American Cyanamid Co v Ethicon Ltd

An applicant for an interlocutory injunction need not establish that success at trial is probable. The claim must disclose a serious question to be tried and a real prospect of obtaining final relief. The court should avoid resolving disputed evidence or difficult legal questions at this stage.

The court should then consider the adequacy of damages for each party, including the protection afforded by the applicant’s undertaking. Where those remedies leave a risk of uncompensated harm, the court must determine the balance of convenience. Preserving the status quo is prudent when other considerations are evenly balanced. Relative merits may be considered only when one case is plainly and disproportionately stronger on facts not credibly disputed. The same principles govern patent actions.

American Cyanamid Co v Ethicon Ltd [1975] AC 396 concerned a patent for absorbable surgical sutures. The patent proprietor alleged that a proposed competing suture would infringe its patent and brought a quia timet action. The defendant disputed the construction and validity of the patent.

Graham J granted an interlocutory injunction on the proprietor’s undertaking in damages. The Court of Appeal discharged it after concluding that the proprietor had not established a prima facie case of infringement. The central issue before the House was whether an applicant had to demonstrate probable success before the court could consider the balance of convenience and, if not, whether Graham J’s order should be restored.

The appeal was allowed unanimously and Graham J’s interlocutory injunction was restored. Lord Diplock delivered the leading speech. Viscount Dilhorne and Lords Cross of Chelsea, Salmon and Edmund-Davies expressly agreed with his reasons.

1. Per Lord Diplock: interlocutory injunctions in patent infringement proceedings are governed by the same principles as injunctions in other actions. Modern patent examination procedures provide a good prima facie reason for treating a granted patent as valid. The former practice, reflected in Smith v Grigg, Limited [1924] 1 K.B. 655, of withholding relief merely because validity would be challenged had become obsolete.
2. Per Lord Diplock: the applicant need not prove a probability, or a strong prima facie case, of ultimate success. The court need only be satisfied that the claim is neither frivolous nor vexatious and that there is a serious question to be tried. Unless the material discloses no real prospect of obtaining a permanent injunction, the court should proceed to the balance of convenience.
3. Per Lord Diplock: the court must not conduct a preliminary trial on incomplete and untested affidavit evidence. It should not resolve evidential conflicts or difficult questions of law requiring mature consideration. Those matters belong to the trial. The undertaking in damages assists the court in preserving this neutrality.
4. Per Lord Diplock: the court should first ask whether damages would adequately compensate the applicant if final relief were granted and whether the defendant could pay. If so, an injunction should normally be refused. If damages would be inadequate, the court should ask whether the applicant’s undertaking would adequately compensate the defendant if the claim failed and whether the applicant could pay. Any remaining uncertainty must be resolved by weighing the balance of convenience and the extent of each party’s potentially uncompensated disadvantage.
5. Per Lord Diplock: where other factors are evenly balanced, prudence favours preserving the status quo. Relative merits may tip the balance only where undisputed evidence reveals a marked disparity between the parties’ cases. The court must not determine comparative strength by trying disputed affidavits.
6. Per Lord Diplock: serious questions of infringement and validity arose. Ethicon had not yet marketed its product, whereas entry before trial risked causing Cyanamid lasting and difficult-to-quantify loss of market position and goodwill. Graham J had properly assessed those considerations. There was no basis for appellate interference with his discretionary decision, and his order was restored.

1. House of Lords: In American Cyanamid Co v Ethicon Ltd [1975] UKHL 1, reported at [1975] AC 396, the House unanimously allowed the patent proprietor’s appeal and restored Graham J’s interlocutory injunction.
2. Court of Appeal: On 5 February 1974 the court allowed Ethicon’s appeal and discharged the injunction because it considered that Cyanamid had not established a prima facie case of infringement.
3. High Court: On 30 July 1973 Graham J granted an interlocutory injunction on the usual undertaking in damages, having found a strong prima facie case and a balance of convenience favouring preservation of the status quo.