Gerard Kelly and Eimear O’Brien, Mason Hayes & Curran
Ireland is a relatively small market, and patent litigation, which is an expensive process, is largely driven by pan-European pharmaceutical cases involving high-value products – whether of a biosimilar or generic nature. While Ireland is a common law jurisdiction with fewer cases than most European jurisdictions, there have been a number of recent cases that provide useful guidance on a number of interesting aspects of Irish patent law, in particular, preliminary injunctions, stays pending EPO proceedings and discovery.
One of the main developments in Ireland in the area of patent law has been the sudden rise in popularity, but ultimate failing, of the preliminary injunction application. Historically, preliminary injunctions in Irish patent cases had been uncommon. The main Irish authority on the subject was the 2003 High Court decision in SmithKline Beecham plc v Genthon. In short, the Irish High Court refused to grant a preliminary injunction in that case on the basis that the plaintiff could be compensated in damages for any commercial loss suffered by the plaintiff. For 14 years, no further decision was handed down on this issue – but in 2018, no fewer than three patent injunction applications were heard by the Irish Courts in the space of six months, including an expedited appeal to the Court of Appeal. However, all three of those cases failed to achieve an injunction.
In terms of first principles, the requirements for obtaining a preliminary injunction in Ireland are essentially the same as the requirements in the UK, namely the principles set out in American Cyanamid Co v Ethicon Limited. Once the court is satisfied that there is a serious issue to be tried, which is itself a relatively low threshold, the next question to be considered is whether or not damages would be an adequate remedy for the plaintiff or the defendant. If damages would not adequately compensate either party, the court must consider where the balance of convenience lies and whether the status quo should be preserved. The question of whether damages are an adequate remedy has become a paramount consideration for the Irish courts when deciding patent injunction cases. This position has been confirmed by the three recent decisions.
In the decision of Gilead Sciences Inc v Teva Pharmaceuticals (and related case Gilead Sciences Inc v Mylan), dated 7 November 2017, the Irish Commercial Court refused Gilead’s application for interlocutory relief against the launch by Teva and Mylan of a generic alternative to its anti-retroviral drug, Truvada. The underlying proceedings, which are due to be heard in April 2019, relate to the alleged infringement of a supplementary protection certificate (SPC) and a counterclaim for invalidity. Ultimately, the deciding factor in the decision was the transparency and accountability across the pharmaceutical industry of sales and market share data through service providers such as Quintiles IMS, and the resultant ease of calculation of damages. That Truvada was not widely dispensed and was available solely through limited specialised clinics involved with the treatment of HIV in the state further supported this approach.
In June 2018, the Irish High Court refused a further preliminary injunction application in Teva Pharmaceuticals v Generics t/a Mylan, this time, in relation to the manufacture of a drug by Mylan in Ireland for export to the US market. The product itself did not have a marketing authorisation and was not sold in Ireland. As such, Teva’s claim of infringement related solely to the issue of manufacturing and export within the state. With regard to the adequacy of damages, Teva sought to distinguish the earlier Gilead case on the basis that the market in the earlier case was a stable one with data and evidence readily available in relation to any sales. In contrast, Teva argued that the market for MS therapies in the US is dynamic and highly competitive. The Court did not accept this argument and held that damages would adequately compensate Teva and the preliminary injunction should be refused.
Finally, in June 2018, a decision of the Irish High Court in Merck Sharp & Dohme Corporation v Clonmel Healthcare Limited refusing an application for a preliminary injunction was upheld by the Court of Appeal. The High Court had refused the application at first instance on the basis that damages would be an adequate remedy. Again, market stability and the relatively short period left to run in the SPC (11 months) were cited as the main reasons for the decision. Leave to appeal to the Supreme Court has been granted although the resolution of the point prior to SPC expiry is questionable.
Recent case law would suggest that patent holders will struggle in seeking a preliminary injunction in Ireland in circumstances where data relating to sales and market share are readily available in the particular product market. It is difficult to see this approach changing in the near future save for the existence of exceptional circumstances.
As mentioned previously, patent litigation in Ireland is often one piece of a much broader pan-European litigation strategy. In such circumstances, it is common for related proceedings to be ongoing before the European Patent Office (EPO) in addition to other national courts.
In July 2018, the Irish High Court stayed the hearing of patent revocation proceedings between Eli Lilly and Eisai pending the determination of EPO opposition proceedings concerning the patent the subject matter of the proceedings. However, contrary to previous case law on the subject, the Court did not stay the proceedings in their entirety and instead allowed the parties to proceed with the exchange of pleadings and trial preparations, only the hearing would be stayed. In other words, the parties would go to the effort and expense to prepare the case for trial but the trial itself would not proceed during the stay.
This decision is noteworthy as, in effect, the public interest in bringing the matter on for trial was not considered to outweigh the potential wasted costs if the patent was revoked centrally at the EPO. The court acknowledged the risk of wasted costs in circumstances where the matter may be resolved before the EPO. The court also noted that a strong public interest existed in ensuring that the risk of any delay in supplying a potential treatment for Alzheimer’s disease should be minimised. Earlier case law was distinguished on the basis that it did not concern potentially ground-breaking treatment. These considerations were found to significantly outweigh the plaintiff’s concerns as to costs in preparing for a trial that may not proceed.
In Ireland, the discovery process in litigation remains robust and burdensome, being still rooted in Peruvian Guano principles, namely, documents that may assist or damage a case are relevant, a fact that has been openly noted and criticised by the Irish Court of Appeal. In short, the parameters of the discovery obligations date back several decades to a time when the lack of technological advances ensured that documents were captured in manageable quantities. Today, this process has become somewhat oppressive and plays a significant part in deterring parties from litigation in Ireland. In one patent case, reference was made to the Irish process being a haven for discovery.
For those unfamiliar with the concept of “discovery”, this describes the procedure whereby a party obtains documentation relating to the case prior to the hearing, which is in the possession, custody or power of another party to the proceedings. A discovery request must set out in detail the various categories of documents sought and the reasons they are sought. If the receiving party refuses to agree to the request for voluntary discovery, an application is usually made to have the disputed categories determined by the court. Once discovery has been either agreed or determined by the court, an affidavit of discovery is sworn by each party. Generally, a party is usually required to make discovery of documentation in its power, possession or procurement with the exception of privileged documents.
However, patent litigation is one area in which the exercise of discovery obligations in itself has caused insurmountable obstacles and the courts continue to actively encourage parties to reach agreement regarding discovery to the extent possible.
In fact, it is often the commercial sensitivity of documentation and the scale of the exercise that becomes a reoccurring issue in discovery hearings in patent litigation in Ireland. In the case of Teva v Boehringer (2015), Boehringer brought an application before the Irish High Court to put in place certain confidentiality protections for the discovery and pretrial phase of patent invalidity proceedings. In particular, Boehringer sought to establish a “confidentiality club” as discovery was sought of marketing authorisation documents, including the relevant dossier amongst other matters. Although it was agreed that a confidentiality club should be established, no agreement was reached between the parties as to who would be included in the confidentiality club and what restrictions would apply to the viewing of the confidential documents. It was agreed that Irish and UK external lawyers and expert witnesses should be included.
It was argued by Boehringer that just one of Teva’s in-house counsel should be admitted to the club. The Court considered this restriction “impractical and too restrictive”. In particular, the risk, for example, of illness on the part of the single in-house counsel bringing the proceedings to a halt was considered very real. Boehringer also argued that the in-house counsel should be prevented from being involved in any other litigation involving the same matters in any jurisdiction for a period of five years. The Court found this “an unacceptable restriction and an unnecessary one”. The Court also considered any fear of inadvertent disclosure to be unrealistic given that the three in-house counsel in question were “responsible, respectable and experienced”, and held that compliance with the undertakings should be presumed. The Court considered the in-house counsel “less likely than the experts to inadvertently reveal confidential information”.
In the context of the same proceedings, the Court of Appeal handed down a decision relating to the types of categories sought and, in effect, the breadth of discovery to be handed over. It was noted by the Court that “the applicant for discovery must establish firstly relevance of the documents sought to the matters in question in the proceedings as a matter of probability and not only possibility.” This led to a revised view on whether the inventors’ notebooks, for example, would be considered relevant, given that the person skilled in the art lacks inventiveness and as such could not be the inventor of the patent. Similarly, subjective consideration by the patentee on the question of validity would be of limited relevant where it was a matter of expert evidence. Relevance always must be assessed in view of the burden in making the discovery and this can be significant if there are numerous years involved. Irish law does not have the same rule as in the UK concerning two years either side of the priority date, for example.
As such, recent decisions of the Irish courts concerning discovery applications in the context of patent litigation have seen the courts typically refuse the majority of categories sought. For example, in Boehringer v Teva (2016), while five categories of discovery were granted in the High Court, three were subsequently overturned on appeal. While the documents were found to meet the threshold of relevance, the Court held that Teva had not “established that any of the categories as a matter of probability contain documents potentially admissible in evidence having regard to the claims made, the nature of the evidence to be adduced and the absence of any intention to call an inventor”. Further, in a more recent case of Biogen v Celltrion (2018), the Irish High Court granted two out of the seven categories of discovery sought. In coming to this conclusion, the Court took into consideration the significantly narrower scope of discovery handed over in the course of the corresponding UK and US proceedings.
Recent case law suggests that there is a clear separation between the questions of whether a category is relevant to the extent that it may, as a matter of probability, lead to a line of inquiry and whether such category is necessary for the fair disposal of the proceedings. With this, we have seen a perhaps welcome trend develop towards more concise and pointed discovery obligations, which should hopefully mean cases come on for trial sooner.