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You are here: BAILII >> Databases >> England and Wales High Court (Patents Court) Decisions >> Neurim Pharmaceuticals (1991) Ltd & Anor v Teva UK Ltd [2022] EWHC 954 (Pat) (26 April 2022) URL: https://www.bailii.org/ew/cases/EWHC/Patents/2022/954.html Cite as: [2022] EWHC 954 (Pat) |
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2022] EWHC 954 ( Pat) | ||
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
PATENTS
COURT
Rolls Building, Fetter Lane, London, EC4A 1NL |
||
2022 |
B e f o r e :
____________________
| (1) NEURIM PHARMACEUTICALS (1991) LIMITED (2) FLYNN PHARMA LIMITED |
Claimants |
|
| - and - |
||
| TEVA UK LIMITED |
Defendant |
____________________
Miss Charlotte May QC and Edward Cronan (instructed by Bird & Bird LLP) for the Defendant
Hearing date: 12th April
2022,
Confidential Judgment provided in draft 20th April.
____________________
Crown Copyright ©
2022
Mr Justice Mellor:
Introduction
2022,
the Claimants applied first for expedition and second for interim injunctive relief against the Defendant (Teva). The First Claimant (Neurim) is the registered proprietor of the
patent
in suit and the Second Claimant (Flynn) is the exclusive licensee. Roth J granted expedition on the papers, enabling the Claimants to secure a hearing which was listed before me on 12th April
2022.
At this hearing, the injunction which the Claimants seek is, in summary, an Order to restrain Teva (howsoever acting) until judgment in this action or further Order in the meantime from disposing, offering for sale or disposal, selling or supplying:
any generic version of the Claimants' Circadin product to which the Defendant's Marketing Authorisation (PL 00289/2202) relates, including under any other name or marketing authorisation, or any other product that falls within any claims of EP (UK) 3,103,443 ("thePatent")
or that has been manufactured by any process that falls within any claim of the
Patent.
Patent
expires on 12 August
2022.
Circadin is the brand name for the drug melatonin. Melatonin is a naturally occurring hormone. The
Patent
(EP443) in its amended claim 1 claims, in a prolonged release formulation, the use of melatonin 'in the manufacture of a medicament for improving the restorative quality of sleep in a
patient
aged 55 years or older suffering from primary insomnia characterised by non-restorative sleep'.
Applicable legal principles
i) Is there a serious issue to be tried?
ii) Are damages an adequate remedy for the claimant?
iii) If not, are damages under the cross-undertaking an adequate remedy for the defendant?
iv) If damages are not adequate for either side, where does the balance of the risk of injustice lie?
v) 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.
patent
cases. Again, none of these additional points were disputed and I can combine the points from each side as follows:
i) Serious issue to be tried:
'The general principle is now well established that, on an application for an interim injunction, the court should not attempt to resolve critical disputed questions of fact or difficult points of law on which the claim of either party may ultimately depend, particularly where the point of law turns on fine questions of fact which are in dispute or are presently obscure': Sukhoruchkin v Van Bekestein [2014] EWCA Civ 399 at [32].
ii) Adequacy of damages: the more uncertain their quantification, the more likely that damages will not be deemed to be adequate: Leo Pharma A/S v Sandoz Ltd [2008] EWCA Civ 850 [23]-[25].
iii) The issue of adequacy of damages is a matter for judicial evaluation in each case, but the boundary between adequate and inadequate is not a precise one: Neurim Pharmaceuticals (1991) Ltd v Generics UK Ltd [2020] EWCA Civ 793 ('Neurim CA Int Injn Jmt') at [16] per Floyd LJ:
'16. As the judge noted, when Lord Diplock spoke of damages being an "adequate" remedy, he was not suggesting that damages must provide a perfect remedy. As the judge also observed, there comes a point where "damages as a remedy falls so far short of the perfect, that the remedy can no longer be described as adequate". I agree with this. The boundary between the adequate and the inadequate is not a precise one. It is a matter for judicial evaluation on the evidence in any given case whether or not the boundary is crossed. If it is not crossed in relation to the claimant's loss then, normally, an injunction will not be granted.'
iv) As Teva pointed out, the adequacy of damages to the Claimants in the First Mylan action (i.e. at stage 2 of the American Cynamid approach) was considered in relation to two periods: "period 1" being the period in which the injunction will take effect pending trial, and "period 2" being the period between trial and expiry of the
patent
in suit. As Floyd LJ explained at [51]-[52], from the point of view of the
patentee
it is more likely to be period 2 that provides the basis for unquantifiable loss (although it did not in that case):
'51. It is true that in some, indeed many, pharmaceuticalpatent
cases the courts have treated the
patentee's
lost sales and loss due to price depression as giving rise to unquantifiable loss for the purpose of stage 2. Comparisons with other cases for this purpose usually reveal differences on the facts which render them unhelpful. A number of features of the present case, in my judgment, make the court's task in assessing the loss to Neurim and Flynn relatively straightforward. First, and most importantly, Neurim and Flynn have, and have provided to the court, reasonably detailed forecasts of their expected sales revenues in Periods 1 and 2. These can form the basis of the court's calculation of the position which Neurim and Flynn ought to have been in, but for Mylan's infringement, for both Periods. The object of the inquiry as to damages will be to restore their revenues to those levels. Secondly, in respect of Period 1, the court will have Flynn's and Mylan's actual sales figures and the prices at which they have sold. This can form the basis for the lost sales and price depression claim for Period 1, and I see no reason to suppose that this will be inadequate.
52. At the start of Period 2 the price for Circadin may have been depressed by the period of generic competition in Period 1. The court will, however, know what this price is. During this period Circadin will not be exposed to generic competition, and to that extent the monopoly will be restored, albeit that it will no longer be possible to charge the monopoly price, because the court is likely to accept the evidence that it will not be possible to raise the Circadin price to its former levels without loss of customer goodwill. I agree with the judge that the calculation for Period 2 will require an extrapolation to determine Flynn's likely sales and prices in Period 2, and to that extent it will be marginally less robust. Damages are, however, to be "assessed liberally" without going so far as to punish the infringer: see Pneumatic Tyre Co Ltd v Puncture Proof Pneumatic Tyre Co Ltd (1899) 16 R.P.C. 209 at 215. I therefore agree with the judge that damages will provide an adequate remedy for the loss in Period 2 as well.'
v) The extent and nature of the price depression which Floyd LJ referred to in [51] above may depend on the number of generic entrants in the market. As Floyd LJ observed in Novartis AG v Hospira UK Ltd [2013] EWCA Civ 583 (where the CA were concerned with the grant of an interim injunction pending appeal where the
patentee
had lost at the first instance trial) at [23]:
'The arguments [before the first instance judge, Birss J] were the familiar ones in the pharmaceuticalpatent
field. On Novartis' side it was maintained that Novartis would suffer harm from the effect of Hospira and other generic companies undercutting its monopoly price. It would have to reduce its prices or lose market share. It would be difficult to raise its prices again if successful on appeal. If it did so, it would face damage to its reputation. On Hospira's side, Hospira would or might lose the advantage of being the first to market, the so-called 'first mover advantage'. The first mover advantage is the advantage that the first generic to market enjoys when it enters the market at a price near the monopoly price in the absence of other generic competition. In such circumstances it can reap far greater rewards than second and subsequent companies who would be likely to cause an uncontrolled downward price spiral.'
vi) Whether the price depression manifests itself in a downward spiral in price is 'intensely fact sensitive': see Floyd LJ in Neurim CA Int Injn at [13]:
'Whilst it is recognised that the entry of a first generic competitor may be at a price not far below that of the branded product, much fiercer price competition can be contemplated where two or more generic manufacturers are competing with each other on price. The price will accordingly be driven down faster and further. Whether a price spiral will occur in the period until trial in any given case is intensely fact sensitive.'
vii) The same point was made by Arnold LJ in his recent judgment on Mylan's renewed application to stay the injunction granted by Marcus Smith J following the trial on EP443: Neurim Pharmaceuticals (1991) Ltd v Generics UK Ltd [
2022]
EWCA Civ 370 ('Neurim CA Stay Jmt') at [30]:
'…. the presence of two or more generic suppliers commonly leads to a price war between the suppliers, and hence a downward spiral in the price which is apt to cause thepatentee
damage which is difficult to quantify even if the
patent
monopoly is subsequently restored by an injunction.'
viii) More generally but as is clearly recognised in the citations above, once the monopoly price previously charged by the
patentee
has been depressed (whether a price spiral occurs or not), it is often difficult if not impractical to restore the price to previous levels: see e.g. Novartis AG v Hospira UK Ltd [2013] EWCA Civ 583, per Floyd LJ at [63]:-
"The unquantifiable damage to the claimant seems to me to outweigh that to the defendant. From the evidence, an immediate downward price spiral, even in the period between now and the hearing of the appeal, seems highly likely if not inevitable. The fact that the claimant can divert sales to Sandoz does not vitiate this conclusion. They will still be faced with the fact that the market will have become accustomed to lower prices, and restoring their monopoly position will, if possible at all, be accompanied by harm of other kinds."
ix) Balance of convenience:
'The balance of convenience is simply 'the basic principle…that the court should take whichever course seems likely to cause the least irremediable prejudice to one party or the other': National Commercial Bank Jamaica Ltd v Olint Corp Ltd [2009] UKPC 16, per Lord Hoffmann at [17].
x) Status quo: finally, as regards the status quo, in Frank Industries v Nike [2018] EWCA Civ 497 Lewison LJ explained (Kitchin LJ agreeing) at [19]:
'19. The status quo to which Lord Diplock referred is as he clarified in the later case of Garden Cottage Foods Limited v The Milk Marketing Board [1984] AC 130, the status quo immediately before the issue of proceedings, or the application notice if substantially later, rather than the status quo when the conduct complained of began.'
'However, there is a well-established line ofpatent
cases in which interim injunctions are commonly granted. These all concern the launch of a generic pharmaceutical product. Although each case turns on its own facts, the court has shown itself to be ready to accept an argument that the launch of a generic pharmaceutical product will cause substantial and unquantifiable loss to the
patentee
because it will permanently depress the
patentee's
price. The argument goes that entry of the generic product(s) will result in a downwards spiral in the price of the product and that even if the
patentee
were to be successful at trial and remove the generic products from the market, they will not be able to put the price back to previous levels. Examples of cases where this argument has been accepted are listed in the footnote [fn364]. An exception to this general principle was Cephalon v Orchid. However, that was a case where the infringement claim only just passed the serious issue hurdle, the invalidity arguments looked strong and, most importantly, there was evidence that the
patentee
had been able to raise the price of the product after temporarily lowering it to compete with competition from parallel imports. Another case in which a
patentee's
argument of unquantifiable loss by reason of a permanent price depression was rejected was Actavis v Icos. In that case, an injunction pending an appeal to the Supreme Court was sought after the
patent
was found invalid by the Court of Appeal. There were several aspects of the case that were different from other cases. First, if the appeal to the Supreme Court was successful, the
patent
would only have a short period before it expired. There would therefore be only a very short period in which the price could be raised. Secondly, the
patentee's
price was fixed. The court would therefore know on a damages inquiry the price at which it would have sold any product during the next few years. Thirdly, the market for the product in question was flat and not growing in terms of either volume of packs sold or price. Finally, the defendants accepted that every sale made by them would be a sale lost to the
patentee.'
'Damage for this purpose includes harm that is not normally recoverable in damages – see Terrell 19th ed'n at 14-175 - 14-178 citing SmithKline Beecham v Apotex Europe Ltd [2003] EWCA Civ 137 per Aldous LJ at [18].'
'Aldous LJ has also quoted from Lord Diplock's classic statement in American Cyanamid Co v Ethicon Ltd [1975] AC 396, 406, where he said:
'The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he would not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial …'
The purpose of an interlocutory injunction therefore is protection, not just against 'loss which would sound in damages', but against violation of any right where damages would not be adequate compensation. An obvious example of the need for that wider formulation is the case of trespass to land. A landowner whose title is not disputed is normally entitled to an injunction to restrain trespass on his land, even if the trespass does not harm him (seePatel
v WH Smith (Eziot) Ltd [1987] 1W.L.R. 853, 858F).'
patent
monopoly. Claim 1 of EP443 is relatively narrow and not every sale by Teva of melatonin will constitute or entail a use within claim 1. The Claimants' point is that without their marketing authorisation (which refers, effectively, to the use covered by claim 1), Teva would not be on the market at all. Hence, the Claimants suffer damage caused by Teva's sales outside the claim, for which the Claimants may not be able to recover damages.
'Dr Fakes also explained that the Claimants had commenced proceedings against Teva. We were informed by counsel for the Claimants that they had recently applied for an interim injunction in those proceedings, but the Claimants had failed to place the evidence relied upon before this Court and so we do not know what the basis for that application is. Counsel for the Claimants nevertheless submitted that, if this Court granted Mylan a stay, that would adversely affect the Claimants' prospects of obtaining an interim injunction against Teva. I do not accept that that is necessarily so. The status quo is that there is only one generic supplier in the market place. In that situation it is generally not in the interests of the generic supplier to engage in a price war (as opposed to undercutting thepatentee
by a certain percentage), and there is no suggestion that Mylan have done so. By contrast, the presence of two or more generic suppliers commonly leads to a price war between the suppliers, and hence a downward spiral in the price which is apt to cause the
patentee
damage which is difficult to quantify even if the
patent
monopoly is subsequently restored by an injunction. Just as preservation of the status quo favours a stay of the injunction against Mylan, it favours the grant of an interim injunction against Teva. In saying that, I am not intending to pre-judge the outcome of that application. As I have explained, we have not seen the Claimants' evidence in support of it, let alone any evidence filed by Teva resisting it. There may be good reasons for concluding that, in the particular circumstances of that case, an interim injunction against Teva should be refused. The point is that the outcome is not dictated by the grant of a stay in this case.'
The relevant factual background
patent
owned by Neurim, EP(UK) 1,441,702 (EP702), which contained essentially the same principal claim as in EP443. An expedited trial was ordered in the First Mylan action, a principal reason why the Claimants failed to secure an interim injunction against Melatonin Mylan either from Marcus Smith J or the Court of Appeal.
patent
was invalid.
Patent.
10 May 2017: EP702 granted.
9 February 2018: Mylan filed a Notice of Opposition. Oppositions also filed by Teva and Aspire Pharma.
20 November 2019: the Opposition Division at the EPO finds that EP702 lacked novelty. Neurim appealed to the TBA, which suspended the revocation of the ParentPatent
pending the outcome of that appeal, in the usual way.
Early 2020: Mylan obtains a marketing authorisation for generic melatonin and refuses to provide notice of any launch of their product.
14 February 2020: Claim form in the EP702 action issued.
17 February 2020: Neurim serve proceedings on Mylan for infringement of EP702. Mylan denies infringement and counterclaims that EP702 is invalid by a Defence and Counterclaim served 1 April 2020.
2 March 2020: Neurim applies for a preliminary injunction (PI) pending trial in the light of Mylan's refusal to give any undertaking not to launch.
6 March 2020: Mylan applies for expedition of EP702 trial, to which Neurim agrees on 13 March 2020. On 19 March 2020, Nugee J ordered an expedited trial.
20 May 2020: Marcus Smith J hears the PI application, and in a judgment of 3 June 2020 refuses it [2020]EWHC
1362 (
Pat).
His refusal was upheld by the Court of Appeal in a judgment of 24 June 2020: [2020] EWCA Civ 793. The reasoning of both Courts was based partly on the fact that the trial had been expedited and there was limited time for damage to accumulate. The Supreme Court, despite considering that there was a point of law of public general importance, refused to give permission chiefly because of the imminence of trial.
September 2020: Mylan launched its generic melatonin product.
29 October – 5 November 2020: the EP702 trial was heard by Marcus Smith J, who in a judgment of 4 December 2020 found EP702 valid and infringed [2020]EWHC
3270 (
Pat).
Mylan admitted infringement if EP702 was valid.
16 December 2020: form of order hearing where Marcus Smith J made a number of oral orders, and refused Mylan's application for permission to appeal his validity findings. Certain other matters were left to be agreed in the light of the TBA hearing which was to take place on 17-18 December 2020.
18 December 2020: the TBA gave an oral opinion that EP702 was invalid for insufficiency, in the light of which Neurim withdrew its appeal. The suspensive effect of the Opposition Division's decision ceased and EP702 was revoked.
30 December 2020: Marcus Smith J revoked his oral order of 16 December 2020, the terms of the order not having been settled in writing. The Judge made no order on Mylan's counterclaim and recorded a declaration that EP702 had been revoked ab initio, a point he also stated in his judgment on the consequential issues.
12 March 2021: Marcus Smith J made a further consequential Order in the EP702 action. See also his judgment on the consequential issues [2021]EWHC
530 (
Pat).
28 January 2021 and 17 March 2021: Since the opposition procedure operates post-grant, Mylan filed third party observations at the EPO bringing the insufficiency argument raised before the TBA to the attention of the examiner of what became EP443.
14 April 2021: the Examining Division issued its Notice of Intention to Grant EP443, stating that Mylan's third party observations had been examined but found not to be relevant.
19 April 2021: Mylan filed a complaint that the Examining Division had not properly considered its third party observations. On 4 May 2021, the EPO replied confirming that Mylan's third party observations had been debated, that a reasoned decision had been taken internally about how to consider them, and that the point relating to sufficiency had been thoroughly discussed.
4 June 2021: the Examining Division issued its Decision to Grant.
30 July 2021: On the Claimants' application for an expedited trial of preliminary issues in the Second Mylan action, I grant the application, embodied in my Order sealed on 12 August 2021.
15-17 December 2021: Trial of the Preliminary Issues in the Second Mylan action before Meade J.
24 January2022:
Judgment of Meade J on preliminary issues, referring matters to Marcus Smith J.
10 February2022:
Provisional judgment of Marcus Smith J (on the papers) confirming his previous judgment regarding EP702 stands in respect of EP443.
4 March2022:
Hearing before Marcus Smith J in relation to his provisional judgment.
7 March2022:
Order of Marcus Smith J granting a final injunction against Mylan Melatonin to take effect from 10 March
2022.
8 March2022:
Further Judgment of Marcus Smith J in respect of 'lay
patient'
argument. Refuses stay of injunction.
10 March2022:
Order of Arnold LJ granting a stay of the injunction against Mylan until later of the determination of Mylan's application for permission to appeal or 16 March
2022.
16 March2022:
Court of Appeal hearing at which Mylan is granted permission to appeal against the Order of Marcus Smith J dated 7 March
2022
and a stay of the injunction pending judgment on the appeal.
29 March2022:
Court of Appeal judgments: [
2022]
EWCA Civ 370, re PTA and Stay; [
2022]
EWCA Civ 359 on the Claimants' appeal on the exclusive license issue.
16 (or 19) May2022:
Prospective date for the expedited hearing of Mylan's appeal.
12 August2022:
EP443 expires.
The evidence on this application
2022.
2022,
Ms Jarvis told him that she had received a phone call from one of her contacts at a large independent wholesaler that a representative of Teva had offered them Teva Melatonin at competitive prices lower than Flynn's and that Teva were offering to indemnify the supplier who purchased. Dr Fakes says this was the first indication he received 'that Teva is taking active steps to materially enter the market in the UK'.
2022,
having provided signed confidentiality undertakings, Dr Fakes was shown the confidential Bird & Bird letter containing the sales volumes of Teva Melatonin since October 2021. Despite these figures, Dr Fakes (as he states in his evidence) took the view that the alleged sales were 'not material' and that the Teva product had not been supplied to
patients
through retail pharmacies. His conclusion was that 'Teva was not on the market in any material way as at 11 March
2022'.
This (or the view that Teva were not on the market) is a view which he must have formed before seeing the letter, because he says in terms 'Bird & Bird's letter does not change my view that there is no evidence that Teva were materially on the market.'
2022.
It is clear that Arnold LJ was given the impression from the Claimants that Teva was not on the market. I was shown the transcript of that hearing. Counsel for the Claimants evidently felt constrained as to what she was able to submit to the Court of Appeal. What she did say was as follows (at pp47-48):
However, my
9 Lords, I feel it is my duty to bring the following to your
10 attention. I apologise to the court that I do not have
11 evidence in this regard but this is something that only
12 happened in the last day or two, which is that we have
13 indications -- my Lords, I regret I have to give this to you
14 on instructions -- my clients have indications in the market
15 that Teva are manoeuvring to enter fairly forcefully and as
16 a consequence we took the liberty of issuing a preliminary
17 injunction application against them at court either yesterday
18 or the previous day. Again, I apologise that given the timing
19 with everything else that has been going on, I do not have any
20 evidence to support that. However, that is the position and,
21 of course, my Lords, if the injunction here is stayed then
22 plainly as a matter of common sense the chances of my client
23 succeeding on that preliminary injunction against Teva will be
24 slim to the extreme and, in my submission, that will be
25 a clear green light for Teva to stop, as we would say, waiting
1 in the wings to firmly enter and jump into the middle of the
2 stage.
2022
to the Court of Appeal and had done so. Mr Waugh submitted it would have been in the Claimants' interests to have done so and there is some force in that. However, the clock cannot be turned back and I have to deal with the situation which now presents itself.
2022.
2022,
which were a very considerable increase over the average monthly sales for October 2021-February
2022.
Ms Bleasby explains the variations in those monthly figures and also gives her view why the sales volumes jumped so radically in March
2022.
In part, her explanations were that sales volumes in December were higher because Teva's customers wanted to meet rebate targets by the end of the calendar year and higher in March because of targets connected with agreement year-end dates at the end of March and because Teva had some aging stock which it wished to dispose of (this latter explanation being one on which Mr Waugh poured scorn).
2022
and the Tariff price has been reduced from £15.39 (Cat C) to £10.38 (Cat M). As she says, this is consistent with the DHSC having had data from Teva for one quarter and data from Mylan for two quarters with suitable spend/volume requirements being met in accordance with the Cat M guideline criteria. The DHSC will receive Teva and Mylan data for Q1
2022
in April
2022
which will be considered after 29 April
2022,
with any price adjustment taking effect from July
2022.
Similarly, the review of Q2
2022
data will only take place after 29 July
2022.
Any decision to recategorise based on the Q2 data could only take effect from October
2022
(i.e. after expiry of EP443). Her point was that even if Teva was taken off the market now, it would be unlikely that the recategorisation of melatonin could happen before the market becomes
patent
free on 12 August
2022.
2022.
He also relates that Ms Jarvis and her notebook record a call on 8 March
2022
from Lexon which reported that Teva had approached them and offered to supply [ ] packs the following week. Ms Jarvis also told Dr Fakes that Lexon told her that Teva had never offered the product previously.
2022.
This, together with the confidential exhibits to her first statement, show the selling price of Teva Melatonin to every customer. As she says, Teva has never sold Teva Melatonin at or in the region of [ ] per pack and she says Teva has never offered the product at or in the region of that price. She says, again, that Teva have no desire or intention to cause a price spiral and that it is not in Teva's interests to cause a price spiral.
7 September 2018: Teva obtains a marketing authorisation.
Teva's evidence was that, following the revocation of EP702 (on 18 December 2020) they put in train plans to launch what became Teva Melatonin.
25 June 2021: The Claimants write to Teva noting that Teva are making preparations for launch. That letter also acknowledged that the Claimants had seen, from the MHRA website, that the package leaflet for the Teva product had been updated and new artwork had been registered in late May 2021 and was now approved.
30 June 2021: EP443 granted. Claim form issued in the Second Mylan action.
2 July 2021: Teva's solicitors respond to the 25 June letter:
"…Teva is not prepared to restrain any of its commercial activities relating to its melatonin product in the UK. Accordingly, if your client intends to take any legal action against Teva in the UK, it should do so at once."
8 July 2021: further letter from Teva's solicitors:
[Teva] "does not intend to restrain its commercial activities in relation to its melatonin product in the UK whilst thePatent
is in force."
September 2021: the Claimants failed to obtain a preliminary injunction to prevent sales of the Teva Melatonin product in the UK through the court in Israel under a settlement agreement relating to a differentpatent.
28 September 2021: Teva Melatonin product details were provided to the TevaOne Wholesalers.
6 October 2021: Teva Melatonin added to the pharmacy ordering systems.
7 October 2021: Teva Melatonin added to Teva's website. It is apparent from the Claimants' initial disclosure that they printed off a copy of the relevant webpage on 12 October 2021.
11 October 2021: TevaOne customers were emailed to inform them of the intended launch.
13 October 2021: the listing for Teva Melatonin went live on the Dictionary of Medicines and Devices (DM+D), the dictionary of descriptions and codes in use across the NHS. The evidence was that this listing is required to launch a product onto the UK market, and that the Claimants have access to the DM+D.
15 October 2021: Letter before claim sent to Teva noting infringement of EP443. The Claimants' solicitors made it clear that they did not intend to seek injunctive relief against Teva until they had secured an injunction against Mylan.
29 October 2021: Teva respond confirming that it has launched Teva Melatonin and refusing to withdraw product from UK market.
5 November 2021: Claim form in this action issued and served on Teva.
23 November 2021: Particulars of Claim and Particulars of Infringement served on Teva, the latter relying on Teva's offer for sale of Teva Melatonin on its website before the letter before claim dated 15 October 2021.
The parties agreed that the deadline for service of the Defence and Counterclaim should be extended until 14 days after the first instance judgment in the Second Mylan action. Accordingly, the Defence and Counterclaim and Grounds of Invalidity were served on 28 March2022.
7 March2022:
following the ex tempore judgment of Marcus Smith J at the hearing on 4 March
2022
in the Second Mylan action, the Claimants' solicitors wrote drawing attention to the Judge's decision and suggested that, in light of the final injunction he had ordered against Mylan, it was highly likely that they would also obtain interim injunctive relief against Teva.
8 March2022:
Claimants threaten ex parte injunction hearing against Teva on 9 March
2022
on the basis that they had been informed that day by Lexon (a wholesaler) that it had been offered Teva Melatonin at a price below the price of Melatonin Mylan. The letter claimed that this was the first time that the Claimants had become aware of any indication that Teva was actively attempting to sell on the UK market.
9 March2022:
Teva refuse to give undertakings but provide confidential sales data to the Claimants' solicitors in Bird & Bird's letter of that date. Claimants' threat of ex parte relief withdrawn.
14 March2022:
Claimants issue application notices seeking interim injunction against Teva plus expedition of the hearing, supported by the witness statement of Paul Inman (which repeated the point 'It has always been clear to the Claimants that attempting to seek a preliminary injunction against Teva was not likely to succeed when another generic (Mylan) was on the market.') and the first witness statement of Dr Fakes of the Second Claimant.
24 March2022:
Witness statement of Eleanor Root of Teva's solicitors, opposing expedition of this hearing.
28 March2022:
Roth J grants expedition of this hearing.
30 March2022:
Second witness statement of Dr Fakes, in support of the Claimants' application and in response to Root.
5 April2022:
Witness Statements of Laura Reynolds and Abigail Bleasby for Teva.
7 April2022:
Third witness statement of Dr Fakes, responding to Reynolds and Bleasby 1.
8 April2022:
Second witness statement of Abigail Bleasby, responding to two key points in Fakes 3. Skeleton arguments exchanged and filed for this hearing.
12 April2022:
Hearing of Claimants' application for interim injunctive relief.
12 August2022:
EP443 expires.
patent.
2022.
2022.
He said that was the first corroboration which supported what Bird & Bird had said in previous correspondence. However, in my view, the Claimants did not need corroboration to be able to launch an application for an interim injunction against Teva. The previous correspondence (and the website) provided sufficient evidence of a threat. Even if the Claimants suspected that Teva had made a 'soft' launch, that would not have provided a convincing answer against an application for interim relief.
2022
is nothing to the point, and does not change the position. The same is true of Dr Fakes' view that the sales disclosed in the 9th March letter from October 2021 to February
2022
were not 'material'.
i) The overall UK market for melatonin has [ ] (at a rate of about [ ] per annum over 2020 and 2021).
ii) The generic share of the market reflects Mylan's entry in September 2020, with October 2020 showing a market share of [ ], rising to [ ] by September 2021.
iii) Teva's entry in mid-October 2021 established a market share in October 2021 of [ ], but [ ] of the generic market, but with around [ ] market share in November & December 2021 and February
2022,
and over [ ] of the generic market in those months. The figures for January
2022
are much lower, for the reasons explained by Ms Bleasby.
iv) The monthly figures for the total market in March and December in each year are elevated above the months around them, consistent with Ms Bleasby's explanations.
2022
were probably around [ ] of the total market, but that behaviour was Teva acting in its commercial interests, as it had made plain it would do unless restrained. In my view, the sales made by Teva from October 2021-February
2022
(as disclosed in the 9th March
2022
letter) cannot be brushed aside as 'not material'.
i) The number of packs of Teva Melatonin and ASP (actual selling price) sold to each wholesaler each month since launch.
ii) For the period from launch to March
2022,
the customer, order quantity, order date, net price, total value and delivery date of every sale made, and similar data for the sales made 1-7th April
2022.
'A number of features of the present case, in my judgment, make the court's task in assessing the loss to Neurim and Flynn relatively straightforward. First, and most importantly, Neurim and Flynn have, and have provided to the court, reasonably detailed forecasts of their expected sales revenues in Periods 1 and 2. These can form the basis of the court's calculation of the position which Neurim and Flynn ought to have been in, but for Mylan's infringement, for both Periods. The object of the inquiry as to damages will be to restore their revenues to those levels. Secondly, in respect of Period 1, the court will have Flynn's and Mylan's actual sales figures and the prices at which they have sold. This can form the basis for the lost sales and price depression claim for Period 1, and I see no reason to suppose that this will be inadequate.'
patent
in suit. In this case, there is no period 2.
The American Cyanamid analysis
Will damages be an adequate remedy for the Claimants, if no injunction is granted?
Patent,
on the assumption that no generic product was on the market over that period.
Patent
it may be difficult to find exact figures, but the Court will make a determination. The uncertainty inherent in this exercise works both ways, so its effect is neutral.
A downward price spiral between now and expiry?
patent
the Claimants will not be able to raise their prices back to monopoly levels. By contrast, if Teva come off the market, they will have to re-launch on expiry along with all the other generics. On balance, the evidence points to Teva continuing on the market (unless restrained) with no wish to engage in a downward price spiral.
patent
expiry. Whilst other generics may be seeking a marketing authorisation, I consider it is unlikely that they will enter the market until either EP443 is revoked or it has expired. It seems more likely to me that the smaller generics are more risk averse than either Mylan or Teva.
The period post-expiry
'Damages are, however, to be "assessed liberally" without going so far as to punish the infringer: see Pneumatic Tyre Co Ltd v Puncture Proof Pneumatic Tyre Co Ltd (1899) 16 R.P.C. 209 at 215.'
Will damages be an adequate remedy for Teva, if an injunction is granted, yet the
Patent
is revoked?
Patent.
patent.
Teva complain that this would be particularly unfair if Mylan remain on the market and thereby effectively retain a first mover advantage by default.
patent
protection remains uncertain. I accept the fourth reason but not the complaint that it would be unfair if Mylan retain a first mover advantage. Mylan were not only the first mover, they (on this hypothesis) will be responsible for establishing the invalidity of EP443. I am also not impressed by the fifth reason – the Claimants will be able to pay damages under the cross-undertaking even if their planned expenditure in other parts of their busines may have to be curtailed in the short term. Overall, however, I have concluded that damages would not be an adequate remedy for Teva largely because the uncertainties in trying to ascertain their damages would be considerable.
Balance of the risk of injustice and status quo
i) First, that Teva did not clear the way and launched at risk.
ii) Second, that Teva have refused to give any undertaking at least until determination of Mylan's appeal.
iii) Third, because Teva is a massive company and in its very large portfolio, Teva Melatonin is commercially insignificant, whereas for the Claimants, Circadin is a fundamentally important product, being (until 2018) the First Claimant's only product.
2022.
At that point, Teva had been on the market in the UK with Teva Melatonin for 4 full months and, in those first two weeks of March, Teva had taken orders to supply a very considerable number of packs of Teva Melatonin – just under [ ] packs. I am not deterred from taking this date as the point at which to assess the status quo by the Claimants' accusation that, in March
2022,
Teva was dumping large quantities of product onto the market. Even if that is the correct characterisation, that was the risk which the Claimants were running – as Mr Waugh pointed out, Teva have dumped product before.
i) Damages will be an adequate remedy for the Claimants pre-expiry, but not post-expiry.
ii) Damages will not be an adequate remedy for Teva, either pre- or post-expiry.
iii) The balance of the risk of injustice comes down in favour of Teva. As I indicated above, calculating the Claimants' damages post-expiry is subject to fewer uncertainties than for Teva.
iv) In any event, maintaining the status quo leaves Teva on the market.
2022
monthly volume and not below the average sales price of its sales in February
2022. Even though the idea was raised in recent correspondence, the precise wording of such alternative relief was not before me nor were any of the difficulties it would entail discussed in evidence. As Ms May QC submitted, that type of relief might give rise to competition concerns. Furthermore, it is not difficult to envisage severe difficulties resulting if one market participant cannot go below a certain price, but any other market participants can do so. For all these reasons, I saw no requirement to consider this any further.