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Court of Appeal upholds rejection of interim injunction as damages were adequate remedy

Posted on 29 June 2020

Earlier in June, we reported that the Patents Court had rejected Neurim/Flynn's application for an interim injunction against Mylan in relation to its planned launch of a generic competitor product to Circadin. We identified it as a potentially positive development for generic firms, albeit one from a non-specialist patents judge.

The Court of Appeal has now rejected Neurim/Flynn's (hereafter Neurim for simplicity) appeal, having heard it on an expedited basis, therefore upholding the refusal of the interim injunction.  However, in reaching its decision, the Court of Appeal stressed the 'intensively fact sensitive' nature of such cases.  Indeed, it said this case presented 'extremely unusual facts', which meant that calculating Neurim's losses would not be difficult, and that it was not providing any principles of general application.  Because the Court of Appeal upheld the finding that damages would be an adequate remedy, it did not therefore have to consider the balance of convenience and important issues such as 'clearing the way'.

In terms of the specific facts, the expedited trial due to take place in October 2020 (and therefore the short period of generic competition) brought into 'sharp focus' the question whether a price spiral was likely to occur in this case. The Court of Appeal said this was not a downward price spiral case for a number of reasons: four months was a very short timescale for dramatic price effects to occur; 53% of the market was for branded prescriptions; and Circadin is in Category C in the NHS Drug Tariff (and may not move to Category M before trial).

Further, it was also not a case of multiple generic entrants: the evidence was that only Mylan, and possibly Teva, were ready to launch, but Neurim had reached a settlement with Teva. Neurim argued before the Court of Appeal other companies might be in a position to launch but this only highlighted a possibility, not a likelihood, of further generic entry. 

Accordingly, the Court said that its task of assessing Neurim's losses was relatively straightforward, based on Neurim's reasonably detailed forecasts of its expected sales revenues in the relevant periods, and actual sales for Neurim and Mylan for the period up to trial. The calculation for the period after any injunction was granted would be 'marginally less robust', as it required an extrapolation to determine Neurim's likely sales and prices in that period, but damages were to be assessed liberally, i.e., not going so far as to punish the infringer.

The Court of Appeal also rejected Neurim's claim that the Judge should have taken into account its consequential losses such as a need to close down R&D or to make redundancies.

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