Novartis AG & Anor. v Teva UK Limited & Ors.

On an application for permission to appeal an interim-injunction decision, the appellate court will not interfere with evaluative findings about the likely commercial consequences of generic entry unless a recognised error is shown. A judge may distinguish between an accepted short-term price reduction and an unproved severe price spiral, and may assess the evidential likelihood that a market will return to its previous price after trial. The adequacy of damages depends on those findings. A novel legal issue does not, by itself, justify permission where the relevant injunction ground has no real prospect of success.

Novartis sought permission to appeal from Roth J’s refusal of an interim injunction against generic manufacturers of fingolimod pending the October 2022 patent trial. The application concerned a patent which had not yet been granted, although the parties accepted that the proposed products would infringe if the patent were valid. Roth J held that the court had jurisdiction to grant interim relief notwithstanding section 69 of the Patents Act 1977, but concluded that damages were an adequate remedy and that the remaining American Cyanamid factors also supported refusal.

The proposed appeal challenged factual findings about price depression, restoration of the monopoly price, adequacy of damages and related matters. The central issue was whether any ground had a real prospect of success or whether there was some other good reason to grant permission.

Permission to appeal refused.

1. The judge below was entitled to evaluate the evidence about the likely effect of generic entry. He was not required to accept the evidence uncritically. The distinction between marked price depression and a severe price spiral was open to him, and his reasons for rejecting the latter as a material risk before trial disclosed no arguable error. Neurim v Generics [2002] EWCA (Civ) 973 was cited in support of that approach.
2. The judge was also entitled to reject the case that Novartis would be unable to restore the monopoly price or sales after trial. His assessment concerned the strength of the likelihood of a material future event. The sophistication of the purchasers, the short duration of the proposed injunction, the drug’s previous approval and pricing, and the seller’s lack of a rational incentive to reduce its price were relevant considerations.
3. It followed that the conclusion that damages would be an adequate remedy was not realistically challengeable. There was no real prospect of overturning the principal basis of the decision, so it was unnecessary to examine the remaining grounds.
4. There was no other good reason to grant permission. No point of principle concerning quantification of loss arose, there was insufficient time to review the American Cyanamid approach in the Supreme Court, and the novel pre-grant injunction issue did not justify permission where the injunction challenge had no real prospect of success.
5. Practice Direction 52C rule 20(2) did not apply because the respondents had been given the ability, rather than being directed, to attend. Applying the ordinary approach under rule 20(1), there was no order as to the costs of the permission application.

1. Court of Appeal (Civil Division): permission to appeal from the refusal of an interim injunction was refused. The court made no order as to the costs of the permission application.
2. High Court of Justice, Business and Property Courts of England and Wales, Intellectual Property List (ChD), Patents Court: Roth J refused the interim injunction on 26 April 2022 in [2022] EWHC 995 (Ch). He held that the court had jurisdiction to grant interim relief but that damages were adequate and the remaining American Cyanamid factors also favoured refusal.