Recent cases in the UK and Germany suggest that the courts are not shy of challenging long held assumptions about preliminary injunction practice. A fresh reference to the Court of Justice of the European Union may also lead to changes across the EU.
How are preliminary injunction applications determined in the UK?
The approach to determining preliminary injunction applications in the UK courts was established by the House of Lords in American Cyanamid Co v Ethicon Ltd over 40 years ago. This asks:
- whether there is a serious question to be tried
- whether damages is an adequate remedy for the claimant and, if not,
- whether damages (on a cross-undertaking in damages) is an adequate remedy for the defendant?
If damages are not an adequate remedy for either side, the court will assess where the balance of convenience lies.
The American Cyanamid criteria are difficult to satisfy in the general run of patent cases and preliminary injunctions are consequently very rare in the UK. But preliminary injunctions are more common when generic drug competitors launch onto the UK market "at risk".
In these cases, it is the norm to argue that entry onto the market by a generic product will force down the premium price of the branded drug and that such a premium price can arguably never be recovered (even if the generic company were to withdraw from the market). As a result, future losses may be incalculable, damages are an inadequate remedy and immediate measures are needed to cease the infringing activity and hold the status quo until a decision on merits of the case can be made.
Recent developments – namely the Neurim Pharmaceuticals v Generics (UK) litigation, in which a preliminary injunction was refused at first instance and on appeal – have, however, demonstrated that the court will not treat this issue dogmatically.
What about in Europe?
Meanwhile, in some European countries, the courts will, among other requirements, insist that the validity of a patent which is to be the enforced by preliminary injunction is secured. In Germany, the courts in Düsseldorf and Mannheim have established that validity may only be assumed if the patent has survived first instance nullity proceedings in the Federal Patent Court or opposition in the EPO. There are exceptions, however, such as when there are no nullity proceedings on foot, validity is not doubted, or in generic launch cases.
By contrast, the courts in Munich did not apply a general rule that patent validity must have been upheld at first instance until it took a change in courts in the Elektrische Anschlussklemme case. This was later questioned and has now resulted in the Regional Court of Munich referring the issue to the Court of Justice.
The question now is, will these cases signal major shifts in the approach to preliminary injunctions by the UK and German courts, in their different ways, and perhaps to EU courts as a whole? Or is their practical significance limited?
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