Novartis AG v Hospira UK Ltd

Where a claimant has lost at trial, an interim injunction pending appeal requires a real prospect of success. The court must then assess all relevant circumstances, especially the period before the appeal and the balance of hardship. It should not ordinarily give separate weight to the degree of strength of an arguable appeal, and refusal need not render the appeal nugatory.

In pharmaceutical patent litigation, a generic manufacturer which proposes to launch must clear all arguable obstacles, including a possible appeal. Where entry is likely to cause a price spiral and other loss that cannot adequately be remedied, an injunction may be appropriate despite the generic’s potential loss of first-mover advantage and the public interest in lower prices.

Novartis AG owned patents for the use of zoledronic acid in treating osteoporosis. Hospira UK Limited, intending to market a generic product, had succeeded in revocation proceedings in which the use patents were held invalid. Novartis proposed to appeal that decision.

After expiry of a separate supplementary protection certificate, Hospira intended to launch. Novartis therefore issued infringement proceedings and sought an interim injunction pending the validity appeal. Birss J refused relief in [2013] EWHC 1285 (Pat), although he considered that an injunction would probably have been granted before trial. He treated the first-instance decision and pre-trial correspondence as factors against relief.

The central issue was the proper exercise of the discretion to grant an interim injunction pending an appeal after the patentee had lost at first instance.

1. Appeal allowed. The court granted an injunction restraining sale of Hospira’s product until final judgment in the validity appeal or further order.

2. Where a claimant has failed at trial, the court may nevertheless grant interim protection pending appeal. It must first be satisfied that the appeal has a real prospect of success. It should then assess all relevant circumstances, including the likely time before the appeal, the harm caused by granting or refusing relief, and the need to preserve the court’s ability to do justice after the appeal. The jurisdiction under Supreme Court (now Senior Courts) Act 1981 is not confined to cases in which refusal would render the appeal nugatory. The court adopted the balancing approach in Minnesota Mining v Johnson and Johnson [1976] RPC 671.

3. Once real prospects of success were established, Birss J should not have put additional weight against Novartis because its appeal was no more than plainly arguable. There was no clear view on the merits favouring either party. The fact that an injunction would have been granted before trial was not determinative, but the balance of hardship had to be assessed afresh without the erroneous merits weighting.

4. The judge also erred in treating Novartis as responsible for not arranging an earlier trial or appeal. Litigation remains unfinished while an appeal is available. In pharmaceutical litigation, a generic manufacturer planning to launch must clear the way by removing all arguable patent obstacles. It was not for Novartis to warn Hospira that it might seek relief pending appeal, and the correspondence did not amount to an agreement that the first-instance decision would finally clear Hospira to launch.

5. Exercising the discretion afresh, the court held that Novartis faced more certain and greater unquantifiable harm. Generic entry would probably trigger a downward price spiral which could not readily be reversed if Novartis succeeded. Hospira’s loss of first-mover advantage was less certain, particularly because other generic suppliers might enter the market. The limited Paget’s disease market and the public interest in lower medicine prices did not outweigh that harm, notwithstanding the offered cross-undertaking in damages.

• Court of Appeal (Civil Division): Allowed Novartis’s appeal and granted an interim injunction pending final judgment in the validity appeal: [2013] EWCA Civ 583.

• High Court, Chancery Division (Birss J): Refused Novartis an interim injunction in infringement proceedings pending its appeal from the revocation decision: [2013] EWHC 1285 (Pat).