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Neutral Citation Number: [2012] EWHC 627 (Pat) IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT

HIS HONOUR JUDGE BIRSS QC
(Sitting as a judge of the High Court)
- - - - - - - - - - - - - - - - - - - - - Between :
(1) MERCK SHARP DOHME CORP.
(2) BRISTOL-MYERS SQUIBB
PHARMACEUTICALS LIMITED Claimants
(1) TEVA PHARMA B.V.
(2) TEVA UK LIMITED
Defendants
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Justin Turner QC (instructed by Hogan Lovells) for the Claimants
John Baldwin QC and Mark Chacksfield (instructed by Winston & Strawn) for the
Defendants
- - - - - - - - - - - - - - - - - - - - - Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic. HIS HONOUR JUDGE BIRSS QC
Approved Judgment
His Honour Judge Birss QC :
I have before me two applications. One is by the claimants, Merck Sharp & Dohme Corp. and Bristol-Myers Squibb Pharmaceuticals Ltd (together “BMS”) for an interim injunction pending trial to restrain the defendants Teva Pharma B.V. and Teva UK Ltd (together “Teva”) from infringing European Patent (UK) No. 0,582,455. The other application before me is by Teva for an order that the action be struck out in its entirety. The patent includes compound claims directed to a drug known as efavirenz which is marketed by BMS as SUSTIVA. It is an anti-retroviral compound used in combination therapy for the treatment of HIV and AIDS. In the four years to December 2011 sales of SUSTIVA in the UK amounted to approximately $150 million. BMS are represented by Justin Turner QC instructed by Hogan Lovells and Teva are represented by John Baldwin QC leading Mark Chacksfield instructed by Winston & Strawn. The position is that some time prior to October 2011 Teva applied for a Europe wide marketing authorisation for a generic form of efavirenz. That application bore fruit and on 20th October 2011 the Committee for Medicinal Products for Human Use (“CHMP”) adopted a positive opinion and recommended the grant to Teva of a marketing authorisation for efavirenz in the form of 600mg film-coated tablets for the combination treatment of human HIV infection. Teva’s product is known as “Efavirenz Teva”. This positive opinion and recommendation is not the same thing as the actual grant of a marketing authorisation but it is a clear indication that one will be granted soon afterwards. BMS are the proprietors of the patent. They also hold a Supplementary Protection Certificate (“SPC”) which extends the period of protection somewhat. The patent will expire on 3rd August 2013 and the SPC on 20th November 2013. BMS hold corresponding patent rights throughout Europe. The dates are essentially the same, the patent(s) will expire on or about 3rd August 2013 and the SPCs will expire on or about 20th November 2013. On 1st December 2011 BMS’ solicitors wrote to Teva about the matter. In fact the letter was from the Dutch office of Hogan Lovells but nothing turns on that for present purposes. The letter pointed out that it followed from the CHMP’s positive opinion that in all probability Teva would be in a position, from a regulatory standpoint, to market their efavirenz product throughout Europe within the next few months. The letter pointed out that the patent in question was enforceable and would prevent any form of generic efavirenz from being sold. The letter ended by requesting that Teva provide an undertaking not to market their efavirenz product in any country in which the patent remains in force. The undertaking was sought within 8 days. Teva did not respond. Hogan Lovells wrote again on 25th January 2012. By now they understood that the marketing authorisation had been issued or was about to be issued. The request for an undertaking was repeated and sought within 5 days. In fact it HIS HONOUR JUDGE BIRSS QC
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appears that Teva’s marketing authorisation had by then been granted sometime between 22nd December 2011 and 9th January 2012. The precise date does not matter. On 7th February 2012 Teva responded, apologising that the letter may have been missed as a result of an office move but stating that a response would be given before the end of the week. On the same day Hogan Lovells responded stating that if Teva were not prepared to provide the undertaking sought then alternatively BMS required an undertaking not to take steps to market the product without giving 8 weeks prior notice. The letter ends with the following: “If I do not receive an undertaking from you in either of the forms set out above by 5pm today, my clients have no choice but to presume that it is your intention to commence marketing Efavirenz Teva imminently and will protect their position by seeking injunctive relief.” On 8th February Hogan Lovells London wrote to Teva stating that since their clients had not received the requested undertaking or any indication that Teva was prepared to provide the undertaking sought, their clients “therefore believe that it is your intention to commence marketing Efavirenz Teva imminently in the UK.” Consequently they said they would apply to the High Court for an interim injunction on the very same day. The matter came before Floyd J on 8th February. By the time the parties were before the court it had been agreed how to regulate the position pending a full inter partes hearing of the interim injunction application. Essentially Teva gave an undertaking that they would give the claimants’ solicitors 7 days notice in writing of any launch of the product in the UK. The point of this was to allow BMS to apply for an interim injunction if notice was given. On the basis of the undertaking and with a cross-undertaking in damages from BMS, no further order was made save for directions to bring this matter to a hearing expeditiously and for the claimants to issue and serve proceedings. I am told that at the hearing, when giving the undertakings, the defendants’ counsel submitted that the application for interim relief was premature because the claimants had been told by Teva that they would receive a response by the end of the week. On 9th February BMS issued the claim form in this case. On 10th February Teva’s substantive reply to BMS’s solicitors’ letter of 7th February was provided in correspondence. It states: “It is not Teva’s policy to disclose to its competitors information relating to the date on which any product the subject of a Marketing Authorisation will be launched in any given country. This is regarded by Teva, and we believe by all our competitors, as being confidential information. The grant of a marketing authorisation to Teva permits but does not require Teva to market the product in any given territory at any particular time. In reaching a decision whether, where and when to market, Teva will take into account all relevant HIS HONOUR JUDGE BIRSS QC
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commercial factors including Teva’s policy of not infringing valid patents. In the present case, without waiting for a substantive response to your letter, proceedings have been commenced in England seeking interim relief. In those circumstances we consider that it is appropriate for the court to consider whether those proceedings are well founded and whether it is appropriate to grant interim relief. Teva is therefore not prepared to give the undertakings you request.” On 14th February the Particulars of Claim were served. The claim is pleaded on a quia timet basis, in other words the claimants allege that the defendants are threatening and intend to commit an act (marketing efavirenz) which the claimants contend would infringe the patent. In support of the allegation that there is a threat by the defendants to import and sell efavirenz the claimants rely on three things: (i) the obtaining of the marketing authorisation itself on or about 22nd December or 9th January, (ii) the correspondence up to 10th February which I have mentioned and (iii) the manner of the relatively recent launch by Teva of generic atorvastatin. It is said that Teva’s statement about a policy of not infringing valid patents needs to be seen in the context of Teva’s conduct over atorvastatin. In that case, in June 2011, Teva launched the generic drug in question in the face of patent protection and without notice to the patentee. I will return to the atorvastatin point below. The parties exchanged written evidence in relation to the interim injunction. Following service of the Particulars of Claim, Teva applied to strike the claim out. As I said both matters now come before me. It is convenient to summarise Teva’s case first. Teva submit that this case should be struck out because no reasonable grounds for bringing the claim have been disclosed. The submission is nothing to do with the validity of the patent nor any question of whether Teva’s efavirenz product infringes any claim of the patent. The point is, as Mr Baldwin submits, that there is no case that his clients have made a threat to infringe at all. No reasonable grounds for the pleaded threat are given and none exist. He points out, correctly, that obtaining a marketing authorisation is not an infringement of BMS’s patent rights. That has been the position in the UK since at least Upjohn v Kerfoot [1988] FSR 1 and was made clear by the amendment to the Patents Act 1977 to insert s60(5)(i) in order to comply with the Medicines Directive 2001/83/EC. Thus, Mr Baldwin submits, all there is here is an obtaining of such a marketing authorisation (which is not an infringement) coupled with a refusal to answer questions. That is not a threat to infringe and is not sufficient to justify a claim for patent infringement. He submits that Teva’s intentions are their own private confidential information. They are not obliged and should not be coerced into divulging them to their competitors. That is the end of the matter and the claim should be struck out. HIS HONOUR JUDGE BIRSS QC
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A major plank of Teva’s case is that consideration of decisions of other European courts (in France, the Netherlands, Sweden, Germany and Denmark) shows that there is no case where the grant of a marketing authorisation plus the refusal to answer questions was a sufficient basis for injunctive relief. Mr Baldwin also submits that although it is not yet time for his clients to file a Defence, the nature of their defence to these proceedings is simple. They deny that they have made a threat to infringe the patent. Since, he says, there is no basis for the allegation that they have, the case should be struck out. BMS’s case is to the contrary. They contend that Teva’s conduct indicates they intend to launch Efavirenz Teva before the expiry of the SPC and that accordingly such sales of efavirenz would infringe the patent/SPC. As regards validity, although Teva and others have challenged the validity of the corresponding Canadian patent there has been no challenge to validity here. On the balance of justice/balance of convenience, BMS contends this is an appropriate case for interim relief. Launch of generic efavirenz will plainly have an effect on the pricing structure of the drug in the UK. It is a large market with current annual sales of SUSTIVA of about $20 million. Efavirenz is also sold as part of a combination called ATRIPLA with annual sales of $70 million. Generic efavirenz will be launched with a lower price and even if it is subsequently removed from the market the effect will be long term and unquantifiable. These issues are dealt with in detail in BMS’s evidence and BMS point out that Teva has not put in evidence on those issues at all. BMS launched the application for without notice injunctive relief because of a concern that Teva would launch efavirenz without giving notice. This concern arises from Teva’s behaviour in relation to atorvastatin. In that case Teva engaged in correspondence with the patent holder (Warner-Lambert) in 2010 stating that they intended to launch generic atorvastatin in November 2011, which was after the expiry of the relevant SPC, but then surreptitiously launched the product on a very large scale in June 2011, before expiry, and without any notice to the patentee. The matter came before Floyd J on 20th June 2011, the day Warner-Lambert discovered that Teva’s atorvastatin was on sale. Teva’s counsel appeared on the application at very short notice. Teva’s position was that they believed the patent was invalid. In paragraph 6 of his judgment (Warner Lambert v Teva [2011] EWHC 1606 (Pat)) Floyd J noted the evidence that one million packets had been sold in that morning alone. In paragraph 12 Floyd J held that the case was an appropriate one for granting relief without notice and said: “The position until today appears to have been that both the claimants and Teva were proceeding on the basis that there would be no launch of this product until November 2011. Whatever the position may be about the obligation on a defendant to clear the way, there is nothing to stop the defendants from at least informing the claimants that they intended to launch at an earlier date. Instead of taking that course, they have, as Mr Thorley characterises it, “launched surreptitiously” and without any form of notice. What is more, I am unable to see at the moment why it is that as long ago as HIS HONOUR JUDGE BIRSS QC
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2010 the Defendants did not take steps at least to let their contentions about the validity of the patent be known to the Claimants. They had nothing to hide, so far as their intention to market a product was concerned, for their interest in the market for atorvastatin has been shared with the Claimants. I fail to see why it is that they, therefore, did not start those proceedings in at least 2010 if it was really their contention that this patent is invalid.” So BMS fear that the same thing may happen again in this case. They point out that Teva has obtained a Europe wide marketing authorisation for efavirenz and while that is not in itself an infringement, it is not irrelevant either. Applying for a marketing authorisation is not a trivial matter and is the product of careful planning and work. They submit it is evidence of an intention to enter the market albeit not in itself an indication of when that launch will be. They do however point to the fact that the marketing authorisation in this case has been obtained 22 months in advance of the expiry of the SPC. Although not determinative, they contend it is consistent with an intention to launch prior to expiry of the SPC. BMS also submit that the allegation that the launch date for efavirenz is confidential only makes sense if Teva are planning to launch in advance of expiry of the SPC. Generic entry to the market at expiry of BMS’s compound patent rights may be expected and so, contends BMS, there would be no particular value in information that a generic company like Teva intends to launch after expiry of the SPC. BMS also submit that Teva’s refusal to give notice of an intention to launch is evidence that it does indeed intend to launch before expiry. BMS rely on the statements about “clearing the way” which were made by Jacob J as he then was in SmithKline Beecham v Generics (unreported 23rd October 2001, see pages 9 and 10) and by Aldous LJ in the Court of Appeal in SmithKline Beecham v Apotex [2003] FSR 31. In these interim injunction cases the court was critical of the failure by the generic drug company in question to divulge its commercial plans in order to determine the issues of dispute before launch of the generic product. However BMS recognised the observation of Floyd J in Cephalon v Orchid [2010] EWHC 2945 that although it may be material on the balance of convenience in a given case, “clearing the way” is not a principle of law. BMS also rely on a submission about the modern approach to litigation. In modern litigation parties are required to exchange information (see e.g. the Pre-Action Protocol) and so Teva’s failure to do so in this case should not benefit them. Finally at this stage I should mention two points Mr Baldwin took arising from the position on 8th February. He did not submit that they were material non-disclosures of a character which might justify setting aside the orders made on that occasion but submitted that they were points of importance which coloured the claimants’ stance on this application. The first was that the Court had not been told on 8th February that BMS were starting proceedings in other European countries. This included an application in Holland for cross border relief across the EU (save for the UK and Germany). The second point was that the court on 8th February was not told about all the correspondence which had passed between the parties. It seems to me that the first point does not advance matters. The procedures in the various European courts HIS HONOUR JUDGE BIRSS QC
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dealing with patents are different from each other and I do not regard the point as being of assistance on the facts of the case I have to decide. As to the second point, clearly all the relevant correspondence ought to have been referred to. In the course of their submissions each side urged me to allow their application and refuse their opponent’s. Importantly, on BMS’ application, Mr Baldwin did not seek to take points on the balance of convenience in relation to the impact of the launch of generic efavirenz in this market. Although both sides ran their submissions together on each application, in order to address them properly it seems to me that I must take them separately. Principles – the defendants’ strike out application To address the strike out application I need to consider two things, first the requirements for bringing an action of this kind at all and second the principles applicable to strike out applications. At this stage I am not concerned with any question of interim relief. The requirements for bringing an action It is clear that the court has a jurisdiction to grant an injunction before a wrong is committed in order to stop it from happening. The Latin tag “quia timet” is used which indicates that the injunction is granted because of a fear that the wrong will be committed. However such a jurisdiction needs to be kept under control and Mr Baldwin cited the famous words of Lord Dunedin in AG for Canada v Ritchie [1919] AC 999 at 1005 that “no one can obtain a quia timet order merely by saying ‘Timeo’; he must aver and prove that what is going on is calculated to infringe his rights.” In other words saying “I fear” that something will happen is not enough, there must be some concrete basis for the allegation that an infringement of the claimant’s rights is likely to take place. Next Mr Baldwin cited the words of Harman LJ in K.S. Paul v Southern [1964] RPC 118 at 122: “You cannot get an injunction against a man unless you can say he is threatening and intended to do this and unless restrained by injunction will do it? It is exactly as if Mr Aldous in a sworn affidavit had said ‘I am fearful that unless restrained by the court Sir Lionel Heald will hit me on the head with a volume of the Patent Reports’. He then goes on and says ‘if he is not going to do it, it will not hurt him, so you may as well grant an injunction’. I have heard that argument before.” This case was a claim for an interim injunction and needs to be seen in that light. Its reference at this stage of the argument is an example of a characteristic of Teva’s case which ran together the principles applicable to striking out with the principles applicable to interim injunctions. Mr Baldwin submitted, based on K.S. Paul, that the fact that an injunction will not harm the defendant is no justification to grant it. Put HIS HONOUR JUDGE BIRSS QC
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that way I do not disagree but it seems to me that this point is not concerned with the question I am considering at the moment. At this stage, because I am being asked to strike it out, I am considering the basis for the court’s jurisdiction to entertain this claim at all. Mr Baldwin also cited Proctor v Bayley (1889) 6 RPC 538 in which a final injunction was refused in a patent case because, although the defendant had been found to infringe, the court did not accept there was any basis to infer that there would be a continuance of the wrongful activity. The question is one of fact: is there an intention to commit an act of infringement? If so then the patentee would be entitled to an injunction but if not then not. On the facts of Proctor v Bayley the infringements had been committed 6 years before and not continued. There was therefore held to be no basis for an inference that they would continue and no injunction was granted. Mr Baldwin submitted that the description of the test in Terrell (17th Ed.) at para 19-02 is correct. It states that not only must it be clear that the claimant has rights, but “that the defendant has done something which induces the court to believe that he is about to infringe those rights.” He also cited the words of Jessel MR in Frearson v Loe (1878) 9 Ch. D 48 at 65 that “where there is a deliberate intention expressed and about to be carried into execution to infringe … the plaintiff is entitled to come to this Court to restrain the threatened injury”. Thus far I accept Mr Baldwin’s submissions that it is not enough for the claimant simply to fear that an infringement might arise (“timeo”) and Mr Turner did not dissent from that. The court has a jurisdiction to hear an action for an injunction in a case in which no infringement of the claimant’s right has in fact taken place. For the court to have jurisdiction to hear such a case the defendant must threaten and intend to infringe that right. It is the threat and intention which must be averred and proved. That is the first part of the answer to the question I am considering. The key is the existence of a threat and intention to infringe. The second part of the question concerns the basis on which the court may be prepared to infer the existence of such a threat and intention in the absence of an act of infringement already committed. Mr Baldwin submitted that there must be a probability of an act being performed (deriving the word “probability” from Proctor v Bayley) or a demonstrated intention to do the act (based on Frearson v Loe). I prefer not to try and lay down an all encompassing test. What must be alleged and proved is a threat and intention to commit the act. How it is proved will depend on the facts of every case. It is very hard to imagine how such a claim could be supported by nothing more than total silence on the part of a defendant. Mr Baldwin illustrated this with a citation from the judgment of Eady J in KGM v News Group Newspapers [2010] EWHC 3145 (QB). This was a claim for an interim injunction against three newspaper publishers to restrain publication of relevant material. One group (MGN) stated they had no intention to publish the material and the representatives of another (Associated) were without instructions. The judge dismissed the application against those two on the ground that the claimant had no substantive evidence of an intention or threat to publish in the part of either of them. The relevant passage in the judgment is paragraphs 6 to 9. There Eady J cited the words of Lord Dunedin (above) and added “It is not enough to show an unwillingness to offer an undertaking.” He also HIS HONOUR JUDGE BIRSS QC
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considered other issues including the right to bring a claim when a defendant makes a claim of right and the defendant’s freedom of speech (Art 10 of the European Convention). I respectfully agree with Eady J that it is not enough only to show an unwillingness to offer an undertaking but beyond that, it seems to me that the facts of the case before Eady J are so far from the facts before me that I should be wary of importing anything further from it. Another matter raised by Mr Baldwin is the “imminence” of the threat. He submitted that the claimant must show the danger is imminent and cited Hooper v Rogers [1975] Ch 43 at 49. That was a case concerning damages in lieu of a mandatory injunction and a problem of soil erosion between adjacent farms. Russell LJ dealt with an authority that imminent injury was a requirement before a mandatory injunction would be granted. He explained that “imminence” in that context indicated that the injunction must not be granted prematurely and noted that in different cases different phrases have been used in describing the circumstances in which mandatory injunctions and quia timet injunctions will be granted. He ended as follows (at p50) “In truth it seems to me that the degree of probability of future injury is not an absolute standard: what is to be aimed at is justice between the parties, having regard to all the relevant circumstances.” This passage from Russell LJ seems to me to provide the answer to the second part of the question, i.e. the basis on which a threat and intention to infringe may be inferred. There is not an absolute standard. What is aimed at is justice between the parties in all the circumstances. In my judgment one needs to be careful with the “imminence” of a threat. If a defendant intends to launch an infringing product tomorrow then no doubt that is an imminent threat. However if a defendant intends today to launch at any time during the period of the patent, then the fact that the launch date may be one year away (with the patent not due to expire until afterwards) does not make an action for a quia timet injunction premature. On the contrary it makes sense for parties to come to court and sort out their legal rights in advance. Principles applicable to the strike out application Under CPR Pt 3 r3.4 (2)(a) the court may strike out a statement of case if it appears to the court that the statement of case discloses no reasonable grounds for bringing the claim. The term “statement of case” includes the Particulars of Claim and the Claim Form and so if I decide in Teva’s favour I should strike out both, bringing the proceedings to an end. The Particulars of Claim plead that Teva threaten and intend to infringe the patent by selling efavirenz. In my judgment that is an allegation of fact which, if proved, provides a solid foundation for the proceedings. I did not hear detailed submissions on the application of the strike out test in this case but both parties have approached the test on the same basis. That is that the court must examine whether the pleaded facts (marketing authorisation and so on) are sufficient to support the pleaded inference (threat to infringe the patent). If I decide that they are sufficient then I find in favour of BMS, if they are insufficient then I find in favour of Teva. HIS HONOUR JUDGE BIRSS QC
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In my judgment BMS has a sufficient basis to bring the action when one bears in mind that the question is not at this stage concerned with whether Teva threatens to launch efavirenz tomorrow but whether Teva threatens to commit an act of infringement at all. The pleaded case is that Teva intends to launch efavirenz in the UK before expiry of the patent and/or the SPC (see paragraph 5(e)). In my judgment BMS has reasonable grounds for bringing that claim for the following reasons. First, going to the trouble of obtaining a marketing authorisation for efavirenz seems to me to provide a concrete basis for an inference that Teva threaten and intend to sell efavirenz sometime. Teva’s evidence is given in witness statements of Dr Gonen. She explains that Teva has hundreds of unused marketing authorisations (600 unused out of over 1000) and states that “the mere existence of a Teva marketing authorisation for a generic efavirenz product does not mean that a generic efavirenz product will be launched at all.” I remind myself that this is an application to strike out. I do not accept that this evidence provides a basis on which I should reject at this stage the argument that the marketing authorisation justifies an inference that Teva have plans to sell efavirenz sometime. Why else obtain the marketing authorisation? Second, the fact that Teva have obtained the marketing authorisation 22 months in advance of the expiry of the relevant patent (and SPC) supports an inference that the launch of efavirenz they plainly intend to undertake sometime is intended to happen before the expiry. Again I am not concerned at this stage with whether Teva threaten or intend to launch tomorrow. The issue is only whether there is a proper basis for an allegation that Teva threaten and intend to commit an act of infringement. It seems to me to be obvious that Teva must have obtained the marketing authorisation in the case nearly two years in advance of expiry because they intend to launch before the rights have expired. It is not suggested that such a long period of time is normal and Teva do not say that it is. Perhaps recognising the simple and obvious strength of that inference, Teva picked up the gauntlet in evidence and sought to give other reasons why a generic company in their position would seek a marketing authorisation in advance of patent expiry. I will now consider those reasons. I accept that there are good reasons for obtaining a marketing authorisation sometime in advance. Indeed the purpose of s60(5)(i) of the 1977 Act, to ensure that obtaining a marketing authorisation is not itself an act of infringement, is so that one can obtain a marketing authorisation in advance of expiry. But that is so as to allow for orderly launch on expiry. It is not to facilitate infringement before expiry. Dr Gonen stated that the mere existence of the marketing authorisation “is not an indication of the time scale involved in any launch or the territories in which such a launch might occur” and gave reasons why in her witness statement. However the reasons do not seem to me to explain why a marketing authorisation needs to be obtained quite so far in advance as 22 months. One point was that the marketing authorisation is Europe wide and rights expire at different times in different places. While that is so as a generalisation, there is no evidence in this case of any sufficiently early expiry of rights in efavirenz elsewhere in Europe which would explain the timing of the marketing authorisation here. On the evidence before me the HIS HONOUR JUDGE BIRSS QC
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patent(s) and SPC(s) will expire on or about August 2013 and November 2013 respectively. Dr Gonen also explains that sufficient time is needed for variations to the marketing authorisation to be approved but she states that this takes “some months” to complete. That does not explain the nearly two year period in this case. Finally Dr Gonen referred to the delays or “clock stop” periods which can occur in the application process and explained that it is therefore prudent that applications are made in advance of expiry. I do not doubt that this is so but it does not explain the timing in the present case. In my judgment Teva’s evidence directed to undermine the natural inference one can draw from a marketing authorisation acquired nearly two years ahead of expiry is generalised, unspecific and does not meet the point. These points taken together seem to me to provide a solid foundation for the plea that Teva threatens and intends to infringe the patent. The key is the length of time between the marketing authorisation and expiry and the absence of any specific factor about this market which might explain it. On that basis the Claim Form and Particulars of Claim should not be struck out. I have not found it necessary, when addressing the application to strike out the entire action, to consider the stance taken in correspondence by Teva nor the atorvastatin point. Application for an interim injunction Applications for interim injunctions are considered on American Cyanamid principles. The claimant must have an arguable case and if so then one moves to consider the balance of convenience or balance of justice. Mr Baldwin makes no submissions on the balance of convenience in terms of the impact of generic launch on the market. Moreover Teva’s arguments did not draw a distinction between the test for the strike out and the test for arguable case. So one might think that having decided on the strike out, I should simply go ahead and grant the interim injunction. However it is not that simple. Although what I have said above about arguable case and the balance of convenience is how Teva’s case is put, part of the argument involves eliding issues applicable to the strike out with issues applicable to interim relief. I have rejected the application to strike out because it seems to me that in this case it is a fair inference that Teva do intend to launch pre-expiry. Thus I believe there is a properly arguable case that Teva threaten and intend to infringe the patent. But that is a long way from saying that Teva intend to launch tomorrow or next week and there is no evidence before me that Teva in fact intend to launch within say the next couple of weeks. Indeed the existing undertaking disposes conclusively of the next 7 days. What has happened in argument is that Teva have sought to exploit the absence of evidence of a launch on that very short timescale as a reason for bringing this entire action to a halt without them making their intentions clear. The net result of that would be that Teva would be free to jump into this market any time they like and, crucially, unlike the position in atorvastatin, they would be able to say it was not a HIS HONOUR JUDGE BIRSS QC
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“surreptitious” launch because they never said they would not launch before expiry. They would therefore be free to inflict what they accept would be unquantifiable harm on BMS without notice. If in fact Teva intends to launch Efavirenz Teva as far in the future as October 2013 then the action is well founded on any view but there would be no reason for an interim injunction because the normal trial process can resolve the parties’ rights without having to hold the ring pending trial. A trial of this case could easily be heard before October 2013 even if validity and infringement were in issue. The normal post-trial injunction would be available quia timet to prevent a launch in October 2013 and run until expiry. Indeed if the only issue really was Teva’s intentions, as indicated by Mr Baldwin’s submission about Teva’s defence, then it can be tried very quickly. That is a matter on which disclosure and requests for further information will be available. If BMS establish at trial that Teva threaten and intend to infringe then on the basis of Teva’s current position, BMS will succeed in their claim for a final injunction. This could all be done within a matter of a few months. If Teva are found not to threaten and intend to infringe then there will be no injunction because there would be no need for it. It might be said that this analysis is unreal. I disagree. In order to resolve the problem I am faced with it seems to me to be vital to work through the normal consequences of the various procedural steps being taken and the merits of the parties’ arguments at each stage. When Teva come to formulate their defence in due course in these proceedings they will have to plead properly and the rules of CPR Part 16 r16.5 apply. The defence will also bear a statement of truth. The rules require the defendants to state which allegations they deny, which they admit and which they are unable to admit or deny. If a denial is made, reasons must be given. I cannot see how it would be appropriate for Teva in this case to seek to make a non-admission as to their intentions about the launch of efavirenz. It is a matter which is plainly within their knowledge (c.f. the decision of Mann J in Madonna Ciccone v Associated Newspapers [2009] EWHC 1108 at paragraph 29). Teva can admit the allegation pleaded or deny it with reasons but I cannot see how Teva would be unable to admit or deny that they intend to launch efavirenz before expiry. Moreover the other allegations in the Particulars of Claim will need to be dealt with. They will have to state their position on the issue of infringement of the patent. They will also have to decide whether or not to challenge validity. With that background I turn to consider the interim injunction and I remind myself that it is always an exercise of the court’s discretion, seeking to do justice between the parties. The atorvastatin point explains why BMS are concerned in this case. It is evidence that Teva are capable of surreptitiously launching a generic product in advance of expiry and even when their stated intention was to the contrary. Dr Gonen gave evidence that this did not show Teva have a policy of launching products before patent expiry. She said that Teva launched 36 products in the UK in 2011 and only 1 (atorvastatin) was launched in the face of a compound patent. The reference to compound patents is a reflection of the fact that generally (although not always) compound patents are strong both in terms of questions of validity and infringement HIS HONOUR JUDGE BIRSS QC
Approved Judgment
whereas others (such as patents for processes, formulations and second medical uses) may be less so. The patent in this case is a compound patent. In my judgment atorvastatin does not lead to an inference that Teva has a policy of always launching at risk of infringement in the face of a compound patent. However it does show that Teva are prepared to do it if they choose to and it does place into context any prior assurances they may have given. The question is whether all this provides a sufficient basis on which to grant an interim injunction in this case. Interim injunctions are powerful remedies and not lightly granted. I am concerned that Teva’s approach to this application means that I do not know for sure whether an interim injunction restraining sales is really needed in this case. Accordingly, although BMS did not suggest this to me, I wondered whether it was a proper case for different relief from the order sought by BMS. One could craft an order to correspond to the undertakings given to the court on 8th February. However in the end it seems to me that Teva are a large sophisticated organisation and if they wanted to suggest that they could have done so by now. The position taken by Teva in correspondence is relevant to the matter of interim relief. Teva have refused to state what their intentions are. However this is not a case in which mere silence or an unwillingness to offer an undertaking is being taken to prove the existence of a threat or intention to infringe. The correspondence has to be seen in the light of the existence of the marketing authorisation I have already referred to. It is not unreasonable for BMS to infer from the marketing authorisation for generic efavirenz coming 22 months before the expiry of their patent rights in the compound efavirenz that Teva intend to launch generic efavirenz before expiry. The reasonable thing for BMS to do then is to ask. Teva could simply say (if true) – we have no intention of launching before expiry. That would be a very different case from the one before me. I do not have to consider a case in which the defendant has made a clear statement about its intentions which is contrary to the inference the claimant seeks to draw. In my judgment, subject to Mr Baldwin’s point about Teva’s commercial confidentiality, BMS are entitled to rely on the absence of a statement of Teva’s intentions in this case for the purposes of their claim for interim relief. Civil courts regularly draw inferences from silence and this situation is no exception. The key in my judgment is that it is not silence without more nor is it drawing an inference from nothing more than an unwillingness to offer an undertaking. The existence and timing of the marketing authorisation is critical. Moreover since this action is properly constituted in any event, if Teva choose to defend it on the basis that they have no such intention, disclosure will be given and the Court can decide about their intentions. At this interim stage it is entirely fair to draw inferences from silence. Mr Baldwin submits that Teva are entitled not to answer the question about their intentions because to answer it involves divulging a valuable commercial secret which will harm Teva. Its competitors (like BMS) will know about Teva’s plans. Teva have two kinds of competitors in this market, BMS and other generics. HIS HONOUR JUDGE BIRSS QC
Approved Judgment
Dr Gonen alleged that patentees in such cases have taken steps to prepare for generic competition and irrespective of what steps BMS themselves may or may not take, I accept that a patentee will obviously prepare for generic competition and will be better prepared if they know when the launch date will be. Other generics too will be interested and able to act accordingly. Dr Gonen herself explains how swift commercial actions are important in this market. I agree and accept that if Teva intend to launch in advance of expiry of the SPC then the date on which they intend to do so is a valuable commercial secret which would be of value to Teva’s competitors – including BMS and other generics. However self evidently if Teva are going to launch before expiry then this action is entirely well founded. If it is really Teva’s case that the patent is invalid, they can and should bring a claim for revocation. While in the abstract it may have been premature to expect that claim to be brought 2 years in advance of expiry, it is not premature to expect that claim to be commenced now that Teva has this marketing authorisation. BMS submitted that the regime for disclosure in patent actions routinely deals with confidential information and can readily accommodate disclosure of this information on a confidential basis. That is so and the confidentiality “club” system (see e.g. Warner Lambert v Glaxo [1975] RPC 354) would be able to preserve the confidentiality of a detailed launch date. However I nevertheless accept Mr Baldwin’s submission that it is unreal to suppose that some kind of information would not emerge. If in fact Teva does not intend to launch before expiry then I accept that that inference could be drawn by third parties in certain circumstances depending on the course the proceedings take and regardless of a confidentiality regime. Mr Baldwin submitted that even knowing that Teva did not intend to launch before expiry was commercially sensitive and was information which would be valuable to the other generics with which Teva competes in other markets. I suppose it is information with some value but I do not regard that as sufficient to explain away Teva’s refusal to say anything in response to the correspondence from BMS’ solicitors. That a generic company will launch a product once the patent expires is not news to anyone. That a generic company has gone to the trouble and expense of obtaining a marketing authorisation it has no intention to use is far fetched. I note that Dr Gonen’s evidence is that of the thousand marketing authorisations Teva hold, only 400 are currently in use (my emphasis). That does not mean that Teva has ever acquired a marketing authorisation with no intention of using it. To justify an order for interim relief one does not need to know precisely when Teva intend to launch, all one needs to know is that they intend to launch before expiry and before a full trial could be heard. If the trial in this case is a normal High Court patent case involving issues of validity and infringement one can estimate that it will be heard sometime in spring/ summer 2013. I am also struck by the atorvastatin episode. That does seem to me to show that Teva, if they choose to do so, are willing and able to launch very large quantities of product in a very short period of time. On that latter point Mr Baldwin submitted that the secondary care nature of the market for efavirenz meant that it was not possible to flood the market but in my judgment the evidence does not establish that. The fact the drug is a secondary care product (i.e. hospital prescribed) rather than a primary care product (GP prescribed) means that the market is conducted based on tenders to HIS HONOUR JUDGE BIRSS QC
Approved Judgment
trusts, SHAs or consortia and is not focussed on the retail pharmacies. However none of this prevents Teva from selling product very quickly. Dr Gonen emphasised that Teva regarded it as imperative to take all possible steps to capture as large a share of a market as soon as possible after launch. She did not suggest that a launch on a scale comparable to her company’s launch of atorvastatin was impossible in this case. So far I have not considered the European cases. Teva put them forward to support the proposition that there is no case in which a marketing authorisation plus a refusal to answer questions about marketing plans was a sufficient basis for injunctive relief. The cases are addressed in a witness statement of Gareth Morgan, Teva’s solicitor at Winston & Strawn. The issue his evidence addresses is whether the cases show that other European courts regard the obtaining of a marketing authorisation as sufficient proof on its own of an “imminent” threat to infringe. In relation to a number of the cases relied on by Teva, Mr Turner pointed out that injunctions were indeed granted and in other cases where there was no injunction Mr Turner submitted that it was clear other pieces of evidence were before the court, such as clear statements by the companies that they did not intend to launch before expiry. Moreover in reading the cases I am struck by the different legal contexts in which they arise as compared to the way interim injunctions and applications to strike out actions arise here. That does not mean that I should ignore the decisions but it does give grounds for caution in their application. Nevertheless I accept also that there are statements in the decisions which show courts in other European countries have refused to grant preliminary injunctions in cases which bear similarities to the facts of this case. In my judgment Teva’s best case on these can be represented by a decision of the Paris Tribunal de Grande Instance dated 19th August 2010 (Docket 10/56889) in a case between Aventis and Teva about docetaxel and a decision of the Hague District Court of 7th April 2008 (case number 302746/KG ZA 08-63) between Eli Lilly and Ratiopharm about olanzapine. In the French case Teva had obtained a marketing authorisation but had not replied to letters from the patentee Aventis. Aventis sought a preliminary injunction based on an imminent infringement of its rights. At page 7 of the translation the French court stated that one letter from Aventis did not call for a reply and another was replied to by Teva with a statement “confirming its respect for intellectual property rights” and held that Aventis cannot force Teva to make statements of intention. The court held that Teva could legitimately be opposed to legal proceedings intended to oblige it to reveal its commercial strategy. No injunction was granted. In the Dutch case Ratiopharm had applied for a marketing authorisation but did not yet have it. In paragraph 4.6 of the decision the Dutch court noted that Ratiopharm indicated that they did not have any specific plans to access the market pending the validity of Lilly’s exclusive rights. In paragraph 4.7 the court held that the only thing on which Lilly founded its actual threat allegation was Ratiopharm having available a marketing authorisation or obtaining one shortly coupled with the unwillingness to make a (restricted) commitment not to infringe for the duration of Lilly’s rights. The court held that by law there is no general right to have third parties (or competitors) confirm in writing any absolute rights of anyone and a refusal to do so does not create HIS HONOUR JUDGE BIRSS QC
Approved Judgment
any (pressing) interest to enforce this in preliminary proceedings, at least not without additional circumstances which were absent for the time being. The court concluded there was no sufficiently actual threat of infringement which could support an infringement in preliminary proceedings. Another case cited by Teva is a decision of the Higher Regional Court of Düsseldorf on March 29 2006 (I-2 W 43/05). A translation of the judgment was provided and at p2 line 18 of that translation the following appears: “However from the fact that somebody pursues a procedure for obtaining a marketing authorisation for a pharmaceutical product it cannot generally be inferred that, upon receipt of the marketing authorisation, the applicant will launch the pharmaceutical product in question disregarding the patent protection existing in favour of somebody else. Seeking a marketing authorisation only leads to the expectation that the applicant will launch the pharmaceutical product in question after the marketing authorisation has been granted. This behaviour does not contain any indication as to a specific point in time when the product will first be marketed. That this will occur with disregard to existing protective rights prior to their expiration can at least not be inferred from such a conduct if the protective right is due to expire in the relatively near future. In that case the procedure for obtaining the marketing authorisation may also be pursued for the purpose of meeting all the requirements for putting the product on the market in the time now free of protective rights on the first day after the protective right has expired.” If I may say so I entirely agree with the analysis of the Düsseldorf court. It is the same as the way in which I have approached this case. The simple fact of obtaining a marketing authorisation only supports an inference that the applicant will launch the product once the marketing authorisation has been granted. Considered in isolation it does not support an inference as to the timing of the launch. However one can draw inferences from the timing of the marketing authorisation application. As the German Court found, one cannot infer that the launch will take place before expiry of the relevant patent rights if the patent is due to expire in the relatively near future. That is because in such a case, getting a marketing authorisation is equally consistent with launching after expiry. Necessarily therefore the Court was drawing inferences from the timing of the marketing authorisation. In my judgment such inferences are entirely appropriate and provide the basis for my decision in this case. Unlike the case before the Düsseldorf court, the patent here is not due to expire in the relatively near future. Finally I will return to the Dutch decision referred to above. In that case at paragraph 4.8 the court considered the timing of the marketing authorisation application. They held that the fact that the marketing authorisation application “was such a long time before expiry” was not conclusive of an intention to enter the market while the patent was in force. However they reached that decision because Ratiopharm had very recently started a separate invalidation procedure on the merits (see also paragraph 4.6). So here is a case in which Ratiopharm had obtained an early marketing HIS HONOUR JUDGE BIRSS QC
Approved Judgment
authorisation relative to the expiry date, one might therefore infer that they intended to launch before expiry of the patent but, since they had started proceedings to revoke the patent, one could not infer that they intended to launch while the patent was in force. Thus no interim injunction was needed. I will make two overall observations on the European cases. First on the issue of silence, the fact that in some cases other European courts have refused to draw an inference from a refusal to answer a question does not help unless the circumstances are precisely the same as they are before me, which they are not. Moreover, a statement that one party to litigation cannot force another to make a statement of intention needs to be treated with care. Under the procedures applicable to this case I have already addressed the point that I do not believe Teva can avoid the issue altogether. Second, the issue of principle I derive from the various European decisions is that there is no issue of principle. The cases do no more than show that courts throughout Europe require evidence on which to base an assessment of a threat to infringe. At the end of the day each case turns on its particular facts. Each side submitted this application raised a question of policy. BMS submitted that Teva’s refusal to state their intentions undermined the ability of the court to regulate generic entry into this market. Teva replied that regulating markets is not the court’s function. The court’s function is to resolve disputes as and when they arise. I accept Teva’s submission that the court is not a regulator of the pharmaceutical market. But that does not mean that the court cannot draw proper inferences from Teva’s decision not to answer questions which naturally arise. Teva submitted that an interim injunction in this case in effect forced Teva to divulge its commercially confidential information, which would be wrong as a matter of policy. What ought to happen, they submitted, was that BMS should use the ordinary evidence gathering methods available to them and if, as a result of that effort, BMS has basis on which to contend Teva’s launch is imminent then they can seek interim relief. The answer to this point is the same as the previous one. If, as I have found, the action is properly constituted, then there is a dispute to be resolved and in this civil proceeding Teva do not have a right to avoid inferences being drawn from their silence when other evidence points in a particular direction. I agree that in other circumstances it may well not be right to draw inferences from a refusal to answer questions but I am only concerned with the case and the facts before me. No question of policy arises. BMS have reasonable grounds for their claim that Teva threaten and intend to infringe the patent by launching Efavirenz Teva sometime before the patent or SPC expires. The action therefore should not be struck out. The proceedings will oblige Teva to reveal some aspects of its commercial strategy but only at the most generalised level and only because obvious inferences about their strategy already can be drawn. HIS HONOUR JUDGE BIRSS QC
Approved Judgment
In considering the claim for interim relief, I infer from all the circumstances including but not limited to Teva’s silence on the question of their intentions that Teva are not prepared to commit themselves to waiting for the conclusion of these proceedings before launching their generic product. If they were prepared to wait until the proceedings are over, they could readily have said so. On that basis it seems to me that the requirement for an arguable case is satisfied on the material before me and given that Teva do not dispute that the launch of generic efavirenz into the market would cause large and irremediable harm to BMS, I will grant the interim injunction sought to restrain sale of Efavirenz Teva (and so on) pending trial, supported by a cross-undertaking in damages from BMS. After handing down the judgment subject to editorial corrections, the parties pointed out various typographical errors which have been corrected. The claimants’ solicitors also made a comment on paragraph 26 above. They indicated that they understood the second point taken by Teva arising from hearing on 8th February to be a different one from that addressed in paragraph 26. The second point was in fact that BMS’ evidence in chief did not make the distinction between the primary and secondary care markets which was important because while atorvastatin was a primary care product, efavirenz was a secondary care product. The point of the submission was that therefore the efavirenz market could not be flooded whereas the evidence in chief suggested that it could be. Teva’s counsel took a neutral position in relation to the comment on paragraph 26. It is clear from the transcript of the argument before me on 8th March (which I was only provided with attached to the comments now) that the second point was indeed the primary/secondary care market point. Since I addressed the primary/secondary care market and flooding point in substance in paragraph 72 of the judgment and rejected Teva’s argument, I believe nothing turns on the issue. It is also correct that there was an error in the evidence in chief which related to the secondary/primary care point which was corrected in Mr Diarra’s second witness statement dated 14th February 2012. The error arose from a reference to reimbursement price lag for efavirenz in his first witness statement, which related to retail pharmacies whereas efavirenz is a secondary care product. The mistake made no difference in substance.

Source: http://www.ipfrontline.com/downloads/BMS_Teva.pdf

Microsoft word - chf patient pat evised 5-05.doc

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Speciale gast tijdens IDFA: Jonathan Harris Jonathan Harris (1979) is kunstenaar en computer engineer die creëerde hij met Cowbird een gemeenschap van verhalenvertel-in zijn werk de relatie tussen mens en technologie onderzoekt. lers, waarmee hij werkt aan een “bibliotheek van menselijke Hiervoor combineert hij elementen uit de computerwetenschap, ervaringen”. Harris zal op uitnod

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