American Cyanamid Co v Ethicon Ltd

The Court held that the test for granting an interlocutory injunction is discretionary and not governed by a rigid requirement to show a prima facie or >50% chance of success.

The correct approach requires:

• that there is a serious question to be tried;
• an inquiry whether damages would be an adequate remedy for the party likely to succeed;
• where adequacy of damages is doubtful, an assessment of the balance of convenience; and
• where factors are evenly balanced, a preference for preserving the status quo.

This framework governs interlocutory injunctions in patent cases as in other fields.

Cyanamid, proprietor of a patent for absorbable synthetic sutures, sought an interlocutory injunction to restrain Ethicon's proposed launch of a competing copolymer suture (XLG). Graham J granted the injunction. The Court of Appeal discharged it after evaluating conflicting affidavit evidence and concluding no prima facie case of infringement was established. The House of Lords allowed Cyanamid's appeal. The main issue was the correct legal test and discretion for interlocutory injunctions, and whether a requirement of a probability of success prevented consideration of the balance of convenience.

1. Disposition: The House of Lords allowed the appeal and restored the interlocutory injunction granted by Graham J (per Lord Diplock; other Law Lords concurring).
2. Leading principle: Per Lord Diplock, there is no inflexible rule requiring the applicant to show a probability of success (>50%) or a strong prima facie case before the court may consider the balance of convenience. The discretion is governed by practical principles applicable across subject-matters.
3. Framework for interlocutory injunctions: The court should proceed in stages: (a) determine whether there is a serious question to be tried; (b) ask whether damages would be an adequate remedy for the party likely to succeed; (c) if adequacy of damages is doubtful, assess the balance of convenience between the parties; and (d) where factors are evenly balanced, preserve the status quo. This framework replaces reliance on labels like "probability" or "strong prima facie case" as rigid tests (per Lord Diplock).
4. Application to patent context: The grant of a patent after examination provides a good prima facie reason to treat the patent as valid, but patent cases are to be treated by the same discretionary principles as other cases. Special commercial factors, such as time-to-establish a pharmaceutical product and damage to goodwill, are relevant in the balance of convenience (per Lord Diplock; applied by Graham J and endorsed by the House).
5. Appellate restraint: An appellate court should be slow to disturb a judge with special expertise (here the Patent Judge) unless he has erred in law. The Court of Appeal erred in treating the question as requiring a quasi-final judgment on affidavit evidence and so precluding proper balancing.
6. Practical guidance: The court must not try the action on conflicting affidavits. Evidence untested by cross-examination should not be the basis for definitive findings. Where the remedies in damages are adequate and payable, an injunction should normally not be granted. If not, consideration of balance of convenience and status quo follows. (per Lord Diplock)

• Court of Appeal: Appeal allowed; Graham J's interlocutory injunction discharged (see reasons cited in Lord Diplock's speech).
• House of Lords: Appeal allowed; order of Graham J restored (per Lord Diplock; Viscount Dilhorne, Lord Cross, Lord Salmon and Lord Edmund-Davies concurring).