The High Court calls time on a generic pharmaceutical manufacturer’s intentions

Merck Sharp Dohme Corp (MSD) and Bristol-Myers Squibb Pharmaceutical Ltd (BMS) v Teva Pharma B.V. and Teva UK Ltd, [2013] EWHC 1958 (Pat) 09 July 2013

Summary

The High Court has granted a final ‘quia timet’ injunction to prevent a generic pharmaceutical manufacturer, who had obtained a marketing authorisation (MA), from infringing the intellectual property rights of the claimants. Teva refused a request by MSD and BMS to say when it was planning to launch its generic product and refused to give an undertaking that it would not launch whilst a supplementary protection certificate (SPC) was still in force. The case is of interest as it is a rare example of the High Court granting an injunction to restrain harm due to a perceived imminent threat. The case also demonstrates how the courts may be taking a stricter approach to generic manufacturers, requiring companies to ‘clear the way’ before product launch.

Background

MSD and BMS own a patent protecting the branded HIV medication Sustiva/Atripla (efavirenz) which expires on 3 August 2013. The associated SPC is due to expire on 20 November 2013. During 2011 Teva applied to the European Medicines Agency for a MA for efavirenz. In late 2011 the Committee for Medicinal Products for Human Use (CHMP) released its positive opinion on Teva’s application, and in January 2012 the marketing authorisation was finally granted.

Following the announcement of the positive decision of the CHMP, BMS wrote to Teva in December 2011 to ask what its intentions were regarding the launch of generic efavirenz and requested that Teva provide an undertaking not to market the product in any country in which a patent or SPC remained in force. Teva did not respond to this request for an undertaking, or several subsequent communications from BMS' legal advisors. As a result, BMS applied to the court for an interim injunction which was granted on 15 March 2012 to restrain Teva from infringing the patent and commenced infringement proceedings. In February 2012, Teva replied substantively that it was not its policy to provide competitors with launch dates for potential products for which it had obtained a MA, and made an unsuccessful application for the interim injunction to be overturned. Teva also stated that the grant of a MA did not require Teva to market generic efavirenz and that it was company policy not to infringe valid patents.

Decision

A quia timet injunction (Latin: ‘because he fears’), is an injunction to restrain harm which has not yet occurred but what is being threatened is imminent. In this case neither validity nor infringement was in issue by the time of the trial and so it was only necessary to consider whether Teva did threaten and intend to infringe the claimants’ patent. Teva did not challenge the validity of the patent, and accepted that the patent and SPC covered efavirenz but requested that the action should be dismissed as it had no intention to infringe the patent. Birss J, the trial judge upheld and maintained the interim injunction.

In the judgment, Birss J reviewed the case law on quia timet injunctions and concluded that it was necessary to ask whether, in all the circumstances, there is a sufficiently strong probability that an injunction will be required to prevent the harm to the claimant occurring to justify the claimant bringing the proceedings. Birss J held that in assessing intention it is necessary to consider both the subjective intention of the defendant and how the defendant’s actions would be objectively understood by third parties.

In the judgment, Birss J ruled that the evidence did show that Teva was considering an early launch of efavirenz. During the trial, disclosure was given by Teva of internal documents concerning the intended launch date for Teva's product and Birss J held that these documents demonstrated that Teva was actively considering whether or not to launch in the UK before the expiry of the SPC and wanted to keep its options open to do so. He also ruled that it was fair to draw inferences from Teva’s refusal to explain its commercial intentions for launching a generic product and referred to Teva's past history, and in particular its launch of a generic Lipitor (atorvastatin) product in 2011, after the company had previously informed Warner Lambert that they would not launch until after the expiry of the atorvastatin patent. Furthermore, Birss J stated that the fact that Teva had obtained the MA unusually early, at almost 2 years before patent expiry, supported an inference that Teva intended to launch generic efavirenz before the expiry of the patent.

Comment

This decision demonstrates how the courts may be taking a stricter approach to the actions of generic manufacturers when potential infringement may occur, requiring companies to ‘clear the way’ before product launch.

Generic manufacturers have a history of launching products at risk, based upon calculations of projected sales revenues prior to any injunction outweighing any costs or damages they would ultimately be held liable for. Indeed, being the first generic to market often only necessitates a small reduction in price of between 10 and 20 per cent from the innovator’s product.

This judgement may give some comfort to innovative companies facing the looming expiry of patents protecting key products, and provides useful guidance for pre-action correspondence which seeks to ascertain when a generic manufacturer intends to launch its generic product. If generic manufacturers withhold such information from patent proprietors they may face actions for quia timet injunctions.

For the full judgment, please click here.