John: Alright. Looks like numbers have stabilized. So let's get going. So welcome, everyone. Good morning, good afternoon, good evening, depending on where you're located. This is our fourth or fifth seminar in the Life Sciences series and this one is on Preliminary Injunctions. As many of you know once litigation starts the first question is, for the plaintiff, can they get a preliminary injunction? It's a hugely important question and one of the reasons it's such a critical question is it's one of the first steps in litigation, and if the infringer comes to market, the consequences can be devastating. Some of the examples of irreparable harm that can happen is if, for example, a generic company comes to market and a PI is not granted the brand may be forever precluded from going back to its original price. It's the idea that once you have paid something less for a product it's hard to justify going back and paying a higher price afterwards. There's some other unique situations as well. For example, certain generic products don't work quite as well, especially in the ambiotic space and you can see if a generic comes to market the ambiotic may have resistance problems developing and it may just be specific to the generic product and that can cause professionals to say, "This product doesn't work anymore." when in fact it does. We've seen some cases of that in the past and other times hospitals just stop covering that product because of confusion over whether or not it's going to stop, whether it'll continue so those are some of the issues that can be particularly devastating to innovator companies who sell pharmaceuticals.
The panel today is going to look at three things, primarily. The likelihood of obtaining an injunction, the procedure and the test. A few housekeeping matters. This seminar will be recorded and will be available afterwards. At the end we'll also have a Q&A session so you can use the Q&A function on the bottom and we'll answer those questions at the end. So that's pretty much the housekeeping. My name is John Norman. I'm head of Life Sciences in Canada and Russia, a patent litigator in Ottawa and I will be your moderator today. I'll host the panel and will ask various questions to the panelists and they'll give us their perspectives on their jurisdiction. Our first panelist, Celine Bay. Celine is a partner in our Paris office. She focuses on IP litigation in France and the EU. Our second panelist is Eric Creber. Erin's a partner in our Ottawa office. She focuses on IP matters and, in particular, patent litigation. Our next panelist, Paul Inman. Paul is a partner in our London office and has been on a number of these webinars to date. He focuses on patent litigation in the UK and the EU. Last, but not least, Daniela Shaw. She is in our Guangzhou office and she is a qualified Chinese lawyer. She has an emphasis on IP litigation in China.
As I mentioned, I'm going to ask a series of questions to our panelists and they'll give us their perspective on the various jurisdictions. At the end we'll put up a summary slide just summarizing the various answers in the various jurisdictions. We'll give you a copy of the slides at the end of the webinar just so you can have those for your reference. So without further delay, let's get into the very first question.
This one's an interesting question because it has different answers depending on the jurisdiction and some very different answers. So the question is, how often are PIs sought in your jurisdiction? Celine, let's start off with France.
Celine: Okay. Hello, everyone. So, yes, in France preliminary injunction is a key tool for companies, especially for companies operating in life sciences. But before speaking about France, John, I'd like to say a few words about Europe because the necessity for Member States to provide for preliminary injunction in their legal system comes from a European directive, dated 2004. A directive on the enforcement of intellectual property rights. So the objective of this directive, just like any other directive, is to approximate legislative system so as to ensure a high equivalence and homogenous level of protection in Europe. So this directive was implemented in the different national laws according to the same main principles but, as often, the application and the appreciation by the judges differ from country to another. So we'll see how this system differs, for example, in France and in the UK with ... but we can say also a few words about Germany because Germany is a key jurisdiction when we are talking about patent litigation in Europe, of course. So what we can say is that Germany used to be the country to go for preliminary injunction, but today it is no longer the case, because the condition for obtaining a preliminary injunction in Germany has been made more strict by the German judges and even we can say that there is an ongoing rift through the European Court of Justice, currently, because of the recent decision of the German courts refusing to grant preliminary injunction on the ground that the validity of the patent has not been already challenged. We'll see that today it is probably easier to get a preliminary injunction, as well as Europe and in Germany, and especially in France. In France it was rarely granted 10 years ago, let's say, and that for the past 2 years everything changed and the number of preliminary injunction granted by the judge really increased. Today we can say that around 60% of the application for preliminary injunction are granted by the Paris court. Under French law you can obtain, of course, preliminary injunction which means prohibition of further marketing the product, of further manufacturing the product, but you cannot still obtain in preliminary proceedings decision of the product in stock. You can obtain the recall of the product from the market, so this is really powerful, the recall including from pharmacies and from hospital clinics. The recall is ordered in about 40% of the cases. You can also obtain an order against the defendants to communicate all the details, all the information, on the intermediaries. Everyone that has been involved in the manufacturing and the marketing of the product so that you can sue them later on. You can obtain, and this is also very, very important, provisional damages. In about 50% of the cases you can obtain damages before the Paris judge. So I can give you a few examples over the past 3 years. We have had cases where a general concern cases involving generics. Novartis, for example, obtained 13 million Euros as damages in preliminary proceedings together with an injunction against Teva. In 2019 we have had also decision awarding 4 million Euros damages against Mylan and Sandoz and very recently the Paris court, the Paris judge, awarded 4 million plus an injunction to the benefit of Eli Lilly. So we'll see later, John, that there are, of course, conditions for the granting of the preliminary injunction, but we can say that indeed it is a powerful tool, provided that it is carefully used. We will see that also.
John: Thanks, Celine. That's really interesting. The fact that you can get damages before you even have the case heard. That's fascinating. Paul, how about the UK?
Paul: Yes, sure. Thanks, John. Welcome, everyone. I think like in France and Germany, the situation with preliminary injunction has changed over the years. If we go back to before 2000 about, PIs were really quite rare and that was really due to this case that we'll hear about most of this hour, American Sign had made an ethic on. That was a 1975 case that got to the House of Lords, or UK Supreme Court, and it involved, even in the Supreme Court, a 7 day hearing with expert witnesses on the merits of the case to decided whether there should be a preliminary injunction. In that case the Supreme Court said it's not sensible having all of this sort mini trial within a trial at this interim stage. So it set down the principles that still are in force today for the grant of a preliminary injunction. What they said was as long as the parties have an arguable case the merits of the case should not be relevant. So we can get rid of all of this expert evidence and the question is really one of economics. So the main factor moved away from the strength of the parties arguments, and it became would the patentee's damages be quantifiable, and would therefore the patentee be adequately compensated in damages if the PI, preliminary injunction, is wrongfully refused? On that basis, looking at most situations where the patentee has a monopoly on a product, if the preliminary injunction is not grated by the time of the trial the judge can look back, see how many infringing articles were sold by the infringer if the patentee wins and that number would be assumed to have been made by the patentee and the damages were quantifiable. So it was generally the case that damages were found to be an adequate remedy. So preliminary injunctions were fairly rare. But that all changed in the pharmaceuticals sphere in 2001 in the case of Smithkline Beecham and Generics when Mr. Justice Jacob, as he was then, looked at quantifiability of damages in the pharmaceutical area. That's in the case where pharmaceutical prices are regulated by the government and reimbursed by the government. So as you said, John, it's difficult to put prices up but it's even more difficult to put them up when it's the government who are reimbursing those prices. What the judge found was that if a generic comes along, the generic company doesn't need to recoup its R& D costs, so it can sell at a lower price. The price of the product comes down, the government reimbursement price comes down and if there's no injunction and the patentee wins at trial, the reimbursement price would have come down. The patentee won't be able to get it up. So they, as well as lost sales, there's lost cost per sale, and that deflated price will go on into the future. The damage will not be quantifiable and that really set the scene from them on and in pharmaceutical cases the answer is being flipped on its head. No, there are no quantifiable damages and PIs are normally granted if a generic tries to come on in the UK. We'll look at the sign, the mid-principles, in a bit more detail later.
John: Thanks, Paul. That's really interesting. It's amazing how the law has dramatically changed, it sounds like, over the years. Daniela, how about China? How would that apply?
Daniela: Hello. Yes, I would like to talk about China. In China the court are very cautious issuing PIs. So, from 2014 to 2018 around 200 PI were granted by court in China. So it was a around 40 PI cases being granted each year, however, in 2018 the total IP cases being concluded in China were around 320,000 so PI only take a very small amount of the IP cases. There's only very, very small amount patent cases, especially invention patent cases related to IP was granted in China. But a change seen 2019 because the Supreme People's Court is still a provision called Provision of the Supreme People's Court on several ... consenting the education of law in review of cases involving extra preservation cases about IP ... So a further inventive of the provision the court more wary to issue PI especially those PI during the main litigation procedure. One of the cases we discuss in China after the inventive of the provision was the babies ... case. It was the first PI case relating to customer exporters. It was an invention patent case. The ... court is still the PI directing the customer in ... who brought the export of the birth for the first time in China the court has ever issued such PI. So after 2019 we can see more and more PI cases in China. It's still not easy to obtain PI before filing civil litigation in China but it's still worth a try. But in conclusion, PI was not a key tool for a life science crime in China. So that's China.
John: Thanks, Daniela. So it sounds like it's very different than the UK and Europe. Erin, how about Canada?
Erin: Yeah, thanks, John. So in Canada the bottom line is really that obtaining a preliminary, or interlocutory, injunction in an IP proceeding is there and it's still there today. To provide you wish some quick stats on the historical treatment of preliminary injunction, by the Canadian Court, I can say that in the past 25 years there's only been about 25 motions seeking such injunction. Only about 25% of those 25 motions have been successful. There was also a period of about 10 years from 2005 to 2015 where no preliminary injunctions, at all, were granted by the court, in the context of intellectual property. But that said, over the past 5 years or so, since about 2015/2016, the frequency of the courts in granting these injunctions has increased. Though its mainly been in the areas of trademark and copyright matters, it does remain quite difficult to obtain preliminary injunction the patent context. While we will be discussing the requirements to obtain a preliminary injunction in each of the jurisdictions, including in Canada, later on I think it's worth mentioning at this point that the reason most motions in Canada fail is because the moving party doesn't meet the second requirement of the test, which is establishing that the moving party will suffer irreparable harm in the event the injunction is not granted. Just briefly, irreparable harm has been described as that which cannot be compensated by a monetary award. So because it has been, and continues to be difficult to obtain a preliminary injunction in Canada, it really doesn't play a significant role in the litigation strategy of plaintiffs or patentees. An additional consideration is also that in the life sciences, or pharmaceutical patents context, seeking an injunction is often not necessary when you consider the statutory status to provided for under Canada's PMNOC regulations, which stands for the Patent and Medicines Notice of Compliance regulations. Now under the PMNOC framework, which is similar to Hatch-Waxman in the US, an entity which is usually a generic must address any listed patents before it can obtain marketing approval for a product. The listed patents will be addressed by a notice of compliance, or NOC, if issued by the generic at which point there will be a stay of up to 24 months available if an action for infringement is commenced against the generic. As a result of the statutory stay, under this framework, there are only really a few types of infringement where a life sciences patentee may wish to actually seek a preliminary injunction. For example, that would be if there's a exportation of an infringing product outside of Canada. It does the sale of a counterfeit or unapproved drug where its branding and the brand name infringement or where the patentee could not, or did not, list their patent on the patent register. Essentially these are situations that fall outside the situation of the PMNOC framework where that stay is not provided for. Another instance where a party may seek a preliminary injunction could be part of an Anton Piller Order, which is an order where the seizure rand preservation of property is sought from the court.
John: Thanks, Erin. So just in summary, we've got a summary slide and I guess the easiest way to describe the various jurisdictions, Canada and China, fairly difficult to get a preliminary injunction. France and the UK, it used to be difficult. More recently it's actually gone the other way where it seems to be if you've got decent evidence you can get a preliminary injunction. So that's kind of how the lay of the land is for those four countries. We can go to the next question, please. So, what is the procedure for getting a preliminary injunction? Paul, let's start it off with you in the UK.
Paul: Sure. Okay. So, for patentee to get an interim injunction, first of all there has to be a full infringement action on foot. In order to start an infringement action you have to have evidence of infringement or at least evidence of a threat to infringe. So that's the first hurdle that any patentee has to get over. What constitutes a threat to infringe? Well the best evidence is going to be from sales people on the ground. So effectively a customer saying we won't need your product next month because we've had an offer of a generic product. As long as you can get the sales person to put that in a signed statement, that is good evidence of a threat. Always worth making sure your sales people keep an eye out for any generic. Grant of a marketing authorization, per se, has been held several times not to be good enough to be a threat of infringement. But that does depend. There was one case, Merck against Tether in 2012 when Tether obtained their marketing authorization about 2 years before patent expiry. The facts of that case, Merck said that Tether had actually launched, at risk, with no warning before during the pendency of a patent. So in that case Mr. Justice Burr said that Merck had a legitimate concern and did grant preliminary injunction even though it was only on the basis of the granted marketing authorization. Urgency is also important. The court is likely going to consider the status quo. If you launch your PI application after the generic is on the market you've got a higher hurdle to get over. You want to be ready to launch both your infringement action and your preliminary injunction application as soon as possible. That's not always the case. In Leo against Sandoz, Leo had seen that Sandoz might be preparing to launch that engaged them in correspondence and said, "Look, tell us what your launch plans are." the generic refused and just remained silent and in the end launched and it was a few weeks before Leo had brought its PI application. But in that case the court said the status quo will be backdated to when you first asked them what their plans were. Another important point is as soon as you think there's a threat engage the generic in correspondence or get your lawyers to. In terms of procedure, usually PI applications will be inter-parte. You can launch ex parte if there is a reason to believe that things will be destroyed. The hearings can be very quick. For example, in Warner Lambert I think their legal team got in front of a judge on a Sunday afternoon at his home and got a preliminary injunction on the spot there, because there was an urgent threat of a significant launch. Assuming you get to the hearing, the preliminary injection if it's granted, will generally be granted at the hearing. Or if not the court will say, "Look, I'm going to take 3 days to do the judgment and I'll put a restraining order pending that judgment." So it can be extremely quick. Just finally, we don't have any protective brief system in the UK. So that's the brief procedure and we'll look at the test in a minute.
John: Thanks, Paul. I can imagine going before a judge on a Sunday afternoon is not the preferred way of doing this but sometimes it happens. Daniela, how about China?
Daniela: In China most of the PI will be granted after a hearing. Normally the court will call for a hearing and listen to one party or two parties opinion before issuing PIs. So under two situations the court will issue a PI after a ... hearing. So one is the situation is origin and the other one is in the ... hearing may cause a PI cannot be enforced in China. So under origin situation the PI will issue a very short time so it will be required the court to issue the PI within 48 hours but the 48 hours is start from the time of acceptance of the PI rather than from the filing day of the PI. So in practice when the PI are formally accepted by the court it means it is more likely the court will issue a PI after revealing and evaluating its merit. After getting the PI within 48 hours the applicant should immediately prepare to file a ... in according to the provisions. So if the applicant do not file the infringement may actually waiting 13 days from the granting day of the PI, the PI could be filed first. That is normally granted. That's the brief for China.
John: Thanks, Daniela. Really interesting. Erin, how about Canada?
Erin: So in Canada the preliminary injunction can be sought any time after an action is commenced but it is important to move promptly since any delay could be seen as a basis to deny the injunction. So for that reason we do recommend to all our clients to seek to obtain a preliminary injunction, if they do wish get one, at the same time any action is initiated. So this means filing your statement of claim also with the motion for a preliminary injunction. To get the preliminary injunction, as I mentioned, you need a motion and in nearly all cases notice of the motion will be provided to the opposing party, except as Paul mentioned in the case where there's the risk of property being destroyed. In those cases we would seek the Anton Piller Order, would be ex parte, along with an interim injunction, however, even if successful that interim injunction would only be for a very short period of time. That would allow both parties to appear before the court to have a hearing on the issue. So that's the atypical case but in a typical case the motion will be brought with notice to the opposing side and usually it will take about 1 to 4 months to schedule the steps leading up to the hearing and for a decision to issue. In terms of briefing the motion, both parties will ... that they're added which will include affidavit. These will usually include expert affidavit because in order to establish the secondary requirement of irreparable harm bare statements of irreparable harm just aren't enough. So if you put forward expert evidence this helps provide the necessary support in establishing that criteria. Once the evidence of both sides has been submitted they will also have the opportunity to cross-examine the affiant. The parties will then have to submit their ready representations and complete motion records, following which there'll be a hearing. At the hearing the court will typically preserve its decision and a decision will issue shortly thereafter.
John: Thanks, Erin. Celine, France is going to be very interesting. I'm looking forward to hearing this so please go ahead with France and the EU.
Celine: Yes, first of all preliminary injunction can be granted just like elsewhere in Europe, I guess, to private ... the continuation of infringing acts or to prevent any imminent infringement. So this is the threat Paul was talking about. A few words on imminent infringement, just like in the UK, doing acts in preparation for a post patent expiry launch, for example studies of tests in order to obtain the marketing authorization, is not sufficient for the grant of preliminary injunction. In France there is a particularity regarding the procedure to obtain a preliminary injunction, compared to what we've just heard, is that you can apply for preliminary injunction, either before or after you have started your action on the merit. So it is not mandatory to have started an action on the merit to apply for a preliminary injunction. This is quite interesting because if the injunction is rejected, is denied, you do not have to go on the merits if you just want to just drop the case. On the contrary, if the preliminary injunction is granted, now you must then go on the merits and you have around 30 days from the order to do so. So one must be very careful here when deciding to start either before or after the action on the merits. This is really a matter of strategy because if you start by applying for preliminary injunction the case will be heard by the President of the Paris Court, who has exclusive jurisdiction over patent case. The judge acting as a juge d'urgence, emergency judge, and the decision he will, or she will, issue render will be subject to appear immediately. If you wait to apply for preliminary injunction, if you start by the case on the merit and then you apply for the preliminary injunction, the case will be heard by the case management judge who will be in charge of the case on the merit and the decision of that judge will not be subject to an appeal immediately. You will have to wait for the decision on the merit and appeal on both decisions at the same time. So there is a huge difference, of course, between the two so it is usually advisable to apply before the President of the Court in order to be able to appeal the decision. Of course, if you have a very strong case, if you have a very strong case on validity of your patent, we see that this is an essential element in the French law and French procedure. You can choose to start on the merit and then to apply before the case management judge in order to prevent the defendant from appealing the decision. This is really a question of strategy here. Preliminary injunctions in France can be so granted inter-parte or ex parte. In theory, ex parte preliminary injunction are granted in real emergency circumstances, but in practice it is very, very rare. You can obtain one, for example, in case of repeated infringement by the same company but, in any case, if you obtain an ex parte injunction the order will be subject to challenge to dispute by the defendant who can thereafter obtain a hearing before the judge. So, in any case, it is ... that you lose time when you decide to go ex parte and it's advisable to go directly for inter-parte procedure. So it's not possible in France to file a protective letters, protective brief, because precisely there is quite no ex parte injunction. So the system is different from Germany where it is usual to file a protective brief to defend against the potential ex parte injunctions. With regard to timing, you can obtain a decision within, let's say a few weeks, and I would say maximum two months. But of course there is a huge debate on validity. For example, there can be some postponement of the hearings, but we can say that an average of two months is needed to obtain a preliminary injunction in France but, as we have seen, the debates usually are not only injunction but also damages, recall of product, etcetera.
John: Thanks, Celine. Really interesting. So the new thing that I've learned from this is that France is probably unique among the jurisdictions we're looking at because, in fact, in France you can go for a PI before commencing an action. In the UK, China and Canada that's clearly not the case where you actually have to start the action. Also one thing that I heard repeatedly is the act of infringement has to be imminent. If it's speculative at all I suspect that your chance of getting a PI is greatly reduced. With that, if we can move onto the next question. This is the last question and I'll give each of our panelists 5 minutes to talk about the test for deciding whether a PI is granted in their various jurisdictions. So starting off, Daniela, if we can look at China. What is the legal test?
Daniela: Yes, the test in China can be found in Article 7 of the Supreme People's Court provision. So it including four factors that the courts should consider when granting PIs. The first factor is factor a legal basis. It includes the ability of the IP rights and likelihood of infringement. So the Chinese court will consider whether the IP rights are very unstable. You will go to the court, will look at the type of the IP right, and whether the IP right has gone through the substantial ... before granting and whether the IP right has gone through invalidation proceeding. A likelihood of being invalidated also whether the ownership of the IP right is in dispute, the court will go through these four point to confirm the stable of the patent. At the same time the court will also look at the likelihood of infringement. So on the likelihood of infringement sometimes the court will use like a judicial report submitted by the applicant, or issued by a third party, to confirm the likelihood of infringement because sometimes the PI will be issued in a very short 48 hours. The second factor is irreparable harm. So irreparable harm is very important because a lot of PI application were refused for not being able to proving irreparable harm. Under irreparable harm Article 7 of the provision has some sub-factors, including sub-factor 1, harm to ... reputation and personal rights that could not be recovered. Sub-factor 2 is infringement that is difficult to control in creating damages, significantly, and controllable infringement, so such as the cells of the accused infringed product that will harm the ... corporation between the applicant and his commercial partner. Sub-factor 3 is loss of ... In the babies versus ... .... case ... the court rely on all these sub-factors to find irreparable harm. The courts say that it will be difficult to control the distribution of the product if they were allowed to export and this in return will harm the applicant's market share. Or under this brand, the ... and ..., irreparable harm and then issue a PI. So the factor is balancing of convenience. Without the PI the applicant will suffer much more losses. In practice the court will use balancing of convenience to decide whether the PI should be granted. It is a key point. We have done one case for our client, Dyson in China. We have obtained one PI in related to super sonic hair dryer. It is a design patent case. The design patent PI cases we obtain from Guangzhou IP court. The court, using the balancing of convenience, and then finding that if the PI was granted then the defendant, ..., will lose its cause for manufacturing and lose its profit due to not selling the product during the key area of the PI, but the court also found that if the PI was not granted then Dyson will not only lose its ... expense of the advertisement fee and lower pricing, losing its market share and losing its competitive advantage. Based on the about the court found that the balance of convenience favoured Dyson and therefore issued a PI. So this is how the judge in China thinking of the balancing of convenience point. The fourth factor is about public interest. Whether the public interest will be harmed by granting the PI the court will issue an injunction, in China, that is in the public interest. The public interest, such as the impact on the house, on the security, on the environment, etcetera, so it is the fourth factor that the court will consider when granting PI but this is not the most important. The most important factor is the balancing of hardship and irreparable harm. So that's the four factor test in China.
John: Thanks, Daniela. Celine, how about France and the EU?
Celine: The test for France, contrary to some other countries, there's no requirement for urgency. Not anymore. There used to be but there is no anymore so you can apply for preliminary injunction at any time. We will see that this may have some consequences on the type of majeure statute you can obtain but for the injunction you can apply at any time. So the test is merely based on two things. Two questions that the judge will assess. First of all, are the patent owner's rights likely to be infringed or is infringement imminent? And the second question is the question of proportionality. Will the injunction majeure be proportionate considering the circumstances of the case? So first of all the likelihood of infringement. The applicant, the patent owner, must provide any written reasonably available evidence in order to show that there is a sufficient degree of certainty that its rights are being infringed. In life sciences cases, and of course when it involved generics, the main issue is not infringement, per se, but the main issue is validity of the patent. It means that the French judge will first of all, conduct a preliminary assessment of the patent's validity because it will not grant an injunction if he has serious doubts on the validity of the patent, or the validity of the SPC. So it takes the same approach as in proceedings on the merits. We are not on the merits but the judge will assess and will appreciate all the documents, all the evidence, all the prior arts, that the defendant will file before him to discuss validity of the patent. So this is a very important question. Very important issue because we have seen that preliminary injunction is a powerful tool. You can almost, if you win your preliminary injunction, you have almost won the case but if you lose, on the contrary, it can be really problematic for the case on the merits. It's quite ... and also because this is one single judge who will appreciate the validity of the patent in preliminary proceedings. So you must be able to defend the validity. It is not advisable to go for preliminary injunction if your case is not strong. It's not advisable to go without having really worked the case and having anticipated any arguments that could be raised on validity. So it is true that if the patent has already been challenged, the validity has already been recognized by the European Office or by any other court, it's something very positive for the strength of the case. So be careful. You cannot go like this and to go and try to obtain a preliminary injunction because if the patent is subject to compensation you will face a bad decision from the President of the Court. This is not a good start for the case, and this is not a good signal to send to the market, as it could lead other generics to enter the market before expiry. So sometimes it's advisable to not to file a preliminary injunction and to go directly on the merits. On the merits of the case, we know that we can obtain huge damages before the French court. Recently the Paris court awarded 28 million Euros damages to Eli Lilly and its exclusive licence. On the contrary, if you are the defendant in such a case, of course you should contemplate initiating ... cancellation action for invalidity before the courts on the merits, while the preliminary injunction proceeding is pending, to show that you do believe in the invalidity of the patent. So this is the first condition, is likelihood of infringement but the debate, mainly, before the French judge is validity of the patent.
Second question that the judge will assess is proportionality. Proportionality of the measure is a requirement from the European directive and it is more and more assessed by the French judge. Proportionality means that the judge makes a balance of convenience and try to ascertain if the damages can be compensated later on, or not, or if the judge should issue an injunction right now. So we see that it is very much on the case by case basis. So I'm going to give you a few examples of measures that have been considered as proportionate, or disproportionate, recently by the courts. In the case Teva and Baptiste, I referred to earlier 2018, the judge for example refused to order the recall of the stock of the product considering that this is disproportionate because the patentee can be compensated by important damages. In the recent case I also mentioned, Eli Lilly versus Antifa, very recent, January 2021. Again the judge decided that the recall of the products would be disproportionate at this time. It was on the grounds that the patentee waited too long to apply for the injunction and the recall of the product. So we decided to start on the merit before and then to apply for the injunction. In that case the judge considered that it should not order the recall of the product.
John: Thanks, Celine. Sorry, I don't mean to cut you off, just quickly because we're running out of time.
Celine: Yeah, okay. So just to say that in short, in France, it is really on a case by case basis and that proportionality is now or was assessed by the judge who has quite power to decide on whether to grant or not. But as said, at the beginning, we can see more and more preliminary injunction granted, especially in life science cases.
John: Thank, Celine. Paul, how about you? I know we're running out of time so it's going to be a, as we call it in Canada, Coles Notes version.
Paul: Sure. I'll just do the sort of highlights. Unlike in France, as I said earlier, it's not on the merits as long as there's an arguable case and in pharmaceutical patent cases there always is. A patent's always arguably valid and generic almost always invariably would infringe because it's a copy of the originator. So it does come down to damages and adequate remedy. Both sides will say no and generic will lose its first move and the patentee will lose the financial loss that I've described. So it tends to go to what's the balance of convenience, as Daniela discussed. The one thing that's probably unique, or unique-ish, to the UK is, again from Jacob in the Smithkline Beecham cases, he said that there was this clear the way principle that generics, who know they're going to come on in 5 years time, if there's a patent in the way they should take action to remove the patent, and if they don't then they've brought this uncertainty on themselves. Historically since the SB cases, Smithkline Beecham cases, pharmaceutical patentees have obtained interim injunctions if a generic tries to come on without having sought to remove the patent. The one point that I would say, the most recent case for a preliminary injunction which is Neurim against Mylan judgment end of last year, we had a known patents judge consider it, he was actually a competition judge so arguably anti-monopoly, he found that damages would have been inadequate remedy so didn't even go on to consider the balance of convenience, because that was a classic case where an interim injunction should have been granted. Most patent practitioners would have said that ranked the court of appeal who said the judge was allowed to take that view. It then went to the Supreme Court but by that time the trial was only a couple of months away. So the Supreme Court said we haven't got time to hear this in the Supreme Court but we think there is a point of public importance so it is likely that the American Sign and its factors will be considered again by the Supreme Court in the UK, on the next case when it gets there.
John: Thanks, Paul. Erin, you've got 2 to 3 minutes. Apologize. We're running out of time.
Erin: I'll be very quick. So what you need to know is that in Canada the leading case is the Supreme Court's decision of RJR MacDonald which also adopted three part test of the UK House of Lords decision, American ... So there are three factors that you need to consider when you're seeking an interlocutory or preliminary injunction. The first is if there's a prima facia case and the second is if the moving party will suffer irreparable harm if the injunctions not granted, and the third is balance of convenience. The first factor, prima facia case, it's a very low bar. The moving party simply has to establish the action isn't frivolous or vexatious. Irreparable harm, as I mentioned this is usually the most difficult factor for a party to establish, and the reason why most motions seeking preliminary injunction in Canada fail. The evidence of irreparable harm must be clear and non-speculative. That's why expert evidence is often used. Where irreparable harm has been made out in Canada, just to give you a few examples, are in a patent case the inability of the defendant to pay damages. In trademark cases there's been the loss of goodwill and in a recent copyright case there was the loss of market share, to establish irreparable harm. In the pharmaceutical cases, really irreparable harm is very difficult to establish because patent rights are typically economic in nature and the court sees that there's usually no reason why damages caused by infringement can't be measured or calculated and these cases also usually involve very large pharmaceutical companies so inability to pay is not often at issue. Balance of convenience, like the other panelists, this is just considering which party will suffer greater harm if the injunction is or is not granted. Also delay is a factor that is considered by the court because if interlocutory injunctions are supposed to be granted in urgent situations where party delays this does go against the assertion that the injunction is urgently needed.
John: Thanks, Erin. Very concise and bang on point, as always. We have a couple of minutes for questions. There's one question that came in ahead of time, and Celine, I'll direct this towards you. Essentially the question is if you have part of a device that's infringing can you get an injunction on the entire device? You've got a case where there was a patent on the pen device and not the active ingredient and an injunction was granted. You want to just talk a little bit about that?
Celine: Yes. Probably an injunction would be granted on the whole. We have had the case in Germany where it was about an insulin pen so only the device, or the pen, was protected by a patent and the product not protected anymore. But their marketing authorization, I guess it was of Mylan, was on the combination of the device and the pen so the judge issued preliminary injunction on the whole. The pen lose the product because the marketing authorization was on the combination. But I guess that in France the PI would cover the pen so free to the infringer to modify the product and to change the device in order to be able to sell the product free. So the answer would be, yes.
John: Thank you. Paul, last question to you and I guess there's been a number of back and forth about whether price erosion is truly irreparable harm. This is the huge debate in almost all these cases. In Canada they say, no. In the UK they say, yes. Do you want to comment on that?
Paul: Yeah, sure. I mean I think in most of the cases in the UK it's not just price erosion. There tend to be other arguments. So I said that the Neurim case was a sort of model case for a preliminary injunction. That was a case where the patentee had only one product on the market, and it was a blockbuster, and it was essentially holding the company up. So it was also bank rolling other fledgling products. So a drop in income from that would have affected clinical trials on its later products and would have a knock on effect. So it wasn't just the loss income. But yeah, one, as a litigator, one tends to come up with weird and wonderful ways as to how loss is irreparable. I was acting for Neurim and it didn't work in that case but I blame the judge, myself.
John: You never know what's going to happen when you go to court, as we say.
Paul: No.
John: Well, panelists, thank you all very much. Fascinating discussion. Truly I learned a lot today. Thanks everyone for attending. We will have this recording up on our website and we'll send out a survey so you can give us your feedback. Thanks, everyone. Have a good morning, good afternoon and good evening. Take care and bye-bye.