This article was included in the spring 2011 issue of Innovate - the patents newsletter.
In the case of Cephalon v. Orchid Europe  EWHC 2945 (Pat) the Patents High Court was asked to adjudicate on whether an interim injunction should be granted to restrain the Defendants from marketing in the UK a generic Modafinil product for treating sleeping disorders pending the trial for patent infringement.
In his judgment, Floyd J first considered whether there was an arguable case of patent infringement and validity. He felt that the evidence on infringement was weak, but "in the end, and not without difficulty, ... concluded that the evidence just about clears the threshold for establishing that there is a serious question to be tried." He also was sceptical about the validity of the patent, but reached a similar conclusion in that he was "not persuaded that the Claimants had no arguable case on validity".
Following the long established principles of American Cyanamid the merits of a case generally are not a relevant factor taken into account when a Court considers whether to grant an interim injunction. The Defendants argued that the merits in this case were so one-sided that the Court should depart from the normal practice. Despite the Judge's scepticism as to the Claimants' position on infringement and validity the Judge concluded that he did not have sufficient basis to conclude "that the strength of the Defendants' case is disproportionate to that of the Claimants". As both sides had a realistic prospect of success this case was not one that took the case outside the normal principles.
The decision as to whether or not to grant an interim injunction therefore fell to be considered on the balance of convenience basis, i.e. weighing the likely injustice of granting an injunction that later turns out should not have been granted, against the injustice of withholding one which should.
The Claimants' primary argument on the balance of convenience point was that if a generic came onto the market price depression would follow, which could not be increased to former levels should the Claimants later prevail at trial. On this point the Judge concluded that "it does not seem ... that this evidence comes anywhere near establishing that the Claimants could not raise their prices to their former level". On their side the Defendants argued that they would suffer significant injustice if they were to be made the subject of an injunction, which injunction later turned out to have been inappropriate. The Defendants argued that an injunction would deprive them of being the first generic onto the market and asserted that the first generic on to the market obtained a significant advantage over competitors for a number of reasons including: higher price levels when there is only one generic; and when further generics come on to the market as the incumbent supplier the first generic entrant has an advantage.
On the balance of convenience the Judge concluded that the loss to the Defendants of an injunction was the more likely to occur, the more likely to be substantial, and the more difficult to quantify than the loss to the Claimants in the absence of an interim injunction. Accordingly the Judge refused the application for an interim injunction. He did instead order an expedited trial to come on in less than six months in order that any adverse effects on the Claimants were minimised.