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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Novartis AG v Hospira UK Ltd  EWCA Civ 583 (22 May 2013)
Cite as:  WLR 1264,  1 WLR 1264,  EWCA Civ 583,  WLR(D) 188,  RPC 3,  CP Rep 37
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
MR JUSTICE BIRSS
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE KITCHIN
LORD JUSTICE FLOYD
| NOVARTIS AG
|- and -
|HOSPIRA UK LIMITED
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Adrian Speck QC and Tom Mitcheson (instructed by Taylor Wessing) for the Respondent
Hearing date: 17 May 2013
Crown Copyright ©
Lord Justice Floyd:
"The point of the invention is that zoledronic acid can be administered as a single intravenous injection half-yearly or even annually. Other older bisphosphonate compounds in this class are administered orally, which would seem to be more convenient than by injection. However, the problem with oral administration is gastric intolerance. Thus, when a patient takes the tablets, they have to remain standing for half an hour after taking the tablets to seek to mitigate the side effects. The tablets also have to be taken relatively frequently.
Although it was known that intravenous administration would avoid the gastric side effects, the problem was that it was thought that the bisphosphonate injections would have to be given frequently, which is also undesirable. The invention in this case was based on the discovery that zoledronic acid, a known bisphosphonate, could be effective when administered intravenously half-yearly or yearly."
i) an undertaking not to sell any zoledronic acid product prior to the expiry of the SPC on 15th May 2013;
ii) an undertaking not to infringe the use patents until the handing down of judgment in the revocation proceedings;
iii) an acknowledgement that the 5mg/100ml formulation of zoledronic acid covered by the marketing authorisation would infringe the use patents.
"So that our client knows where it stands, we request that you confirm that, if any of the claims of [the use patents] asserted as having independent validity is held valid by the Court following the trial in February, your client will undertake not to launch its Zoledronic Acid Hospira 5 mg/100ml solution for infusion medicine in the UK after 15 May 2013."
"Hospira wishes to review which products and indications it may market in the future in the UK once it knows the outcome of these proceedings".
i) once the court has given a ruling on the merits, a party needs a good arguable case on appeal before the court would be at all likely to grant an injunction pending appeal;
ii) it would not be right mechanically to equate the existence of a real prospect of success on an appeal by someone who has lost at trial with a good arguable case on the merits at the outset of the proceedings;
iii) it did not follow that if the facts would justify an interim injunction at the outset of proceedings, those facts would automatically justify an interim injunction pending an unsuccessful claimant's appeal;
iv) "rather different considerations" applied to the grant or refusal of interim relief once a trial had taken place. This was illustrated by the fact that in some of the authorities reference was made to rendering the appeal "nugatory", although he did not consider that an injunction would only be granted if to refuse it would render the appeal nugatory.
i) The risk of the event which causes the relevant loss to occur was higher for Novartis than it was for Hospira. In other words, it was very likely that Novartis would be unable to restore their prices fully without significant harm to their reputation. On the other hand, he said there was only a risk, albeit a real risk, of the loss to Hospira of first mover advantage.
ii) In terms of numbers, the loss to Novartis would probably be a larger sum than the loss to Hospira.
iii) The uncertainty associated with Hospira's losses was higher than the uncertainty associated with Novartis' losses because if an injunction were granted it would not be possible to know whether Hospira lost the first mover advantage. On the other side, some measure of the effect of the price drop was calculable.
"Looking at uncompensatable harm overall, I am quite satisfied that taking either course will lead to a risk of significant unquantifiable loss. If this case was at the outset of proceedings months or even a year before trial, then as long as all I could say about the merits was what I can now say about the merits of the appeal, I would probably grant the interlocutory injunction. On its facts this is a case like many others in the pharmaceutical field. The magnitude and significance of the unquantifiable harm is such that the best way of holding the ring pending trial might well be to grant an interim injunction. That is where the idea of clearing the way comes from. The generic knows more about its plans than the innovator, so the generic ought to arrange things to have the merits tried before it launches."
"However, now that the merits have been decided I believe the overall balance is different. If they win the appeal Novartis' lawful monopoly in zoledronic acid will be restored after a lapse of about 6 to 8 months; I should say 6 to 8 months is what I understand is the likely listing of this appeal. They will have suffered loss which will be a large sum in financial terms, but the damages they recover can all be paid by Hospira and any other generics who launch in the period. Quantification is not at all easy, but an assessment can be made."
"These proceedings have been conducted on the footing that the trial on the judgment of first instance would be concluded before the SPC expired. The point was obviously to clear rights which might subsist after the SPC expired out of the way. If Novartis had wanted to say that the case should be scheduled to allow an appeal to the Court of Appeal to take place before 15th May, that could have been sought a long time ago; it was not. The letter of 18th December was clearly written on the basis that the trial was going to determine the position vis-a-vis launching after 15th May. Novartis argued that the letter was written on an assumption that the patent was valid. I do not accept that that takes away the significance of the letter. In my judgment, it shows that these proceedings have been arranged, as I say, so that the trial will be in a position to have been decided by the time of the launch date on 15th May."
i) the judge was wrong to hold that the fact that the merits of the validity action had been decided affected the overall balance of convenience;
ii) the judge was wrong to place weight on the letter of 18 December 2012.
Principles for the grant of interim relief pending appeal
"It is not in dispute that where a plaintiff has at first instance established a right to a perpetual injunction, the court has a discretion to stay the operation of that injunction pending an appeal by the defendant against the judgment. On what principles ought such a discretion to be exercised? The object, where it can be fairly achieved, must surely be so to arrange matters that, when the appeal comes to be heard, the appellate court may be able to do justice between the parties."
"Where an injunction is an appropriate form of remedy for a successful plaintiff, the plaintiff, if he succeeds at first instance in establishing his right to relief, is entitled to that remedy upon the basis of the trial judge's findings of fact and his application of the law. This is, however, subject to the defendant's right of appeal. If the defendant in good faith proposes to appeal, challenging either the trial judge's findings or his law, and has a genuine chance of success on his appeal, the plaintiff's entitlement to his remedy cannot be regarded as certain until the appeal has been disposed of. In some cases the putting of an injunction into effect pending appeal may very severely damage the defendant in such a way that he will have no remedy against the plaintiff if he, the defendant, succeeds on his appeal. On the other hand, the postponement of putting an injunction into effect pending appeal may severely damage the plaintiff. In such a case a plaintiff may be able to recover some remedy against the defendant in the appellate court in respect of his damage in the event of the appeal failing, but the amount of this damage may be difficult to assess and the remedy available to the appellate court may not amount to a complete indemnity. It may be possible to do justice by staying the injunction pending the appeal, the plaintiff's position being suitably safeguarded. On the other hand it may, in some circumstances, be fair to allow the injunction to operate on conditions that the plaintiff gives an undertaking in damages or otherwise protects the defendant's rights, should he succeed in his appeal. In some cases it may be impossible to devise any method of ensuring perfect justice in any event, but the court may nevertheless be able to devise an interlocutory remedy pending the decision of the appeal which will achieve the highest available measure of fairness. The appropriate course must depend on the particular facts of each case."
"In circumstances such as the present, I can see no reason why the familiar principles of American Cyanamid v Ethicon, with the necessary qualification that the question is no longer whether there is a triable issue, but whether there is a prospect of an arguable appeal should [not be] the principles to apply. And so in a case in which I thought there was a real prospect of success on an appeal, I would myself be inclined to continue the injunctive relief if it had been granted before trial."
"Moreover, I cannot see any reason in principle why the considerations which are applicable when the court is considering the grant of a Mareva injunction should not be applied in favour of a plaintiff, even if he has lost in the court below, though the question will not be 'Does he have a good arguable case?' but 'Does he have a good arguable appeal?' This is likely to be a more difficult test to satisfy, and, if the case turns upon questions of fact which the judge has resolved against the plaintiff, may well be insuperable. This threshold must be at least as high as that which has to be satisfied when the court considers whether or not to grant leave to appeal where that is required."
"proper weight to any clear view which the court can form at the time of the application for interim relief (and without the need for a mini-trial on copious affidavit evidence) as to the likely outcome at trial" (see ).
"It should be noted the question is not the same when one is considering what to do on an application for an interim injunction pending trial. In that case the patentee has yet to establish his right, whereas after successful trial he has prima facie done just that. So in general, when an appeal is pending, the patentee will get his injunction provided he gives a cross-undertaking in damages against the possibility that the defendant's appeal would be successful. The question, however, remains one of a balance of convenience. "
i) The court must be satisfied that the appeal has a real prospect of success.
ii) If the court is satisfied that there is a real prospect of success on appeal, it will not usually be useful to attempt to form a view as to how much stronger the prospects of appeal are, or to attempt to give weight to that view in assessing the balance of convenience.
iii) It does not follow automatically from the fact that an interim injunction has or would have been granted pre-trial that an injunction pending appeal should be granted. The court must assess all the relevant circumstances following judgment, including the period of time before any appeal is likely to be heard and the balance of hardship to each party if an injunction is refused or granted.
iv) The grant of an injunction is not limited to the case where its refusal would render an appeal nugatory. Such a case merely represents the extreme end of a spectrum of possible factual situations in which the injustice to one side is balanced against the injustice to the other.
v) As in the case of the stay of a permanent injunction which would otherwise be granted to a successful claimant, 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.
"It does so on this ground, that when there is an appeal about to be prosecuted the litigation is to be considered as not at an end..."
"You would have to be very naïve in the pharmaceutical industry to think that the patentee, with a product as important as this, would not, if it had anything other than a frivolous chance of success, take action."
"I see no question of principle involved here of any sort. It is purely common sense. If there may be an obstacle in your way, clear it out. To my mind this is a case where the retention of the status quo is a rational thing to do. It was something that could have been avoided by the defendants. They chose not to do it."
The discretion in the present case
i) It was unreasonable to expect a generic manufacturer to start proceedings so far in advance of intended launch as to be able to obtain a judgment from the Court of Appeal. To do so was contrary to the public interest as it would discourage generic manufacturers from entering the market, which benefited the public by making available lower cost medicines.
ii) We should have regard to the public interest in obtaining lower cost medicines. Even though Novartis had offered a cross-undertaking to protect the National Health Service, the recovery on such a cross-undertaking was likely to be imperfect. The Secretary of State, if interested at all in pursuing the cross-undertaking, would not effect a 100% recovery.
Lord Justice Kitchin
Lord Justice Lewison