court and the Court of Appeal have dealt with a range of cases in which they have had to decide the most appropriate way to deploy injunctive relief, in their discretion. The way the Court exercises its discretion may depend on the industry sector in question, but the recent cases show a spectrum of injunction options available to the court – whether for fear of infringing acts (quia timet orders); after patent expiry for things done before expiry (“springboard” injunctions); or to maintain the position between trial and appeal by (maintaining an interim injunction or staying a final injunction).