Warner-Lambert Company Llc v Teva UK Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Floyd |
| Judgment Date | 27 June 2011 |
| Neutral Citation | [2011] EWHC 1691 (Pat) |
| Docket Number | Case No: HC 11 C02091 |
| Date | 27 June 2011 |
| Court | Chancery Division (Patents Court) |
[2011] EWHC 1691 (Pat)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr. Justice Floyd
Case No: HC 11 C02091
Mr. Simon Thorley QC and Mr. Joe Delaney (instructed by Allen & Overy LLP) appeared for Warner-Lambert Co. LLC.
Mr. Tom Mitcheson (instructed by Taylor Wessing LLP) appeared for Teva UK Limited.
Mr. Thomas Hinchliffe (instructed by George Davies Solicitors LLP) appeared for Phoenix Healthcare and Rowlands Pharmacy.
Mr. Andrew Lykiardopoulos (instructed by Pinsent Masons LLP) appeared for AAH Pharmaceuticals and Trident Pharmaceuticals.
On Monday 20th June, that is to say, seven days ago, I granted a without notice interim injunction against the first three defendants, who I shall refer to as Teva, Phoenix and AAH. The injunction restrained sales and similar alleged infringing acts in relation to generic atorvastatin.
It appeared that Teva had launched their generic atorvastatin ahead of the anticipated expiry date of the SPC which protects the claimants (Warner-Lambert's) sales of Lipitor, an anticholesterol drug.
The launch had taken place on an apparently substantial scale through wholesale pharmacies such as Phoenix and AAH, and by direct sales as well as over the internet.
Given that the application had been made without notice and on the suggestion of counsel for Teva, who was present at the hearing on 20th June, I qualified the injunction that I granted with an exception or carve-out in the cases of the second and third defendants, which read as follows:
"…save for atorvastatin supplied by Pfizer Ireland Pharmaceuticals Limited" (that is to say, the claimants' Lipitor product) and save in the case of the second and third defendants only, in pursuance of an existing contractual obligation incurred before notification of this order, for supply before Thursday 11th July 2011."
The purpose of the carve-out was to protect those who had contractual expectations of receiving the generic atorvastatin, such as retail pharmacies, who might be placed in difficulty if the injunction was to bite immediately on orders which had been accepted for delivery in the relatively near future.
The injunction was expressed to continue until a return date of 11th July. That was to give sufficient time for the filing of evidence on both sides. However, the matter comes back before me today on the basis of a liberty to apply which I granted to AAH and Phoenix to set aside or vary the order.
Although a number of disputes had arisen between the parties in the meantime, the principal matters which I have to decide are, first of all, whether the injunction should extend to two further companies. Barclay, the fourth intended defendant, is an affiliated company of AAH and Rowlands, which is an affiliated company of Phoenix. Rowlands is, but Barclay is not, a retail pharmacy.
The reason the injunction is sought is that there are substantial quantities of generic atorvastatin which remain unsold and for which there are no contractual commitments to supply. Some of that atorvastatin is already in the possession of Rowlands and had been at the date on which I granted the injunction.
The other issue which I have to decide is the application by AAH and Phoenix to discharge the without notice injunction. They say that there was no adequate basis for the injunction to be granted in the first place, given that it was only to extend over a relatively short period.
The way in which I dealt with the balance of convenience on 20th June was to say this:
"It does seem to me that, even over a relatively short period until the application can be heard, there is a real risk of damage being caused to the market in this product, which, even on this limited amount of evidence, it is possible to discern. The launch is obviously on a very large scale, involving at least two pharmaceutical retailers and millions of tablets. To suggest that that is not going to have a real impact on the market over three weeks is, in my view, not correct. What is more, the fact that these pharmaceuticals are being offered over the internet suggests, to me at least, that the availability of this product is likely to spread extremely rapidly — faster than if it was being marketed by sales representatives on a one-to-one basis.
"Given those considerations, in my view, the balance of convenience over the very short period until the effective hearing of the application is in favour of the Claimants. I bear in mind that the Second and Third Defendants have not been notified, but it is not as if atorvastatin is not available from other sources. What is more, it is difficult to see how being deprived of atorvastatin from this particular source could cause damage to those Defendants on a scale anything approaching that which would occur to the Claimants."
The position of the second and third defendants was further fortified by the carve-out. Whilst it is not correct to say that the second and third defendants could themselves obtain supplies of atorvastatin from the claimants, it is quite clear that their customers can. Indeed, until last Sunday, any retail pharmacist who was interested in stocking atorvastatin could do so by obtaining supplies from the claimants. That remains the case today.
AAH and Phoenix challenge the conclusion which I reached in those paragraphs of my judgment. They invite me to look at the incremental effect of the relatively circumscribed sales which could be made if the injunction were discharged. They suggest that this quantity is so small compared with the annual sales of Lipitor, that the impact on the claimant can be described as minimal.
Warner-Lambert's position is that in the light of the figures which are now available as to the amount of generic atorvastatin sold by Teva, their fears of a very large launch were justified. The total amount of atorvastatin supplied amounts to about two months of the total UK market in atorvastatin. If all this atorvastatin is allowed to reach the market, one could be looking at a very substantial period of supply, particularly in the context of the short period which remains in the life of the SPC.
Warner-Lambert complain that the damage they will suffer is not limited to their lost profits. Pharmacists who are offered the reduced price generic product will exert pressure on Warner-Lambert to reduce their prices and the effects of this will last beyond 11th July. If this atorvastatin is allowed to be sold without the injunction restraining it, then the effects will undoubtedly continue beyond that date.
AAH and Phoenix take as their primary position that Warner-Lambert will suffer no irreparable harm at all pending the hearing on 11th July. They say that over that very short period, it is extremely unlikely that Warner-Lambert will have to reduce their prices. If Warner-Lambert stand firm on their prices then damages, according to the usual measure, will be a perfect recompense for them.
I have to say that I am wholly unable to accept that submission. A launch on the scale which was contemplated and has begun would undoubtedly distort the market in Lipitor beyond the ability of any inquiry as to damages to compensate the claimants. One only has to think of the effect on Warner-Lambert's reputation when it is made clear that a price differential of 22.5% is available to...
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