Merck Sharp & Dohme Corporation v Clonmel Healthcare Ltd

• Jurisdiction: Ireland
• Judge: MR JUSTICE MICHAEL PEART,Mr. Justice Gerard Hogan,Ms. Justice Máire Whelan
• Judgment Date: 12 June 2018
• Neutral Citation: [2018] IECA 177
• Date: 12 June 2018
• Court: Court of Appeal (Ireland)
• Docket Number: Neutral Citation Number: [2018] IECA 177 Court of Appeal No. 2018/166

BETWEEN/

MERCK SHARP & DOHME CORPORATION

PLAINTIFF/APPLICANT/APPELLANT

- AND -

CLONMEL HEALTHCARE LIMITED

DEFENDANT/RESPONDENT

[2018] IECA 177

Peart J.

Hogan J.

Whelan J.

Peart J.

Hogan J.

Whelan J.

Neutral Citation Number: [2018] IECA 177

Record Number: 2018/166

Court of Appeal No. 2018/166

THE COURT OF APPEAL

Interlocutory injunction – Infringement of intellectual property rights – Damages – Plaintiff seeking an interlocutory injunction – Whether damages would be an adequate remedy

Facts: The plaintiff/applicant, Merck Sharp & Dohme Corp, appealed to the Court of Appeal against the refusal by the High Court (Haughton J) by order dated the 27th April 2018 to grant an interlocutory injunction the effect of which would be to restrain the defendant/respondent, Clonmel Healthcare Ltd, until the trial of these proceedings from infringing Merck’s intellectual property rights in its medicinal product Inegy® by continuing to market and sell its rival generic product which it launched onto the market on the 17th April 2018.

Held by Peart J that the conduct of a defendant in relation to events which precede the application for an injunction ought to be considered when the balance of convenience is under consideration. However, it seemed to Peart J that such conduct, even where it is open for the Court to reasonably take an adverse view in relation to the alleged conduct (Peart J reached no concluded view on the allegations made by the plaintiff against the defendant in this case), ought not lead to the granting of an interlocutory injunction where for other reasons such an injunction would not be granted on the basis of the normal legal principles i.e. where damages are an adequate remedy.

Peart J held that he would refuse to grant the interlocutory injunction sought by Merck.

Appeal dismissed.

JUDGMENT OF MR JUSTICE MICHAEL PEART DELIVERED ON THE 12TH DAY OF JUNE 2018

1 This is an appeal by Merck Sharp & Dohme Corp (‘Merck’) against the refusal by the High Court (Haughton J.) by order dated THE 27th April 2018 to grant an interlocutory injunction the effect of which would be to restrain Clonmel Healthcare Limited (‘Clonmel’) until the trial of these proceedings from infringing Merck's intellectual property rights in its medicinal product, Inegy® by continuing to market and sell its rival generic product which it launched onto the market on the 17th April 2018.

2 Merck's 599 Patent which expired on the 14th September 2014 covered Ezetimibe which is the generic name of the active ingredient in Inegy® and other Merck products, as well as the combination of Ezetimibe and Impastation which, when used in combination, allows for reduced doses of the cholesterol-reducing statin. This, it is claimed, has added benefits to the user.

3 However, Merck's exclusive rights in relation to products containing Ezetimibe as an active ingredient were extended to the 16th April 2018 by a Supplementary Protection Certificate 2003/014 (‘the 014 SPC).

4 Merck claims that its exclusive rights in respect of products containing Ezetimibe in combination with Simvastatin (Inegy®) have been further extended until the 1st April 2019 by Supplemental Protection Certificate No. 2005/2001 which I shall refer to as ‘the Combi-SPC’.

5 Clonmel challenges the validity of this Combi–SPC by way of defence to these proceedings. Clonmel's position is that if the SPC is not valid, then its launch of its own rival generic product upon the expiration of the 014 SPC on the 16th April 2018 infringes no extant intellectual property right of Merck.

6 Unsurprisingly, Merck maintains that the Combi–SPC was issued in full compliance with the provisions of Article 3 of Regulation (EC) No. 469/2009 (‘the SPC Regulation’). Clonmel considers that the Combi–SPC falls foul of Article 3 in a number of respects, and relies upon a number of decisions of the CJEU such as Activis Group PTC EHF v. Sanofi ( Case C-443/12 (12 December 2013), Georgetown University v. Octrooicentrum Nederland ( Case C-484/12(12 December 2013). In response Merck places much reliance upon the Opinion of Advocate General Wathelet in Teva UK Limited & others v. Gilead Sciences Inc. ( Case C-121/17) on what he describes as ‘the thorny issue of the criteria for determining whether an active ingredient or a combination of active ingredients of a medicinal product is protected by the basic patent in force within the meaning of [the SPC Regulation]’. The Court has not as yet given its judgment in that case.

The test for interlocutory relief

7 The traditional test is that expressed by O'Higgins CJ in his judgment in Campus Oil Ltd v. Minister for Industry and Commerce [1983] IR 88 at p.107 as follows:-

‘In my view, the test to be applied is whether a fair bona fide question has been raised by the person seeking the relief. If such a question has been raised it is not for the court to determine that question on an interlocutory application, that remains to be decided at trial. Once a fair question has been raised, in the manner in which I have indicated, then the court should consider the other matters which are appropriate to the exercise of its discretion to grant interlocutory relief. In this regard, I note the views expressed by Lord Diplock, with the concurrence other members of the House of Lords, at p. 407 of the report of American Cyanamid v. Ethicon Ltd. I merely say that I entirely agree with what he said.’

8 It is worth noting also that in this same judgment, O'Higgins CJ at p. 106 rejected a submission that such a plaintiff must demonstrate a probability of success in relation to the bona fide issue identified, stating, inter alia, that such a test would be contrary to principle. It should be borne in mind also that Campus Oil was a case where a mandatory injunction was sought. I mention that because in the present case Clonmel has characterised the injunction sought by Merck as being mandatory in nature given that its effect, if granted, would require that Clonmel take positive steps by removing its product from its website and any other sales outlets. It is unnecessary to reach a definitive conclusion as to its character, but my view is that the injunction sought is prohibitory in nature namely to restrain Clonmel from infringing Merck's intellectual property rights protected by the Combi-SPC. What steps must be taken in that regard does not in my view alter that essential character.

9 It is useful to refer to the judgment of Clarke J. (as he then was) in Okunade v. Minister for Justice & others [2012] IESC 49 in which the applicable test was considered, albeit in the context of judicial review proceedings. At p.33 of his judgment he identifies as the most detailed expression of the basis rules for the grant or refusal of an injunction at the interlocutory stage of proceedings, the statement by McCracken J. in B&S Limited v. Irish Auto Trader Limited [1995] 2 I.R. 142 at p. 145, and he summarised the test as follows by reference to B&S as follows, stating:

‘9.8 As formulated in B & S the test can be summarised as follows:

• The party seeking the injunction must show that there is a fair or bona fide or serious question we tried.

• If that be established the court must then consider two aspects of the adequacy of damages. First the court must consider whether, if it does not grant an injunction at the interlocutory stage, a plaintiff who succeeds at the trial of the substantive action will be adequately compensated by an award of damages for any loss suffered between the hearing of the interlocutory injunction and the trial of the action. If the plaintiff would be adequately compensated by damages the interlocutory injunction should be refused subject to the proviso that it appears likely that the relevant defendant would be able to discharge any damages likely to arise.

• If damages would not be an adequate remedy for the plaintiff then the court must consider whether, if it does grant an injunction at the interlocutory stage, a plaintiff's undertaking as to damages will adequately compensate the defendant, should the latter be successful at the trial of the action, in respect of any loss suffered by him due to the injunction being enforced pending the trial. If the defendant would be adequately compensated by damages then the injunction will normally be granted. This last matter is also subject to the proviso that the plaintiff would be in a position to meet the undertaking as to damages in the event that it is called on.

• If damages would not adequately compensate either party then the court must consider where the balance of convenience lies. If all other matters are equally balanced the court should attempt to preserve the status quo.

10 Clarke J. went on to refer to the basic principle in these matters that the court must minimise the risk of injustice when considering whether or not to grant an injunction of this kind. He stated in that regard:

‘9.9 …If the plaintiff does not establish a fair case or serious issue to be tried then interfering with the position of the defendant by means of imposing an interlocutory injunction on that defendant would create a serious and disproportionate risk of injustice. Where damages are adequate on either side and likely to be capable of being recovered, in practice then there is no risk of injustice for the plaintiff or defendant, as the case may be, will, if they win the case, be either awarded damages (in the case of the plaintiff) or be able to recover damages on the undertaking (in the case of a defendant). There is, of course, no real risk of injustice if such recovery would adequately compensate the relevant party.’

11 In his judgment, delivered ex tempore at the conclusion of the hearing of the application for interlocutory injunction on the 27th April 2018, the trial judge, because of the urgency of the matter, expressed his conclusions...