25 March 2012

"Frit" - Merck Sharp Dohme Corp v Teva Pharma BV

Margaret Thatcher's birth place in Grantham  Source Wikipedia
According to Wikiquote, "frit" is an unusual Lincolnshire dialect abbreviation of 'frightened' which Mrs Thatcher evidently recalled from her Grantham childhood.  I am reminded of the word for two reasons.  First, Lady Thatcher is reported by today's Independent to have said that she wishes she had never gone into politics. A report that prompted my mischievous and slightly unfair but quite irresistible tweet that perhaps for the first time the former Prime Minister has spoken for the nation. The second reason is that I got round to reading Judge Birss QC's judgment in Merck Sharp Dohme Corporation and Another v Teva Pharma BV and Another [2012] EWHC 627 (Pat) (15 March 2012) which concerned the circumstances in which a quia timet action and indeed interim injunctive relief are justified.  "Quia timet", as Margaret Roberts could no doubt once have told us when she was a sweet little schoolgirl, means "because he's frit".

The judgment in Teva is interesting because it shows the approach of a judge who usually sits in the Patents County Court to interim injunctions applications. That is important because
- there have not been too many of those before any of the judges of the Patents County Court; but
- if such an application were to be made CPR 6.25 (3) gives the judge the power to decide the it on paper.

According to its website, "Teva is a global generic pharmaceuticals leader and one of the top 15 pharmaceutical companies in the world. Headquartered in Israel, Teva operates in 60 countries and has 46,000 employees worldwide. Established in 1901, Teva takes great pride in its long tradition of leadership and dedication to excellence." It can place substantial quantities of a generic versions of a branded drug on the market very quickly - within days of a patent or supplementary protection certificate's expiry or, as in Warner-Lambert Company LLC v Teva UK Ltd and Others [2011] EWHC 2018 (Ch) [2011] FSR 44, [2011] EWHC 2018 (Ch) (22 July 2011) even before expiry. Thus, big pharmas like Merck Sharp & Dohme Corp. and Bristol-Myers Squibb Pharmaceuticals Ltd which earned US$150 million from sales of the anti-retroviral drug efavirenz have reason to be frit, very firt, of this powerful competitor.

On 20 Oct 2011, the Committee for Medicinal Products for Human Use  recommended the grant to Teva of a marketing authorization for a generic efavirenz in the form of 600mg film-coated tablets to be known as "Efavirenz Teva" for the combination treatment of human HIV infection.  Now Merck is the proprietor of European patent EP0582455 for Benzoxazinones as inhibitors of HIV reverse transcriptase. This patent is due to expire on 3 Aug 2013 but there is also an SPC which will expire on or about 20 Nov 2013.

In the Warner Lambert case, Teva said it would launch a generic version of the patented drug atorvastatin in November 2011 which would have been just after the expiry of Warner Lambert's patent for the product was due to expire.  It actually launched on a massive scale in June which was before the patent's expiry. Mindful of what had happened to Warner Lambert, solicitors for Merck wrote to Teva on 1 Dec 2011 asking for 8 days notice of intention before launching "Efavirenz Teva" in any country for which the patent was in force.  The reason for 8 days notice was that it would give Merck and Bristol-Myers Squibb sufficient time to apply for an interim injunction were Teva to market their product before the expiry of the patent.

Teva did not answer that letter so the claimants' solicitors wrote again on 25 Jan 2012. That elicited an apology for not replying sooner with an explanation that the first letter had  probably been lost in an office move but a reply was promised on 7 Feb 2012.  Between the first letter and the acknowledgement of 7 Feb Teva received marketing authorization for generic efavirenz.  The claimants' solicitor wrote:
"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."
No such undertaking being given, Merck and Bristol-Myers applied for interim injunctive relief.  On 10 Feb 2012 Teva wrote:
"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 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."
Teva replied with a cross-application that this claim be struck out because no reasonable grounds for bringing the claim had been disclosed. The application was based not on the validity or otherwise of the claimants' patent but on whether there had been a threat to infringe at all.   In other words, had Merck and BMS jumped the gun.   Both applications came on before Judge Birss QC.

Teva's case was that
 "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."
The same issue had come before the courts of France, the Netherlands, Sweden, Germany and Denmark and they had all decided the point in Teva's favour.

Judge Birss disagreed.  At paragraph [43] of his judgment, he said "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."  He continued:
"[44] 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?
[45] 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.
[46] 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."
Teva had anticipated and tried to answer that last point with evidence that they had loads of marketing authorizations which they had not actually got round to using.  The judge was unimpressed:  
"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."
In his view  the key point was the "length of time between the marketing authorisation and expiry and the absence of any specific factor about this market which might explain it."

Having decided not to strike out the claim the judge considered whether an interim injunction was appropriate and decided that it was.  He thought about the form of the order and considered granting an injunction requiring slightly less notice than had been requested by Merck and BMS but decided in the end against it. He was struck by the atorvastatin episode which seemed to me to show that Teva, if they choose to do so, were willing and able to launch very large quantities of product in a very short period of time. He also read and considered the continental cases but found them of limited relevance as they were decided on their facts in jurisdictions with different evidential requirements. As every package tourist knows, they do things differently on the Continent from eating snails and drinking in moderation to driving on the right.

1 comment:

David Scott said...

Interesting! I think the judge has a point. However, it seems to me the real probl;em is that the regulatory authorities are able to grant marketing authorisation wven when it is clear that at the time of grant such authorisations encourage an illegal act (infringing a patent).