Introduction

The case of Novartis Pharma AG v Eli Lilly Nederland BV & Ors ([2021] IEHC 814) was adjudicated by the High Court of Ireland on December 21, 2021. This litigation involved two major pharmaceutical companies disputing over patents related to treatments for psoriasis—specifically Novartis' Cosentyx and Eli Lilly's Taltz.

Central to the dispute was the ownership and validity of European Patent (IE) 2 784 084, owned by Novartis, and the alleged infringement of this patent by Eli Lilly's Taltz. Eli Lilly sought to modularize the trial, aiming to separate the infringement and revocation proceedings from the competition law defense, in hopes of conserving court time and resources amidst a noted shortage of judges.

Summary of the Judgment

Mr. Justice Twomey delivered a comprehensive judgment addressing Eli Lilly's application to modularize the trial. The primary contention revolved around whether such modularization would save court time without causing undue prejudice to Novartis, particularly regarding the potential loss of an injunction remedy due to the impending expiry of the patent.

The High Court concluded that while there is a significant public interest in conserving court time—especially given Ireland's acute shortage of judges—this must be balanced against the potential prejudice to the plaintiff, Novartis. Specifically, the modularization sought by Eli Lilly could deprive Novartis of the opportunity to obtain an injunction before the patent's expiry on June 2, 2024.

Ultimately, the Court refused Eli Lilly's application to modularize the trial, emphasizing that the potential prejudice to Novartis outweighed the benefits of saving court time and resources.

Analysis

Precedents Cited

The judgment referenced several key cases to frame the principles surrounding trial modularization:

• Cork Plastics Manufacturing v. Ineos Compound UK Ltd. & Flopast Ltd. v. Cork Plastics [2008] IEHC 93
• McCann v. Desmond [2010] 4 I.R 554
• Weavering Macro Fixed Income Fund Ltd. (in liquidation) v. PNC Global Investment Servicing (Europe) Ltd. [2012] 4 I.R 681
• James Elliott Construction Ltd. v. Lagan [2016] IEHC 599

These cases collectively establish that the default position in litigation favors a unitary trial, and any departure requires substantial justification, particularly concerning complexity and potential time savings.

Legal Reasoning

The Court employed a structured analysis based on five key principles derived from the cited precedents:

1. Default preference for a unitary trial.
2. Obligation on the requesting party to justify modularization.
3. Assessment of complexity and length of proceedings.
4. Evaluation of potential prejudice to opposing parties.
5. Determination of good faith in the application for modularization.

Applying these principles, the Court scrutinized whether the proposed modularization would genuinely save court time and resources without disproportionately disadvantaging Novartis. While acknowledging the complexity of the competition defense, the Court found that the primary motivation for Eli Lilly's request was to avoid potentially adverse injunctions, thereby constituting significant prejudice to Novartis.

Impact

This judgment sets a noteworthy precedent in Irish civil litigation, particularly in patent disputes. It underscores the judiciary's emphasis on safeguarding the rights of plaintiffs against procedural maneuvers that may undermine substantive remedies, such as injunctions. Additionally, it highlights the Court's willingness to balance public interest considerations with the equitable treatment of litigants.

Future cases involving requests for modularization will likely reference this decision, especially concerning the assessment of potential prejudice versus procedural efficiencies. Litigants may need to provide more robust justifications for modularization requests, ensuring that they do not inadvertently seek to circumvent essential legal protections.

Complex Concepts Simplified

Modularisation of Trials

Modularisation refers to the splitting of a trial into separate parts or "modules." This approach can streamline complex cases by addressing different issues sequentially, potentially saving time and resources. However, it must be balanced against the risk of prejudice to any party involved.

Injunctions in Patent Law

An injunction is a court order that can compel or prevent a party from performing certain acts. In patent disputes, an injunction can stop the alleged infringer from manufacturing or selling the infringing product. The availability of an injunction can be crucial for the patent holder to protect its rights effectively.

Abuse of Dominant Position

This is a concept within competition law where a dominant company uses its position to engage in practices that unfairly limit competition. In this case, Eli Lilly argued that Novartis' handling of the patent constituted such an abuse.

Supplementary Protection Certificate (SPC)

An SPC extends the protection of a patent for pharmaceutical products, compensating for the time taken to obtain regulatory approval. This extension can provide patent holders with additional exclusive rights beyond the original patent term.

Conclusion

The High Court's decision in Novartis Pharma AG v Eli Lilly Nederland BV & Ors underscores the judiciary's commitment to ensuring that procedural strategies do not compromise substantive rights. While recognizing the necessity of efficient court processes, the Court prioritized the potential prejudice to Novartis over the benefits of modularisation. This judgment serves as a critical reminder that in patent litigation, the preservation of fundamental remedies like injunctions remains paramount, even amidst pressures to streamline judicial proceedings.

Moving forward, parties engaged in similar disputes must carefully weigh their strategies, ensuring that requests for procedural adjustments do not infringe upon the equitable treatment of other litigants or undermine the integrity of essential legal protections.