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You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> American Cyanamid Co (No 1) v Ethicon Ltd [1975] UKHL 1 (05 February 1975)
URL: http://www.bailii.org/uk/cases/UKHL/1975/1.html
Cite as: [1975] 1 All ER 504, [1977] FSR 593, [1975] UKHL 1, [1975] AC 396, [1975] 2 WLR 316

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JISCBAILII_CASE_TRUSTS

    Die Mercurii, 5° Februarii 1975

    Note:
    American Cyanamid principles

    Guidelines set out in this case to establish whether an applicant has an adequate case for the granting of an interlocutory injunction. The guidelines consider:

    •   Whether the claimant had a strong or merely an arguable case.
    •   The adequacy of damages as a remedy.
    •   The balance of convenience.
    •   Whether the status quo should be maintained.

    Parliamentary Archives,
    HL/PO/JU/4/3/1262

    HOUSE OF LORDS

    AMERICAN CYANAMID

    v.
    ETHICON LIMITED

    Lord Diplock
    Viscount Dilhorne
    Lord Cross of Chelsea
    Lord Salmon
    Lord Edmund-Davies


    Lord Diplock

    MY LORDS,

    This interlocutory appeal concerns a patent for the use as absorbable
    surgical sutures of filaments made of a particular kind of chain polymer
    known as " a polyhydroxyacetic ester " (" PHAE "). These are sutures of
    a kind that disintegrate and are absorbed by the human body once they
    have served their purpose. The Appellants (" Cyanamid "), an American
    Company, are the registered proprietors of the patent. Its priority date
    in the United Kingdom is October 2nd, 1964. At that date the absorbable
    sutures in use were of natural origin. They were made from animal
    tissues popularly known as catgut. The Respondents (" Ethicon "), a sub-
    sidiary of another American Company, were the dominant suppliers of
    catgut sutures in the U.K. market.

    Cyanamid introduced their patented product in 1970. The chemical sub-
    stance of which it is made is a homo-polymer, i.e. all the units in the chain,
    except the first and the last (" the end stabilisers"), consist of glycolide
    radicals. Glycolide is the radical of Glycolic acid, which is another name
    for hydroxyacetic acid. By 1973 this product had succeeded in capturing
    some 15 per cent, of the U.K. market for absorbable surgical sutures. Faced
    with this competition to catgut, Ethicon who supplied 80 per cent, of the
    market were proposing to introduce their own artificial suture (" XLG ").
    The chemical substance of which it is made is not a homopolymer but a
    copolymer, i.e. although 90 per cent, by weight of the units in the chain
    consist of glycolide radicals, the remaining 10 per cent, are lactide radicals,
    which are similar in chemical properties to glycolide radicals but not identical
    in chemical composition.

    Cyanamid contend the XLG infringes their patent, of which the principal
    claim is " A sterile article for the surgical repair or replacement of living
    " tissue, the article being readily absorbable by living tissue and being formed
    " from a polyhydroxyacetic ester." As is disclosed in the body of the patent,
    neither the substance PHAE nor the method of making it into filaments was
    new at the priority date. Processes for manufacturing filaments from PHAE
    had been the subject of two earlier U.S. patents in 1953 (Lowe) and 1954
    (Higgins). The invention claimed by Cyanamid thus consisted of the
    discovery of a new use for a known substance.

    On 5th March, 1973, Cyanamid started a quia timet action against Ethicon
    for an injunction to restrain the threatened infringement of their patent by
    supplying sutures made of XLG to surgeons in the United Kingdom. On
    the same day they gave notice of motion for an interlocutory injunction.
    Voluminous affidavits and exhibits were filed on behalf of each party. The
    hearing of the motion before Graham J. lasted three days. On 30th July,
    1973, he granted an interlocutory injunction upon the usual undertaking
    in damages by Cyanamid.

    Ethicon appealed to the Court of Appeal. The hearing there took eight
    Jays. On 5th February, 1974, the Court of Appeal gave judgment. They
    allowed the appeal and discharged the judge's order. Leave to appeal
    from that decision was granted by Your Lordships' House. It was estimated
    that the hearing in this House of the appeal at which leave to adduce more
    affidavit evidence was to be sought would last twelve days.

    The question whether the use of XLG as an absorbable surgical suture
    is an infringement of Cyanamid's patent depends upon the meaning to be
    given to the three words " a polyhydroxyacetic ester " in the principal claim.

    2

    Cyanamid's contention is that at the date of publication of the patent those
    words were used as a term of art in the chemistry of polymerisation not only
    in the narrower meaning of a homopolymer of which the units in the chain,
    apart from the end stabilisers, consisted solely of glycolide radicals but also
    in the broader meaning of a copolymer of which up to 15 per cent, of the
    units in the chain would be lactide radicals; and that what was said in the
    body of the patent made it clear that in the claim the words were used in
    this wider meaning.

    Ethicon's first contention is that the words " a polyhydroxyacetic ester "
    in the principal claim bear the narrower meaning only, viz. that they are
    restricted to a homopolymer of which all the units in the chain except the
    end stabilisers consist of glycolide radicals. In the alternative, as commonly
    happens where the contest is between a narrower and a wider meaning in
    a patent specification, they attack the validity of the patent, if it bears the
    wider meaning, on the grounds of inutility, insufficiency, unfair basis and
    false suggestion. These objections are really the obverse of their argument
    in favour of the narrower construction. They are all different ways of saying
    that if the claim is construed widely it includes copolymers which will not
    have as surgical sutures the characteristics described in the body of the patent.
    Ethicon also attack the validity of the patent on the ground of obviousness.

    Both Graham J. and the Court of Appeal felt constrained by authority to
    deal with Cyanamid's claim to an interlocutory injunction by considering
    first whether, upon the whole of the affidavit evidence before them, a prima
    facie
    case of infringement had been made out. As Russell L.J. put it in
    the concluding paragraph of his reasons for judgment with which the other
    members of the court agreed: —" If there be no prima facie case on the
    " point essential to entitle the plaintiff to complain of the defendant's
    " proposed activities, that is the end of any claim to interlocutory relief."

    " Prima facie case " may in some contexts be an elusive concept, but the
    sense in which it was being used by Russell L.J. is apparent from an earlier
    passage in his judgment. After a detailed analysis of the conflicting expert
    testimony he said: —" I am not satisfied on the present evidence that on the
    " proper construction of this specification, addressed as it is to persons
    " skilled in the relevant art or science, the claim extends to sterile surgical
    " sutures produced not only from a homopolymer of glycolide but also from
    " a copolymer of glycolide and up to 15 per cent, of lactide. That is to say
    " that I do not consider that a prima facie case of infringement is established."

    In effect what the Court of Appeal was doing was trying the issue of
    infringement upon the conflicting affidavit evidence as it stood, without
    the benefit of oral testimony or cross-examination. They were saying " If we
    " had to give judgment in the action now without any further evidence we
    " should hold that Cyanamid had not satisfied the onus of proving that their
    " patent would be infringed by Ethicon's selling sutures made of XLG." The
    Court of Appeal accordingly did not find it necessary to go into the questions
    raised by Ethicon as to the validity of the patent or to consider where the
    balance of convenience lay.

    Graham J. had adopted the same approach as the Court of Appeal; but,
    upon the same evidence he had come to the contrary conclusion on the issue
    of infringement. He considered that on the evidence as it stood Cyanamid
    had made out a " strong prima facie case" that their patent would be
    infringed by Ethicon's selling sutures made of XLG. He then went on to
    deal briefly with the attack upon the validity of the patent and came to the
    conclusion that upon the evidence before him none of the grounds of
    invalidity advanced by Ethicon was likely to succeed. He therefore felt
    entitled to consider the balance of convenience. In his opinion it lay in
    favour of maintaining the status quo until the trial of the action. So he
    granted Cyanamid an interlocutory injunction restraining Ethicon from
    infringing the patent until the trial or further order.

    The grant of an interlocutory injunction is a remedy that is both temporary
    and discretionary. It would be most exceptional for your Lordships to give
    leave to appeal to this House in a case which turned upon where the balance

    3

    of convenience lay. In the instant appeal, however, the question of the
    balance of convenience, although it had been considered by Graham J. and
    decided in Cyanamid's favour, was never reached by the Court of Appeal.
    They considered that there was a rule of practice so well established as to
    constitute a rule of law that precluded them from granting any interim
    injunction unless upon the evidence adduced by both the parties on the hear-
    ing of the application the applicant had satisfied the court that on the balance
    of probabilities the acts of the other party sought to be enjoined would, if
    committed, violate the applicant's legal rights. In the view of the Court of
    Appeal the case which the applicant had to prove before any question of
    balance of convenience arose was "prima facie " only in the sense that the
    conclusion of law reached by the court upon that evidence might need to be
    modified at some later date in the light of further evidence either detracting
    from the probative value of the evidence on which the court had acted or
    proving additional facts. It was in order to enable the existence of any such
    rule of law to be considered by your Lordships' House that leave to appeal
    was granted.

    The instant appeal arises in a patent case. Historically there was
    undoubtedly a time when in an action for infringement of a patent that was
    not already " well established ", whatever that may have meant, an interlocu-
    tory injunction to restrain infringement would not be granted if counsel for
    the defendant stated that it was intended to attack the validity of the patent.

    Relics of this reluctance to enforce a monopoly that was challenged, even
    though the alleged grounds of invalidity were weak, are to be found in the
    judgment of Scrutton L.J. as late as 1924 in Smith v. Grigg, Limited ([1924]
    1 K.B. 655); but the elaborate procedure for the examination of patent
    specifications by expert examiners before a patent is granted, the opportunity
    for opposition at that stage and the provisions for appeal to the Patent Appeal
    Tribunal in the person of a patent judge of the High Court, make the grant
    of a patent nowadays a good prima facie reason, in the true sense of that
    term, for supposing the patent to be valid, and have rendered obsolete the
    former rule of practice as respects interlocutory injunctions in infringement
    actions. In my view the grant of interlocutory injunctions in actions for
    infringement of patents is governed by the same principles as in other actions.
    I turn to consider what those principles are.

    My Lords, when an application for an interlocutory injunction to restrain
    a defendant from doing acts alleged to be in violation of the plaintiff's legal
    right is made upon contested facts, the decision whether or not to grant an
    interlocutory injunction has to be taken at a time when ex hypothesi the
    existence of the right or the violation of it, or both, is uncertain and will
    remain uncertain until final judgment is given in the action. It was to mitigate
    the risk of injustice to the plaintiff during the period before that uncertainty
    could be resolved that the practice arose of granting him relief by way of
    interlocutory injunction ; but since the middle of the nineteenth century this
    has been made subject to his undertaking to pay damages to the defendant
    for any loss sustained by reason of the injunction if it should be held at the
    trial that the plaintiff had not been entitled to restrain the defendant from doing
    what he was threatening to do. The object of the interlocutory injunction is
    to protect the plaintiff against injury by violation of his right for which he
    could not be adequately compensated in damages recoverable in the action if
    the uncertainty were resolved in his favour at the trial; but the plaintiff's
    need for such protection must be weighed against the corresponding need of
    the defendant to be protected against injury resulting from his having been
    prevented from exercising his own legal rights for which he could not be
    adequately compensated under the plaintiff's undertaking in damages if the
    uncertainty were resolved in the defendant's favour at the trial. The Court
    must weigh one need against another and determine where " the balance of
    " convenience " lies.

    In those cases where the legal rights of the parties depend upon facts that
    are in dispute between them, the evidence available to the court at the hearing
    of the application for an interlocutory injunction is incomplete. It is given
    on affidavit and has not been tested by oral cross-examination. The purpose

    4

    sought to be achieved by giving to the court discretion to grant such injunctions
    would be stultified if the discretion were clogged by a technical rule forbidding
    its exercise if upon that incomplete untested evidence the court evaluated the
    chances of the plaintiff's ultimate success in the action at 50 per cent, or less,
    but permitting its exercise if the court evaluated his chances at more than 50
    percent.

    The notion that it is incumbent upon the court to undertake what is in effect
    a preliminary trial of the action upon evidential material different from that
    upon which the actual trial will be conducted, is, I think, of comparatively
    recent origin, though it can be supported by references in earlier cases to the
    need to show " a probability that the plaintiff is entitled to relief " (Preston v.
    Luck 27 Ch.D. 497 per Cotton L.J. at p. 506) or " a strong prima facie case
    " that the right which he seeks to protect in fact exists " (Smith v. Grigg
    Limited
    [1924] 1 K.B. 655 per Atkin L.J. at p. 659). These are to be contrasted
    with expressions in other cases indicating a much less onerous criterion, such
    as the need to show that there is " certainly a case to be tried " (Jones v.
    Pacaya Rubber and Produce Company, Limited [1911] 1 K.B. 445 per
    Buckley L.J. at p.457) which corresponds more closely with what judges
    generally treated as sufficient to justify their considering the balance of
    convenience upon applications for interlocutory injunctions, at any rate up
    to the time when I became a member of your Lordships' House.

    An attempt had been made to reconcile these apparently differing
    approaches to the exercise of the discretion by holding that the need to show
    a probability or a strong prima facie case applied only to the establishment
    by the plaintiff of his right, and that the lesser burden of showing an arguable
    case to be tried applied to the alleged violation of that right by the defendant
    (Donmar Productions Ltd. v. Bart [1967] 1. W.L.R. 740 per Ungoed Thomas
    J. at p. 742 Harmon Pictures Ltd. v. Osborne [1967] 1 W.L.R. 723 per Goff
    J. at p. 738). The suggested distinction between what the plaintiff must
    establish as respects his right and what he must show as respects its violation
    did not long survive. It was rejected by the Court of Appeal in Hubbard v.
    Vosper
    ([1972] 2 Q.B. 84)—a case in which the plaintiff's entitlement to copy-
    right was undisputed but an injunction was refused despite the apparent weak-
    ness of the suggested defence. The Court, however, expressly deprecated any
    attempt to fetter the discretion of the court by laying down any rules which
    would have the effect of limiting the flexibility of the remedy as a means of
    achieving the objects that I have indicated above. Nevertheless this authority
    was treated by Graham J. and the Court of Appeal in the instant appeal
    as leaving intact the supposed rule that the court is not entitled to take any
    account of the balance of convenience unless it has first been satisfied that
    if the case went to trial upon no other evidence than is before the court at the
    hearing of the application the plaintiff would be entitled to judgment for a
    permanent injunction in the same terms as the interlocutory injunction sought.

    Your Lordships should in my view take this opportunity of declaring that
    there is no such rule. The use of such expressions as " a probability ", " a
    " prima facie case ", or " a strong prima facie case " in the context of the
    exercise of a discretionary power to grant an interlocutory injunction leads to
    confusion as to the object sought to be achieved by this form of temporary
    relief. The court no doubt must be satisfied that the claim is not frivolous
    or vexatious; in other words, that there is a serious question to be tried.

    It is no part of the court's function at this stage of the litigation to try to
    resolve conflicts of evidence on affidavit as to facts on which the claims of
    either party may ultimately depend nor to decide difficult questions of law
    which call for detailed argument and mature considerations. These are
    matters to be dealt with at the trial. One of the reasons for the introduction
    of the practice of requiring an undertaking as to damages upon the grant
    of an interlocutory injunction was that " it aided the court in doing that
    " which was its great object, viz. abstaining from expressing any opinion upon
    " the merits of the case until the hearing " (Wakefield v. Duke of Buccleugh
    [1865] 12 L.T. n.s. 628 at 629). So unless the material available to the court
    at the hearing of the application for an interlocutory injunction fails to

    5

    disclose that the plaintiff has any real prospect of succeeding in his claim for
    a permanent injunction at the trial, the court should go on to consider whether
    the balance of convenience lies in favour of granting or refusing the inter-
    locutory relief that is sought.

    As to that, the governing principle is that the court should first consider
    whether if the plaintiff were to succeed at the trial in establishing his right
    to a permanent injunction he would be adequately compensated by an award
    of damages for the loss he would have sustained as a result of the defendant's
    continuing to do what was sought to be enjoined between the time of the
    application and the time of the trial. If damages in the measure recoverable
    at common law would be adequate remedy and the defendant would be in
    a financial position to pay them, no interlocutory injunction should normally
    be granted, however strong the plaintiff's claim appeared to be at that stage.
    If, on the other hand, damages would not provide an adequate remedy for
    the plaintiff in the event of his succeeding at the trial, the court should then
    consider whether, on the contrary hypothesis that the defendant were to
    succeed at the trial in establishing his right to do that which was sought to be
    enjoined, he would be adequately compensated under the plaintiff's under-
    taking as to damages for the loss he would have sustained by being prevented
    from doing so between the time of the application and the time of the trial.
    If damages in the measure recoverable under such an undertaking would be
    an adequate remedy and the plaintiff would be in a financial position to pay
    them, there would be no reason upon this ground to refuse an interlocutory
    injunction.

    It is where there is doubt as to the adequacy of the respective remedies in
    damages available to either party or to both, that the question of balance of
    convenience arises. It would be unwise to attempt even to list all the
    various matters which may need to be taken into consideration in deciding
    where the balance lies, let alone to suggest the relative weight to be attached
    to them. These will vary from case to case.

    Where other factors appear to be evenly balanced it is a counsel of
    prudence to take such measures as are calculated to preserve the status quo.
    If the defendant is enjoined temporarily from doing something that he has not
    done before, the only effect of the interlocutory injunction in the event of his
    succeeding at the trial is to postpone the date at which he is able to embark
    upon a course of action which he has not previously found it necessary to
    undertake ; whereas to interrupt him in the conduct of an established enter-
    prise would cause much greater inconvenience to him since he would have
    to start again to establish it in the event of his succeeding at the trial.

    Save in the simplest cases, the decision to grant or to refuse an interlocutory
    injunction will cause to whichever party is unsuccessful on the application
    some disadvantages which his ultimate success at the trial may show he ought
    to have been spared and the disadvantages may be such that the recovery of
    damages to which he would then be entitled either in the action or under the
    plaintiff's undertaking would not be sufficient to compensate him fully for
    all of them. The extent to which the disadvantages to each party would be
    incapable of being compensated in damages in the event of his succeeding
    at the trial is always a significant factor in assessing where the balance of
    convenience lies; and if the extent of the uncompensatable disadvantage to
    each party would not differ widely, it may not be improper to take into
    account in tipping the balance the relative strength of each party's case as
    revealed by the affidavit evidence adduced on the hearing of the application.
    This, however, should be done only where it is apparent upon the facts dis-
    closed by evidence as to which there is no credible dispute that the strength
    of one party's case is disproportionate to that of the other party. The court
    is not justified in embarking upon anything resembling a trial of the action
    upon conflicting affidavits in order to evaluate the strength of either party's
    case.

    I would reiterate that, in addition to those to which I have referred, there
    may be many other special factors to be taken into consideration in the
    particular circumstances of individual cases. The instant appeal affords one
    example of this.

    6

    Returning, therefore, to the instant appeal, it cannot be doubted that the
    affidavit evidence shows that there are serious questions to be tried. Graham
    J. and the Court of Appeal have already tried the question of infringement
    on such affidavit evidence as was available and have come to contrary
    conclusions. Graham J. has already also tried the question of invalidity on
    these affidavits and has come to the conclusion that the defendant's grounds
    of objection to the patent are unlikely to succeed, so it was clearly incumbent
    upon him and on the Court of Appeal to consider the balance of convenience.

    Graham J. did so and came to the conclusion that the balance of con-
    venience lay in favour of his exercising his discretion by granting an inter-
    locutory injunction. As Patent Judge he has unrivalled experience of
    pharmaceutical patents and the way in which the pharmaceutical industry
    is carried on. Lacking in this experience, an Appellate Court should be
    hesitant to over-rule his exercise of his discretion, unless they are satisfied that
    he has gone wrong in law.

    The factors which he took into consideration and, in my view properly,
    were that Ethicon's sutures XLG were not yet on the market; so they had no
    business which would be brought to a stop by the injunction ; no factories
    would be closed and no work-people would be thrown out of work. They
    held a dominant position in the United Kingdom market for absorbent surgical
    sutures and adopted an aggressive sales policy. Cyanamid on the other hand
    were in the course of establishing a growing market in PHAE surgical sutures
    which competed with the natural catgut sutures marketed by Ethicon. If
    Ethicon were entitled also to establish themselves in the market for PHAE
    absorbable surgical sutures until the action is tried, which may not be for
    two or three years yet, and possibly thereafter until the case is finally
    disposed of on appeal, Cyanamid, even though ultimately successful in
    proving infringement, would have lost its chance of continuing to increase
    its share in the total market in absorbent surgical sutures which the continua-
    tion of an uninterrupted monopoly of PHAE sutures would have gained for
    it by the time of the expiry of the patent in 1980. It is notorious that new
    pharmaceutical products used exclusively by doctors or available only on
    prescription take a long time to become established in the market, that much
    of the benefit of the monopoly granted by the patent derives from the fact
    that the patented product is given the opportunity of becoming established
    and this benefit continues to be reaped after the patent has expired.

    In addition there was a special factor to which Graham J. attached
    importance. This was that, once doctors and patients had got used to
    Ethicon's product XLG in the period prior to the trial, it might well be
    commercially impracticable for Cyanamid to deprive the public of it by
    insisting on a permanent injunction at the trial, owing to the damaging effect
    which this would have upon its goodwill in this specialised market and
    thus upon the sale of its other pharmaceutical products.

    I can see no ground for interfering in the Learned Judge's assessment of
    the balance of convenience or for interfering with the discretion that he
    exercised by granting the injunction. In view of the fact that there are
    serious questions to be tried upon which the available evidence is incomplete,
    conflicting and untested, to express an opinion now as to the prospects of
    success of either party would only be embarrassing to the Judge who will
    have eventually to try the case. The likelihood of such embarrassment
    provides an additional reason for not adopting the course that both Graham
    J. and the Court of Appeal thought they were bound to follow, of dealing
    with the existing evidence in detail and giving reasoned assessments of their
    views as to the relative strengths of each party's cases.

    I would allow the appeal and restore the order of Graham J.

    Viscount Dilhorne

    MY LORDS,

    I have had the advantage of reading the speech of my noble and learned
    friend, Lord Diplock. I agree with it and that this appeal should be
    allowed and the Order of Graham J. restored.

    7

    Lord Cross of Chelsea

    MY LORDS,

    For the reasons given by my noble and learned friend Lord Diplock in
    his speech, which I have had the advantage of reading in draft, I would allow
    this appeal.

    Lord Salmon

    MY LORDS,

    I agree with the opinion of my noble and learned friend Lord Diplock, and
    for the reasons he gives I would allow the appeal and restore the order of
    Graham J.

    Lord Edmund-Davies

    MY LORDS,

    For the reasons given by my noble and learned friend, Lord Diplock,
    I would also allow this appeal.

    317330 Dd 896252 120 1/75 St S


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