Dr Reddy's Laboratories (UK Ltd) v Warner-Lambert Company LLC
| Jurisdiction | England & Wales |
| Judge | Mr Justice Zacaroli |
| Judgment Date | 30 July 2021 |
| Neutral Citation | [2021] EWHC 2182 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HP-2015-000007; HC-2014-001795; HP-2014-000021; HP-2015-000049; HP-2015-000006; HP-2020-000031; HP-2020-000032; HP-2020-000033; HP-2020-000038 |
[2021] EWHC 2182 (Ch)
Mr Justice Zacaroli
Case No: HP-2015-000007; HC-2014-001795; HP-2014-000021; HP-2015-000049; HP-2015-000006; HP-2020-000031; HP-2020-000032; HP-2020-000033; HP-2020-000038
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
PATENTS COURT
7 Rolls Building
Fetter Lane, London
EC4A 1NL
Brian Nicholson QC and Christopher Hall (instructed by Mishcon de Reya LLP) for Dr Reddy's
Andrew Lykiardopoulos QC and David Scannell QC (instructed by Powell Gilbert LLP) for Actavis and (instructed by Pinsent Masons LLP) for Teva
Philip Moser QC, Brendan McGurk and Alice Hart (instructed by Government Legal Department) for NHS England, Wales and Northern Ireland
Douglas Campbell QC and Ligia Osepciu (instructed by Reynolds Porter Chamberlain LLP) for NHS Scotland
Benet Brandreth QC (instructed by HGF Law LLP) for Ranbaxy
Richard Boulton QC, Charlotte May QC, Tim Goldfarb, Tim Austen and Thomas Lunt (instructed by Kirkland & Ellis (International) LLP) for the Warner-Lambert Company LLC and Pfizer Limited
Hearing dates: 14, 15, 16 and 17 June 2021
APPROVED JUDGMENT
Introduction
This is the trial of preliminary issues (ordered by Birss J on 18 December 2020) in claims by numerous parties (together the “Inquiry Claimants”) for compensation under cross-undertakings in damages given in respect of various interlocutory injunctions or contractual undertakings, and for damages in respect of threats of infringement proceedings pursuant to section 70(1) of the Patents Act 1977.
It raises the question as to the appropriate assumptions to make when identifying the relevant counterfactual(s) for the purposes of determining such compensation and damages, where different parties have claims under different cross-undertakings and threats, given or made on different occasions, but relating to the same patent and where all parties operate in the same (largely finite) market.
Background
The background to this matter is fully explained in the judgment of the Supreme Court dated 14 November 2018 in Warner-Lambert v Generics (UK) Ltd (t/a Mylan) [2018] UKSC 56, and the judgment of Arnold J at first instance in the same case dated 10 September 2015 ( [2015] EWHC 2548 (Pat)). I set out here only the background that is directly relevant to the preliminary issues.
The first inquiry defendant, Warner-Lambert Company LLC, was the registered proprietor of European Patent No. 0 641 330 for Isobutylgaba, of which pregabalin is a derivative, for the treatment of seizure disorders, notably epilepsy and general anxiety disorder (“GAD”). The second inquiry defendant, Pfizer Limited, was the holder of the relevant marketing authorisation for “Lyrica”, the branded pregabalin medicine marketed in the UK. I will refer to the inquiry defendants together as “Pfizer”. This patent expired in the United Kingdom on 17 May 2013.
Pfizer is also the proprietor of a second medical use European Patent (UK) No. 0 934 061 with claims in Swiss form (explained at paragraphs 2–3 of the Supreme Court judgment referred to above), directed exclusively to the use of pregabalin for treating pain (the “Patent”). The Patent had a priority date of 24 July 1996 and expired on 16 July 2017. Notwithstanding the fact that the Patent covered pain of various descriptions, Pfizer has only ever been authorised to market pregabalin for the treatment of neuropathic pain.
The Inquiry Claimants are predominantly pharmaceutical companies mainly engaged in marketing generic pharmaceutical products (“Generics”). Upon expiry of EP No. 0 641 330 and the subsequent expiry in July 2014 of data exclusivity for Lyrica, Generics were free to apply, broadly speaking, for a marketing authorisation for pregabalin for use in treating epilepsy and GAD. The parties have used the following terms to refer to different forms of marketing authorisation:
skinny label: marketing authorisation indicated for the treatment of epilepsy and GAD, but not neuropathic pain;
full label: marketing authorisation indicated for the treatment of epilepsy, GAD and neuropathic pain;
intermediate label: marketing authorisation indicated for the treatment of epilepsy, GAD and central neuropathic pain (but not peripheral neuropathic pain).
On 24 June 2014 Generics (UK) Limited, trading as Mylan, commenced revocation proceedings against the Patent. On 9 July 2014, the second to fifth Inquiry Claimants (“Actavis”) applied for marketing authorisation for a full label pregabalin product. Actavis commenced its own revocation action against the Patent on 12 September 2014. On 30 September 2014, Actavis notified Pfizer of its intention to launch a skinny label pregabalin product. On 8 December 2014 Pfizer commenced infringement proceedings against Actavis in respect of its skinny label product. Over the period November 2014 to February 2015, Pfizer wrote to various parties (including the Pharmaceutical Services Negotiating Committee, superintendent pharmacies, clinical commissioning groups and the Department of Health) in terms which were subsequently held by Arnold J to constitute threats of patent proceedings within section 70(1) of the Patents Act 1977 (the “Threats”).
Interlocutory orders and undertaking
The precise chronology of the various interlocutory orders and undertakings is of some importance to the parties' arguments, and I will therefore set it out in detail.
In early January 2015 Pfizer sought an injunction against Actavis. Although Actavis was lawfully entitled to sell pregabalin for the treatment of epilepsy and GAD (due to the expiry of EP No. 0 641 330 and the Patent only covering pain), it was nevertheless foreseeable (to Actavis' knowledge) that pharmacists would be likely to dispense generic pregabalin for the treatment of neuropathic pain. That was because (as explained in more detail by Arnold J in his judgment refusing to grant the injunction: [2015] EWHC 72 (Pat), at [28]–[29]) the great majority of prescriptions identify the drug prescribed by its generic name and do not indicate the condition for which the drug is prescribed, in which case the pharmacist is free to dispense either a branded drug or a generic one.
In refusing to grant the injunction, Arnold J concluded ( [2015] EWHC 72 (Pat) at [112]) that mere knowledge on the part of Actavis that pharmacists would dispense its product for the treatment of neuropathic pain was insufficient for the purposes of section 60(1)(c) of the Patents Act 1977 (which makes it an infringement to keep, dispose of or offer to dispose of any product obtained directly by means of the claimed process). Accordingly, Pfizer's claim did not raise a serious question to be tried. At [73], however, he noted that the best solution to the problem was to try to ensure that prescribing doctors prescribed pregabalin for the treatment of pain by reference to the brand name Lyrica rather than by reference to the generic name pregabalin.
Actavis and the first Inquiry Claimant (“Dr Reddy's”) launched skinny label products in February 2015.
Pfizer then applied for and was granted an order by Arnold J dated 26 February 2015 (the “NHS Guidance Order”) which required the National Health Service Commissioning Board to distribute guidance to GP practices and community pharmacies. The guidance referred to the dispute between Pfizer and a number of generic suppliers regarding pregabalin and said:
“1. Pregabalin should only be prescribed for the treatment of neuropathic pain under the brand name Lyrica (unless there are critical contra-indications or other special clinical needs e.g. a patient allergic to an excipient, branded product unavailable etc which apply to Lyrica, when you should not prescribe Lyrica or pregabalin).
2. When prescribing pregabalin for the treatment of neuropathic pain to patients you should (so far as reasonably possible):
a) prescribe by reference to the brand name Lyrica; and
b) write the prescription with only the brand name “Lyrica” and not the generic name pregabalin or any other generic brand.
3. When prescribing pregabalin for the treatment of anything other than pain, you should continue to prescribe by reference to the generic name pregabalin.
4. When dispensing pregabalin, if you have been told that it is for the treatment of pain, you should ensure, so far as reasonably...
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