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	England and Wales High Court (Patents Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Patents Court) Decisions >> Les Laboratoires Servier & Anor v KRKA Polska SP Zo.o & Anor [2006] EWHC 2453 (Pat) (03 October 2006) URL: http://www.bailii.org/ew/cases/EWHC/Patents/2006/2453.html Cite as: [2006] EWHC 2453 (Pat)

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IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		3rd October 2006

MR. JUSTICE KITCHIN:

Introduction

1. I have before me two applications in a patent action concerning EP (UK) 1 296 947 ("the Patent"). The first is an application by the claimants (collectively "Servier") for an interim injunction under the Patent to prevent the defendants (collectively "KRKA") from importing, offering to dispose of or disposing of within the UK a generic pharmaceutical containing as its active ingredient perindopril erbumine ("perindopril") in the alpha crystalline form pending the trial. The second is an application by KRKA for summary judgment on the basis that the Patent is clearly invalid.
2. The first claimant is the largest privately owned innovative pharmaceutical company in France and the second largest French pharmaceutical company worldwide. It holds 2,400 marketing authorisations worldwide, but the most commercially successful drug which it has developed and produced is Coversyl, whose active ingredient is perindopril. Servier are heavily committed to research and development. They invest 25% of their turnover and 2,500 of their employees work in research and development.
3. The second claimant is a UK registered company and a wholly owned subsidiary of the Servier Group. It currently has 501 employees, who are split between sales and marketing on the one hand and research on the other. The majority of its 345 medical representatives are engaged in supporting the sales of Coversyl.
4. Coversyl acts by blocking the activity of Angiotensin - Converting Enzyme ("ACE"), that is to say it is an ACE inhibitor. This is the basis of the action of the drug in reducing blood pressure and providing beneficial vascular and antiatherosclerotic effects. It is used in the treatment of hypertension, heart failure and coronary artery disease.
5. Coversyl has596 marketing authorisations and is sold in 108 countries around the world. It accounts for 31% of Servier's worldwide turnover and 87% of the turnover of the second claimant. Worldwide sales of the drug generated about £477 million in 2005 and about £72 million in the UK. During 2006, the growth rate of UK sales was 22%.
6. Coversyl is an important therapy and is broadly prescribed in the UK. The UK is currently the biggest national market worldwide for Coversyl, both in terms of turnover and units sold.
7. KRKA are members of the KRKA Group and are suppliers of a wide range of generic pharmaceutical products.

Background

8. The Patent relates to the alpha crystalline form of perindopril and methods for its preparation. It has been the subject of opposition proceedings before the European Patent Office ("EPO"), brought by a total of ten opponents, including KRKA. An oral hearing took place before the Opposition Division on 27^th July 2006and the Patent was upheld with amended claims. The arguments raised on this application by KRKA were considered and rejected by the Opposition Division during the course of the hearing. That decision is to be the subject of an appeal, at least by KRKA.
9. In December 2005, Servier became aware that KRKA had obtained a marketing authorisation for generic perindopril in Hungary and were offering to sell that product under the brand name Prenessa. Servier acquired a sample of the product and analysed it to determine its crystal form. They took the view that the product contained the alpha crystalline form and, thereafter, took steps to prevent KRKA from commercialising the product in Hungary. Those steps began with a cease and desist letter written on 4^th May 2006. Servier monitor the UK market constantly to look for the entry of generic versions of their branded products and, as part of that monitoring, discovered, on 11^th May 2006, that KRKA had been granted four marketing authorisations for generic perindopril in 2 and 4 mg forms in the UK. KRKA's marketing authorisations were obtained under the Mutual Recognition Procedure and the reference state was Hungary.
10. Mr. Falcand, the Chief Executive Officer of the second claimant, has deduced from this that the UK marketing authorisations are based on the same regulatory dossier as submitted in support of KRKA's application for a marketing authorisation to the Hungarian authorities and that the product which KRKA seek launch in the UK must therefore be identical to the one commercialised in Hungary.
11. Thereafter, Servier and KRKA corresponded through their UK lawyers. On 15^th May, Servier's solicitors wrote to KRKA drawing their attention to the fact that Servier had learnt that KRKA had obtained marketing authorisations for the sale of the generic form of perindopril in the UK and requesting, as a matter of urgency, information as to whether or not it was their intention to launch generic perindopril in the UK and, if so, the anticipated launch date, the provision of full details of the product and the industrial process by which it is produced, and a sample of the product itself.
12. On 31^st May, KRKA's solicitors provided a product description and, on 23^rd August, samples of KRKA's tablets were provided to an independent laboratory. In the meantime, on 1^st August, Servier issued proceedings seeking interim relief with an original return date of 13^th September. On 9^th August, KRKA's solicitors offered short-term undertakings not to launch their product in the UK until the earlier of the effective hearing date of the interim injunction application or the expiry of two clear working days' written notice of the proposed launch date. On 1^st September, KRKA served their application for summary revocation of the Patent. So it is that the two applications now come before me.
13. There are two other matters that I should mention at the outset. First, this is not the only infringement action under the Patent. In July 2006, Servier became aware that another generic manufacturer, Apotex, had applied for, and obtained, marketing authorisation for the marketing of a generic perindopril product in the UK. On 8^th August, Servier applied for, and were granted, an interim injunction to restrain the marketing of that product pending further hearing of the application, anticipated to take place in about three weeks' time. In the event, I understand the injunction has been continued by agreement pending the trial of the action which is currently listed to be heard in February of next year. I should add that Apotex accepted, for the purpose of the hearing, that the Patent was valid.
14. Secondly, another generic company, Ratiopharm, have also obtained authorisation to sell a generic perindopril product. Ratiopharm have undertaken to refrain from the launch of that product pending the conclusion of these proceedings.

Legal principles

15. The general principles I have to apply when considering whether to grant an interim injunction were explained by the House of Lords in American Cyanamid v. Ethicon [1975] AC 396. The House of Lords emphasised that it is no part of the court's function at this stage of litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend. The starting point is that the court must be satisfied that the claim is not frivolous or vexatious, that is to say, that there is a serious question to be tried. Unless the material before the court fails to disclose that the claimant has any real prospect of success in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interim relief sought.
16. The steps involved in the exercise of these principles are well-known and I do not need to repeat them here. I would simply note that the adequacy of the respective remedies in damages to the parties must be considered and that it is where there is doubt as to the respective remedies in damages that the question of balance of convenience arises. Further, in assessing where the balance of convenience lies, the extent to which the disadvantages to each party would be incapable of being compensated in damages in the event of his success at trial is a significant factor to take into consideration. Where other factors are evenly balanced, then it is a counsel of prudence to take such measures as are calculated to preserve the status quo.
17. As to the extent to which it is appropriate to take into account the strength of each party's case, Lord Diplock said this at 409:

"…. if the extent of uncompensatable disadvantage to each party would not differ widely, it may not be improper to take into account in tipping the balance the relative strength of each party's case as revealed by the affidavit evidence adduced on the hearing of the application. This, however, should be done only where it is apparent upon the facts disclosed by evidence as to which there is no credible dispute that the strength of one party's case is disproportionate to that of the other party. The court is not justified in embarking upon anything resembling a trial of the action on conflicting affidavits in order to evaluate the strength of either party's case."

18. In considering the application of these principles, it is important to keep in mind that the starting point is that the claimant must establish, by his evidence, that there is a serious question to be tried. As Lord Diplock himself said in Eng Mee Yong v. Letchumanan [1980] AC 331, at 341B-G,

"Although in the normal way it is not appropriate for a judge to attempt to resolve conflicts of evidence on affidavit, this does not mean that he is bound to accept uncritically, as raising a dispute of fact which calls for further investigation, every statement on an affidavit however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently improbable in itself it may be. In making such order on the application as me "may think just" the judge is vested with a discretion which he must exercise judicially. It is for him to determine in the first instance whether statements contained in affidavits that are relied upon as raising a conflict of evidence upon a relevant fact have sufficient prima facie plausibility to merit further investigation as to their truth."

19. The same point emerges from the judgment of Slade J in Re Lord Cable [1976] 3 All ER 417, at 430:

"I add one further observation in relation to the evidentiary position. American Cyanamid Co. v. Ethicon Ltd. may have led prospective plaintiffs to the belief, perhaps partially justified, that it is not necessary for them to adduce affidavit evidence in support of a motion for an interlocutory injunction of such a precise and compelling nature as might have been required before that decision. Nevertheless, in my judgment it is still necessary for any plaintiff who is seeking interlocutory relief to adduce sufficiently precise factual evidence to satisfy the court that he has a real prospect of succeeding in his claim for a permanent injunction at the trial. If the facts adduced by him in support of his motion do not by themselves suffice to satisfy the court as to this, he cannot in my judgment expect it to assist him by inventing hypotheses of fact on which he might have a real prospect of success."

20. This brings me to the principles to be applied in relation to KRKA's application for summary judgment. These were summarised by the Vice-Chancellor in Celador Productions v. Melville [2004] EWHC 2362. as follows: (a) the applicant must show that the respondent's case has no real prospect of success at trial; (b) a "real" prospect of success is one which is more than fanciful and merely arguable; (c) if it is clear beyond question that the respondent will not be able at trial to establish the facts on which he relies then his prospects of success are not real; (d) the court is not entitled, on an application for summary judgment, to conduct a trial on the documents without disclosure or cross-examination.

Infringement
 


21. The evidence in support of the infringement claim is set out in the witness statement of Mr. Whitfield, a solicitor in the firm of solicitors instructed by Servier in these proceedings and who has the conduct of this action under the supervision of his partner. He explains, as is the case, that claim 1 of the Patent is to the particular alpha crystalline form of perindopril which is characterised by an X-ray diffraction pattern expressed in the form of the relative intensities of the diffraction peaks found at various scattering angles 2 theta. The most intense peak of the alpha form pattern is at a 2 theta angle of 9.0 degrees, and further intense peaks are found at 2 theta angles of 11 degrees and 13.7 degrees.
22. Mr. Whitfield deposes that he has been informed by Dr. Jaguelin-Guinamant, who has a PhD in chemistry and is Head of Patents at Servier, that powder x-ray diffraction analysis of KRKA's tablets is sufficient to determine the crystalline form of the generic perindopril they contain. This is because each crystalline from of perindopril has its own characteristic x-ray diffraction pattern, and the presence of peaks unique to one crystalline form are determinative of its presence. He has further been told by Dr. Jaguelin-Guinamant that there is no need to establish the presence of all of the x-ray diffraction peaks set out in claim 1 in order to be certain that the alpha crystalline form as claimed in the Patent is present. Provided that "fingerprint" peaks are observed, the identity of the crystalline form can be ascertained.
23. Servier have compared, first, x-ray diffraction patterns of KRKA's tablets; second, x-ray diffraction patterns of reference samples of three crystalline forms of perindopril, that is to say the alpha, beta, and gamma forms; and, third, x-ray diffraction patterns derived from tablets that are equivalent in composition to KRKA's tablets but with the perindopril active ingredient removed. Analysis of the x-ray diffraction patterns of KRKA's tablets has revealed that three peaks are present at 2 theta angles of 9 degrees, 11 degrees, and 13.7 degrees and, further, these peaks are not found in the x-ray diffraction patterns of the equivalent tablets but with the perindopril removed.
24. Mr. Whitfield explains that it is Dr. Jaguelin-Guinamant's opinion that the presence of these peaks in the patterns derived from KRKA's tablets clearly indicates the presence of the alpha crystalline form. KRKA have not yet admitted infringement but neither have they put forward any case in answer to that advanced by Servier. In the light of the evidence to which I have referred, I am satisfied that Servier have established a serious issue to be tried on the question of infringement.

Validity

25. This is an area of major dispute between the parties. For the purpose of the application before me, KRKA submit that the Patent is plainly invalid for lack of novelty or obviousness in the light of (a) an earlier Servier patent, namely, EP 0 308 341 ("341"), and/or (b) the sale by Servier before the priority date of the Patent of Coversyl tablets. They say it should be revoked now. I will address the objections in turn.

341

26. 341 describes a method for the synthesis of perindopril and the subsequent formation of the perindopril salt which is obtained as a solid product after a process of crystallisation. It does not describe the particular crystalline form of the perindopril salt, nor that perindopril can occur in alpha, beta, and gamma crystalline forms. The crucial part of the disclosure is "Stage 3D" which instructs the reader to place in a reactor approximately 140 litres of ethyl acetate and 10 kg of the particular carboxylic acid product previously obtained. The reader is further instructed to "Add gradually approximately 2.20 kg of tert-butylamine, heat to reflux until all has dissolved; filter. Cool, filter off, and dry".
27. KRKA's case is that the inevitable result of carrying out this stage is the production of perindopril in the alpha crystalline form. In support of this contention KRKA rely upon a number of matters.
28. First, they point to the evidence of their expert, Mr. Ward, who is a retired industrial chemist, having worked for all his professional life for GlaxoSmithKline and its predecessor businesses, starting in 1961 until his retirement in 2002. He explains that as an industrial chemist working in the pharmaceutical industry he has gained considerable experience in the manufacture and study of crystalline compounds at laboratory, pilot plant scale and industrial scale.
29. Mr. Ward explains that he understands Stage 3D to be describing natural cooling. He points out there is no indication in the description of Stage 3D or elsewhere within 341 of any special measures being required to cool the mixture. Given that the author is concerned with an industrial process, Mr. Ward has no doubt that had he or she required special steps to be taken to obtain rapid cooling to low temperatures then the fact and nature of this cooling would have been specified. He therefore believes that natural cooling is required and that this view would be shared by others skilled in the art.
30. A little later in his evidence he elaborates his reasoning and, in particular, points out that Stage 3D describes either a small production batch or a pilot plant scale batch. It uses 140 litres of ethyl acetate and that a batch of this size would require a jacketed steel vessel of at least 250 litres capacity. In his experience, the first choice of reactor for this type of crystallisation would be a glass-lined steel reactor. He would expect that the cooling of such a reactor vessel from the reflux temperature down to ambient temperature would take several hours, bearing in mind the considerable mass of metal in the vessel and its jacket. Such a first choice reactor could not handle rapid cooling as there would be a very real risk of the thermal stress shattering the glass lining. Another choice of vessel would be needed, for instance a stainless steel vessel with a suitable low temperature coolant circulated through the jacket; yet no specific mention of such a vessel is made in Stage 3D.
31. Second, KRKA rely upon the evidence of Professor Geffken of the Department of Pharmaceutical and Medicinal Chemistry at the University of Hamburg, and the evidence of Professor Meden of the Department of Inorganic Chemistry, University of Ljubljana. Both professors have carried out experiments for the purposes of the opposition proceedings in which they scaled down the quantities described in Stage 3D so they could be performed on a laboratory scale. Importantly, they allowed the filtrate to cool naturally. They both obtained the alpha crystalline form of perindopril.
32. Third, KRKA have put before the court, through the evidence of Mr. Ward, two letters sent by Servier to the EPO in connection with the prosecution of the beta crystalline form patent. These letters strongly indicate, say KRKA, that it is Servier's own view that performing the Stage 3D process of 341 will not produce the beta crystalline form. Since there is no evidence that Stage 3D will produce the gamma crystalline form, KRKA say that it must produce the alpha crystalline form.
33. Fourth, KRKA point to the disclosure of the Patent itself. That describes a particular process for the preparation of the alpha crystalline form which does appear to involve a period of active, albeit slow, cooling.
34. Finally, KRKA have asked for disclosure from Servier of internal documents evidencing the results that Servier obtained when they performed Stage 3D of 341. As yet Servier have not produced any such documents. They say they have not carried out the disclosure exercise, that disclosure is not due and that no application for early specific disclosure has been made.
35. I am satisfied that all of these maters provide a powerful base for the attack on the validity of the patent for lack of novelty or obviousness over 341. Servier, however, say that the matter is not as straightforward as KRKA's submissions would suggest. Crucially, they say that KRKA and their experts have wrongly interpreted the 341 disclosure; rather than teaching natural or carefully controlled and slow cooling under the particular conditions of the Patent, they say that the skilled person would understand 341 to be teaching active cooling and that in so far as the letters they have written to the EPO suggest the contrary, then they are wrong. Further, if active cooling is carried out, Servier say that the alpha crystalline form is not obtained.
36. Servier rely in support of their submissions upon a report of Professor Motherwell, FRS, of the Department of Chemistry, University College London. He explains that in addition to his academic work he has co-operated closely with industry, having worked as a consultant for many years for, amongst others, Quest International, Kimberly-Clark, Heineken, Astra Zeneca, and GlaxoSmithKline. He has frequently been consulted to advise about early stage research and synthetic pathways, typically when a company is looking for new compounds, or ways to make a compound for research purposes, or when a company has already discovered a chemical compound of interest but is having difficulty expanding the production from a few grams needed for research purposes to the quantities required for industrial commercialisation and marketing. He therefore believes that he is familiar with the synthetic requirements for chemical processes on an industrial scale.
37. Professor Motherwell has read 341 and points out that it is clearly concerned with a method for the complete chemical synthesis of the perindopril molecule and subsequent formation of the perindopril salt. Further, the reader is directed to carry out a crystallisation step but 341 does not mention any specific crystalline form of perindopril, nor that perindopril can occur in more than one crystalline form. So far as he is concerned, he understands 341 to be disclosing a chemical synthesis of perindopril which can be employed on an industrial scale. He considers that Stage 3D is directed to the formation of the salt in a solution of ethyl acetate and thereafter the isolation of the perindopril salt in solid form, and that his understanding of the direction given is that the operator should employ some positive action to subject the reaction mixture to cooling rather than simply leaving the reaction vessel to cool naturally.
38. He gives a number of reasons for interpreting the instruction in this way and I would summarise them as follows. First, he says that it is accepted practice in chemical literature to be specific when requiring a particular action. If the patentee had intended the instruction to "cool" to be limited to meaning "leave to cool naturally" then he would have said so explicitly.
39. Second, the example process described in 341 is on an industrial scale and it is, to the best of his knowledge, sound practice in any commercial or industrial process involving preparation of crystalline product to effect a specific defined cooling regime. Further, in an industrial process, it is important to maintain precise control over the conditions under which crystallisation takes place in order to ensure that the desired product is obtained in a reproducible manner. Therefore, an industrial scale reactor should always be cooled in a controlled manner.
40. Third, such industrial scale reactions are carried out in large reaction vessels which are fitted with temperature control mechanisms, such as thermal jackets. These enable an operator to heat and cool a reactor by circulating heating or cooling fluid through the jacket. The size of industrial scale vessels means that they will take a very long time to cool if the heating fluid is simply removed leaving the thermal jacket empty, and the vessel left to cool naturally. He therefore does not believe that an industrial reactor would simply be left to cool, but rather that it would be cooled actively by circulation of a cooling medium through the jacket.
41. Fourth, it is undesirable for large volumes of reaction mixture to be maintained at elevated temperatures for longer than is necessary to perform a particular process step. The reason for this is that elevated temperatures can increase the rate of unwanted side reactions, which may lead to contamination of the desired product as well as loss of material. In the case of perindopril, there is one particular side reaction of which he is aware, namely the base-induced racemisation of the particular chiral centres of the molecule which he has identified in paragraph 18(d) of his report. He points out that the risk of such racemisation is extremely important, because conversion to a mixture of different chiral forms would be extremely undesirable as it would lead to a loss of product and, more importantly, a mixture of stereoisomers which would have to be separated to remove the undesired products.
42. Finally, an excess of tert-butylamine present in the reaction mixture could react with the ethyl acetate solvent giving the products N-(tert-butyl)acetamide and ethanol. Such a reaction would be favoured at high temperatures. Ethanol is a common organic solvent and it is possible that the resulting mixture of solvents could have properties different from those of the desired pure ethyl acetate solvent. This, in turn, could affect the crystallisation process.
43. For all of these reasons, Professor Motherwell understands the instruction given by Stage 3D is to apply a cooling regime to the saturated solution.
44. Servier also rely upon experiments which they submitted to the EPO and which show that rapid cooling to a low temperature produces perindopril crystals in something other than the alpha form.
45. In the light of all this evidence it is, in my judgment, impossible to say that there is no issue to go to trial on the question of anticipation or obviousness of the Patent over 341. I reach this conclusion for all of the following reasons.
46. First, there is clearly an acute conflict on the evidence as to whether the skilled person would implement the teaching of Stage 3D of 341 by actively cooling the solution or by letting it cool naturally.
47. Second, the experimental evidence relied upon by KRKA only goes so far as to show that the alpha crystal form of perindopril is produced when the solution is cooled naturally.
48. Third, it is true to say that the Patent discloses a method of making the alpha crystalline form which involves a particular controlled cooling regime. The cooling regime is, however, a slow one.
49. Fourth, it is at arguable in the light of the evidence of Professor Motherwell that the skilled person would be concerned to cool the solution as quickly as possible to avoid adverse side reactions of the kind which he has described.
50. Fifth, there is no evidence before me upon which I can safely conclude at this stage that such rapid cooling will necessarily produce the alpha crystal form. On the contrary, the evidence filed by Servier suggests that rapid cooling to a low temperature will produce something other than the alpha crystalline form, namely, a form similar to the beta crystalline form.
51. Sixth, I accept that the correspondence passing between Servier and the EPO in connection with the beta crystal form patent suggests that very particular conditions are necessary to secure production of the beta crystalline form. However, the conditions there specified are not consistent with the conditions of the experiments upon which Servier now rely and which unquestionably produce something other than the alpha crystalline form.
52. Finally, I have taken into account the fact that Servier have declined to provide early disclosure. However, I do not think that this is a matter which should drive a finding against them at this hearing. Disclosure is not yet due and no application has been made for early disclosure. In all the circumstances I do not think it would be right to draw from the absence of this disclosure the inference that KRKA invite me to.

Prior sale of the Coversyl tablets

53. It is admitted that Servier sold Coversyl tablets before the priority date. However, it is not admitted that the tablets contain the alpha crystalline form of perindopril, nor that the disclosure was enabling.
54. As to the first issue, Mr. Ward explains that he has seen evidence filed by KRKA at the EPO in connection with the opposition to the Patent whereby a Dr. Greman carried out an analysis of tablets from one of the batches sold before the priority date and was able to identify certain peaks that she regarded as distinctive of the alpha crystalline form. Mr. Ward has not had access to the hard data used by Dr. Greman, but certainly her x-ray diffraction patterns show the most significant peak relating to the alpha crystalline form, namely, that at angle 2 theta 9.037. Servier have provided no substantive answer to this evidence.
55. I conclude that KRKA have established that the Coversyl tablets sold by Servier before the priority date of the Patent did contain the alpha crystalline form. On the evidence they have put before me, Servier have not shown that they have any real prospect of success on this issue.
56. I turn then to consider the second issue, that is to say, whether that disclosure was enabling. KRKA say that the sale of the tablets was clearly enabling and that at the priority date any skilled person would have been able to reproduce the tablets, including the alpha crystalline form of perindopril, without undue effort. In support of this submission, they again rely upon the evidence of Mr. Ward.
57. Mr Ward was asked to consider whether a person skilled in the art could make the alpha form of perindopril and expresses the view that he has absolutely no doubt that he could. All that he would have to do is to repeat Stage 3D of 341. He continues that he was also asked to consider what the skilled person would do if he followed the teaching of 341 and, contrary to Mr. Ward's belief, applied a rapid cooling regime and ended up with the beta crystalline form. Mr. Ward says that there is no question that one of the things he would do is alter his cooling regime because it is (and was) common general knowledge that a way of getting a different crystal form is to cool rapidly. Consequently, if rapid cooling produced the wrong crystal form, cooling naturally or more slowly to see if a different form is produced would be an obvious option he would try. Mr Ward also says he would first cool naturally in any event.
58. Further, Mr. Ward says that he could have taken an extra step to ensure that he obtained the same crystalline form as existed in the prior art tablets. He could have crushed the tablets in a pestle and mortar and seeded the hot Stage 3D solution with the resulting powder prior to allowing the solution to cool. The fragments of perindopril ingredient from the pulverised tablet would act as seeds and such seeding would lead to crystallisation of the same crystal form as in the prior art tablet. This, he says, is a well-known technique and was so at the relevant priority date.
59. Further, he was asked to consider whether the skilled person could tell that the product he produced was different to the one on the market. He recognises that it is true that the x-ray diffraction diagram of the tablet is complicated by the presence of excipients which generate their own peaks, which may lie over peaks of the active ingredient, but says that there are two strategies to deal with this problem. The first is to concentrate only on one or two peaks which are not obscured by other ingredients. The second is to generate an x-ray diffraction diagram of the mixture of tablet ingredients in the absence of the active ingredient and perform a process of mathematical subtraction in an attempt to identify those peaks associated only with the active ingredient. He says that, as it happens, the matter would, in this case, be straightforward.
60. If the skilled person found that it was the beta form that was produced by performing 341 then he would be able to tell that it was not the form in the prior art tablets and could produce the prior art form by seeding or altering his cooling conditions accordingly.
61. This is, to my mind, powerful evidence. But it proceeds on a number of assumptions. First, it is important to have in mind that the tablet itself reveals nothing about the crystal form of the perindopril it contains. At the priority date of the Patent, there was no knowledge or understanding of the different crystal forms of perindopril and there is no disclosure of these different forms or how to make them in 341.
62. Second, Mr. Ward does not say that it was possible to extract perindopril from the tablet and so separate the active ingredient from all the excipients. I have no evidence before me to say that the skilled person could carry out this task without undue effort at the priority date.
63. Third, Mr. Ward's evidence therefore proceeds on the basis that the skilled person could, and would, determine the crystal form of the perindopril in the tablet itself. Professor Motherwell has given some important evidence on this issue in his report. He says that the approach proposed by Mr. Ward is, in theory, capable of identifying peaks in an x-ray diffraction pattern that are attributable to the active pharmaceutical ingredient of the tablet tested. However, the active ingredient typically forms a small fraction of the tablet's composition, the remaining material comprising the tablet's excipients. The x-ray diffraction signal that is due to the active ingredient will therefore be low in comparison with that due to the much greater concentration of excipients. This could lead to the relatively small peaks arising due to the active ingredient being lost during the subtraction process described by Mr. Ward as a result of the error in the signal.
64. In the present case it is true to say that this does not in fact occur. Nevertheless, Professor Motherwell's evidence is important because it points to the perception that the skilled person would have. Professor Motherwell also explains that Mr. Ward assumes that if peaks arising due to the active ingredient can be identified, these peaks may be relied upon as a fingerprint character of that ingredient. However, unless the possible crystalline forms of the substance have been characterised, it is not possible to be sure that any particular peak is unique to only one particular crystalline form.
65. Further, he says that except for the testing of the KRKA product carried out in the context of this action, he has never heard of a pharmaceutical company carrying out such a convoluted reverse engineering procedure of a marketed pharmaceutical product in this way as part of its drug development work.
66. To my mind, an important point emerging from this evidence is that it is far from clear that it would occur to the skilled person to carry out the reverse engineering process that Mr. Ward described. Whether or not it would be possible to make it work in practice is one issue. As I have indicated, I certainly have powerful evidence to suggest that it would. However, another issue is whether or not the skilled person would embark upon the task at all. It is on this point that I understand the opinions of the experts differ.


 


67. Fourth, Mr. Ward then assumes that the skilled person would turn to 341 to provide a method of making perindopril. But there is no evidence that 341 was common general knowledge at the priority date or something that would attract the skilled person as providing an appropriate method of synthesis.
68. Fifth, even assuming the skilled person did turn to 341, he would face the issue of how to perform the crystallisation step. As I have explained in considering the disclosure of 341, I am not satisfied at this stage, on the evidence before me, that it would be obvious to implement it in such a way that the final product would be the alpha crystalline form. This is a matter that must be determined at trial.
69. Finally, Prof. Motherwell addresses the suggestion made by Mr. Ward that any difficulty could be overcome by seeding. He explains in response that while he agrees that seeding of saturated solutions is a common technique employed to initiate crystal formation, it is desirable to use a sample of pure crystal of the seed. Further, in order to reproduce the crystalline form present in the tablet it would be necessary for the skilled person to select an appropriate solvent and cooling regime. He further explains that whilst seeding of a solution of a product with a sample of a particular crystalline form may affect the crystalline form which is obtained upon the cooling of that solution, in the absence of experimental data he does not know the extent to which the effect of seeding would dominate the effect of choice of solvent or cooling regime, or the extent to which it could be predicted. He says that he has seen no experimental data to demonstrate that such a seeding technique works in the particular case of perindopril tablets.
70. In summary, I have no doubt that KRKA have shown that there is a serious issue to be tried that the sale of Coversyl tablets before the priority date deprives the Patent of novelty. However, I am not persuaded that Servier have no real prospects of defending the Patent against that attack. In the circumstances, I must go on to consider the various matters to be taken into account under the balance of convenience.

Balance of convenience

71. Evidence in support of the application is given by Mr. Falcand, the Chief Executive Officer of the second claimant. He explains the dynamics of generic competition in the market for prescription drugs. The following points emerge, which I do not believe to be controversial.
72. In the United Kingdom doctors are free to prescribe drugs by reference to the original brand or the generic name of the active ingredient. They are, however, encouraged by the Primary Care Trusts ("PCTs") and the NHS to prescribe generically. If doctors prescribe the original branded product then pharmacists have no option but to dispense that specific product. But if doctors prescribe generically, then pharmacists are free to dispense either the original branded product or any generic product.
73. In the case of Coversyl, some 99.6% of doctors prescribe the drug generically as perindopril. As long as there is no generic product in the UK market the NHS reimbursement price will match the price of the branded product. Once a generic product is commercialised, however, the NHS will fix the reimbursement price for the generic product. Not surprisingly, a generic entrant will almost inevitably set its price below that of the original branded product. It can take several months for the NHS to fix a reimbursement price for a generic. Before the reimbursement price is fixed, there will be a window of opportunity for the pharmacists, and so also for the generic manufacturer and wholesalers, during which the reimbursement price of any dispensed generic will be the reimbursement price of the branded product. In this way generic products rapidly gain a large share of the market.
74. However, once the NHS has fixed a generic reimbursement price, it is this price which determines reimbursement to the pharmacist even if the branded product is dispensed. There is, therefore, clearly a financial incentive for pharmacists to dispense generic perindopril once it becomes available. If the pharmacist dispenses the branded product on a generic prescription the pharmacist will bear a loss equal to the difference between the cost of the branded product and the generic reimbursement price.
75. If there is more than one generic product entering the market, then the generic products are placed in category M, which means that the average reimbursement price is assessed on the basis of the average selling price of the different generic manufacturers less any discounts. Category M contains generics of branded products which the NHS considers are sold in sufficient volume to warrant an immediate fixing of the generic reimbursement price. This can happen in a matter of weeks.
76. Against this background, Servier reasonably fear that the launch by KRKA of generic perindopril will cause them severe and continuing unquantifiable losses for all of the following reasons. First, KRKA will, by offering its generic perindopril at a lower price than Coversyl, quickly gain a major share of the UK market.
77. Second, I am satisfied that there is a real risk that this will result in the NHS fixing a reimbursement price for the generic product below that of Coversyl. This will produce a further incentive for pharmacists to dispense generic perindopril with the result that Servier will suffer yet further loss of market share, unless they introduce their own generic product.
78. Third, I accept the evidence of Mr. Falcand that there is a real risk other generic manufactures will launch a generic perindopril product as soon as they can. Apotex has a market authorisation but is currently injuncted until after trial, set, as I have indicated, for February of next year. If, however, KRKA are permitted to sell their generic perindopril pending trial, then Apotex may seek to have that injunction lifted or stayed due to the change in circumstances. Further, the German company Ratiopharm have, as I have also explained, recently been granted a marketing authorisation for generic perindopril products in the UK.
79. Mr. Korosec, a director of the second defendants, suggests that Ratiopharm cannot market their product for some four months. But he expects that other competitors will obtain their product licences within the next few months and says that if KRKA are kept off the market until the New Year it is likely that other generic manufacturers will have been able to catch up with them. In the light of this evidence I am satisfied that unless Servier are granted protection there is a real risk that a number of generic manufacturers will have launched generic perindopril into the UK market by the time judgment is given following the trial of this action.
80. Fourth, the effect of this competition is likely to produce a downward spiral in the price of generic perindopril. So much is common ground between Mr. Falcand and Mr. Korosec.
81. Fifth, this downward spiral in price is likely to lead to a collapse in the reimbursement price of perindopril. Mr. Falcand gives some graphic illustrations of this in his evidence, as I shall explain.
82. Sixth, Mr. Falcand believes that once the reimbursement price of perindopril has suffered such a collapse, it will be impossible for Servier to restore the price to its original level, even if they are successful at trial. The reason for this is that once NHS purchasers or PCTs adjust to paying the lower price for generic perindopril, they will be extremely reluctant to resume their purchase of Coversyl at the higher reimbursement price of the branded product. Mr. Falcand fears that if Servier were to insist on a higher price, then the PCTs and NHS purchasers would encourage doctors to prescribe alternative ACE inhibitor products such as Ramipril or Lisinopril, which are currently available as generics.
83. As Mr. Falcand explains, in the case of Ramipril, within two months of the launch of a generic 80% of the market had been lost, and now some 90% of the market is generic. In the case of Lisinopril, the effect of generic entry was even more drastic. AstraZeneca lost over 90% of its market in two months and currently holds less than 3% of the market.
84. Mr. Korosec responds that this belief is ill-founded because Servier could leave their own branded price unchanged and, if successful at trial, recover their market at that original price. I have to say that I find Mr. Korosec's suggestion to be unrealistic. If Servier do not lower their price or launch a generic version of perindopril, they will very quickly lose a substantial part of their market. Further, I am persuaded by Mr. Falcand's evidence that there would, in any event, be a substantial resistance to any attempt to force a substantial increase in the generic tariff rate and this might well lead to a move to prescribe alternative ACE inhibitors and, in particular, Ramipril and Lisinopril.
85. In the result, I conclude that if I do not grant the injunction sought, there is a very substantial risk that Servier will suffer severe damage through price erosion and that such damage is likely to continue long after trial, even if Servier prevail.
86. Conversely, if I do not grant the injunction I accept that KRKA will suffer unquantifiable loss because it will not be possible to determine with any certainty the extent of sales they would have made pending trial and the price they would have achieved for those sales. However, it seems to me that the difficulty of assessing this loss and its extent are far outweighed by the potential damage to Servier.
87. Mr. Korosec also points to a further element of unquantifiable loss which he says KRKA will suffer if I grant the injunction sought. He says that KRKA will be deprived of the benefit which flows from being first to market a generic version of an established drug. However, I accept the submission advanced by Servier that KRKA are only in this position because Apotex have themselves been injuncted. It seems to me that there is no justification for affording to KRKA an advantage which has been denied to Apotex.
88. Finally, I think it is important to have regard to three further matters. First, Coversyl is, as I have indicated, crucial to Servier's business in the UK. Conversely, KRKA produce numerous different generic products and I accept the submission that there is no reason to believe that perindopril is particularly significant to their future business plans.
89. Secondly, if, which I do not accept, other factors were evenly balanced, consideration of the status quo clearly leads to the conclusion that it is appropriate to grant an injunction. KRKA are not on the market with perindopril. If I grant the injunction sought, that position will be preserved for the few months pending trial.
90. Finally, but importantly in all the circumstances of this case, I think it is right to note that the patent was granted in February 2004 and it is clear that KRKA have been prepared to launch their product in Europe for some time. Indeed, they must have made an application for marketing authorisation in Hungary some time before the launch of their product in December 2005. They have chosen to seek to revoke the Patent through opposition proceedings before the EPO. Those opposition proceedings have not as yet proved successful. I think it is clear that they could have launched proceedings in the UK for revocation of the Patent some time ago and so cleared the way for the marketing of their generic perindopril in the UK. But they chose not to do so.
91. In all the circumstances, I have reached the conclusion that it is appropriate to grant to Servier the relief that they seek on this application.
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