Prominence given to the preservation of the status quo

The Court of Appeal has stayed an interim injunction to allow Mylan’s generic to remain on the market in a bid to preserve the status quo, despite recognising that damages could be an inadequate remedy for Neurim, if Mylan is infringing its patent.

This is the latest instalment in a series of decisions between Neurim Pharmaceuticals (1991) Ltd & Anor (“Neurim”) and Generics (UK) Ltd & Anor (t/a “Mylan”). Neurim exclusively licensed EP1441702 (the “Parent”) to Flynn Pharma who market Circadin, a drug which treats insomnia. The Parent has been subject to the following back and forth between the EPO and Court:

20 November 2019:

The Opposition Division held that the Parent lacked novelty and revoked it. Revocation was suspended when Neurim appealed.

14 February 2020:

Neurim brought an infringement claim in the Patents Court.

02 March 2020:

Neurim applied for an interim injunction in the Patents Court to restrain Mylan from launching a generic version of Circadin.The injunction was refused but directions were given for an expedited trial.

24 June 2020:

Neurim appealed the interim injunction decision. The Court of Appeal refused the appeal on grounds that Neurim would be adequately compensated by an award of damages for losses suffered by it as a result of any infringing acts before the expedited trial.

04 December 2020:

The Patents Court held that the Parent (as proposed to be amended) was valid and had been infringed.

18 December 2020:

The Board of Appeal orally announced that the Parent was invalid for insufficiency. The Parent was revoked when Neurim withdrew its appeal.

This particular decision relates to Neurim’s EP3103443 (the “Divisional”), whose claims are patentably indistinct from the Parent (as amended).

On 10 February 2022 the Patents Court found Mylan had infringed the (valid) Divisional on the papers. This decision was followed by an oral hearing where the Court maintained its reasoning. Therefore, Neurim was granted an injunction to restrain Mylan from infringing. Clearly, the Court did not follow the Board of Appeal’s insufficiency findings in relation to the identical Parent (nor is it required to).

The Court of Appeal granted Mylan permission to appeal. Expedition was deemed appropriate in light of the Divisional’s August 2022 expiry. As such, the question before the Court was whether to grant a short-term interim injunction.

Lord Justice Arnold found that Neurim could be adequately compensated by a damages award because:

• the expedited trial would result in a short window for infringements; and
• evidence didn’t suggest the stay would give generic suppliers a “green light” to come on the market during that window.

The Court held that disrupting the status quo would undermine Mylan’s gained advantage as the first generic supplier on the market, with a right of first refusal of future contracts to supply pharmacies. The Court were persuaded that quantifying Mylan’s loss of sales would be difficult if it granted the injunction.

Lord Justice Birss concurred that the preservation of the status quo was the decisive factor. Notwithstanding that, he emphasised that due to the uncertainties and complexities in the case, there would be broad margins for numerical error in any damages assessment subsequent to an appeal decision.

The Court made reference to Neurim’s ongoing proceedings against Teva, in relation to Teva’s generic equivalent of Circadin. Without pre-judging the outcome of those proceedings, the Court noted that, in accordance with the status quo, Mylan are the sole generic incumbent, and Teva are not on the market.

Parties seeking an interlocutory injunction ought to bear in mind that the status quo will have a critical influence on the Court’s decision.

Neurim Pharmaceuticals (1991) Ltd & Anor v Generics (UK) Ltd & Anor (Rev2) [2022] EWCA Civ 370

This article was prepared by HGF IP Solicitor Christie Batty.