English Patents Court grants further interim injunctions to prevent generic launch pending appeal decision on patent and SPCs' validity

On 28 April, the Patents Court handed down a decision holding that AstraZeneca's patent and associated supplementary protection certificates (SPCs) relating to dapagliflozin were invalid for lack of plausibility and lack of technical contribution.

The Patents Court provided a useful summary of the law on plausibility in the UK, and remained firm on the UK position in light of the European Patent Office's (EPO) decision in G2/21. The judge, Michael Tappin KC (sitting as a Deputy Judge of the High Court), did, however, note that a higher court would need to consider the interplay between the UK law on plausibility from Warner-Lambert and the law applied by the EPO and whether the standard applied in the context of inventive step should be different than in the context of insufficiency. Permission to appeal was granted and the hearing has been listed for 25 and 26 June. Will this point eventually make its way to the Supreme Court?

An interim injunction had previously been granted by the Court of Appeal following conclusion of the validity trial (but prior to judgment) pending the form of order hearing. AstraZeneca applied for the grant of further interim injunctions pending a decision from the Court of Appeal on validity. After multiple hearings, the Patents Court decided that it was appropriate to maintain the status quo until the Court of Appeal's validity judgment and thus granted AstraZeneca's applications for interim injunctive relief.

Generic launch

Three claimants, Viatris, Teva and Glenmark, brought proceedings before the Patents Court, seeking declarations that AstraZeneca's patent and associated SPCs were invalid and should be revoked. Following invalidity findings, the threat of generic launch led to a number of applications for interim relief by AstraZeneca.

Firstly, an interim injunction was refused by the Patents Court, but was overturned on appeal and granted by the Court of Appeal. An invalidity judgment was swiftly handed down after the Court of Appeal's grant of the interim injunction.

Since that judgment, AstraZeneca made subsequent applications for further interim injunctions pending the outcome of the validity appeal, which resulted in three separate hearings to determine the issue.

All other generic companies with a UK marketing authorisation for dapagliflozin agreed to undertakings not to launch until the injunction hearing took place or risked being ordered to do so by the Patents Court.

AstraZeneca's patent and SPCs invalid

Michael Tappin KC found AstraZeneca's patent to be invalid for lack of plausibility and lack of technical contribution and therefore the SPCs were also invalid.

Plausibility

The leading decision on plausibility in the UK remains the Supreme Court's majority judgment in Warner-Lambert, which the judge had to apply in this case. Warner-Lambert was clear that a patent's specification must disclose some reason for supposing that the implied assertion of efficacy is true – that is, it must make the invention plausible. In other words, the patent must provide a technical contribution in exchange for the monopoly that flows from the patent.

In this case, the judge identified whether the patent made a technical contribution by applying the three-step test set out by the Court of Appeal in FibroGen v Akebia:

1. Identify what it is which falls within the scope of the claimed class

Claim 2 was limited to the single compound (dapagliflozin), and claim 15 was limited to the use of the compound.

2. Consider what it means to say the invention works

The judge decided that for claim 15 it was treating or delaying the progression of diabetes. For claim 2, he concluded it was either the same as claim 15, or reducing blood or plasma glucose in vivo with sufficient efficacy to allow it to be used as an experimental tool.

3. Ask if you can make a reasonable prediction that the invention will work for substantially everything falling within the scope of the claim

The judge concluded that the patent merely made bare assertions that dapagliflozin was an SGLT2 inhibitor and would be useful to treat diabetes. The patent did not disclose enough to make it plausible that dapagliflozin would have an in vivo effect on blood or plasma glucose such that it could be used as an experimental tool or to treat diabetes.

Arbitrary selection

The judge concluded that the patent did not make a technical contribution over the prior art. There was nothing in the patent or evidence that indicated that dapagliflozin was anything more than an arbitrary selection from the genus of compounds in the prior art.

Another interim injunction?

The first hearing

Following the validity judgment, there was a hearing before HHJ Hacon on 14 May to hear submissions on the issue of whether to grant a further interim injunction pending the Court of Appeal's decision on validity.

AstraZeneca argued that the injunction should remain in place due to irreparable harm that it would suffer because of the number of generics ready to launch. A key aspect of its argument was that there would be an irreversible downward price spiral.

Teva argued, on public policy grounds, that the three generics who initiated validity proceedings to "clear the way" should be entitled to rely on their "first-mover advantage" and that it would be impossible to quantify the loss experienced if they were not able to make use of this advantage. Consequently, it submitted that other generics with marketing authorisations should be injuncted on the basis that they did not take the necessary steps to clear the way.

Teva explained that it would undertake only to sell a certain volume of products pending the appeal decision, therefore avoiding market saturation and a price spiral, which it said made damages quantifiable for AstraZeneca.

Sandoz argued that AstraZeneca's prices, if reduced, would be capable of restoration to their previous levels in accordance with the Voluntary Scheme for Branded Medicines Pricing and Access (VPAG). There was also a letter from the Department of Health and Social Care (DHSC) in evidence, claiming that, in accordance with this scheme, AstraZeneca would not have any obstacles in restoring its price and that the NHS does not have a practice of resisting such a restoration.

AstraZeneca raised numerous issues with Teva's "carve-out approach" and highlighted that none of the other parties (that is, other generics with marketing authorisations) were present at the hearing to make submissions.

The second hearing

Following conclusion of the first hearing, HHJ Hacon directed that his decision would be handed down the following day.  However, at this hearing, HHJ Hacon explained that because AstraZeneca's evidence did not address the clause of the VPAG scheme that allowed a party to restore its prices, he did not understand the evidence well enough to give a judgment that day. As such, following reflection on the DHSC letter, he adjourned to allow AstraZeneca to explain its position at a further hearing.

However, the judge did grant Teva and Viatris permission to deliver further stock to wholesalers, but it was not to be supplied onwards. Sandoz applied for a similar order, but the judge did not grant permission as it had not attempted to clear the way.

The third hearing

At the hearing on 28 May, HHJ Hacon granted the injunctions sought by AstraZeneca pending the substantive appeal in an ex tempore judgment given at the hearing. The judge opted to maintain the status quo and refused to carve-out the position with respect to Teva, Viatris and Glenmark. The decision has now been published.

Teva, Sandoz, Viatris and Glenmark sought permission to appeal the decision from the judge but this was refused. Teva indicated that it would apply for permission directly at the Court of Appeal.

First mover advantage

The judge acknowledged that there must be a limit to how many first movers there can be while the first-mover advantage still has any effect. Teva, Viatris and Glenmark argued that they had acted responsibly in seeking to the clear the way and therefore the court should not stop them from marketing their generics because of their behaviour and their potential loss of the first mover advantage. They maintained that those who had not sought to clear the way should be subject to an interim injunction.

HHJ Hacon held that there were no public policy arguments in this case that should mean that the generic companies that brought the invalidity proceedings to clear the way should be treated preferentially to those that did not.

Irreparable harm

If the interim injunction was lifted, there would more likely than not be market saturation, with AstraZeneca potentially standing to lose 92% of the market if it maintained its current price. The judge held that this would mean AstraZeneca would more likely than not have to cut its prices by a significant amount.

Although the VPAG scheme does not limit AstraZeneca's legal right to restore its prices, the judge held that there was no reason to reject AstraZeneca's evidence that it would struggle to restore its actual price following a reduction. The letters provided by the DHSC were given little weight, largely because they were not in a formal witness statement with a statement of truth.

As such, it was accepted that if an interim injunction was not maintained, then AstraZeneca would suffer irreparable harm. The judge also accepted that the generic companies may suffer irreparable harm as a consequence of maintaining the interim injunction. However, the harm on either side would be different and therefore a like-for-like comparison assessing the comparative risks could not be done with any level of accuracy.

In cases such as this, the judge said that the Court of Appeal had established a principle of law in Neurim Pharmaceuticals, which it endorsed in the appeal judgment concerning the first interim injunction in this case, which says that if it is not possible to say if the balance of irreparable harm tips significantly one way or the other, then maintaining the status quo becomes important.

This persuaded HHJ Hacon that it was most appropriate to maintain the status quo and grant the further injunctions, particularly as the Court of Appeal validity hearing has been expedited, meaning that it could deliver its judgment in as little as four weeks.

Osborne Clarke comment

After a saga of multiple hearings to determine whether further interim injunctions should be granted, the Court of Appeal's validity decision is eagerly anticipated. It will not only determine whether the potential generic launch can happen, but may also address the much debated questions concerning plausibility in the UK in light of the EPO's decision in G2/21.

With respect to HHJ Hacon's ultimate decision to grant AstraZeneca further interim injunctions, his reasoning mirrored the Court of Appeal's and he was clear that the Court of Appeal's decision to maintain the status quo in Neurim Pharmaceuticals set out a "principle of law" that should be followed when there is irreparable harm on both sides without a clear tipping of the scales in either direction.

Ultimately, it is unsurprising that the status quo has been maintained pending the outcome of the Court of Appeal hearing regarding validity, particularly given that a decision may well be issued over the course of the next month.

What is more surprising is the length of the hearing, and the volume of complex evidence, required to reach that conclusion. This underlines the fact-sensitive nature of interim injunction applications, and how the various factors will be finely balanced on a case-by-case basis. The outcome in this decision emphasises the need for generics to take adequate steps to clear the path to appeal level before launch.

This Insight was written with the assistance of Shereen Younis, trainee solicitor at Osborne Clarke.