Neurim Pharmaceuticals (1991) Limited & Anor. v Teva UK Limited

On an application for an interim injunction, the court should apply the five-stage American Cyanamid approach, including the prudential preservation of the status quo where other factors are evenly balanced.

The adequacy of damages and the likelihood of a downward price spiral in pharmaceutical markets are intensely fact-sensitive. Delay may affect the assessment of the balance and status quo without necessarily amounting to laches. The relevant status quo is ordinarily that existing immediately before the application notice was served. Where damages are materially less adequate for the defendant, and the status quo favours continuation of the defendant’s sales, an injunction may properly be refused.

Neurim, the proprietor of a patent concerning the use of prolonged-release melatonin, and Flynn, its exclusive licensee, sought an interim injunction restraining Teva from selling or supplying generic melatonin products pending trial or further order. The patent was due to expire on 12 August 2022.

Teva had launched its product in October 2021. The claimants delayed applying for interim relief until March 2022, while related patent proceedings concerning Mylan were continuing. The central issues were whether damages would be adequate for either side, whether Teva’s continued presence would cause a downward price spiral, where the balance of the risk of injustice lay, and what constituted the relevant status quo.

1. Application refused. The claimants established a serious issue to be tried on infringement and validity, but the remaining stages of the American Cyanamid approach favoured Teva.
2. For the period before expiry, the claimants’ losses could be calculated with a reasonably high degree of accuracy from market data, sales volumes and prices. The attribution of loss between generic suppliers might be disputed, but that did not make the claimants’ remedy inadequate. The prospect of a price spiral did not alter that conclusion.
3. For the post-expiry period, damages would not be an adequate remedy for the claimants because the effects of pre-expiry competition and any price depression were substantially uncertain. Damages would also not be adequate for Teva if an injunction were wrongly granted. Teva’s future sales volumes, prices and market share would be difficult to predict, and an injunction could deprive it of an established market foothold.
4. The evidence did not establish that a downward price spiral was likely before expiry. The situation was unusual because Mylan’s appeal was imminent and Teva had no evident commercial incentive to precipitate a price war. The issue was fact-sensitive, and general assumptions about generic competition could not replace the evidence in the particular case.
5. The claimants had delayed significantly. The delay did not disentitle them to relief on laches grounds, but it meant that Teva had built up a market presence and made substantial sales before the application. Teva had made its intentions clear and the claimants could have sought relief earlier.
6. The relevant status quo was the position immediately before service of the application notice on 14 March 2022. At that time Teva had been selling for four months. Preserving that position favoured leaving Teva on the market. The balance of the risk of injustice consequently favoured Teva.
7. The court declined to devise an alternative volume or price cap, partly because its wording and practical consequences had not been properly examined and because it might create competition concerns.

First-instance decision on an interim injunction application in the Patents Court. The judgment records related patent proceedings involving Mylan, including decisions of the High Court and Court of Appeal, but this application was determined independently.