Legal Updates

Intellectual Property Law – Patent – Pharmaceuticals – Generic Drugs - Damages – Interim Injunction – Patent Infringement

The case of Leo Pharma and Another v Sandoz Ltd [2008] related to alleged infringement of a patented pharmaceutical cream called Calcipotriol. The defendant developed a generic version of the cream called Calcipotriol Monohydrate which is a new crystalline form of calcipotriol used to treat psoriasis.

The first claimant owned the patent rights to the cream calcipotriol. The second claimant was a subsidiary of the first claimant, while the defendant was a substantial business in the market of generic pharmaceutical products and intended to exploit the first generic cream in respect of calcipotriol.

The defendant obtained market authorisation for the generic version of the cream containing the monohydrate version of the calcipotriol. Subsequently, the claimants brought proceedings against the first defendant for patent infringement seeking an interim injunction to restrain the distribution of the cream on the grounds that the key ingredients of the defendant’s cream contained a monohydrate crystalline form of calcipotriol.

A number of issues arose as to the adequacy of damages for the claimant in the event that the defendant was allowed to market the cream up until the trial. There were also issues relating to the adequacy of a cross-undertaking in damages for the defendant.

Those issues were to be considered in conjunction with the claimant’s financial uncertainties, such as:

   §   The potential loss of sales;

§   The need to reduce prices due to the presence of a competitor in the market; and

§   Potential losses for the defendant, which included the loss of the benefit of being the first generic supplier to market the cream.

In addition, the effect of the balance of convenience and the status quo fell to be determined.

The judge allowed the interim injunction and stopped the distribution of the new cream. He held that on the evidence presented before the court, the claimant could not adequately be compensated by way of damages. He further held that the balance of convenience meant that the injunction against the defendant should be granted.

The defendant appealed against this decision. The defendant argued that the judge had been incorrect in deciding whether there could be a price cut for the patented cream before the trial which would produce irreparable damage to the claimants.

The claimant in this case submitted that the judge had been entitled on the evidence to come to the decision he had in relation to the possible price cut.

The appeal was dismissed.

It was held that it was important to consider precisely what it was that the judge had to consider. He did not have to decide on a balance of probabilities whether or not there would be price cuts if the injunction was not granted. He had to consider the various possibilities which might occur before the trial, disregarding any fanciful possibilities. If there was the possibility of a particular circumstance arising, the judge had been entitled to go on and consider whether damages were an adequate remedy in those circumstances. This meant that the judge had applied the correct test and was accordingly entitled to reach the conclusion that he had.

Note:  In an interim injunction case, the test is whether there is an arguable case for proceeding to trial and on the balance of convenience, which party has a chance of succeeding if the case went to trial and if the injunction was granted whether damages would be an adequate remedy.

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© RT COOPERS, 2008. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.