Cephalon, Inc & Ors v Orchid Europe Ltd & Anor

On an application for an interim injunction, the claimant must show a serious question to be tried, or a realistic prospect of succeeding in obtaining a permanent injunction. The court should not conduct a mini-trial or resolve conflicting evidence at that stage. Relative merits may exceptionally be considered where the evidence is undisputed and one case is disproportionately stronger. The balance of convenience requires comparison of the likely irreparable and unquantifiable harm on each side. Factors such as a generic manufacturer’s failure to clear the way may be relevant, but they are not rules of law and must be weighed against the evidence as a whole. An expedited trial may be appropriate where commercial uncertainty is significant.

The claimants, proprietors and licensees of patents relating to modafinil, sought to restrain the defendants from marketing generic modafinil pending trial. The application concerned alleged infringement of patents relating to particle size in a pharmaceutical composition.

The principal issues were whether there was an arguable or realistic case of infringement and validity, whether the court should take relative merits into account, and where the balance of convenience lay. The court also considered whether the matter should be expedited.

1. The application for interim relief was refused. The court directed an expedited trial in April 2011.

2. The claimants’ construction of the patent, under which particle size was measured in the composition rather than solely in the bulk active ingredient, was manifestly arguable. The evidence concerning sonication, tabletting and particle-size reduction was sufficient to establish a serious question to be tried, although it did not establish infringement on the balance of probabilities.

3. The applicable threshold was whether the claimants had a realistic prospect of succeeding in obtaining a permanent injunction. They had to provide sufficiently precise factual evidence. The court could not invent factual hypotheses for them and was not required to resolve conflicting evidence at the interlocutory stage: re Lord Cable [1977] 1 WLR 7; American Cyanamid v Ethicon [1975] AC 513.

4. The defendants’ obviousness case based on Lafon was superficially attractive, but the evidence was incomplete and inconclusive. The claimants therefore retained an arguable case on validity. This was not an exceptional case in which the relative strength of the parties’ cases could properly determine the balance of convenience. The exception identified in American Cyanamid v Ethicon required facts free from credible dispute and a disproportionate difference in strength.

5. The court had to weigh the likely injustice of granting an injunction later found unjustified against the injustice of withholding an injunction later found justified. Both parties could pay damages. The claimants faced possible goodwill and pricing effects, but the evidence did not establish irreversible price erosion. The defendants faced a strong likelihood of losing the unique opportunity to be first generic to market, with no reliable yardstick for quantifying that loss.

6. The defendants’ failure to take steps to clear the way was a relevant factor, but it was not a principle of law and did not necessarily outweigh the other considerations. The cases concerning pharmaceutical generic competition, including SKB v Apotex [2003] FSR 30, had to be applied according to their evidence and circumstances.

First-instance interlocutory decision; no appellate history is stated in the judgment.