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

On an application for an interim injunction, the court must apply the structured approach in American Cyanamid Co v Ethicon Ltd [1975] AC 396. The merits ordinarily remain confined to the low threshold of a serious issue to be tried, unless the case is suitable for summary determination or the facts are unequivocal at the final balancing stage.

Irreversible market effects do not necessarily make damages inadequate. The relevant question is whether the loss can be quantified and compensated. In a pharmaceutical patent case, market data, sales records, price information and properly proved projections may permit compensation for both immediate losses and later consequences. The application therefore failed because damages were an adequate remedy.

Neurim, the proprietor of a patent concerning prolonged-release melatonin formulations, and Flynn, its exclusive licensee, sought an interim injunction restraining Mylan from launching a generic product pending an expedited trial. Mylan intended to rely on a marketing authorisation derived from Circadin’s authorisation. The patent had also been revoked by the EPO Opposition Division, although that decision was under appeal.

The application raised issues concerning the American Cyanamid test, the relevance of the EPO decision, Flynn’s standing, the scope and quantification of recoverable patent-infringement losses, and the effect of generic entry on prices and market position. The central question was whether interim protection should be granted pending final judgment.

1. Application dismissed. The court declined to grant an interim injunction.
2. The governing framework was the four-stage approach in American Cyanamid Co v Ethicon Ltd [1975] AC 396: whether there was a serious issue to be tried; whether damages would be adequate for the claimant; whether the claimant’s undertaking would adequately protect the defendant; and, if necessary, where the balance of convenience lay.
3. The serious-issue threshold is deliberately low and prevents a trial within a trial. The court should not resolve difficult factual disputes or difficult questions of law at the interlocutory stage. The approach in Series 5 Software Ltd v Philip Clarke [1996] FSR 273 was not adopted insofar as it suggested a broader merits shortcut. National Commercial Bank Jamaica v Olint [2009] UKPC 16 and Warner-Lambert v Actavis [2015] EWHC 72 (Pat) were treated as consistent with American Cyanamid.
4. The EPO Opposition Division’s decision was not binding on the English court. The relevance of foreign decisions and EPO proceedings had to be assessed through the prism of the proceedings in this jurisdiction. The pending EPO appeal and the reasons for the EPO decision were therefore immaterial to whether there was a serious issue to be tried.
5. There was plainly a serious issue concerning validity and infringement. Questions concerning Flynn’s status as an exclusive licensee and the recoverability of losses arising from off-label uses were difficult, fact-sensitive matters for trial. They were not suitable for final determination on the interim application. Section 67 of the Patents Act 1977 was relevant to Flynn’s standing, but did not require the issue to be resolved at this stage.
6. Although generic entry might cause an irreversible or slowly reversible depression in prices, that was not the legal test. The ordinary tortious measure of patent damages could, in principle, compensate for losses in both the direct-competition period and the later period before patent expiry. Sales records, price data and properly proved projections could support the assessment.
7. Damages were accordingly an adequate remedy for Neurim and Flynn, so the application failed at Stage 2. The court nevertheless observed that Mylan’s failure to clear the way by challenging validity in this jurisdiction was a relevant factor at Stage 3, and that third-party interests, including those of the NHS, could be considered when exercising the discretion. Those observations did not alter the result.