Novartis Ag v Hospira UK Ltd

After a full trial has determined the parties’ rights, an application for an interim injunction pending appeal is governed by the court’s discretion and the need to preserve the effectiveness of the appeal. A good arguable appeal is necessary, but a real prospect of success is not automatically equivalent to the merits threshold at the start of proceedings. The court must weigh the risks of significant loss that damages may not compensate, while giving substantial weight to the fact that the patent has been found invalid. An injunction may be appropriate where required to prevent the appeal becoming nugatory or where the appeal has strong prospects. Where the appeal is merely plainly arguable and the risks are balanced, the risk should ordinarily be borne by the appellant.

Novartis sought an interim injunction restraining Hospira from launching generic zoledronic acid pending Novartis’s appeal. The application followed a full revocation trial before Arnold J, who held Novartis’s patents invalid because the claims were not entitled to priority, although he found the invention non-obvious. Permission to appeal had been granted.

The compound SPC was due to expire on 15 May 2013. Hospira wished to launch under its marketing authorisation immediately afterwards. Novartis argued that the appeal raised an arguable construction issue and that generic entry would cause an irreversible price reduction. Hospira relied on the trial judgment, its possible first-mover advantage, and the quantifiability of Novartis’s loss. The central issue was whether interim relief should be granted after trial, where the appeal was plainly arguable but its outcome could not be predicted.

1. Application refused. The court had jurisdiction to grant interim relief pending appeal, but the application was an exercise of discretion.
2. The principles in Erinford Properties Ltd v Cheshire County Council [1974] Ch 261, Ketchum International plc v Group Public Relations Holdings Ltd [1997] 1 WLR 4 and the other authorities showed that the court should, where possible, preserve the practical value of a successful appeal. However, after a full trial the court must give weight to the judgment determining the parties’ rights. The situation is materially different from an application before trial.
3. A good arguable appeal is required before an injunction pending a full appeal is likely to be granted. The existence of a real prospect of success does not mechanically justify an injunction merely because equivalent facts might have justified relief before trial. The relevant considerations after trial reflect the need to prevent the appeal becoming nugatory, although the jurisdiction is not limited to that case.
4. The appeal on priority was plainly arguable, but the court could not predict its outcome and declined to examine the merits further. The evidence established a real risk of unquantifiable loss to both parties. Hospira might lose a valuable first-mover advantage, whereas Novartis might suffer a substantial price reduction that would be difficult to reverse.
5. The losses were capable of being assessed to some extent, and both parties could meet any award. The proceedings had been arranged on the footing that the trial would determine the position by the expiry of the SPC. The balance therefore differed from that applicable before trial. The risk should be borne by Novartis as appellant. The interim injunction was refused.
6. Novartis’s application for permission to appeal was refused because the decision was an exercise of discretion, and the Court of Appeal could grant permission or relief directly. Hospira was ordered to pay Novartis’s costs of the application? No: Hospira, as successful party, was awarded its costs of the application. Hospira undertook not to launch before 4 pm on Friday to allow Novartis to approach the Court of Appeal.

The judgment itself describes the application as following Arnold J’s first-instance revocation judgment, in which the patents were held invalid and permission to appeal was granted. No citation for that judgment is stated. The present court refused the interim injunction and refused permission to appeal.