For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

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Sunday, 23 March 2008

"Dangerous to use common sense", says patents judge

A treatment for psoriasis was at the core of Leo Pharma and another v Sandoz Ltd, a decision of Mr Justice Mann in the Chancery Division, England and Wales, on 17 March 2008. So far this decision has only been picked up by LexisNexis Butterworths' subscription-only site.

Leo held a patent for calcipotriol monohydrate, a new crystalline form of calcipotriol which was used in the treatment of the skin disease psoriaris. The patent claimed that the monohydrate form had technical and stability properties better than those of the existing anhydrate form. On April 2007 Sandoz obtained market authorisation for a calcipotriol ointment, launching the product shortly thereafter. On 18 June, it obtained market authorisation for a cream, the authorisation being posted on a publicly available website on 26 July.

Leo obtained a sample of the ointment and, on testing it, found that it contained the monohydrate version of the calcipotriol molecule. On 28 August Leo's lawyers wrote to Sandoz, stating that the ointment infringed its patent. Their letter added that Leo understood that the cream was to be launched in September and requested a sample, inferring that it too would contain the monohydrate molecule.

In the subsequent correspondence between the parties, Sandoz refused the request for a sample on confidentiality grounds and challenged the reliability of Leo's testing procedures. Sandoz continued to refuse the request, which was repeated on several occasions, and failed to disabuse Leo of their mistaken belief as to the date of the cream's launch, which actually occurred on 31 October. Following a further request for a sample made in December, Sandoz told Leo that the cream had been on the market for some time, meaning they could obtain a sample from a third party. Having experienced difficulties in getting hold of a sample, Leo repeated the request and later told Sandoz that it would be bringing infringement proceedings. At this point Sandoz made samples available, the testing of which revealed the presence of the monohydrate molecule, which constituted 15% of the crystalline forms detected.

At this point Leo applied for an interim injunction to stop Sandoz distributing the cream. Sandoz argued that there was no serious issue of infringement to be tried since, according to Leo's own tests, the presence of monohydrate crystals was so small that, as a matter of common sense, the beneficial effects referred to in the patent were not present. Questions also arose as to whether damages would be an adequate remedy for Leo if Sandoz were allowed to market the cream until trial, and as to the adequacy of any cross-undertaking in damages that Leo (whose own financial position was in doubt) would have to make in favour of Sandoz in the event that interim relief should not have been granted.

Mann J allowed Leo's application for interim relief. In his assessment of the situation

* there was a serious issue to be tried regarding infringement. It would be dangerous for a judge in an interim application to use common sense to determine what is ultimately likely to be a technical question that might require expert evidence.

* as to the balance of convenience if an interim injunction were either granted or refused, both parties had a case for saying that financial compensation would be inadequate to address their losses, although the impact of the financial uncertainty was greater so far as Sandoz was concerned. Accordingly, it was necessary to turn to other factors going to the balance of convenience and, if necessary, the status quo.

* the balance of convenience and what could be taken to have been the status quo also pointed in favour of granting an injunction. The correspondence in this case showed that Sandoz had embarked on a deliberate tactic to obstruct Leo as far as possible. While this was not something which was legally wrong, since Sandoz was entitled, as a matter of law, to employ this tactic, the fact that it had done so would have an effect on the balance of convenience and on determining the appropriate period by which the status quo was measured.

* the uncertainties relating to the adequacy of damages were created by Sandoz itself. This shifted the balance of convenience in favour of granting an injunction. Likewise Sandoz could not rely on a status quo whereby it had been distributing its product for three months as a result of its own unreasonable behaviour.
The IPKat agrees with the result, but wonders whether it is strictly correct to predicate the issue of balance of convenience -- an issue relating to the future -- upon the nature of the defendant's past conduct. It would have been nicer, he thinks, if the court was able to say that, since Sandoz's own conduct, though not unlawful, was not very sporting or cooperative, equity favoured Leo whose own conduct had been (on the brief facts of the LexisNexis note) irreproachable. Merpel adds, the conduct of patent owners is often the subject of adverse criticism; it makes a change to see the reproaches being aimed at the alleged infringers. Says Tufty, here's a conundrum: the judge says that it's dangerous to rely on "common sense" to determine a technical issue -- but the decision not to leave the technical issue to common sense is itself a decision that is based on common sense. Sort that one out!

More on psoriasis here
Coming up to scratch: psoriasis treatments for cats here

1 comment:

The Chief said...

Isn't the point regarding balance of convenience to do with the fact that the status quo can be considered as part of that? What Mann J seems to have done is to prevent Sandoz from saying that the status quo had been created in the three months that the cream had been on the market, but rather that it was in the period before that. But yes, I suppose you could just turn that around and say that the defendant's conduct is why the equitable remedy was allowed against them. This way though Mann J has headed off a crafty Garden Cottage appeal.

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