Practice - Neurim Pharmaceuticals v Mylan

Author The Judicial Office, UK Licence CC BYSA 4.0 Source Wikimedia Commons

Jane Lambert

Patents Court (Mr Justice Mellor) Neurim Pharmaceuticals (1991) Ltd and another v Generics UK Ltd (t/a Mylan) and another [2021] EWHC 2198 (Pat) (2 Aug 2021)

This case shows how quickly the English courts can move to resolve disputes when there is a need for them do so.  On 2 Aug 2022 Mr Justice Mellor ordered a 2-day trial of a number of preliminary issues in a claim for the infringement of European patent (UK) 3 103 443 2 months after the application for the expedited trial  and 3 months after the patent had been granted.

The reason for the urgency was that the patent prevented Mylan from marketing a treatment for insomnia through the use of melatonin. As Me Justice Mellor said at para [40] of his judgment in Neurim Pharmaceuticals (1991) Ltd and another v Generics UK Ltd (t/a Mylan) and another [2021] EWHC 2198 (Pat) (2 Aug 2021):

"i) Neurim has a prima facie valid patent.
ii) It would appear that the product which Mylan has on the market infringes the patent."

There had already been extensive litigation between Neurim Pharmaceuticals (1991) and Flynn Pharma Ltd of the one part ("Neurim") and Generics UK Ltd and Mylan UK Heakthcare Ltd. ("Mykan") of the other over European patent (UK)  1, 441,702.  I discussed some of those cases in Patents - Neurim Pharmaceuticals v Mylan on 4 June 2020,  Interim Injunctions: the Appeal in Neurim Pharmaceuticals v Mylan on 1 Juky 2020 and  and Snatching Defeat from the Jaws of Victory - Neurim Pharmaceuticals v Mylan  on 14 Masy 2021,  

As  European patent (UK) 3 103 443 had been a divisional of European patent 1, 441,702, Neurim argied that ut was not necessary to try all the issues that had been tried before,   . Instead of seeking expedition of the trial simpliciter, the Neurim companies sought expeditroin of the trial of the followubgf prekiminary issues:

"(a) That the issues the Claimants contend are the subject matter of issue estoppel as pleaded in paragraphs 9 and 10 of, and Annex B to, the Particulars of Claim be determined as a preliminary issue. In summary, this is the issue of whether Mylan is estopped from contesting the amendments to and the validity and infringement of the Patent (as so amended) in this claim. I shall refer to this as the "Estoppel Preliminary Issue";
(b) That the standing of Flynn in this claim as exclusive licensee subsequent to the execution of the agreement with Neurim dated 10 December 2020 as pleaded in paragraphs 19 to 25 of the Particulars of Claim be determined as a preliminary issue. I shall refer to this as the "Exclusive Licence Preliminary Issue";
(c) That Neurim's application to amend the Patent1 (the "Amendment Application") be heard and determined at the same time as the hearing and determination of the Estoppel and Exclusive Licence Preliminary Issues (unless it is necessary to distinguish between them I shall refer to both of these preliminary issues as the "Preliminary Issues"); and
(d) That the determination of the Preliminary Issues and Amendment Application be heard with expedition as soon as possible after 1st October 2021 and before the end of November 2021."

 

Mylan contended that the issues were drawn too vaguely, that their determination wouold not be conclusive and that it would be entitled to challenge the validity of  EP 3 103 443

Mr Justice Mellor considered the authorities on preliminaty issues.

At para [7] of his judgment, he referred to para [65] of Mr Justice Steel's judgment in McLoughlin v Jones [2001] EWCA Civ 1743:

"In my judgment, the right approach to preliminary issues should be as follows:-
a. Only issues which are decisive or potentially decisive should be identified;
b. The questions should usually be questions of law.
c. They should be decided on the basis of a schedule of agreed or assumed facts;
d. They should be triable without significant delay, making full allowance for the implications of a possible appeal;
e. Any order should be made by the court following a case management conference."

The judge also referred to HH Judge Birss QC's judgment in  Wagner v Earlex [2011] EWHC 3897 (Pat) at [9], setting out the slightly longer list of some 9 criteria emanating from the Judgment of Mr Justice Neuberger (as he then was) in Steele v Steele [2001] CP Rep 106:

"'(a) whether the determination of the preliminary will dispose of the whole case or at least one aspect of the case;
(b) whether the determination of the preliminary issue will significantly cut down the cost and the time involved in pre-trial preparation and in connection with the trial itself;
(c) if the preliminary issue is an issue of law, the amount of effort involved in identifying the relevant facts for the purposes of the preliminary issue;
(d) if the preliminary issue is an issue of law whether it can be determined on agreed facts. If there are substantial disputes of fact it is unlikely to be safe to determine the legal issue until the facts are found;
(e) whether the determination of the preliminary issue will unreasonably fetter either the parties or the court in achieving a just result;
(f) the risk that an order will increase the costs or delay the trial and the prospects that such an order may assist in settling the dispute;
(g) the more likely it is that the issue will have to be determined by the court, the more appropriate it is to have it determined as a preliminary issue;
(h) the risk that the determination may lose its effect by subsequent amendments and statements of case; and
(i) whether it is just and right to order the determination of the preliminary issue."

At para [9] Mr Justice Meller recalled the following warnings in respect of preliminary issues:

"i) First, as Lord Scarman observed in Tilling v Whiteman [1980] AC 1,25: "Preliminary points of law are too often treacherous short cuts".
ii) Second, Lord Neuberger (then Master of the Rolls) also cautioned against preliminary issues in Bond v Dunster [2011] EWCA Civ 455 at [107]: "While they have their value, it is notorious that preliminary issues often turn out to be misconceived, in that, while they are intended to short-circuit the proceedings, they actually increase the time and cost of resolving the underlying dispute…"
iii) Third, that preliminary issues should normally be resisted, per Lord Neuberger in Rossetti v Diamond Sofa [2012] EWCA Civ 1021 at [1] (emphasis added):

This is an appeal from a decision of Cranston J determining certain preliminary issues arising out of a dispute between (i) Rossetti Marketing Ltd ("RML") and Solutions Marketing Ltd ("SML"), and (ii) Diamond Sofa Co Ltd ("Diamond"). It represents yet another cautionary tale about the dangers of preliminary issues. In particular, it demonstrates that (i) while often attractive prospectively, the siren song of agreeing or ordering preliminary issues should normally be resisted, (ii) if there are none the less to be preliminary issues, it is vital that the issues themselves, and the agreed facts or assumptions on which they are based, are simply, clearly and precisely formulated, and (iii) once formulated, the issues should be answered in a clear and precise way.

His lordship also consulted the principles on expediton which are listed at para [14] of Petter v EMC Europe [2015] EWCA Civ 480:

"a) whether there is good reason for the expedition;
b) whether expedition would interfere with the good administration of justice;
c) whether expedition would cause prejudice to the Defendant; and
d) whether there are any other special factors."

The judge decided to allow Neurim to secure a trial listing of 2 days, with 1 day pre-reading on the follwoing conditions:

"i) On or before 9th August 2021, Neurim must serve a Statement of Case which properly identifies each issue on which they say Mylan is estopped, together with such other issues as they require the Judge at the trial of the preliminary issues to determine;
ii) On or before 16th August 2021 (having served their Defence and Counterclaim on 11th August 2021), Mylan must serve their Statement of Case in response, which must also identify all the issues which Mylan wish to be determined at the trial of the preliminary issues;
iii) The parties must negotiate with the Listing Officer to secure a trial date. I will not direct that the trial must take place in the Michaelmas term – that will be a decision for the Listing Officer – but the trial should take place with a moderate degree of expedition and before the end of February 2022 at the latest;
iv) I propose to review the Statements of Case during the week of 16th August 2021, when I am one of the Vacation Judges, and I give the parties permission to apply to me during that week;
v) Further case management may be required to ensure that (assuming the action is not stayed at the hearing in October) the trial of preliminary issues is kept on track. If the preliminary issues appear to be going badly off track, the parties may face the prospect of losing the trial date I have directed, so it is in both their interests to co-operate to ensure that does not happen."

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