Summary

In a recent decision1, the UK Court of Appeal has overturned an earlier decision of the High Court and granted Novartis AG an interim injunction to prevent sales of a generic version of their zoledronic acid-containing product, Aclasta™. The interim injunction was granted despite the relevant patents having previously been declared invalid by the High Court. Prior to this decision, there was no judicial precedent for the grant of an interim injunction pending appeal, where the patent for which injunctive relief is sought has previously been found invalid.

Background

Novartis AG is the proprietor of two European patents (UK) Nos. 1296689 and 1591122, which cover the use of zoledronic acid for the treatment of osteoporosis. These patents are set to expire in 2021 and 2025 respectively. The supplementary protection certificate (SPC) based upon the zoledronic acid compound patent expired on 15 May 2013.

Hospira UK Limited planned to sell a generic product containing zoledronic acid and initiated revocation proceedings against the two Novartis AG use patents in 2011. Hospira obtained marketing approval for their generic product in November 2012. Novartis subsequently requested an undertaking that Hospira would not sell their zoledronic acid product before expiry of the SPC for the compound patent and an acknowledgement that Hospira’s generic product infringed their two use patents. In February 2013, both of the use patents were declared invalid by the High Court on the grounds of lack of novelty and insufficiency.

Novartis appealed the High Court decision in April 2013. Following Hospira’s confirmation of their intention to launch their generic product on expiry of the SPC for the compound patent, Novartis initiated infringement proceedings accompanied by an application for an interim injunction pending disposal of the appeal.

The Interim Injunction Decision

On 14 May 2013, one day prior to expiry of the SPC, the UK High Court refused the interim injunction application. In this instance, the Court decided that an interim injunction pending appeal could not be granted since there was no strong prospect of success in the appeal. This finding was despite the Court’s acceptance that an interim injunction pending trial would ordinarily have been given in this case based upon the principles set out in American Cyanamid vs Ethicon [1975] AC 396. Additionally, the fact that Novartis did not expedite the appeal proceedings tipped the scale against Novartis on the balance of uncompensable harm.

Appeal on the Interim Injunction Decision

The Court of Appeal overturned the High Court decision and granted an interim injunction to Novartis, setting out the following principles in relation to the grant of an interim injunction pending appeal, where the claimant has been unsuccessful at first instance:

  • The Court must be satisfied that the appeal has a real prospect of success, and nothing else, i.e. it should not attempt to form a view on how strong the prospects of appeal are, or use it to assess the balance of convenience;
  • It does not follow automatically from the fact that an interim injunction has or would not have been granted pre-trail that an injunction pending appeal should be granted;
  • The grant of an interim injunction is not limited to the case where its refusal would render an appeal useless;
  • As in the case of a permanent injunction, the Court should endeavour to arrange matters so that the Court of Appeal is best able to do justice between the parties once the appeal has been heard.

Applying these principles, the High Court was held to have decided incorrectly in finding against Novartis merely because they would not satisfy a high (validity) threshold on the merits, with the Court of Appeal concluding that “the judge was correct to say that the best way of holding the ring pending trial would have been to grant an injunction (had one been necessary) but wrong to say that the same did not apply pending the appeal”.

Conclusions

This decision provides a number of points to be considered for planning strategies in litigation matters, for both originator and generic pharmaceutical companies.

Patentees will likely welcome this decision which provides precedent that the Court may grant an interim injunction pending appeal, even if the patent in suit has previously been found invalid. However, it should be borne in mind that, to be successful, the patentee will have to prove the same factors in applying for an interim injunction pending appeal as they would for an interim injunction pending trial.

The Court of Appeal reiterated that litigation is not finally concluded until all appeals are disposed of, and the way to market for a generic pharmaceutical manufacturer is not clear until all arguable objections from the patentee have been eliminated. Thus, the burden remains on generic manufacturers to fully clear the path before their launch a generic product. It is prudent for the generic manufacturer to disclose their intention to launch a product to the product originator in time for the appeal to take place. Further, the burden to seek expedition of the proceedings does not lie only with the product originator (patentee), but also with the generic manufacturer.