HomeInsightsQuia Timet Injunction Granted where Defendant Failed to State Its Intentions

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Merck Sharp Dohme Corp., Bristol-Myers Squibb Pharmaceuticals Limited v Teva Pharma B.V., Teva UK Limited [2013] EWHC 1958 (Pat) 

Introduction

The UK Patents Court granted the patentee and exclusive licensee (together “BMS”) a final ‘quia timet’ injunction against the defendants (together “Teva”) in circumstances where Teva had (1) the opportunity and motivation to infringe if it wished to so, (2) previously shown a propensity to launch at risk in respect of different products and patents, and (3) failed to state its intentions in response to a warning letter.

Background

The dispute concerned efavirenz, a viral replication inhibitor used in the treatment of HIV. Efavirenz is protected by European patent (UK) 0 582 455 and supplementary protection certificate SPC/GB00/035 which extends protection for efavirenz until 19 November 2013.

In October 2011 it was made public that Teva was likely to be granted marketing authorisation for a generic version of efavirenz in the near future. This prompted BMS to write to Teva in early December 2011 seeking undertakings not to launch prior to the expiry of the SPC. Teva did not respond at all to this first letter.

BMS wrote to Teva repeating its demands for undertakings in late January 2012, by which time Teva’s marketing authorisation had been granted and so, from a regulatory perspective, Teva was able to launch its generic efavirenz product.

Teva eventually provided a substantive response to BMS on 10 February 2012 (the day after proceedings were issued). Teva refused to give the undertakings sought and refused to provide any information relating to the launch date for efavirenz in the UK on the grounds that such information was confidential.  Teva also pointed out that the grant of a marketing authorisation permits, but does not require Teva to put the product on the market and that it was not Teva’s policy to infringe valid patents.

In March 2012 an interim injunction was granted on the balance of convenience – the merits of the case were not considered in detail. The case proceeded to full trial in June 2013 where BMS sought a final injunction to restrain the threatened infringement.

The Decision

The key issue before the court was whether or not, at the date the action started – 9 February 2012, Teva was threatening to launch efavirenz prior to the expiry of the SPC. Birss J held that an injunction should be granted if there was at the date proceedings were issued “a concrete, strong and tangible risk that an injunction is required in order to do justice in all the circumstances.

Teva argued that, as a matter of fact, it did not have any intention to launch at risk and the fact that BMS may have perceived there to be a threat of infringement was irrelevant. Birss J did not agree with either proposition.

Objective considerations

Birss J considered the following factors to point towards there being a “real risk” that an injunction was needed:

  • There was a “real commercial incentive” for Teva to launch at risk because the UK market for efavirenz is large and valuable and the first generic company on the market obtains a significant ‘first mover advantage’.
  • Teva had in the past shown a propensity to launch at risk surreptitiously and on a large scale.  In particular, Teva’s conduct in the atorvastatin case was cited where Teva indicated to Pfizer that it intended to launch upon expiry, and then without warning launched early.
  • Teva had obtained a marketing authorisation for its efavirenz product far in advance of the SPC expiry date. Although this did not in itself demonstrate an intention to launch efavirenz ‘at risk’, it did make such a launch feasible from a regulatory standpoint.

Subjective intention

As to Teva’s subjective intentions Birss J held that on the evidence:

  • Teva had been actively considering the possibility of launching the product in the UK before expiry of the SPC, even if it had not firmly made a decision to do so.
  • Teva actively wanted to keep the option of an at risk launch open.

Thus, he concluded that “a later decision to actually launch efavirenz before expiry would not be a change of mind, it would be the crystallisation of what was, as at 9 February 2012, an option Teva was taking steps to consciously keep open”.

Comment

Generic companies operating in the UK should take heed of this decision.  It suggests that the UK courts will take a tougher stance on the failure to engage meaningfully in pre-action correspondence.  Stock responses such as “it is our policy not to infringe any valid rights” may now not be enough to avoid legal proceedings being brought successfully. This signals a further move by the English courts to try to encourage generic companies to be more open with their plans and to ‘clear the way’ before launching generic products.

However, it is important to note that a large part of the prejudice against Teva in this case was its previous conduct in relation to atorvastatin.  Therefore, generic companies without a reputation for launching early in the face of strong patents and in circumstances where they has said that they will not do so, may receive more sympathy.

Published with minor alterations in Intellectual Property Forum, Issue 95, November 2013