Practice - Bayer IP v Aspire Pharma
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Aspire Pharma Ltd. was one of several pharmaceutical companies that hoped to supply generic rivaroxaban upon the expiry of the SPC. However, Bayer Intellectual Property GmbH also held European patent number 1 845 961 B1 for the treatment of thromboembolic disorders with rivaroxaban which covered the use of rivaroxaban for the manufacture of tablets for once-daily oral administration to a human patient. Aspire sought a declaration of non-infringement and other companies claimed the revocation of that patent. Bayer Intellectual Property GmbH and the other Bayer companies counterclaimed for injunctions to restrain infringement.
His Honour Judge Hacon had promised to deliver judgment in the revocation proceedings in or shortly after 9 April 2024. One of the possible outcomes was a finding that the patent was valid and infringed in which case the Bayer companies would have been entitled to a final injunction. They therefore sought an interim injunction from Judge Hacon to restrain the sale of rivaroxaban for once-daily administration until after any consequentials hearing following the handing down of His Honour's judgment. Judge Hacon heard the application on 25 March 2024 and gave judgment on 27 (see Bayer Intellectual Property GmbH and others v Aspire Pharma Ltd and others [2024] EWHC 711 (Pat) (27 March 2024)),
The judge directed himself that the principles to be applied by the court in an application for an interim injunction were explained by Lord Diplock in American Cyanamid Co v Ethicon Ltd [1975] AC 396 at para [18] of his judgment. The relevant considerations were:
"(1) Whether there is a serious issue to be tried.
(2) Whether damages would be an adequate remedy to the applicant for the interim injunction in the event that no interim injunction is granted and the judgment at trial finds that the applicant is entitled to an injunction. If yes and the defendant would be in a financial position to pay, no interim injunction will be granted.
(3) If not, whether damages would be an adequate remedy to the respondent in the event that an interim injunction is granted and the judgment at trial finds that the applicant is not entitled to an injunction. If yes and the applicant would be in a financial position to pay, the interim injunction will be granted
(4) If damages would not be an adequate remedy to either side, where the balance of convenience lies, in particular the balance of likely irreparable harm to each side.
(5) If the balance is equal, it is a counsel of prudence to preserve the status quo."
"(1) Whether there is a serious issue to be tried.
(2) Whether damages would be an adequate remedy to the applicant for the interim injunction in the event that no interim injunction is granted and the judgment at trial finds that the applicant is entitled to an injunction. If yes and the defendant would be in a financial position to pay, no interim injunction will be granted.
(3) If not, whether damages would be an adequate remedy to the respondent in the event that an interim injunction is granted and the judgment at trial finds that the applicant is not entitled to an injunction. If yes and the applicant would be in a financial position to pay, the interim injunction will be granted
(4) If damages would not be an adequate remedy to either side, where the balance of convenience lies, in particular the balance of likely irreparable harm to each side.
(5) If the balance is equal, it is a counsel of prudence to preserve the status quo."
He reminded himself that Lord Hoffmann considered and explained American Cyanamid in National Commercial Bank Jamaica Ltd v Olint Corp Ltd [2009] UKPC 16, [2009] WLR 1405, [2009] 1 CLC 637, [2009] Bus LR 1110, [2009] 1 WLR 1405 though nothing in that appeal had any bearing on any issue that His Honour had to decide.
While noting that every interim injunction application turns on its own facts His Honour observed that there are judgments on facts having some overlap with those of the application before him that provided guidance as to the correct approach. He referred in particular to Neurim Pharmaceuticals (1991) Ltd and another v Generics (UK) Ltd and another (Rev2) [2022] EWCA Civ 370 where the patent in suit had been held to be valid and infringed. Although there were important factual differences between the cases he gleaned the following points at para [27]:
"(1) Where there are or will be two or more manufacturers competing for the generic market, this 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.
(2) Where the defendant is the only player in the generic market, there is no incentive for it to reduce its price much below that of the branded manufacturer. Moreover, being the first generic supplier is likely to carry a particular advantage by way of accumulating loyalty to its own supplier brand that would be lost if kept off the market in the relevant period by an injunction.
(3) If one or more generic suppliers are already on the market, irreparable damage to them may be caused by an injunction restraining their sales, being those identified by Arnold LJ in his paragraph [33].
(4) Where both sides are equally likely to suffer damage that could not be adequately compensated, specifically where the uncertainties involved in a future calculation of damages on each side are of a similar order, preservation of the status quo assumes importance."
(2) Where the defendant is the only player in the generic market, there is no incentive for it to reduce its price much below that of the branded manufacturer. Moreover, being the first generic supplier is likely to carry a particular advantage by way of accumulating loyalty to its own supplier brand that would be lost if kept off the market in the relevant period by an injunction.
(3) If one or more generic suppliers are already on the market, irreparable damage to them may be caused by an injunction restraining their sales, being those identified by Arnold LJ in his paragraph [33].
(4) Where both sides are equally likely to suffer damage that could not be adequately compensated, specifically where the uncertainties involved in a future calculation of damages on each side are of a similar order, preservation of the status quo assumes importance."
Points (1) and (4) applied to the case before Judge Hacon. The others did not.
The Bayer companies argued that the interim injunction should cover not just the period up to the consequential hearing but also the outcome of any appeal, The judge disagreed. The application notice concerned an interim injunction for 9-10 days and nothing more. He considered the market for rivaroxaban between [36] and [43]. He summarized the issue at para [44]:
"As might be expected, the parties agreed that there is a serious question to be tried. It has been tried and" judgment will be given in the first week of next term. There was no dispute that there is a potential for irreparable harm to one side or the other whether an interim injunction is granted or not. The issue between the parties concerned the balance of irreparable harm."
He set out the parties' arguments between [45] and [54].
"I doubt that either Bayer or any of the respondents would suffer a great deal of irreparable harm on the alternative hypotheses of an injunction being granted or not. Bayer's counterfactual sales absent an injunction in that short period should be fairly easy to calculate. The level of Bayer's current sales is known. To the extent that actual sales were to fall below that figure, damages would fall due. I do not say that Bayer is not at risk of any irreparable harm at all because there would be uncertainties, but they would be modest. The same applies in mirror-image to any losses the respondents may suffer in the event of an injunction. Dr Chowdhury's concerns, assuming they are valid, would only arise over a longer period than 9-10 days. If there were an injunction over that short period which is thereafter lifted, it seems to me a graph of each of the respondents' sales could be notionally moved back by 9-10 days or by whichever time that the evidence may suggest is appropriate. An area under the curve calculation – the area between the lines of notional and actual sales until they meet at steady state – would be sufficiently accurate to calculate the losses of each respondent with reasonable accuracy."
He concluded that the Court of Appeal had emphasized the importance of maintaining the status quo. It seemed to him that it was all the more important where the period in question was so short. Any other decision would change the status quo in respect of any application that there might be after judgment had been handed down. That would potentially give rise to significant irreparable harm to Bayer.
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