Interim Injunction Applications in IPEC - Well Lead Medical Co Ltd v CJ Medical Ltd
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Intellectual Property Enterprise Court (Charlotte May KC) Well Lead Medical Co Ltd v CJ Medical Ltd [2024] EWHC 951 (IPEC) (26 April 2024)
This was an application by the claimant in a patent infringement action for an interim injunction to restrain the marketing and supply in the United Kingdom of a ureteral access sheath (UAS) under CPR 25.1 (1) (a). The claimant sought that application on the ground that such marketing and sales would infringe EP (UK) 3 760 143 B1 for a suction evacuation device that is used to retrieve stones from a patient's body. The application was heard by Charlotte May KC sitting as a deputy judge of the High Court on 10 April 2024. By para [100] of her judgment in Well Lead Medical Co Ltd v CJ Medical Ltd [2024] EWHC 951 (IPEC) (26 April 2024), Miss May dismissed the application.
Ownership of the Patent
Applicable Principles
Miss May's starting point was the House of Lords's decision in American Cyanamid Co v Ethicon Inc [1975] UKHL 1, [1975] 1 All ER 504, [1975] AC 396, [1977] FSR 593, [1975] 2 WLR 316 as explained by Lord Justice Floyd at para [15] of his judgment in Neurim Pharmaceuticals (1991) Ltd and another v Generics UK Ltd (t/a Mylan) and another [2020] EWCA Civ 793, [2021] RPC 7:
- "Stage 1: Is there a serious question to be tried?
- Stage 2: Are damages an adequate remedy for the claimant?
- Stage 3: If not, are damages (on the cross-undertaking in damages) an adequate remedy for the defendant?
- Stage 4: If damages are not an adequate remedy for either side, where does the balance of convenience lie?"
The defendant discerned the following additional points from Neurim:
"i) Damages must be an adequate remedy, not a perfect one. The boundary between adequate and inadequate is not a precise one, and it will be a matter for judicial evaluation on the evidence as to whether or not the boundary has been crossed ([16]).
ii) If the boundary between adequate and inadequate is not crossed in relation to the claimant's loss then, normally, an injunction will not be granted ([16]).
iii) It follows that the court should not assume that damages will be inadequate and move straight to consider the balance of convenience. It is important to consider Stages 1 and 2 first ([17]).
iv) It is well settled that, in deciding Stage 1, the court should not conduct a 'mini trial' but confine itself to seeing whether there is a serious question to be tried on the substantive claim ([18]).
v) In tackling Stages 2-4, the court must do the best that it can on the available written evidence. Merely because the task is hard should not lead to the court abandoning the task at the outset ([18]).
vi) It can be appropriate to consider the question of damage by reference to two periods: the period up to the point (hypothetically assumed) when the patentee succeeds in getting a permanent injunction after trial (Period 1) and the subsequent period between that point and the expiry of the patent (Period 2) ([21])."
"i) Damages must be an adequate remedy, not a perfect one. The boundary between adequate and inadequate is not a precise one, and it will be a matter for judicial evaluation on the evidence as to whether or not the boundary has been crossed ([16]).
ii) If the boundary between adequate and inadequate is not crossed in relation to the claimant's loss then, normally, an injunction will not be granted ([16]).
iii) It follows that the court should not assume that damages will be inadequate and move straight to consider the balance of convenience. It is important to consider Stages 1 and 2 first ([17]).
iv) It is well settled that, in deciding Stage 1, the court should not conduct a 'mini trial' but confine itself to seeing whether there is a serious question to be tried on the substantive claim ([18]).
v) In tackling Stages 2-4, the court must do the best that it can on the available written evidence. Merely because the task is hard should not lead to the court abandoning the task at the outset ([18]).
vi) It can be appropriate to consider the question of damage by reference to two periods: the period up to the point (hypothetically assumed) when the patentee succeeds in getting a permanent injunction after trial (Period 1) and the subsequent period between that point and the expiry of the patent (Period 2) ([21])."
Date of Trial
The deputy judge announced that the action would be listed for trial in January 2025. In considering stages 2 and 3 Miss May had to consider the harm that the claimant could suffer between the date of judgment in the interim injunction application and January 2025 were an interim injunction to be refused and the harm that the defendant would suffer between those dates if an injunction were to be granted.
Stage 1 - Was there a Serious Issue to be Tried
It was common ground that the claimant had an arguable case on infringement.
Stage 2 - Whether Damages Would Be an Adequate Remedy
The claimant accepted that damages would be an adequate remedy for the loss of sales of its UAS between the dates of judgment in the interim injunction application and judgment in the trial ("Period 1") but it contended that it would suffer other kinds of harm after trial even if it was completely successful ("Period 2"). Such harm would include loss of exclusivity for which damages would not be adequate compensation,
The claimant had argued that its market exclusivity allowed it to develop the market for UAS which opportunity it would lose were there a competing product on the market. While the deputy judge accepted the claimant's evidence in general terms it was not clear to her how the claimant's activities had developed the market or how sales of the defendant's product would undermine the claimant's efforts. In Miss May's judgment, even allowing for the fact that the suction UAS market might be a growing one, there was no evidence to support an argument that loss of market exclusivity, if an injunction were refused, would damage the claimant's ability to develop the market at all, let alone in an unquantifiable way.
The claimant also argued that a refusal to grant an injunction against the defendant would encourage other suppliers to market competing UASs in the UK. Two companies in the UK appeared to be making preparations to sell UASs in this country but they had been deterred by letters before claim from the claimant's solicitors. Another supplier had been injuncted from exhibiting a competing UAS at an important trade fair in Germany but that company was not yet listed on the NHS Supply Chain, The deputy judge rejected the claimant;'s contention as there was no evidence that third parties were awaiting the result of the interim injunction application before deciding whether or not to enter the UK market. In her view, "the hypothetical risk of third-party entrants per se cannot be enough to justify injunctive relief, certainly not on the facts of this case. "
The claimant also argued that a refusal to grant an injunction against the defendant would encourage other suppliers to market competing UASs in the UK. Two companies in the UK appeared to be making preparations to sell UASs in this country but they had been deterred by letters before claim from the claimant's solicitors. Another supplier had been injuncted from exhibiting a competing UAS at an important trade fair in Germany but that company was not yet listed on the NHS Supply Chain, The deputy judge rejected the claimant;'s contention as there was no evidence that third parties were awaiting the result of the interim injunction application before deciding whether or not to enter the UK market. In her view, "the hypothetical risk of third-party entrants per se cannot be enough to justify injunctive relief, certainly not on the facts of this case. "
The claimant complained that the defendant had said that the claimant's UAS was less safe than its own. The defendant accepted that that criticism was mistaken and had not repeated it. Even though its claim was for patent infringement and not trade libel or malicious falsehood, the claimant argued that an interim injunction would remove an incentive for the defendant to criticize its products. Miss May rejected that argument. There was no evidence that the defendant was repeating its criticism to the public or that it would do so in the future and the injunction sought would not prohibit the defendant from making derogatory statements.
As the claimant's UAS was similar to the defendant's the claimant contended that the only basis for competition would be price. The appearance of the defendant's product on the market would inevitably lead to a price war. The defendant denied that that was the case and said that it had contracted to supply the NHS at the same price as that of the claimant's product. The deputy judge rejected the claimant's contention on the basis that there was no reason to suppose that there would be a price war.
The deputy judge held that damages would be an adequate remedy were the claimant to succeed at trial. The claimant had produced sales forecasts up to February 2026 based on the assumption that it would retain market exclusivity. As the trial was scheduled for January 2025 market exclusivity would be restored long before February 2026. By the time of any inquiry, the court would know the actual sales and prices of the products that the claimant will have sold after trial. It should be able to compare those figures with the claimant's forecasts. Any shortfall can be adequately calculated and compensated in damages. Having found that damages would be an adequate remedy the application for an interim injunction failed at stage 2.
Although it was not strictly necessary for the deputy judge to address stages 3 and 4, she did so out of deference to the parties' arguments and in case her decision was to be appealed.
Stage 3 - Whether Damages Would be an Adequate Remedy for the Defendant
Stage 3 - Whether Damages Would be an Adequate Remedy for the Defendant
The deputy judge held that it would be more difficult to assess the damages due to the defendant upon the claimant's cross-undertaking were it to be injuncted than it would to assess the damages for the claimant were an injunction to be refused but such an assessment would not be impossible. For Period 1, there were sales forecasts for the defendant between the date of the injunction application and the date of judgment after trial. It might be more difficult to assess damages for Period 2 (the period after trial because the claimant will have entrenched its position in the market by that time). She accepted that the assessment might be complicated if third-party competitors were to enter the market while the defendant was injuncted but the defendant had not produced any evidence on that point. The defendant had argued that it would lose sales of uteroscopes if it were prevented from selling UAS but the volume of those sales was predictable. Miss May also rejected the defendant's contention that the defendant would suffer reputational damage were it to be injuncted and that it would be difficult to enforce a cross-undertaking as to damages against a claimant in China. She concluded that damages would have been an adequate remedy to the defendant under Stage 3 if the analysis had gone that far.
Stage 4 - Balance of Convenience
Had it been necessary for the deputy judge to consider the balance of convenience she would have decided the issue in favour of the defendant. It had submitted that the injunction would enjoin it from conduct it had already commenced. As a result, if the injunction was granted it would not have preserved the status quo. Also, the balance of the risk of injustice would have come down in favour of the defendant because, as indicated above, calculating damages to the defendant after the trial would have been more difficult than calculating the claimant's damages.
Comment
In contrast to Recorder Michaels's judgment in Mechanical-Copyright Protection Society Ltd and another v Made Television Ltd and others [2024] EWHC 405 (IPEC) (29 Feb 2024) and Pat Treacy's in Wise Payments Ltd v With Wise Ltd and others [2024] EWHC 234 (IPEC) (9 Feb 2024) and Ocean On Land Technology (UK) Ltd and Another v Land and Others [2024] EWHC 396 (IPEC) (4 March 2024) which I discussed in IPEC’s Cost Benefit Analysis Test in my IP Update newsletter for April 2024 neither the parties nor the deputy judge addressed the question of whether an interim injunction application in IPEC was appropriate. Such applications are rare because trial dates are fixed at the first case management conference and that is because damages are limited to £500,000 and the maximum costs that can be recovered for making or responding to an application under para 11.1 (b) and Table A of the Part 46 Practice Direction is £4,000.
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