Patents: Neurim Pharmaceuticals v Teva UK Ltd

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Jane Lambert

Patents Court (Mr Justice Mellor) Neurim Pharmaceuticals (1991) Ltd and another v Teva UK Ltd [2022] EWHC 954 (Pat) (26 April 2022)

This was an application by  Neurim Pharmaceuticals (1991) Ltd., the proprietor of European patent (UK)  3,103,443, and Flynn Pharma Limited, Neurim's exclusive licensee, for an interim injunction to restrain Teva UK Ltd. from disposing, offering for sale or disposal, selling or supplying any generic version of the claimants' Circadin product that falls within any of the claims of that patent or that has been manufactured by any process that falls within any of its claims until judgment or further order. 

An interim injunction is a court order to do, stop doing or not to do something on pain of punishment for disobedience.  The approach by which a court decides whether or not to make such an order was set out by Lord Diplock in American Cyanamid Co (No 1) v Ethicon Ltd [1977] FSR 593, [1975] 1 All ER 504, [1975] 2 WLR 316, [1975] AC 396, [1975] UKHL  Mr Justice Mellor summarized it at para [5] of his judgment in Neurim Pharmaceuticals (1991) Ltd and another v Teva UK Ltd [2022] EWHC 954 (Pat) (26 April 2022):

"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."

In the previous paragraph of his judgment, Mr Justice Mellor had noted that in most cases, an application for an interim injunction is issued at or around the same time as the claim form.  This interim injunction application was unusual in that it was launched more than 4 months after the issue of the claim form.  Another unusual feature was that the patent was due to expire on 12 Aug 2022.

The apparent reason for the delay in launching the application is that the first indication that Neurim received that Teva was taking active steps to enter the UK market was a phone call from a large independent wholesaler on 8 March 2022 that a representative of Teva had offered melatonin at lower prices than Flynn's together with an indemnity against any claim by Neurim. However, Teva had begun to prepare to launch the product as early as June 2021. The claimants had asked  Teva for undertakings not to supply to the UK.  Teva refused to do so.  That is why the claimants issued their claim form.

When a supplier of generic pharmaceuticals wishes to launch a product to compete with a patented product, it usually clears the way by bringing revocation or declaration of non-infringement proceedings.  Neurim criticized Teva for not clearing the way,  Teva replied that there was no point in doing so because the patent in suit was about to expire.

Mr Justice Mellor does not seem to have been impressed by Neurim's explanation for the delay.  He said at [47]:

"In my view, Teva did make their intentions clear to the Claimants. Indeed, via their solicitors, Teva's position was very clearly stated: no undertakings would be given and the product had launched on 13 October 2021 (as the Claimants were well aware). Even before the launch, the Claimants had sufficient evidence of a threat to launch to bring an application for an interim injunction to restrain any launch by Teva onto the market. At that point in time, the Claimants had made it clear that they did not intend to seek injunctive relief against Teva until they had secured an injunction against Mylan. I do not need to form any view as to whether that position was right or sensible because the fact remains they did not seek any interim relief against Teva until the present Application Notice was issued on 14 March 2022."

He continued at [50]:

"In not seeking any interim relief against Teva before or just after their launch, thereafter the Claimants were running the risk that Teva would make sales and build up a presence on the UK market – as Teva thought fit. This is exactly what has happened. Dr Fakes' protestations that he and his staff were unable to obtain samples of Teva Melatonin until 24 or 28 March 2022 is nothing to the point, and does not change the position."

He concluded at [51] that the claimants delayed significantly in seeking interim relief against Teva though the delay was not such as to disentitle the claimants to relief on laches grounds.

The learned judge then proceeded to apply Lord Diplock's Cyanamid principles. Both sides agreed that there was a serious issue to be tried. Neurim and Flynn argued unsuccessfully that damages would not be an adequate remedy. The claimants had made sales forecasts and there would be sufficient sales data to compute any losses that they might sustain for the period up to the expiry of the patent. But there was insufficient evidence of the effect of price depression as a result of competition between two generic suppliers afterwards. He decided at [75] to proceed on the basis that damages would not be an adequate remedy for the claimants for the post-expiry period. As for the third Cyanamid principle, his lordship decided at [83] that it was going to be more difficult to compensate Teva adequately (on the assumption that it was injuncted but should not have been) than the claimants (on the assumption that no injunction was granted but the claimants were ultimately successful). There would be much greater uncertainties applying to Teva's position than that of the claimants. As for the last consideration, "the relevant status quo is that which existed at the date the Application Notice was served on Teva, which was late in the evening on 14 March 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." He, therefore, dismissed the application.

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