In an emergency hearing (Novartis AG v Hospira UK Limited  EWCA Civ 583), the Court of Appeal of England and Wales has reversed a High Court decision, declaring there should be an interim injunction against the marketing of a generic pharmaceutical product, pending an appeal against the High Court decision that the patent concerned was invalid.
Hospira sought revocation of two Novartis patents that related to the treatment of osteoporosis by the administration of zoledronic acid or zoledronate (a zoledronic acid salt) intravenously at intervals of at least six months. On 15 March 2013, Arnold J held that both patents were invalid on account of the fact that none of the claims were entitled to the claimed priority, which Novartis conceded rendered both patents invalid. In addition, several claims of each patent were invalid for insufficiency. Novartis was granted leave to appeal the decision.
Hospira’s lawyers subsequently informed Novartis that Hospira would not support any application to expedite the appeal and that it was considering opposing it. In addition, Hospira communicated its intention to launch in the United Kingdom "following expiry of the supplementary protection certificate on 15 May 2013". Novartis later brought infringement proceedings by a separate action that included an application for an interim injunction. Following an opposed hearing on 13 May 2013, Birss J refused to grant the injunction. The Court of Appeal then granted permission to appeal Birss J’s judgment.
The Court of Appeal allowed the appeal and granted the interim injunction. The lead judgment, given by Floyd LJ, set out the reasons for granting the interim relief pending appeal of patent validity.
Prior to Birss J’s decision, there was no precedent for the grant of an interim injunction pending appeal when the patent in question had been found invalid. After reviewing case law to identify the principles that apply generally to the grant of an interim injunction, the Court of Appeal concluded that Novartis’ appeal had a real prospect of success. The Court found there would be an abrupt and irrecoverable reduction in market price if generic zoledronic acid were to be launched before the appeal hearing, meaning the unquantifiable damage to Novartis outweighed that to Hospira. Further, the Court was not convinced that Hospira would lose its first mover advantage.
The Court of Appeal acknowledged that companies that plan to launch a generic product must take steps before the launch to clear the obstacles in the way of getting the product to market. As the generic producer knows more about its plans than the innovator, the burden is on the generic producer to organise for the merits to be fully tried before launch. As appeals are the norm rather than the exception in this type of case, it is not unreasonable to expect generic producers to organise their clearance strategy on the basis that there is likely to be an appeal.
This is a welcome judgment for innovator pharmaceutical companies. Patentees who are unsuccessful in asserting their rights at first instance may still be granted an interim injunction pending appeal. It is apparent that the burden of clearing the way before launch falls on the generic producer, not the patentee, and that this course of action must be scheduled taking appeals into account. This is no mean feat considering that the time to appeal varies depending on the workload of the Court of Appeal at the time. Additional complexity is added by the fact that there could be further appeals to the Supreme Court or a reference to the European Court of Justice.