Neurim Pharmaceuticals (1991) Ltd & Anor v Generics UK Ltd (t/a Mylan) & Anor

On an application for an interim injunction, the prohibition against conducting a mini-trial applies to whether there is a serious question to be tried. At the later stages of the American Cyanamid inquiry, the court must evaluate the available evidence as well as it can.

Damages need not provide a perfect remedy to be adequate. Their adequacy depends on a judicial evaluation of the evidence. Where reliable forecasts, sales records and pricing data permit lost sales and price depression to be assessed, pharmaceutical market disruption may be compensable despite some uncertainty. Claims of consequential business loss must be examined critically in light of the likely duration and scale of competition and the claimant’s available resources.

Neurim owned a patent concerning prolonged-release melatonin, and Flynn was its registered exclusive licensee. They alleged that Mylan’s proposed generic product would infringe the patent and sought an interim injunction preventing its launch. A trial had been expedited to October 2020, so the proposed injunction would operate for just over four months.

The Patents Court, in [2020] EWHC 1362 (Pat), refused relief because damages would adequately compensate Neurim and Flynn. They appealed, contending principally that generic entry would depress sales and prices and cause wider damage to research, products, employment and distribution networks. The central issue was whether those losses were sufficiently difficult to quantify to make damages inadequate under the established interim-injunction principles.

1. Appeal dismissed. Floyd LJ, with whom Males and Arnold LJJ agreed, held that damages would adequately compensate Neurim and Flynn if they succeeded at trial. It was therefore unnecessary to consider the balance of convenience or the issues raised by Mylan’s respondent’s notice.

2. The prohibition against a mini-trial governs the serious-question stage of the American Cyanamid inquiry. At the stages concerning adequacy of damages and the balance of convenience, the court must do the best it can with the written evidence. The judge had erred by treating disputed facts at those stages merely as serious questions to be tried, but the Court of Appeal could evaluate the evidence itself and the error did not affect the result.

3. Damages need not constitute a perfect remedy. Adequacy has no precise boundary and requires judicial evaluation in the circumstances. If the claimant’s loss does not cross the boundary into inadequacy, an interim injunction will normally be refused.

4. The alleged consequential loss was not established. Much of the supporting evidence assumed generic competition lasting one or two years, whereas the expedited trial reduced the relevant period to just over four months. Neurim had sufficient reserves to maintain the activities in question, and the evidence did not show that lost revenue during the short period would require research, clinical trials, educational programmes or other operations to be curtailed.

5. The evidence did not establish that a price spiral caused by multiple generic entrants was likely before trial. Branded prescriptions protected a substantial part of Flynn’s market, reclassification under the NHS Drug Tariff was unlikely before trial, and the evidence fell well short of showing that another generic supplier would enter during that period.

6. Lost sales and price depression were capable of adequate assessment. Existing forecasts could establish the counterfactual revenues, while actual sales and pricing records could quantify losses during the pre-trial period. Any continuing post-trial effect could be assessed by extrapolation. Some uncertainty did not make the remedy inadequate, particularly because damages may be assessed liberally without punishing the infringer.

1. Court of Appeal (Civil Division): The court dismissed the appeal from the refusal of an interim injunction: [2020] EWCA Civ 793.
2. Patents Court: Marcus Smith J refused the claimants’ application for an interim injunction on the ground that damages would be an adequate remedy: [2020] EWHC 1362 (Pat).