MR JUSTICE ARNOLD :
Introduction
- This is an application by the Defendants ("Sandoz") to vary an interim injunction which I granted against Sandoz by an order dated 17 November 2015 which was sealed on 19 November 2015 ("the 17 November Order") for the reasons given in my judgment dated 4 November 2015 [2015] EWHC 3153 (Pat) ("Sandoz I"). The injunction was granted on the application of the Claimant ("Warner-Lambert") to restrain Sandoz from infringing European Patent (UK) No. 0 934 061 ("the Patent") by dealings in a full label generic pregabalin product ("the Sandoz Full Label Product").
- Sandoz contend that there has been a material change of circumstances since 17 November 2015, and that as a result paragraph 1 of the 17 November Order should be amended as shown below:
"The First and Second Defendants will not, while EP 0 934 061 B3 (the 'Patent") is in force, pending an order made post-judgment in this action or further order in the meantime (whether acting by their directors, officers, servants, agents or otherwise howsoever) do or cause or procure others to do any of the following acts within the UK, namely: offer for sale, sell or supply pregabalin for use in the treatment of acute herpetic and postherpetic pain or causalgia pain: (i) under Sandoz GmbH's European Medicines Agency marketing authorisation EMEA/H/C/004010 (identified on the SmPC as MA no EU/1/15/1011); or (ii) bearing a patient information leaflet which indicates use for the treatment of pain or neuropathic pain under Sandoz GmbH's European Medicines Agency marketing authorisation EMEA/H/C/004010 (identified on the SmPC as MA no EU/1/15/1011) (hereinafter pregabalin supplied pursuant to that marketing authorisation or carrying such a patient information leaflet is referred to as Sandoz Full Label Pregabalin Product) PROVIDED THAT the First and Second Defendants may supply any Sandoz Full Label Pregabalin Product returned to it by the Third Defendant or AAH Limited to any other company within the Sandoz Group for the purposes of repackaging that product to then supplying it under Sandoz GmbH's European Medicines Agency marketing authorisation EMEA/H/C/004010 (identified on the SmPC as MA no EU/1/15/1011) in territories where the Patent and corresponding patents are not in force, or otherwise under Sandoz GmbH's European Medicines Agency marketing authorisation EMEA/H/C/004070 (identified on the SmPC as MA no EU/1/15/1012/069-083) AND FURTHER PROVIDED THAT nothing in this paragraph of this Order shall prevent any Sandoz Full Label Pregabalin Product from being offered for sale, sold or supplied as pregabalin to be prescribed, administered and dispensed in the UK subject to and in accordance with the requirements of the NHS Guidance in the form of Schedule 1 of this Order in force at the date of this Order or as revised from time to time."
- For reasons that I will explain, counsel for Sandoz accepted during the course of argument that the first variation should be revised so as to read "for use in the treatment of trigeminal neuralgia pain or acute herpetic and postherpetic pain or causalgia pain". Furthermore, Warner-Lambert raised certain issues about the wording of these variations. Regardless of the precise wording, however, the purpose of Sandoz's application is to enable Sandoz to market the Sandoz Full Label Product pending trial (or, more realistically for the reasons explained below, until expiry of the Patent).
The Patent
- Claims 1, 2 and 3 of the Patent (as centrally limited on 21 January 2015) are as follows:
"1. Use of [pregabalin] or a pharmaceutically acceptable salt thereof for the preparation of a pharmaceutical composition for treating pain.
2. Use according to Claim 1 wherein the pain is inflammatory pain.
3. Use according to Claim 1 wherein the pain is neuropathic pain."
- Claims 4-14 are limited to various specific types of pain. Claims 5 ("post-operative pain"), 7 ("burn pain"), 8 ("gout pain") and 9 ("osteoarthritic pain") cover specific types of inflammatory pain. Claims 10 ("trigeminal neuralgia"), 11 ("acute herpetic and postherpectic pain", also known as "PHN pain") and 12 ("causalgia pain") cover specific types of neuropathic pain, and in particular specific types of peripheral neuropathic pain.
The Mylan and Actavis proceedings down to 21 October 2015
- The background to the present application is of considerable complexity. To a large extent, it arises out of proceedings concerning the Patent between Warner-Lambert and Pfizer Ltd ("Pfizer") on the one hand and Generics (UK) Ltd trading as Mylan ("Mylan") and Actavis Group PTC ehf and related companies ("Actavis") on the other hand. In order to shorten this judgment, I shall assume that the reader is familiar with the history of those proceedings. I shall nevertheless provide a brief summary.
- Pfizer markets pregabalin for the treatment of neuropathic pain, epilepsy and generalised anxiety disorder ("GAD") under licence from Warner-Lambert under the trade mark Lyrica. The marketing authorisation is held by Pfizer. Pfizer's data exclusivity in respect of the data used to obtain the marketing authorisation expired on 8 July 2014. Mylan and Actavis launched separate claims challenging the validity of the Patent on 24 June 2014 and 12 September 2014 respectively. Actavis applied for a full label marketing authorisation for pregabalin on 9 July 2014, but subsequently they decided to launch initially under a so-called "skinny label" marketing authorisation (i.e. one which excluded the indications covered by the Patent and only covered epilepsy and GAD). They notified Warner-Lambert of this intention on 30 September 2014. On 8 December 2014 Warner-Lambert commenced quia timet proceedings against Actavis for infringement of claims 1 and 3 of the Patent in respect of Actavis' skinny label pregabalin product. Actavis subsequently counterclaimed in respect of allegedly groundless threats made by Pfizer. On 16 February 2015 Actavis received a skinny label marketing authorisation, and on 17 February 2015 Actavis launched their skinny label pregabalin product.
- In those proceedings I dismissed an application by Warner-Lambert for an interim injunction against Actavis for the reasons given in my judgment dated 21 January 2015 [2015] EWHC 72 (Pat) ("Warner-Lambert I"). Subsequently I dismissed an application by Actavis to strike out, alternatively for summary judgment dismissing, Warner-Lambert's claim for infringement under section 60(1)(c) of the Patents Act 1977 for the reasons given in my first judgment dated 6 February 2015 [2015] EWHC 223 (Pat) ("Warner-Lambert II"), but acceded to Actavis' application to strike out the claim for infringement under section 60(2) for the reasons given in my second judgment dated 6 February 2015 [2015] EWHC 249 (Pat) ("Warner-Lambert III"). On 26 February 2015 I made an order, largely by consent, requiring the National Health Service Commissioning Board ("NHS England") to issue guidance ("the NHS Guidance") to Clinical Commissioning Groups ("CCGs") in England and to the NHS Business Services Authority ("the BSA") for transmission to NHS pharmacy contractors for the reasons given in my judgment dated 2 March 2015 [2015] EWHC 485 (Pat), [2015] RPC 24 ("Warner-Lambert IV"). On 28 May 2015 the Court of Appeal dismissed an appeal by Warner-Lambert against Warner-Lambert I and allowed an appeal by Warner-Lambert against Warner-Lambert III for the reasons given in the judgment of Floyd LJ delivered on that date [2015] EWCA Civ 556, [2015] RPC 25 ("Warner-Lambert CA").
- On 10 September 2015 I handed down judgment following the trial of Mylan and Actavis' claims for revocation of the Patent, of Warner-Lambert's claim against Actavis for infringement of claims 1 and 3 of the Patent and of Actavis' claim against Pfizer for groundless threats [2015] EWHC 2548 (Pat), [2016] RPC 3 ("Warner-Lambert V"). In that judgment I held that:
i) none of the claims of the Patent was obvious over any of the prior art relied upon by Mylan and Actavis;
ii) claims 1, 3, 4, 6, 13 and 14 of the Patent were invalid on the ground of insufficiency;
iii) even if claims 1 and 3 were valid, Actavis had not infringed those claims pursuant to section 60(1)(c) or section 60(2); and
iv) Pfizer was liable for making groundless threats of patent infringement proceedings, albeit not in all the cases alleged by Actavis.
- So far as the issue of insufficiency was concerned, I concluded that claim 3 was invalid, because although the specification made it plausible that pregabalin would be effective to treat peripheral neuropathic pain, it did not make it plausible that pregabalin would be effective to treat central neuropathic pain. I held that claim 1 was invalid both for this reason and because it was not plausible that pregabalin was effective to treat all types of pain. I held that claims 10, 11 and 12 were valid because these were specific types of peripheral neuropathic pain.
- On 16 October 2015 I gave both Mylan and Actavis on the one hand and Warner-Lambert on the other hand permission to appeal against my decisions with respect to insufficiency and I gave Warner-Lambert permission to appeal against my decision with respect to infringement under section 60(1)(c) because I was satisfied that those appeals had a real prospect of success.
- Meanwhile, on 1 October 2015 Warner-Lambert had launched a conditional application to amend the Patent. The proposed amendments fell into two categories. The first category consisted of simple deletion of claims which were held to be invalid. Those amendments were uncontroversial. The second category consisted of a proposed amendment to what was claim 3 of the Patent which consisted of adding to the end of the claim the words "caused by injury or infection of peripheral sensory nerves". Actavis and Mylan contended that the application to make the latter amendment constituted an abuse of process. On 16 October 2015 I directed that there be a preliminary determination of that issue.
The NHS Guidance
- In order to enable the arguments on the present application to be understood, I shall set out the NHS Guidance once again:
"1. Pregabalin should only be prescribed for the treatment of neuropathic pain under the brand name Lyrica® (unless there are clinical contra-indications or other special clinical needs e.g. patient allergic to an excipient, branded product unavailable etc which apply to Lyrica®, when you should not prescribe Lyrica® or pregabalin)
2. When prescribing pregabalin for the treatment of neuropathic pain to patients you should (so far as reasonably possible):
a. prescribe by reference to the brand name Lyrica®; and
b. write the prescription with only the brand name 'Lyrica', and not the generic name pregabalin or any other generic brand.
3. When prescribing pregabalin for the treatment of anything other than pain, you should continue to prescribe by reference to the generic name pregabalin.
4. When dispensing pregabalin, if you have been told that it is for the treatment of pain, you should ensure, so far as reasonably possible, that only Lyrica®, the branded form of pregabalin, is dispensed. However, when dispensing pregabalin for the treatment of anything other than pain, you are not restricted to dispensing Lyrica®."
- As recounted in Warner-Lambert V at [511]-[512], this was issued by NHS England (under the title Important Information in Relation to Prescribing and Dispensing Pregabalin) on 27 February 2015. CCGs were required to distribute it to GPs by 6 March 2015 and the BSA to distribute it to pharmacists by the same date. Equivalent guidance was issued in Wales on 6 March 2015 and in Northern Ireland by 16 March 2015. It remains the case that no equivalent guidance has been issued in Scotland.
- As I noted in Sandoz I at [70], there is a mismatch between the wording of paragraphs 1 and 2 of the NHS Guidance on the one hand and paragraph 3 on the other hand. Paragraphs 1 and 2 refer to prescribing pregabalin for neuropathic pain, whereas paragraph 3 refers to prescribing pregabalin for pain. Pregabalin is only authorised for neuropathic pain (leaving aside epilepsy and GAD), but it is prescribed off-label by doctors for other types of pain (see Warner-Lambert V at [399]).
Warner-Lambert's application against Sandoz
- The state of affairs described above was the state of affairs which prevailed when, on 21 October 2015, I heard the application by Warner-Lambert for an interim injunction against Sandoz (and Lloyds Pharmacy Ltd, "Lloyds"). The background to that application is set out in full in Sandoz I. Summarising briefly, however, on 9 July 2014 Sandoz filed applications for marketing authorisation for both full label and skinny label generic pregabalin products through the centralised European procedure. Sandoz became aware of the Mylan and Actavis challenges to the validity of the Patent and decided not to bring any revocation claim of their own. On 19 June 2015 Sandoz received marketing authorisations for their full label and skinny label pregabalin products (EMEA/H/C/004010 and EMEA/H/C/004070 respectively). On 26 June 2015 Sandoz launched their skinny label pregabalin product. On 2 October 2015 Sandoz notified Pfizer that Sandoz had started to supply the Sandoz Full Label Product. It subsequently emerged that on 1 October 2015 Sandoz had agreed to supply over 100,000 packs of the Sandoz Full Label Product to AAH Pharmaceuticals Ltd which had sold them to Lloyds on 2 October 2015. This led to an urgent application by Warner-Lambert for an interim injunction to restrain dealings by Sandoz and Lloyds in the Sandoz Full Label Product. It was that application which subsequently came on for a full hearing on 21 October 2015.
Sandoz I
- I will assume that the reader has read Sandoz I. It is nevertheless convenient to recapitulate three key aspects of my reasoning. First, I considered the evidence adduced by Warner-Lambert as to the effectiveness of the NHS Guidance, which in summary indicated that the percentage of pregabalin being prescribed by reference to the brand name Lyrica was in the range 28-34%. I concluded at [76]:
" … I consider that Warner-Lambert is justified in saying that the present evidence suggests that the NHS Guidance is not yet fully effective in England so far as prescribing is concerned, and may not be so for some time to come."
- Secondly, I rejected a submission made by counsel then appearing for Sandoz that, although there was a serious issue to be tried, Sandoz's case was stronger than that of Warner-Lambert. I expressed my reasons for this at [85] as follows:
"So far as the validity of the Patent is concerned, Warner-Lambert has a real prospect of success in its appeal with respect to the validity of claims 1 and 3. Even if Warner-Lambert is not successful in that appeal, I have held claims 10, 11 and 12 to be valid, and Sandoz is supplying pregabalin with a marketing authorisation which embraces those kinds of pain. Turning to infringement, as stated in Warner-Lambert II at [37], it is arguable that "preparation" in a Swiss form claim includes packaging and labelling. On that basis, the relevant date for assessing Sandoz's state of mind would be shortly before 1 October 2015. In my judgment, applying the construction of the word "for" laid down in Warner-Lambert CA in the manner described in Warner-Lambert V, Warner-Lambert has a well arguable case that, as at that date, it was foreseeable to Sandoz that there would be intentional administration of the Sandoz Full Label Product to treat neuropathic pain (and in particular the types of neuropathic pain covered by claims 10, 11 and 12) where doctors prescribed generic pregabalin for neuropathic pain and pharmacists dispensed the Sandoz Full Label Product. As counsel for Warner-Lambert submitted, this is supported by the numbers: if Lloyds expects to dispense over 100,000 packs of Sandoz Full Label Product in three months, it is known from Lloyds' sales of Lyrica that this would represent some 66% of Lloyds' total sales of pregabalin, far above the 30% represented by sales of pregabalin for the non-patented indications. Although the evidence on this application suggests that the kinds of pain covered by claims 10, 11 and 12 represent no more than 5% of the pregabalin market, even if Warner-Lambert were restricted to those claims once the appeals and the amendment application had been determined, it would have still have an arguable case of infringement."
- Thirdly, I concluded that granting the relief sought by Warner-Lambert would create a lesser risk of irremediable harm than refusing it. This was for two main reasons which I expressed at [103] as follows:
"First, I consider that there is a greater risk of Warner-Lambert suffering unquantifiable and irremediable loss if an injunction is refused than there is of Sandoz suffering unquantifiable and irremediable loss if an injunction is granted. Secondly, I consider that there is a strong case for preservation of the status quo pending trial (or the decision of the Court of Appeal, if that is available sooner). If no injunction is granted, the arrival of full label generic pregabalin on the market will make it significantly more difficult for the Court to ensure appropriate compensation of those parties which it is finally determined merit compensation."
Subsequent developments in the proceedings
- On 25 November 2015 I handed down judgment on the preliminary issue which I had directed concerning Warner-Lambert's application to amend the Patent, concluding that the application to amend claim 3 was an abuse of process [2015] EWHC 3370 (Pat), [2016] RPC 16 ("Warner-Lambert VI"). Warner-Lambert was subsequently granted permission to appeal against that decision.
- On 17 December 2015 Warner-Lambert, Sandoz and Lloyds agreed a consent order providing for:
i) the discontinuance of Warner-Lambert's claim against Lloyds (following a settlement between Warner-Lambert and Lloyds);
ii) all further proceedings in Warner-Lambert's claim against Sandoz to be stayed "until the final determination (by way of settlement or Court determination) of all appeals" from Warner-Lambert V and Warner-Lambert VI (subject to the parties having permission to lift the stay and restore the proceedings on notice after the judgment of the Court of Appeal); and
iii) the scheduled trial date in March 2016 to be vacated.
- On 13 October 2016 the Court of Appeal handed down its judgment on Warner-Lambert's appeals against Warner-Lambert V and Warner-Lambert VI [2016] EWCA Civ 1006 ("Warner-Lambert CA II"). The Court of Appeal dismissed both sides' appeals on the issue of insufficiency. It also dismissed Warner-Lambert's appeal on the issue of abuse of process. As Floyd LJ, with whom Kitchin and Patten LJJ agreed, noted at [184], it followed that Warner-Lambert's claim against Actavis for infringement of claims 1 and 3 failed. Floyd LJ nevertheless went on to consider a number of the issues with respect to the infringement claim at [185]-[225].
- The upshot of Warner-Lambert CA II is that the status of the Patent remains as it was after Warner-Lambert V. In summary, claims 1, 3, 4, 6, 13 and 14 have been held to be invalid, but claims 2, 5, 7, 8, 9, 10, 11 and 12 have been held to be valid.
- The Court of Appeal refused to grant Warner-Lambert permission to appeal to the Supreme Court, but stayed the declarations of invalidity of claims 1, 3, 4, 6, 13 and 14 pending an application by Warner-Lambert to the Supreme Court. On 10 November 2016 Warner-Lambert filed an application to the Supreme Court for permission to appeal against the Court of Appeal's conclusions with respect to (i) the validity of claims 1, 3, 4, 6, 13 and 14 and (ii) abuse of the process. I was informed that Mylan and Actavis have filed statements of objection resisting the grant of permission to appeal, but contending in the alternative that, if Warner-Lambert is granted permission to appeal on the validity of claims 1, 3, 4, 6, 13 and 14, then Mylan and Actavis should be granted permission to cross-appeal on the validity of claims 10, 11 and 12.
- There has been no indication from the Supreme Court as to when its decision on Warner-Lambert's application for permission to appeal may be expected, but it is common ground that it is unlikely that the decision will be made before mid-January 2017 at the earliest.
The genesis of the present application
- On 13 October 2016, shortly after the Court of Appeal handed down Warner-Lambert CA II, Pfizer issued a press release announcing its intention to seek permission to appeal to the Supreme Court. The press release also stated:
"Following the Court of Appeal's judgment, and pending the outcome of its appeal to the Supreme Court, Pfizer will now seek to have the NHS England Pregabalin Guidance on prescribing and dispensing by brand name, Lyrica®, limited to prescribing and dispensing for the types of pain in those patent claims upheld as valid by the Court of Appeal."
- Also on 13 October 2016 Warner-Lambert's solicitors wrote to Sandoz giving notice under the order dated 17 December 2015 for the stay to be lifted and the proceedings restored.
- On 15 October 2016 Warner-Lambert's solicitors wrote to NHS England's solicitors proposing that the NHS Guidance be revised in the light of Warner-Lambert CA II. The letter enclosed a draft order which included revised guidance in the following terms:
"1. When prescribing pregabalin for the treatment of inflammatory pain, post-operative pain, burn pain, gout pain, osteo-arthritic pain, trigeminal neuralgia pain, acute herpetic pain, post-herpetic pain or causalgia pain, you should only do so by reference to the brand name Lyrica® so far as reasonably possible (i.e. write 'Lyrica' on the prescription and not the generic name or any other generic brand) except where there are clinical contra-indications or other special clinical needs (e.g. patient allergic to an excipient or the Lyrica® product is unavailable).
Please note that Lyrica® is licensed for the treatment of neuropathic pain and not other pain types. Therefore, where the pain type does not include a neuropathic element, treatment with Lyrica® is unlicensed.
2. When prescribing pregabalin for the treatment of anything other than inflammatory pain, post-operative pain, burn pain, gout pain, osteo-arthritic pain, trigeminal neuralgia pain, acute herpetic pain, post-herpetic pain or causalgia pain, you should continue to prescribe by reference to the generic name pregabalin.
3. When dispensing pregabalin, if you have been told that it is for the treatment of inflammatory pain, post-operative pain, burn pain, gout pain, osteo-arthritic pain, trigeminal neuralgia pain, acute herpetic pain, post-herpetic pain or causalgia pain, you should ensure, so far as reasonably possible, that only Lyrica®, the branded form of pregabalin, is dispensed.
Please note that Lyrica® is licensed for the treatment of neuropathic pain and not other pain types. Therefore, where the pain type does not include a neuropathic element, treatment with Lyrica® is unlicensed.
4. When dispensing pregabalin for the treatment of anything other than inflammatory pain, post-operative pain, burn pain, gout pain, osteo-arthritic pain, trigeminal neuralgia pain, acute herpetic pain, post-herpetic pain or causalgia pain, you are not restricted to dispensing Lyrica®."
- It can be seen that the revised guidance proposed by Warner-Lambert required prescribers to prescribe Lyrica not only for trigeminal neuralgia pain, PHN pain and causalgia pain (the conditions covered by claims 10, 11 and 12), but also inflammatory pain, post-operative pain, burn pain, gout pain and osteo-arthritic pain (the conditions covered by claims 2, 5, 7, 8 and 9). This is despite the facts that (i) pregabalin is not authorised for treatment of the latter types of pain, (ii) the original NHS Guidance did not mention the latter types of pain and (iii) claims 2, 5, 7, 8 and 9 had been found valid in Warner-Lambert V and there was no appeal against that conclusion by Mylan or Actavis, yet no revised guidance had been proposed by Warner-Lambert at that stage. Although Sandoz challenged Warner-Lambert as to the justification for this in its evidence on this application, no answer was forthcoming. When I asked counsel for Warner-Lambert about this during the hearing, all he could say was that claims 2, 5, 7, 8 and 9 had been found valid. He was not able to explain why Warner-Lambert had seen fit to propose this change when it did. I surmise, however, that it was prompted in part by what I had said in Sandoz I at [70] and in part by Warner-Lambert's analysis of the percentage of prescriptions for pregabalin which are written for these unauthorised indications (it appears from Warner-Lambert's evidence that this is over 13.8%).
- On 17 October 2016 Sandoz's solicitors replied to Warner-Lambert's solicitors' letter dated 13 October 2016 inviting Warner-Lambert to consent to the discharge of the interim injunction, and to the withdrawal or revision of the NHS Guidance.
- On 19 October 2016 NHS England's solicitors replied to Warner-Lambert's solicitors' letter dated 15 October 2016 enclosing a revised draft order and stating that NHS England would not oppose an application for an order in those terms. The revised guidance included in the revised draft order was not materially different to that proposed by Warner-Lambert. As counsel for Warner-Lambert pointed out, this suggests that at that stage NHS England was content that the revised guidance should extend to the conditions covered by claims 2, 5, 7, 8 and 9 even though pregabalin was not authorised for the treatment of those conditions. I find that surprising, but since NHS England was not represented before me I am unaware of NHS England's reasons for taking that view. In any event, as I will explain, NHS England has subsequently been reconsidering the matter.
- On 20 October 2016 Warner-Lambert's solicitors wrote to the solicitors acting for the various interested generic suppliers enclosing the revised draft order proposed by NHS England's solicitors and asking for comments.
- On 21 October 2016 Sandoz's solicitors replied to Warner-Lambert's solicitors' letter dated 20 October 2016 raising a number of concerns about the proposed revised guidance, and in particular the following:
"We note that your proposed revisions to the Guidance include references to unlicensed indications … We have not had a chance to consider this thoroughly but on an initial review, we queried whether the inclusion of such language might raise issues of direct or disguised promotion of unlicensed use, contrary to the ABPI Code. Please let us know whether you have considered this point. We would be grateful for an explanation as to how you have alleviated these concerns. …"
The letter went on to say that, in the absence of Warner-Lambert's agreement, Sandoz were taking steps to apply to discharge or vary the interim injunction.
- On 25 October 2016 Sandoz's solicitors wrote to Warner-Lambert's solicitors noting among other things that they had not received a substantive response to their question about promotion of unlicensed use.
- On the same day Warner-Lambert's solicitors replied without answering the question raised by Sandoz's solicitors and instead saying:
"NHS England's solicitors have already amended the first draft of the revised Guidance to wording that they are comfortable with … as regards off label indications. Please reach out to NHS England's solicitors if the proposed wording causes your clients any difficulties."
- On 26 October 2016 Warner-Lambert's solicitors wrote to Sandoz's solicitors in response to the latter's letters about the interim injunction. Although they said that they would revert once they had the final order from the Court of Appeal, they also said:
"For the avoidance of doubt, and without prejudice to our client's application to the Supreme Court for permission to appeal and a future claim for back damages for infringement, our client does not wish to prevent your clients' access to the market for those indications which are only protected by the Patent claims which the Court of Appeal has held to be invalid."
- On the same day Sandoz's solicitors replied saying that "Sandoz is prepared to take all reasonable steps within its power to ensure that its pregabalin products are not prescribed or dispensed for the treatment of licensed indications that are covered by patent claims which have not been held invalid", and that the interim injunction should therefore be discharged.
- On 27 October 2016 Actavis' solicitors replied to Warner-Lambert's solicitors' letter dated 20 October 2016 raising a number of concerns about the proposed revised guidance, and in particular the following:
"1. The guidance refers to a number of specific unlicensed indications for pregabalin. Your client never asserted in its claim against our clients that they infringed the claims to these unlicensed indications … and the previous guidance sought by your client makes no reference to these. The likely impression given to a recipient who is aware of the existing guidance but unaware of the developments in the litigation is that the freedom to prescribe our clients' product has been restricted to [a] greater extent than before. This is likely to have a chilling effect on the prescription of our clients' product in a way that is contrary to the judgment of the Court of Appeal.
2. Further, our clients are seriously concerned that the directions given to clinicians to prescribe your client's product by brand for unlicensed indications amount to a promotion of Lyrica for these purposes, contrary to Council Directive 2001/83/EC … as well as the ABPI Code of Practice … Our client considers it inappropriate for your clients to seek or NHS England to issue any statements that are in breach of the above and so any guidance should be limited to indications for which Lyrica is licensed.
3. Our clients are also concerned at the wider policy implications of requiring the NHS to issue guidance relating to second medical use claims to indications for which the relevant medicinal product is unlicensed. …"
The letter enclosed revised draft guidance limited to trigeminal neuralgia pain, PHN pain and causalgia pain.
- On 28 October 2016 Sandoz's solicitors wrote to Warner-Lambert's solicitors referring to Actavis' solicitors' letter dated 27 October 2016 and noting that they had raised the same issue on 21 and 25 October 2016, but received no substantive response.
- Also on 28 October 2016 Sandoz's application to discharge or vary the interim injunction was listed for hearing in the week commencing 5 December 2016 even though it had not been issued at that stage. (Subsequently the date was changed to 13 or 14 December 2016 due to the unavailability of a suitable judge in that slot.)
- On 31 October 2016 Warner-Lambert's solicitors wrote to Actavis' solicitors and Sandoz's solicitors saying that they understood that NHS England was considering the matters raised in their letters dated 27 and 28 October 2016.
- On 3 November 2016 NHS England's solicitors wrote to Warner-Lambert's solicitors saying:
"By way of update on our client's review of the revised Guidance, in view of the serious policy issues raised in relation to the difference in scope of Lyrica's® marketing authorisation and the extant patent claims, it is necessary that these issues are considered at a senior clinical level within NHS England. Due to limited availability of key individuals, we anticipate that we will be able to revert to you in the first part of next week."
- On 11 November 2016 Sandoz's solicitors wrote to Warner-Lambert's solicitors asking whether the form of revised NHS Guidance proposed by Actavis was acceptable to Warner-Lambert. Warner-Lambert's solicitors replied the same day saying that they would revert when they had heard from NHS England.
- On 14 November 2016 NHS England's solicitors wrote to Warner-Lambert's solicitors asking why Warner-Lambert was proposing that the NHS Guidance be reduced in scope given that Warner-Lambert was seeking permission to appeal to the Supreme Court, and what would happen if Warner-Lambert was successful on appeal.
- On 17 November 2016 Warner-Lambert's solicitors replied to NHS England's solicitors' letter dated 14 November 2016. I must quote this letter in full since it was strongly relied upon by counsel for Sandoz:
"As your letter notes, our client is seeking permission to appeal to the Supreme Court in relation to the validity of the Patent. The appeal is being sought because our client believes the decisions of the High Court and Court of Appeal were in error in three serious respects, as set out in our client's grounds of appeal (which we have provided to you previously). In the meantime, the order for revocation from the High Court remains stayed (as we understand would be usual).
In view of the above, our client naturally reserves all of its rights as to the position regarding infringement of the Patent, in particular, in the event that further claims are upheld as valid following appeal to the Supreme Court, or if claim 3 of the Patent is successfully amended. That said, our client does not envisage that it will take action under the Patent against prescribing doctors, NHS pharmacists or NHS bodies generally (including your client and CCGs).
Notwithstanding the above, our client also recognises the possibility that claim 3 (and other claims that have thus far been held invalid) may not ultimately be upheld. Pending the outcome of the application to the Supreme Court, our client accordingly does not wish to adopt a position that prevents generic pharmaceutical companies from selling pregabalin products for indications that are only protected by the Patent claims that have thus far been held invalid, if those generic companies wish to do so (albeit it reserves its rights in respect of such sales). From a commercial perspective, it is also undesirable for our client to be exposed to unknown but potentially significant liabilities as a result of the various cross-undertakings given during proceedings, including in relation to the issuing of the original NHS guidance.
In addition to the above, our client had anticipated that a narrowing of the guidance would be what prescribing doctors and pharmacists, and indeed NHS England, would expect of our client, given the Court of Appeal's decision. Whilst our client believes that the Court of Appeal decision is wrong, our client does not wish to cause damage to its stakeholder and customer relationships through continued insistence on the previous guidance. Our client has made its views on this issue public. However, if your client believes that another approach is appropriate or preferable, our client is of course open to discussion."
- On 18 November 2016 Sandoz issued their application (although, rather oddly, the application notice bears a Court seal dated 11 November 2016).
- On 25 November 2016 Warner-Lambert's solicitors wrote to Sandoz's solicitors saying that Warner-Lambert was still waiting to hear what NHS England's position was.
- On 1 December 2016 NHS England's solicitors wrote to Warner-Lambert's solicitors saying that they were still taking instructions from their client in view of Warner-Lambert's pending application for permission to appeal from the Supreme Court. This was re-iterated in a letter dated 9 December 2016. By the date of the hearing before me, nothing further had been heard from NHS England, which I regard as unfortunate.
- Despite being repeatedly challenged by Sandoz's solicitors and Actavis' solicitors in the correspondence referred to above, and again by Sandoz in their evidence on this application, on the question of whether the proposed revised NHS Guidance constituted promotion of Lyrica contrary to European Parliament and Council Directive 2001/83/EC of 6 November 2001 on the Community code relating to medicinal products for human use and the ABPI Code, there was no response from Warner-Lambert or its solicitors in either correspondence or evidence prior to the hearing before me. When I asked counsel for Warner-Lambert what Warner-Lambert's position was, he initially tried to avoid answering the question, but eventually told me that Warner-Lambert denied that the proposed wording amounted to promotion of Lyrica. Even then, he was not able to explain why Warner-Lambert took that position. I regard it as most unsatisfactory that Warner-Lambert did not provide the other parties to this dispute with a reasoned statement of its position within a short period of them raising this issue, as it was entirely capable of doing. It seems likely that this has contributed to the delay in resolving the issue.
- Be that as it may, there was little dispute by the end of the hearing that there was little realistic prospect of a revision to the NHS Guidance being agreed in the near future. Nor was there any suggestion that any party would make an application to the Court to enable the dispute to be resolved in the near future. Accordingly, I must proceed on the basis that, at least for the near future, the NHS Guidance will remain as it stands. Even once it is revised, the revision will take some time to have effect.
Intermediate marketing authorisations
- Before proceeding further, it is necessary to explain the regulatory position and the reasoning behind the stance adopted by Warner-Lambert in Warner-Lambert's solicitors' letters to Sandoz's solicitors dated 26 October 2016 (paragraph 36 above) and to NHS England's solicitors dated 17 November 2016 (paragraph 45 above).
- The regulatory position with respect to skinny label marketing authorisations was explained in Warner-Lambert I at [17]-[18]. As is explained by Nicola Dagg of Warner-Lambert's solicitors in her sixth witness statement made for the purposes of the present application, Warner-Lambert made the concession set out in the letters dated 26 October and 17 November 2016 so that generic companies could obtain variations to their skinny label marketing authorisations which extended the authorised indications beyond epilepsy and GAD to central neuropathic pain, but not to peripheral neuropathic pain (an "intermediate" label), as two of Sandoz's competitors had requested. This concession also to some extent reflected the reality of the marketplace as perceived by Warner-Lambert.
- Actavis have obtained an intermediate label, but Sandoz have not. Dr Stephan Eder of Sandoz explains in his witness statement that Sandoz do not wish to amend their full label marketing authorisation in this way. Dr Eder gives a number of reasons for this. The first is that Sandoz do not want to exclude all of peripheral neuropathic pain, when only claims 10, 11 and 12 have been held valid and not a claim covering all types of peripheral neuropathic pain. That is understandable, but nevertheless, as counsel for Warner-Lambert submitted, it is Sandoz's choice. More importantly, the other reasons relate to the fact that any such amendment would have effect EU-wide because the marketing authorisation was obtained by the centralised procedure. As Dr Eder explains, Sandoz have concerns as to the effect of such an amendment, including from a patient safety perspective, in countries where Sandoz have been able to market the Sandoz Full Label Product. I accept that these concerns are reasonable ones.
- It is common ground that one way round this problem would be for Sandoz to apply for a duplicate marketing authorisation via the centralised procedure which could then form the basis for obtaining an intermediate label. It is Sandoz's evidence that this would be likely to take more than a year. Even if Sandoz had applied immediately after Warner-Lambert's solicitors' letter dated 26 October 2016, they would have been very unlikely to have obtained an intermediate label prior to expiry of the Patent.
- Accordingly, I accept that, between now and expiry of the Patent, Sandoz will only be able to market pregabalin in the UK under either their skinny label marketing authorisation or their full label marketing authorisation.
Has there been a material change in circumstances?
- It is common ground that a threshold condition which Sandoz must satisfy in order to succeed in its application is that there has been a material change in circumstances since the 17 November Order. If Sandoz establishes that there has been a material change in circumstances, then the Court must re-exercise its discretion in the light of the changed circumstances.
- Counsel for Sandoz relied upon two factors as, separately or cumulatively, amounting to a material change of circumstances: first, the judgment of the Court of Appeal in Warner-Lambert CA II; and secondly, the stance adopted by Warner-Lambert since then, as manifested in Warner-Lambert's solicitors' letters to Sandoz's solicitors dated 26 October 2016 (paragraph 36 above) and to NHS England's solicitors dated 17 November 2016 (paragraph 45 above). I will consider these in turn.
- So far as Warner-Lambert CA II is concerned, it is common ground that this amounts to a change in circumstances. Whereas the position as at 17 November 2015 was that Warner-Lambert had been granted permission to appeal against the finding that claims 1, 3, 4, 6, 13 and 14 were invalid on the basis that the appeal had a real prospect of success, in the event the appeal has not succeeded. Equally, Mylan and Actavis' appeal against the finding that claims 10, 11 and 12 are valid has not succeeded either. The question is whether this change in circumstances is a material one.
- Counsel for Sandoz relied upon the fact that there were now concurrent findings by this Court and by the Court of Appeal that claim 3 was invalid and that Warner-Lambert's application to amend that claim was an abuse of process. He submitted that those findings engaged the principle that the Supreme Court would not interfere with concurrent findings of fact by the two courts below unless those findings were manifestly erroneous or procedurally unfair or otherwise amounted to a miscarriage of justice: see Stemson v AMP General Insurance (NZ) Ltd [2006] UKPC 30, [2006] Lloyd's Rep IR 852 at [16]-[20] (Lord Hope of Craighead) and Sienkiewicz v Greif (UK) Ltd [2011] UKSC 10; [2011] 2 AC 229 at [166] (Lord Rodger of Earlsferry JSC).
- As counsel for Warner-Lambert pointed out, however, the conclusions of this Court and the Court of Appeal with respect to the validity of claim 3 are not findings of fact. Rather, they are evaluative assessments based on the application of a legal test. Warner-Lambert's first argument on its application to the Supreme Court is that the wrong legal test has been applied. Moreover, its second argument is that both this Court and the Court of Appeal wrongly construed claim 3, which again raises an issue of law. Finally, its third argument is that both this Court and the Court of Appeal erred in law in concluding that its application to amend claim 3 was an abuse of process, either because such an application is not within the scope of the abuse of process doctrine at all or because the wrong test was applied.
- Furthermore, as counsel for Warner-Lambert also pointed out, while it is true that Warner-Lambert's appeals to the Court of Appeal were dismissed, the fact remains that the appeal process has not yet been exhausted. If the Supreme Court grants permission to appeal, which it will generally do if it considers that the case raises one or more arguable issues of law of general public importance, then it may yet turn out that claim 3 is either held to be valid even as construed by this Court and the Court of Appeal or valid because it is more narrowly construed or that Warner-Lambert is permitted to pursue its amendment application (which would then have to be considered on its merits but might lead to a valid claim of narrower scope). At this stage, it cannot be assumed that the Supreme Court will refuse permission to appeal.
- Accordingly, I accept the submission of counsel for Warner-Lambert that the change of circumstances as a result of Warner-Lambert CA II is not a material one. This Court's task in Sandoz I was to decide what course would be least likely to cause one party or the other irremediable harm in circumstances where the merits of Warner-Lambert's claims had not yet been finally determined. At present, it remains the case that the merits of Warner-Lambert's claims concerning the validity of claims 1, 3, 4, 6, 13 and 14 have not yet been finally determined. Nor, for that matter, have the merits of its claims concerning the validity of claims 10, 11 and 12 been finally determined, since it remains possible that the Supreme Court will grant Mylan and Actavis permission to cross-appeal. Finally, the merits of Warner-Lambert's claims for infringement of those claims (if valid) have not been determined even at first instance.
- I turn then to consider Warner-Lambert's stance as set out in the letters dated 26 October and 17 November 2016. In short, Warner-Lambert has stated that it will not prevent generic companies from marketing pregabalin for indications which are only protected by claims held invalid by Court of Appeal (although it reserves its right to claim financial remedies if successful in the Supreme Court). As counsel for Warner-Lambert submitted, the word "only" is important. What it means is that Warner-Lambert will not rely upon claim 3 in so far as it extends beyond claims 10, 11 and 12 to prevent generic companies marketing pregabalin i.e. Warner-Lambert will not seek an injunction on that basis. In particular, Warner-Lambert will not seek an injunction to prevent generic companies marketing pregabalin under intermediate labels which extend to central neuropathic pain. I did not understand counsel for Warner-Lambert to dispute that this was another change in circumstances, but he again disputed that it was a material one.
- Counsel for Sandoz submitted that this was a material change in circumstances because Warner-Lambert's case at the time of the 17 November Order was based both upon claim 3 and upon claims 10, 11 and 12, whereas it had now abjured the wider case for the purposes of injunctive relief. He argued that this was material because of its significance to Sandoz's argument on proportionality (as to which, see below). Counsel for Warner-Lambert submitted that it was not a material change, because Warner-Lambert still relied upon the narrower case, and it could be seen from Sandoz I at [85] that I had explicitly held that Warner-Lambert had a well arguable case of infringement based solely upon claims 10, 11 and 12.
- I have not found this question easy to decide. On the one hand, it can be said in favour of Sandoz's contention that Warner-Lambert's change of position with regard to the enforcement of claim 3 by injunction is material because it enables Sandoz to argue that an interim injunction to restrain infringement of claims 10, 11 and 12, but not claim 3, would be disproportionate. On the other hand, it can be said in favour of Warner-Lambert's contention that it was open to Sandoz to advance that argument at the 21 October 2015 hearing anyway, because the position following Warner-Lambert V was that it had been held that claim 3 was invalid, but claims 10, 11 and 12 were valid.
- The conclusion I have reached is that Warner-Lambert's change of position with regard to the enforcement of claim 3 by injunction is a material change of circumstances. Whereas Warner-Lambert's position at the time of the 17 November Order was that it relied upon claim 3 to prevent generic access to the pregabalin market prior to expiry of the Patent, it no longer does so. This matters when it comes to the assessment of the balance of the risk of injustice, because claim 3 confers a broader monopoly on Warner-Lambert than claims 10, 11 and 12, particularly if claim 3 covers both peripheral and central neuropathic pain as is Warner-Lambert's primary contention. In particular, as noted in the preceding paragraph, it enables Sandoz to advance its argument on proportionality. That argument was not open to Sandoz in the same way at the hearing on 21 October 2015 because at that stage Warner-Lambert was still relying upon claim 3. While it is true that I held in Sandoz I that Warner-Lambert had an arguable case of infringement of claims 10, 11 and 12 even if claim 3 was invalid, I went on to assess the balance of the risk of injustice on the basis that Warner-Lambert had a real prospect of success on claim 3 and I did not carry out a separate assessment on the assumption that Warner-Lambert only had a real prospect of success on claims 10, 11 and 12.
- Before leaving this topic, I wish to add four points. First, although Warner-Lambert maintains that claims 1, 4, 5, 6, 13 and 14 are also valid, it is claim 3 which matters for present purposes, since claim 1 cannot stand if claim 3 is invalid while claims 4, 5, 6, 13 and 14 are both narrower than claim 3 and unlikely to survive if claim 3 falls.
- Secondly, there has been another change in circumstances since the 17 November Order which Sandoz did not contend was material. At the time of the 17 November Order, it was anticipated that Warner-Lambert's infringement claim against Sandoz would be tried in March 2016: see Sandoz I at [80]. As related above, the parties subsequently agreed to vacate that trial date. Although Warner-Lambert has given notice to lift the stay, no procedural steps have been taken to progress the matter beyond the service of Warner-Lambert's draft Re-Amended Particulars of Infringement and draft Re-Amended Particulars of Claim. Neither party sought the fixing of a new trial date upon an expedited basis, and I understand it to be common ground that the trial is unlikely to take place before the Patent expires on 16 July 2017. It necessarily follows that (subject to the outcome of Sandoz's present application) the interim injunction will endure until the Patent expires. Although Sandoz do not rely upon this as a material change in circumstances which gives the Court jurisdiction to reconsider the grant of the injunction, it is a matter which has to be taken into account upon the reconsideration.
- Thirdly, it might be said that there has been another change in circumstances since the 17 November Order. This is that the Court of Appeal has given further consideration to the law on infringement in Warner-Lambert CA II (as to which, see further below). Even if this is a change of circumstances, however, Sandoz did not rely upon it as being material. Again, however, it is a matter which has to be taken into account upon the reconsideration.
- Fourthly, given that the Supreme Court's decision is expected in January or February 2017, I should make it clear what I consider the effect of that decision will be for present purposes. Given that the reason why I have concluded that there is a change of circumstances is that Warner-Lambert no longer relies upon claim 3 for the purposes of obtaining injunctive relief, it seems to me that it will make no difference whether the Supreme Court grants or refuses Warner-Lambert permission to appeal in relation to claims 1, 3, 4, 6, 13 and 14. As I see it at the present, the only relevance of the Supreme Court's decision is with respect to claims 10, 11 and 12. Even if the Supreme Court grants Mylan and Actavis permission to cross-appeal on the validity of claims 10, 11 and 12, however, that will not improve Sandoz's position for present purposes.
Principles to be applied
- There is no dispute that the basic principles to be applied in considering whether to grant – or, as here, continue – an interim injunction are those stated by Lord Hoffman when giving the advice of the Privy Council in National Commercial Bank Jamaica Ltd v Olint Corp Ltd [2009] UKPC 16, [2009] Bus LR 1110 at [16]-[20]. I set out the relevant passage in Warner-Lambert I at [90], and it is not necessary to do so again. The key point is that the court should adopt whichever course seems likely to cause the least irremediable prejudice to one party or the other.
- Counsel for Sandoz placed at the forefront of his argument, however, the proposition that it was also important for the Court to consider whether the injunction was proportionate and avoided creating barriers to legitimate trade. In support of this proposition he relied upon two main authorities. The first was the following passage from my judgment in Napp Pharmaceutical Holdings Ltd v Dr Reddy's Laboratories (UK) Ltd [2016] EWHC 1517 (Pat):
"[168] Remedies. What remedy or remedies should the court grant if it finds that the defendant is threating to do acts which will fall within the claim sufficiently often that they cannot be discounted as de minimis, but which nevertheless amount to infringement on a very small scale? Suppose, for example, it is concluded on the balance of probabilities that the defendant will sell 2000 infringing patches randomly distributed among 1,998,000 non-infringing patches, and it is also concluded that that quantity cannot be discounted as de minimis?
[169] As counsel for Napp accepted, remedies for patent infringement, and in particular the remedy of an injunction, must be effective, proportionate and dissuasive and must be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse: see Article 3(2) of European Parliament and Council Directive 2004/48/EC of 29 April 2004 on the enforcement of intellectual property rights and HTC Corp v Nokia Corp [2013] EWHC 3778 (Pat), [2014] Bus LR 217 at [19]-[28].
[170] It seems to me that these principles provide the answer to the question posed in paragraph 168 above. Even if the level of infringement cannot be discounted as de minimis in such a case, I consider that an injunction would be both disproportionate and a barrier to legitimate trade. It would be disproportionate because the harm to the patentee from infringement on such a small scale would be indistinguishable from the harm caused by wholly non-infringing acts. It would be a barrier to legitimate trade because the practical effect of such an injunction would be to require the defendant to operate even further outside the boundaries of the claim, and thus would effectively extend the scope of the patentee's monopoly. In such a case, the appropriate remedy would be a financial one."
- The second is the following passage from the recent judgment of the Court of Justice in Case C-494/15 Tommy Hilfiger Licensing LLC v Delta Center as [EU:C:2016:528]:
"[31] By its second question, the referring court asks, in essence, whether the third sentence of Article 11 of Directive 2004/48 must be interpreted as meaning that the conditions for an injunction within the meaning of that provision against an intermediary who provides a service relating to the letting of sales points in market halls are identical to those for injunctions which may be addressed to intermediaries in an online marketplace, set out by the Court in the judgment of 12 July 2011 in L'Oréal and Others (C-324/09, EU:C:2011:474)."
[32] In paragraph 135 of that judgment, the Court first of all noted, referring to recital 23 of Directive 2004/48, that the rules for the operation of the injunctions for which the Member States must provide under the third sentence of Article 11 of the directive, such as those relating to the conditions to be met and to the procedure to be followed, are a matter for national law.
[33] Next, it stated that those rules of national law must be constructed so as to achieve the objectives of Directive 2004/48. For that purpose, and in accordance with Article 3(2) of that directive, injunctions must be effective and dissuasive (judgment of 12 July 2011 in L'Oréal and Others, C-324/09, EU:C:2011:474, paragraph 136).
[34] Lastly, the Court held that injunctions must be equitable and proportionate. They must not therefore be excessively expensive and must not create barriers to legitimate trade. Nor can the intermediary be required to exercise general and permanent oversight over its customers. By contrast, the intermediary may be forced to take measures which contribute to avoiding new infringements of the same nature by the same market-trader from taking place (see, to that effect, judgment of 12 July 2011 in L'Oréal and Others, C-324/09, EU:C:2011:474, paragraphs 138 to 141).
[35] The Court thus took the view that any injunction within the meaning of the third sentence of Article 11 of Directive 2004/48 may be pronounced only if it ensures a fair balance between the protection of intellectual property and the absence of obstacles to legitimate trade (see, to that effect, judgment of 12 July 2011 in L'Oréal and Others, C-324/09, EU:C:2011:474, paragraph 143).
[36] While, admittedly, in the case which gave rise to the judgment of 12 July 2011 in L'Oréal and Others (C-324/09, EU:C:2011:474), the Court had to interpret the third sentence of Article 11 of Directive 2004/48 in the context of injunctions which may be addressed to an intermediary in an online marketplace, it interpreted that article in the light of the general provisions formulated in Article 3 of that directive, without specific considerations relating to the nature of the marketplace at issue. Nor is it apparent from Article 3 of the directive that its scope is limited to situations which occur in online marketplaces. Moreover, it follows from the wording of Article 3 of the directive that it applies to any measure referred to by that directive, including those provided for in the third sentence of Article 11 of the directive.
[37] Therefore, the answer to the second question is that the third sentence of Directive 2004/48 must be interpreted as meaning that the conditions for an injunction within the meaning of that provision against an intermediary who provides a service relating to the letting of sales points in market halls are identical to those for injunctions which may be addressed to intermediaries in an online marketplace, set out by the Court in the judgment of 12 July 2011 in L'Oréal and Others (C-324/09, EU:C:2011:474)."
- As counsel for Sandoz submitted, the CJEU has confirmed in this passage that Article 3(2) of European Parliament and Council Directive 2004/48/EC of 29 April 2004 on the enforcement of intellectual property rights ("the Enforcement Directive") is directed to national courts when considering whether or not to grant an injunction (and not merely to the Member States' legislatures when framing national laws) and that this applies not merely to injunctions against intermediaries under the third sentence of Article 11, but also to the other measures specified in the Enforcement Directive, which include interim injunctions (Article 9(1)).
- I entirely accept that the court must consider the proportionality of any injunction, including an interim injunction. Nevertheless, I consider that there is an important difference between considering the proportionality of a final injunction after the merits of a dispute have been determined (at least at first instance) and considering the proportionality of an interim injunction before the merits of the dispute have been determined. In the latter situation, the court's primary task remains that of taking the course which appears least likely to cause one party or another irremediable prejudice.
- Although there is no reference to Article 3(2) of the Enforcement Directive in Warner-Lambert CA II, counsel for Sandoz also relied upon the statement by Floyd LJ at [187] that "the remedies for infringement will have to be moulded so as to achieve fair and proportionate relief tailored to the very special circumstances of this type of case". That statement was, I think, primarily directed to final relief, but I accept that, subject to the point I have just made, it is also applicable to interim relief.
Warner-Lambert's pleaded case on infringement
- In its current Amended Particulars of Infringement Warner-Lambert alleges infringement by Sandoz of claims 1, 3, 11 and 12 of the Patent, but not claim 10. (This is a point which appears to have been overlooked at the hearing on 21 October 2015.) On 7 December 2016, however, Warner-Lambert served draft Re-Amended Particulars of Infringement on Sandoz which add an allegation of infringement of claim 10. Counsel for Sandoz did not have instructions formally to consent to that amendment, but he accepted that the Court should proceed on the assumption that that amendment would be made. It is for that reason that he accepted that the variation sought by Sandoz should be revised in the manner indicated in paragraph 3 above.
- Warner-Lambert's draft Re-Amended Particulars of Infringement also introduce allegations of claims 2 and 8. Counsel for Sandoz indicated that Warner-Lambert's application to introduce those allegations would be resisted. Given that, and given that there was no application by Warner-Lambert for permission to make those amendments before the Court, those allegations cannot be relied upon by Warner-Lambert for the purposes of resisting Sandoz's application. I would add that, as I indicated to counsel for Warner-Lambert during the course of argument, my provisional view is that the allegations require further particularisation anyway.
- What was not drawn to my attention during the course of the hearing, but I have subsequently noticed, is that Warner-Lambert's existing Amended Particulars of Infringement allege infringement of claims 5, 7 and 9. It follows that, in principle, Warner-Lambert would be entitled to rely upon those allegations for the purposes of resisting Sandoz's application. Counsel for Warner-Lambert did not rely upon those allegations as part of his argument, however. This is consistent with the stance adopted by Warner-Lambert at the hearing on 21 October 2015, when it did not rely upon those allegations for the purposes of its interim injunction application. I would add that my provisional view is that those allegations also require further particularisation.
- This does not mean that claims 2, 5, 7, 8 and 9 are irrelevant for the purposes of the present application. On the contrary, those claims have been found to be valid and there is no extant challenge to that finding. It follows that, in principle, Warner-Lambert is entitled to the benefit of the monopoly conferred by those claims even if it is not in a position to allege infringement of those claims (as distinct from claims 10, 11 and 12).
Is there a serious issue to be tried?
- Counsel for Sandoz accepted that Warner-Lambert's claims for infringement of claims 10, 11 and 12 of the Patent raised a serious issue to be tried, but he did so very reluctantly. He explained the reasons for this reluctance as follows.
- To begin with, he pointed out that Floyd LJ had expressly accepted in Warner-Lambert CA II at [185] that the analysis of the law of infringement of second medical use claims in Warner-Lambert CA was obiter and he pointed out that the further analysis of that question in Warner-Lambert CA II was also obiter. Thus neither analysis constituted law binding upon his clients.
- Then he submitted that Floyd LJ's analysis in Warner-Lambert CA II at [205]-[208] contained three key errors. First, it involved a false antithesis between subjective intention and objective assessment: intention is always subjective, but must always be objectively assessed. Secondly, the test propounded at [206] was a test of imputed intention, which the Supreme Court has held "has no proper role in the modern law of tort": see O v Rhodes [2015] UKSC 32, [2015] 2 WLR 1373 at [45] (Baroness Hale of Richmond and Lord Toulson, with whom Lord Clarke of Stone-cum-Ebony and Lord Wilson agreed) (cited in Warner-Lambert V at [596]). Thirdly, if intention was imputed upon the basis of foreseeability, then it could not be disimputed because the alleged infringer had taken "all reasonable steps within his power to prevent the consequences occurring". This was to turn patent infringement into a branch of the law of negligence.
- Finally, he submitted that the right answer was to interpret the word "for" in a Swiss-form claim to mean "specifically for". In this regard, he drew an analogy with the doctrine of instruments of deception in the law of passing off as expounded by the Court of Appeal in British Telecommunications plc v One in a Million Ltd [1999] FSR 1.
- I express no view on these submissions. As counsel for Warner-Lambert submitted, they have little relevance to Warner-Lambert's claim against Sandoz for infringement of claims 10, 11 and 12 through dealings in the Sandoz Full Label Product. (They may be very relevant to Warner-Lambert's claims for infringement against Actavis, Sandoz and others through dealings in skinny label pregabalin products, but that is another matter.)
- There is no dispute that Sandoz intend (whether acting by themselves or their agents) to package, label and market the Sandoz Full Label Product. I held in Warner-Lambert II at [37] and Sandoz I at [85] that it was arguable that "preparation" in a Swiss-form claim included packaging and labelling. As counsel for Warner-Lambert submitted, this argument receives strong support from the observations of Floyd LJ in Warner-Lambert CA II at [224] albeit that those observations were made in the context of indirect, rather than direct, infringement. (I note in passing that Floyd LJ went on at [225] to suggest that "other acts of the pharmacist" than packaging and labelling could also amount to preparation of the medicament or pharmaceutical composition, but counsel for Warner-Lambert was unable to suggest what those "other acts" might be.)
- There can be little dispute that Sandoz intend that the Sandoz Full Label Product should be dispensed to patients who have been prescribed pregabalin for indications for which it is authorised. If one turns to the Summary of Product Characteristics for the Sandoz Full Label Product, one finds the following statement in section 4 "Clinical Particulars" sub-section 4.1 "Therapeutic indications":
"Neuropathic pain
Pregabalin Sandoz is indicated for the treatment of peripheral and central neuropathic pain in adults."
- This statement makes it plain that the Sandoz Full Label Product is indicated for the treatment of peripheral neuropathic pain, which includes the conditions covered by claims 10, 11 and 12.
- Furthermore, there are also the following statements in section 5 "Pharmacological Properties" sub-section 5.1 "Pharmacodynamic properties":
"Efficacy has been shown in trials in diabetic neuropathy, post herpetic neuralgia and spinal cord injury. Efficacy has not been studied in other models of neuropathic pain.
…
In clinical trials up to 12 weeks for both peripheral and central neuropathic pain, a reduction in pain was seen by week 1 and was maintained throughout the treatment period.
In controlled clinical trials in peripheral neuropathic pain 35% of the pregabalin treated patients and 18% of the patients on placebo had a 50% improvement in pain score. …"
- These statements reinforce the message given by the passage quoted in paragraph 87 above. Furthermore, the first paragraph I have quoted specifically mentions PHN pain, which is the condition covered by claim 11.
- I therefore conclude that Warner-Lambert has not merely an arguable, but a strong case, that, if claims 10, 11 and 12 are valid, dealings by Sandoz in the Sandoz Full Label Product will infringe those claims.
- Counsel for Warner-Lambert went further and submitted that Sandoz had no arguable defence to this aspect of Warner-Lambert's infringement claim. That submission assumes, however, that claims 10, 11 and 12 will continue to be found valid. Given that the decision of the Supreme Court is awaited, it is neither necessary nor appropriate for me to say any more about it.
Harm to Warner-Lambert if the variation is granted
- In Sandoz I I concluded at [95] that, if no injunction was granted, but Warner-Lambert was successful in its infringement claim in respect of the Sandoz Full Label Product at trial, then there was a significant risk of Pfizer, and hence Warner-Lambert, suffering damage during the interim which would be very difficult to quantify and irremediable loss in the long term. Counsel for Warner-Lambert submitted that there was no reason to reach a different conclusion now. On the contrary, subsequent developments and the evidence now before the Court reinforced that conclusion. In this regard, he relied upon five factors.
- First, he relied upon further evidence adduced by Warner-Lambert as to the lack of efficacy of the NHS Guidance. This consists of two elements. The first consists of data extracted from the NHS Prescription Costs Analysis ("PCA") data published by the BSA and corresponding data from the NHS Wales Primary Care Data Services, NHS National Services Scotland and HSC Business Services Organisation (covering Northern Ireland). This data appears to show that, in England, the level of prescribing by reference to the Lyrica brand name peaked at just over 30% in about September 2015 and has since declined slightly to 29.4% as at August 2016. In Wales the level reached a plateau in about October 2015 and has remained fairly stable since then at 25.5%. In Scotland the figure peaked at about 18% in about October 2015 and was at 16.9% as at March 2016. In Northern Ireland the figure plateaued in about September 2015 and remains at 13.2%. It is unclear why the figure should be lower in Northern Ireland, where the NHS Guidance was issued, than in Scotland, where it was not.
- The second element consists of an analysis of the PCA data for August 2016 at CCG and GP practice level. This appears to show that, as at that date, around 60% of CCGs still had generic prescribing levels for pregabalin of 70% or over, while around 98% of CCGs had generic prescribing levels of 30% or over. Even more strikingly, over 2,700 GP practices (out of 7,923) were still writing between 95 and 100% of their prescriptions by reference to the generic name or a generic brand. This strongly suggests that the GPs in those practices have simply ignored the NHS Guidance. The reasons for this are unclear, but in my view merit investigation by NHS England.
- Secondly, counsel for Warner-Lambert relied upon evidence adduced by Warner-Lambert as to the current state of the market for pregabalin. Again, this has two elements to it. The first consists of the percentage of the pregabalin market currently retained by Lyrica. Although the commercially available IMS data for September 2016 suggests that Lyrica has about 64% of the market (including about 11% consisting of parallel imported Lyrica), Warner-Lambert's evidence is that the true figure is lower, namely about 50% in October 2016 (including about 8% parallel imports).
- The second is the discount from the NHS List Price being offered for pregabalin from various sources over the period February 2015 to November 2016. This shows a sharp increase in the average discount (and hence a sharp drop in the market price) for generic pregabalin over the period from June 2015 to April 2016. Since then it has been fairly stable at about 92%. Pfizer's ex-factory price has only declined to a discount of 20%, but this is a consequence of Pfizer's Brand Equalisation deals (which have been revised from a 70:30 split between patented and non-patented indications to a 15:85 split). The discount on parallel imported Lyrica is, as one would expect, a little higher.
- Thirdly, counsel for Warner-Lambert relied upon the fact that it is common ground that certain pharmacy chains prefer to purchase full label pregabalin rather than skinny label pregabalin, since it means that they only have to stock and dispense one product. It is this market that Sandoz are particularly keen to target with the Sandoz Full Label Product, but by the same token it is this market which Pfizer is particularly keen to preserve for Lyrica.
- Fourthly, counsel for Warner-Lambert relied upon the fact that there are now even more generic companies with diverse forms of marketing authorisation for pregabalin. At least 16 generic companies, including Sandoz, now have skinny label marketing authorisations, including all of the biggest companies operating in the UK. Five generic companies, including Sandoz, also have full label marketing authorisations. Actavis do not have a full label marketing authorisation, but as mentioned above they do have an intermediate label marketing authorisation. As noted in Sandoz I at [93], the evidence is that the generic companies which do not currently have a full label marketing authorisation could convert their skinny label marketing authorisations into full label ones in 30-60 days.
- Fifthly, counsel for Warner-Lambert relied upon the fact that, as noted above, the Patent will expire on 16 July 2017 and it is now unlikely that the trial will take place before that. As counsel submitted, this is significant, because if Sandoz are permitted to launch the Sandoz Full Label Product now, they will be able to establish a "bridgehead" in the full label market prior to expiry, with consequent damage to Warner-Lambert after expiry: cf. Corruplast Ltd v George Harrison (Agencies) Ltd [1978] RPC 761 and Monsanto Co v Stauffer Chemical Co [1984] FSR 574.
- I accept counsel for Warner-Lambert's submission that these five factors support the conclusion I reached in Sandoz I. But against this I have to consider the impact of Warner-Lambert's concession that it no longer relies upon claim 3 in so far as it extends beyond claims 10, 11 and 12 for the purposes of injunctive relief. In this regard, counsel for Sandoz relied strongly upon Warner-Lambert's own evidence that the percentage of the pregabalin market covered by claims 10, 11 and 12 is only 1.13%. In financial terms, that equates to a market worth just over £4 million per annum based on full Lyrica prices, or about £2.3 million for the period between now and the expiry of the Patent.
- I will consider the question of proportionality separately below, but in my view this factor does not change the analysis with respect to the harm which Warner-Lambert would suffer if the injunction were varied now so as to permit Sandoz to sell the Sandoz Full Label Product, but Warner-Lambert was successful at trial. Even though the conditions covered by claims 10, 11 and 12 represent a small percentage of the pregabalin market, if the marketing of the Sandoz Full Label Product infringes those claims, Warner-Lambert is prima facie entitled to an injunction to prevent such marketing prior to expiry. If Sandoz were permitted to market the Sandoz Full Label Product now, it is clear that they would be quickly followed by other generic companies. Some might be able to launch very quickly after Sandoz, while others might have to wait 30-60 days. Within a couple of months, however, there would be a free-for-all in the full label market. The consequence would be further pressure on the market price of pregabalin. This would require Pfizer to spend even more money on Brand Equalisation deals if it was to try to maintain the ex-factory price of Lyrica. In practice, Pfizer might well have to cease supporting the ex-factory price in that way. Moreover, although expiry of the Patent is now less than seven months away, re-categorisation of pregabalin for the purposes of the Drug Tariff during that period remains a possibility. Pfizer would not be able put the price up again if Warner-Lambert is successful, not least because the Patent would have expired. The loss which Warner-Lambert would suffer as a result would be very difficult to quantify. The difficulty of the quantification exercise would be exacerbated by the substantial level of off-label prescribing of pregabalin for conditions covered by claims 2, 5, 7, 8 and 9, particularly given the likely uncertainty as to the extent to which that demand is met by full label as opposed to skinny label pregabalin. Moreover, it would be far from easy to quantify Warner-Lambert's loss even in that part of the pregabalin market which is protected solely by claims 10, 11 and 12.
- Sandoz have offered to take certain further steps to publicise the NHS Guidance, and to try to ensure that the Sandoz Full Label Product is not dispensed if the pharmacist knows that pregabalin has been prescribed for one of the conditions covered by claims 10, 11 and 12, if the injunction is varied. I do not consider that these offers materially affect the assessment of the harm which Warner-Lambert will suffer, however.
Harm to Sandoz if the variation is refused
- In Sandoz I I concluded at [97] that, if an injunction was granted, but Warner-Lambert was unsuccessful in its infringement claim in respect of the Sandoz Full Label Product at trial, then Sandoz would suffer damage which would be difficult to quantify because of the absence of any track record of sales of the Sandoz Full Label Product and because of the loss by Sandoz of the "first mover" advantage.
- Counsel for Warner-Lambert did not seriously contend that Sandoz's loss between now and expiry of the Patent would be quantifiable, but he did submit that the extent of the loss was likely to be smaller because the period of the first mover advantage was likely to be shorter. I do not accept this given that the trial is now unlikely to take place prior to July 2017.
Clearing the path and preservation of the status quo
- In Sandoz I I concluded at [101]-[103] that Sandoz's failure to clear the path and preservation of the status quo were factors that favoured the grant of the injunction. Counsel for Warner-Lambert submitted that this remained the case. I accept that submission.
Balance of the risk of injustice
- In my judgment, subject to the question of proportionality, granting the relief sought by Sandoz would create a greater risk of irremediable harm than refusing it. My reasons are essentially the same as I gave in Sandoz I at [103]. In particular, having reconsidered the matter in the light of the circumstances which exist now, I remain of the view that the arrival of full label generic pregabalin on the market prior to the expiry of the Patent would make it significantly more difficult for the Court to ensure appropriate compensation of those parties which it is finally determined merit compensation.
Proportionality
- As stated above, counsel for Sandoz placed proportionality at the forefront of his argument. In short, he submitted that an injunction to prevent Sandoz from marketing the Sandoz Full Label Product would be disproportionate when (i) the effect of the NHS Guidance was that about 30% of prescriptions in England were written by reference to the brand name Lyrica and thus could not have any generic product dispensed against them and (ii) in practice Pfizer retained about 50% of the pregabalin market, but (iii) claims 10, 11 and 12 only covered 1.13% of the market. Despite this, as counsel for Sandoz pointed out in his submissions in reply, counsel for Warner-Lambert did not mention the subject of proportionality in his submissions in answer. Perhaps he did not consider that he needed to.
- Be that as it may, I do not consider that proportionality is a trump card for Sandoz on the present application for the following reasons. First, the figure of 1.13% ignores the rather larger part of the market (over 13.8% on Warner-Lambert's evidence) which is covered by claims 2, 5, 7, 8 and 9. As I have said, in principle, Warner-Lambert is entitled to the benefit of a monopoly of the latter part of the market even if it is not in a position to allege infringement of those claims (as distinct from claims 10, 11 and 12). It is immaterial for this purpose that Pfizer only reaches that part of the market through off-label prescribing because pregabalin is not authorised for the conditions covered by those claims.
- Secondly, even if one disregards the part of the market covered by claims 2, 5, 7, 8 and 9, and leaving aside for the moment the effect of the NHS Guidance, the main cause of the problem which faces Sandoz is the preference which certain pharmacy chains have to stock full label product. Even though the conditions covered by claims 10, 11 and 12 represent a small percentage of the total market, Warner-Lambert is prima facie entitled, assuming that its claim for infringement of those claims succeeds, to use that monopoly to protect the full label market for pregabalin (as distinct from the skinny label and intermediate label markets). I do not consider it disproportionate to grant an injunction to enforce that entitlement on an interim basis. In this regard, it should not be forgotten that Sandoz have the benefit of Warner-Lambert's cross-undertakings not only with respect to the injunction, but also, to the extent that it contributes to the damage Sandoz suffer by ensuring that too large a percentage of prescriptions is written for Lyrica, the NHS Guidance. When it comes to the stage of considering whether to grant a final injunction, the position may be different (as to which, see HTC Corp v Nokia Corp [2013] EWHC 3778 (Pat), [2014] Bus LR 217 at [29]-[32] as well as the cases cited above); but that is a matter for another day.
The wording of the order
- Given the conclusion I have reached, the disputes between the parties as to the wording of the order proposed by Sandoz are academic. I will nevertheless comment briefly upon them.
- First, Warner-Lambert contends that the insertion of the words "for use in the treatment of" is inappropriate given that the meaning and effect of those words is a key issue in the proceedings: see Staver Co Inc v Digitext Display Ltd [1985] FSR 512. Counsel for Warner-Lambert was unable to suggest any alternative wording which would be suitable to confine the injunction to claims 10, 11 and 12, however.
- Secondly, Warner-Lambert contends that it would not be appropriate to limit sub-paragraph (ii) in the manner proposed by Sandoz since the point of the existing wording is to prevent Sandoz circumventing the injunction by use of a different marketing authorisation. I agree with this.
- Thirdly, Warner-Lambert contends that the wording of the proviso proposed by Sandoz is unclear and uncertain in its scope. I disagree with this.
Conclusion
- For the reasons given above, Sandoz's application is dismissed.
