UK HC confirms that public interest grounds to refuse or limit an injunction to be used sparingly

Evalve Inc v. Edwards Life Sciences Limited [2020] EWHC 513 (Pat)

Summary

Mr Justice Birss’ decision in Evalve Inc v. Edwards Life Sciences Limited [2020] EWHC 513 (Pat) (12 March 2020) clarifies that invoking a public interest defence to limit or carve out an injunction in UK patent litigation is no easy task, and the power to limit or refuse an injunction on this basis should be used cautiously.

It is clear from this decision that an infringing party seeking to resist a final injunction on the basis of public interest faces the difficult task of establishing that its product is objectively superior to that of the patentee – it is not sufficient to simply adduce evidence that illustrates a preference for one product over another. Parties should therefore carefully consider what kind of clinical evidence can be put forward to support their public interest grounds.

The decision also highlights the importance of setting out evidence in relation to the adequacy of damages in lieu at an early stage, especially if a party is seeking to resist or carve out a final injunction.

Background

The case involved two of Abbott’s patents, EP (UK) 1 408 850 (“EP ‘850”) and EP (UK) 1 624 810 (“EP ‘810”), which relate to medical devices used to treat mitral valve regurgitation in human hearts by a transcatheter technique. The patents protect Abbott’s MitraClip products, which have been on the market since 2008.

At the main trial which took place before the public interest trial, Abbott argued that Edwards’ PASCAL product, which is another transcatheter treatment for mitral valve regurgitation, infringes both its patents mentioned above. Both PASCAL and MitraClip operate in essentially the same way, clipping the two leaflets of the valve together, leading to a reduction in mitral valve regurgitation. In the judgment following the main trial, ([2020] EWHC 514 (Pat)), Mr Justice Birss concluded that Abbotts’ patents are valid and that Edwards’ PASCAL device infringes both of them.

At the public interest trial, Edwards argued that there is a body of doctors in the UK whose reasonable clinical opinion is that, at least for certain patients, use of the PASCAL device would be better than using any of the MitraClip products. Edwards therefore submitted that it would not be in the public interest to prevent these doctors from doing so by granting an injunction which prevents all sales of the PASCAL devices. Edwards also advanced a fall-back position wherein if a conventional injunction was to be granted, it should be qualified by carving out supplies of PASCAL for use in patients to whom one or more defined medical criteria apply, indicating that the PASCAL device might be better than the MitraClip options for that patient in the opinion of a reasonable doctor. Finally, Edwards argued that in cases in which MitraClip implantation had been unsuccessful but a doctor reasonably believed a PASCAL would be an appropriate treatment to try after that failure, then supply for that purpose should also be permitted.

In contrast, Abbott argued that an injunction should be granted with the sole qualification that the PASCAL device may be supplied for patients in whom the MitraClip implantation had been unsuccessful. Abbott contended that Edwards had not established that there is any class of patient for whom PASCAL is objectively the only viable treatment or is objectively a better treatment than MitraClip. The fact that there are some doctors who would prefer to use PASCAL over MitraClip (and would not be negligent in having that view) does not justify refusal of the injunction, as this is a “mere” preference and is not founded on sufficiently objective evidence.

The judge did not consider that the public interest in allowing doctors to exercise their clinical judgments in the best interests of their patients is sufficient to justify the refusal or carving out from a patent injunction. The judge therefore granted an injunction in the terms sought by Abbott. The only carve out granted was for cases where a MitrClip implantation had already been unsuccessful.

Analysis

In arriving at his decision, Mr Justice Birss analysed the UK and European law on injunctions and public policy. He set out the following seven general principles in relation to injunctions in patent litigation:

1. A general injunction to restrain future infringements is the normal remedy for a patentee.
2. The burden is on the defendant to give reasons why such an injunction should not be granted.
3. All the circumstances should be considered in granting or refusing an injunction, such as public interest and the impact on third parties.
4. Public interest may justify refusal of or carve out from an injunction, and an award of damages in lieu. Smallness of the quantity of damages in lieu is not determinative.
5. The starting point for any consideration of the public interest is that the patent system as a whole is already criss-crossed with provisions which strike balances between different public interests.
6. The availability of an exclusionary injunction is an important manifestation of the monopolistic nature of a patent right.
7. Therefore when, as in this case, various public interests are engaged and pull in different directions, one should have in mind that the legislator is better equipped than the courts to examine these issues and draw the appropriate broad balance.

It is worth noting that Birss J displayed a high degree of deference to the legislature in his judgment, owing to the fact that the Patents Act 1977 (the “Act”) and other relevant legislation already contain numerous provisions which strike a balance between the rights of the patentee and public interest, such as the compulsory licensing regime, and the restrictions on patentable subject matter.

Application to the clinical setting

Applying the above to the clinical setting, Mr Justice Birss held that in order to engage a public interest defence it was necessary to examine the evidential basis for the clinical judgments being relied upon. Sufficient objective evidence that there are in fact patients who ought not be treated using the patentee’s product and who should, in the reasonable opinion of a body of doctors, instead be treated using the rival’s product is what is required. In other words, the relevant public interest that would be sufficient to justify a refusal or carve out of a patent injunction is the need to protect the lives of patients for whom the defendant’s product is the only suitable treatment, provided that fact is established by objective evidence.

The judge also noted that the public interest ground argued by Edwards in this case was very similar to the ‘market demand’ ground for obtaining a compulsory licence under s.48A of the Act. However, in the present case, Edwards could not have applied for a compulsory license at least in relation to EP ‘810, as the three-year period under section 48 of the Act had not elapsed. The judge agreed with previous case law on the point and noted that the court should be very cautious before making an order which would be tantamount to a compulsory licence in circumstances where this would not otherwise be available, essentially requiring the defendant to show that the refusal of such an order would be “grossly disproportionate”. However, Birss J did suggest that in cases where a carve out would be justified on public interest grounds, such a carve out may be ordered pending an application for a compulsory licence.

Damages in lieu

In considering whether an injunction may be refused, another criterion that must be assessed is the adequacy of damages in lieu as a remedy. Birss J noted that to make this assessment, the court needs to have evidence on whether the damages are adequate, and this evidence needs to be presented at the trial at which the issue of the injunction is to be decided. It was therefore incorrect to assume that such evidence was only needed at the stage of inquiry as to damages, which generally follows the grant or refusal of an injunction.

Where the patentee had its own product on the market (as is the case for Abbott’s MitraClip devices), the proper compensation would be the patentee’s lost profits. A reasonable royalty instead of lost profits, which was proposed by Edwards as it would have allowed the PASCAL devices to stay on the market, would leave the patentee substantially out of pocket. Once again, this shows that what Edwards was seeking was in essence a compulsory, royalty bearing licence.

However, the judge appreciated that if the proper compensation could only be lost profits, this would completely disincentivise the defendant from putting its product on the market, as there would be no financial incentive to do so. But the point of the public interest argument when resisting an injunction is that it would be in the public interest that the defendant’s products actually come onto the UK market. The judge therefore went on to note that that in cases where damages in lieu are awarded on the grounds of public interest, perhaps a reasonable royalty would in fact be a more realistic option than lost profit damages, despite this leaving the patentee at a financial disadvantage.

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