Mylan Appeals Stay of Injunction in Neurim Pharmaceuticals v Generics Case

Introduction

The case of Neurim Pharmaceuticals (1991) Ltd & Anor v Generics (UK) Ltd & Anor ([2022] EWCA Civ 370) revolves around the infringement and validity of European Patent (UK) No. 3 103 443 ("EP443"). This dispute involves key players in the pharmaceutical industry: Neurim Pharmaceuticals, the patent holder, Flynn, the marketer under the Circadin trademark, and Mylan, a generic pharmaceutical company accused of infringing EP443. The central issues pertain to patent validity, infringement, and the appropriateness of granting a stay on injunctions pending appeal.

Summary of the Judgment

The England and Wales Court of Appeal (Civil Division) dealt with Mylan's appeal against Marcus Smith J's order, which granted an injunction against Mylan for infringing EP443. The Court granted permission for Mylan to appeal, expedited the hearing, and stayed the injunction pending the appeal's outcome. The core of the dispute lies in whether EP443 is valid and whether Mylan's generic version of Circadin infringes upon it. The Court delved into previous rulings, the validity of the patent, and the appropriateness of maintaining the injunction during the appeal process.

Analysis

Precedents Cited

The judgment references several key precedents that influenced the Court's decision:

Novartis AG v Hospira UK Ltd [2013] EWCA Civ 582 - Provided principles for granting stays on injunctions pending appeals, emphasizing the balance between preserving the status quo and ensuring fair compensation.
Minnesota Mining and Manufacturing Co v Johnson & Johnson Ltd [1976] RPC 671 - Established foundational principles for when courts should grant stays on injunctions, focusing on fairness and the potential for unquantifiable damages.

These cases underscored the Court's approach to balancing the rights of the patent holder and the generic manufacturer, especially concerning the adequacy of damages as a remedy.

Legal Reasoning

The Court's legal reasoning centered on whether granting a stay would preserve the status quo without causing unquantifiable harm to either party. Key points include:

Validity of EP443: Initially, EP702, from which EP443 was divided, was revoked for lack of novelty. However, EP443 was a divisional patent that Neurim attempted to validate by making it patentably indistinct from EP702. The opposition proceedings at the EPO and the subsequent judgments played a crucial role in assessing its validity.
Infringement by Mylan: Mylan admitted to infringing EP443 if it were valid but contested its validity. The Court had to assess whether the patent claims were sufficiently plausible, especially concerning the use of melatonin for improving restorative sleep.
Stay of Injunction: Applying precedents, the Court evaluated whether granting a stay would be justifiable. It considered the adequacy of damages as compensation and the potential for unquantifiable losses if the injunction were not stayed.

The Court concluded that while both parties risk unquantifiable damages, preserving the status quo by granting a stay was the fair approach, especially given the expedited appeal process and the impending expiration of EP443.

Impact

This judgment has significant implications for future patent infringement cases, particularly in the pharmaceutical sector:

Expedited Appeals: The Court's decision to expedite the appeal process emphasizes the importance of timely resolutions in cases where patents are nearing expiration.
Balance of Remedies: The ruling highlights the delicate balance courts must maintain between granting injunctions and allowing appeals, especially when damages may not fully compensate for potential losses.
Patent Strategy: For patent holders and generic manufacturers alike, this case underscores the importance of robust patent claims and the strategic use of divisional patents to extend protection.

Overall, the judgment reinforces the courts' role in ensuring fairness and mitigating undue harm to either party while upholding intellectual property rights.

Complex Concepts Simplified

Several intricate legal concepts are at play in this judgment. Here's a breakdown to enhance understanding:

Divisional Patent: A subdivision of an existing patent application, allowing the applicant to pursue additional claims based on the original invention without affecting the parent patent's scope.
Stay of Injunction: A temporary halt on enforcing an injunction while an appeal is pending, ensuring that the status quo is maintained until a final decision is reached.
Lay-Patient Argument: A legal standard where the sufficiency of a patent's disclosure is judged from the perspective of a hypothetical person skilled in the art without inventive capacity, assessing whether the invention is plausibly described.
Issue Estoppel: A doctrine preventing a party from re-litigating an issue that has already been decisively settled in court.

Understanding these concepts is crucial for grasping the nuances of the case and the Court's rationale.

Conclusion

The Court's decision in Neurim Pharmaceuticals v Generics underscores the judiciary's role in balancing the enforcement of patent rights with the practical implications of such enforcement on generic manufacturers. By granting Mylan's appeal permission and staying the injunction, the Court preserved the status quo pending a thorough appellate review. This approach not only ensures that all legal avenues are fairly explored but also minimizes potential economic disruptions that could arise from immediate enforcement of injunctions. The judgment serves as a precedent for handling similar disputes, emphasizing fairness, timely resolution, and the careful assessment of damages as remedies.