BASF SE v Sipcam (UK) Ltd

On an application for an interim patent injunction, the court must first identify an arguable case and then apply the American Cyanamid principles. Where refusal risks permanent price depression and an injunction would cause only quantifiable, temporary loss pending a speedy trial, the balance of convenience may favour restraint. The status quo is assessed in the light of the parties’ actual conduct and correspondence. A claimant’s delay will not count against relief where it acted reasonably and the defendant’s conduct materially obscured its launch plans. The court may decline to take account of relative strength of case where the balance is not sufficiently even and the merits would not determine the application. A “clearing the way” consideration is fact-sensitive and may carry no weight where the defendant could not fairly be expected to know that litigation was inevitable.

BASF sought an interim injunction restraining Sipcam from launching and selling Most Micro, a pendimethalin capsule-suspension formulation, pending trial of BASF’s claim that the product infringed European Patent (UK) 0 747 116. Sipcam accepted that BASF had an arguable infringement case but maintained that its non-infringement defence was stronger. The dispute centred on whether calcium nitrate had been present before the capsule walls were formed.

The application also raised the effect of BASF’s conduct in seeking inspection and negotiating undertakings, the proper status quo, the risk of irreparable harm to each party, and whether the relative strength of the parties’ cases or a “clearing the way” consideration should affect the outcome.

Application granted. An interim injunction was granted, with a cross-undertaking in damages in favour of Sipcam (UK) Ltd and Sipcam SpA. The court indicated that a speedy trial and an independent inspection of the manufacturing process were required.

1. There was a proper arguable case of infringement and an equally proper arguable defence. The dispute could best be resolved by an unfettered inspection by independent experts, who could take samples and analyse the process and ingredients.
2. Applying American Cyanamid, the balance of convenience favoured BASF. Refusal risked irredeemable price depression and a permanent change in the relevant market. By contrast, if the injunction proved unjustified, Sipcam’s lost sales would be capable of assessment, particularly if a speedy trial allowed it to return to the market.
3. The relevant status quo was that Sipcam was not yet selling in the United Kingdom. BASF had acted reasonably in attempting to resolve the dispute. Sipcam’s correspondence and conduct had led BASF reasonably to believe that sales would not begin before the autumn, whereas Sipcam had in fact taken orders and launched earlier. The correspondence therefore favoured BASF.
4. The court declined to rely on the “clearing the way” factor discussed in SmithKline Beecham v Apotex, [2002] EWHC 2556 (Pat), approved by the Court of Appeal at [2003] EWCA Civ 137. Sipcam’s Italian sales of the same product, in a state covered by the Italian designation of the patent, meant that it was not fair to assume that litigation had been inevitable before February 2013.
5. The court did not take account of relative strength of case. The balance was not sufficiently even for that approach, and the evidence did not establish that an injunction would effectively end Sipcam’s case. The technical evidence raised a serious question about calcium’s location, but did not prove infringement definitively.