Approved Prescription Services Ltd v Merck & Co Inc

I have before me today an application for directions in an action for a declaration of non-infringement of European Patent (UK) No. 0 352 918. The applicant is Approved Prescription Services Limited (“APS”). The patentee is Merck & Co. Inc. (“Merck”). APS seeks directions to enable an expedited determination of what it describes as a short point of construction.

Merck claims to have invented a new cholesterol-reducing pharmaceutical known as simvastatin. It is covered by at least two of Merck’s patents. The first has been extended by the grant of a supplementary protection certificate (“SPC”) which expires on 5 May of this year. The second, which is the patent in suit in these proceedings, has longer to live. APS, which is a company in the Teva group of companies, wishes to market a generic version of simvastatin immediately the SPC expires. It has already obtained, so I understand, regulatory approval to do so.

APS is not the only company which wishes to sell generic versions of simvastatin in this country. There are at least three other companies, namely Synthon, Ivax and Niche. Those companies are also in litigation with Merck in a manner which I will explain in a moment.

I have been provided with a copy of the patent, some of the pleadings in some of the proceedings and also a witness statement prepared by Mr. Jenkins on behalf of APS. The patent contains process and product claims. The process claims are numbered 1 to 15. APS, so I understand, is confident that it will not infringe any of those claims by the importation of the product which it intends to bring into this country soon after 5 May. The issue in relation to which it wishes to have a declaration of non-infringement concerns the product claims, which are claims 16 to 21. For present purposes it is only necessary to point out that all the product claims define in a standard way, by reference to a structural formula and a list of permissible substitutions, a large class of chemicals. However, all the product claims are limited to chemicals “containing less than 0.2% of dimeric impurity”.

APS seeks guidance from the court as to the effect of that limitation in the claims. The declaration of non-infringement is designed to elucidate how far above 0.2%, if at all, it needs to go to be sure that its product avoids infringement. The reason that this is of commercial value to APS is that the regulatory licence permitting it to sell a generic version of this drug in the United Kingdom allows a relevant impurity level of up to 0.4%. It uses a process, so I am told, which would allow it to make sure that the impurity level of its product is above 0.2% but under 0.4%. It wants to make sure that its marketing of its product cannot be interfered with legitimately by Merck. For that reason it says that it wants its application for a declaration of non-infringement to come on as quickly as possible. There is apparently a gap in the Patent Court Diary at the end of March or the beginning of April into which such an application can be fitted. I will turn to the question of duration of any such application, if it were fitted in that spot, in a moment. In normal circumstances, since it is not suggested that either party would be unable to meet the March or April date, the court would simply order the case to come on in that gap.

However, this is not a standard case. It is necessary to say something about the background in which it arises. It appears that simvastatin is an important pharmaceutical as far as Merck is concerned. At least one version of it is marketed by Merck under the trade mark, Zocor. Merck wishes to ensure that it maintains its monopoly in this product for as long as its patents will allow. That is entirely sensible. Indeed it would be strange if it did not want to do so. Apparently it has equivalents of the patent in suit in many other countries. I understand that it has litigated in the Netherlands, Germany, Slovakia, Slovenia, Denmark, Spain, Hungary and Singapore. It may well have litigated elsewhere. Some of those proceedings have involved other parts of the Teva group, or customers of Teva. Although Teva was more or less certain that there could be no infringement of the process claims, Merck sued for infringement of the process claims in Spain. It applied for, but failed to obtain, an interlocutory injunction. At the trial of the main action in December of last year, the Barcelona court held that the process used did not infringe the Spanish equivalent of the patent in suit. Teva and one of its customers were also sued in Hungary. In that country also interlocutory relief was sought against Teva’s product. That was obtained, although, because the claims were equivalent to those which are in issue in these proceedings, it only covered products with less than 0.2% dimeric impurities.

Teva’s current plans are, as I have indicated, to make sure that the product it has for sale in this country, and I understand in Hungary, will have an impurity level above that set out in the claims at least while the claims subsist. I should also mention that the validity of the patent has been put in issue in a number of countries. In particular, it has been put in issue in this country by Teva’s three competitors, to whom I have referred already. All three say that the claims are invalid on grounds of anticipation, obviousness and insufficiency. A trial has been fixed for the determination of those issues in June of this year. In fact one of those three competitors, namely Niche, has said that it is content to await the outcome of those proceedings. Effectively its action has been stayed, so the proceedings to be heard in June involve the two other competitors only. I am told by Mr. Hinchliffe, who appears on behalf of Merck, that those proceedings, now involving only Synthon, Ivax and Merck, was originally set down with a time estimate of seven days. He tells me that it might take a little bit less time now because Niche has decided to stand on the sidelines.

In relation to validity I also ought to mention that the product claims, which are the only ones which will be in issue in the APS action, have been litigated to a judicial conclusion in only three countries, namely the Netherlands, Germany and Singapore. In all three the claims have been held invalid. In the case of Singapore I understand the decision is final. In the case of the Netherlands and Germany appeals are outstanding.

APS says that it is a competitor not just of Merck but also of Synthon, Ivax and Niche. It only wants a short issue of construction to be determined. It argues that it would be wasteful, unfair and unnecessary to make it wait for the June action to come on and for it to have to sit through days of dispute on obviousness, anticipation and insufficiency when it has a self-contained and simple issue which can be determined very quickly. It suggest that it is not appropriate for its action to be slowed down because other competitors have an action coming on later in the year. Furthermore, APS argues that it is very concerned that unless this matter is dealt with as soon as possible, and within a time limit which of course is achievable by both sides, there is a significant risk that Merck may try to interfere with its marketing of its generic product, for example, by seeking interlocutory relief here. As I have mentioned already, such relief has been sought and obtained in Hungary and Spain and APS wants to make sure that no such interlocutory relief could be sought or obtained here. In correspondence between the parties, which preceded this application, APS’s solicitors attempted to get clarification of whether Merck was reserving to itself the right to seek interlocutory relief. Merck was not prepared to disclose whether it did or did not intend to seek relief. In my view it was not obliged to do so, but by adopting that stance it has left open the possibility of trying to do in this country what it did in Hungary and Spain. APS says it wishes to forestall that possibility. Even if it is likely that it will defeat an application for such relief, it cannot be absolutely certain and, in any event, if the trial comes on in March or April, no question of interlocutory relief will arise if, as it believes, it obtains the declaration it seeks.

APS also says that Merck has shown itself to be less than enthusiastic about refining the issues that need to be determined in these proceedings. For example, in the letter of 15 January in which APS’s solicitors raised the issue of a declaration of non-infringement, they said the following:

“If your case is that such a product would fall within the said claims of the 918 Patent, or if the manner of testing for the level of dimeric impurity in the 918 Patent contemplates the use of anything other than the standard method given in the European Pharmacopoeia, please let us know precisely the basis upon which this is alleged. Please also let us know what you contend the correct approach to analysis of the dimeric impurity to be in the 918 Patent, where it is to be found in that patent or elsewhere and why.”

I should explain the second half of that passage. The patent itself does not give express guidance as to the manner of calculating dimeric impurity. APS’s case is that the standard way of discovering such impurity, that is to say the one set out in European Pharmacopoeia, is the correct one.

In any event, the request set out in the paragraph set out above has not been responded to. Mr. Alexander, who appears for APS, says that even if Merck is entitled to hold its cards to its chest this does not encourage confidence that it will not at some stage try to use its patent to APS’s disadvantage in the market place. APS also says, I think fairly, that it leaves in the air precisely how much will be in dispute when the issue of non-infringement has to be resolved, whether it is in March or April of this year or June.

Mr. Hinchliffe says that it would be highly undesirable for there to be two courts in this country dealing with essentially the same issue at different times. Although many other issues arise in the June action, the exact limits of the product claims will be a major issue in each. The June action is currently scheduled to come on before Pumfrey J. whereas the March or April slot is one which would come before me. Therefore, Mr. Hinchliffe says there is a possibility, if the listing of the actions is as currently indicated, that both Pumfrey J. and I will have to consider the same issue of construction. For that reason, APS’ application to have this case come on in March or April should be rejected. It should be determined with the Synthon and Ivax proceedings. That is a powerful argument.

It is not desirable for there to be a multiplicity of judicial views expressed as to the scope of a patent. As I indicated in a judgment given only a few days ago, in a case called Tarkett Sommer Forsaljnings v. Unilin Beheer, avoiding such a possibility is a matter which the courts consider carefully. Prima facie having two courts deciding the same issue is both wasteful of court time and also susceptible of giving rise to embarrassingly inconsistent judgments.

Mr Hinchliffe also suggests, but with less force, that APS has delayed in bringing these proceedings on. He says that it could have commenced them some months ago. Mr Alexander answers this in two ways. First he says that, even had the proceedings been started earlier, exactly the same argument on listing would have arisen since, absent a successful application for an earlier date, this application for a declaration of non-infringement would have come on with the other actions in June. Second he says that his client has not been sitting idly by, as Mr Hinchliffe suggests. It has been engaged in patent infringement actions in two other countries as referred to above. As I say, Mr Hinchliffe did not advance the delay point with much vigour. He was right not to do so. I do not think that APS has delayed in bringing these proceedings or in seeking this order.

Finally, in considering what to do, I should mention one other matter, which is the estimated duration of these proceedings if they were to be tried in the spring. Mr. Alexander says a day is all that is needed. At the beginning of the hearing before me, Mr. Hinchliffe indicated that they might take a day and a half. I consider a day to be at the outer limit of what would be appropriate for the determination of this issue. At the moment neither Mr. Hinchliffe nor Mr. Alexander suggests that disclosure of documents is necessary. In fact both appear to suggest that there could well be no, or very little, disclosure. I have power to make an order dispensing with disclosure of documents. This may well be a suitable case for so doing. Furthermore, in view of the fact that this application for a declaration of non-infringement is primarily an issue of construction, and bearing in mind the Court of Appeal’s judgment in American Home Products v. Novartis, it is very difficult to see that much in the way of evidence is admissible. Even if evidence is admissible, I am by no means convinced that this is a case where extensive cross-examination, or indeed any cross-examination, would be appropriate. Once again, I have the power to limit or exclude cross-examination and this may be a suitable case for exercising it.

In addition, the court has power to limit the duration of hearings. In the case of actions assigned to the fast-track, they are automatically subject to a limit of one day. The power of the court to actively case manage actions includes an ability to impose time limits on hearings. As Simon Brown L.J said in Attorney General v. Scriven, 4 February 2000 as recorded in volume 1 of the White Book at page 671:

“The courts are not required to listen to litigants, whether represented or not, for as long as they like. It is for the court to control its own process and it is well-entitled to bring arguments to a close when it concludes that its process is being abused and that nothing of value will be lost by ending it.”

Simon Brown LJ is there referring to the exercise of the court’s case management powers in the course of the hearing. Similar powers to limit the duration of a hearing in advance are inherent in the CPR and can be exercised for the same reason.

This is an issue of construction. In the light of the very limited issues to be decided, the hearing of these proceedings should not be allowed to take longer than a day. Were this to be put in a slot at the end of March/beginning of April, it would have to be dealt with accordingly. The question is, should it be put into that slot?

As I have said already, I think Mr. Hinchliffe’s argument as to the undesirability of allowing the potentiality of multiple decisions on the issue of construction is powerful. On the other hand there are already proceedings which will involve the judicial interpretation of the same claims in many countries. The possibility of conflicting view is already a possibility. The possibility of difference of view as between two of the patent judges in this country is much reduced where, as here, what is at issue is a question of construction, not the assessment of complex and disputed issues of fact. Further, it seems to me that it is necessary to bear in mind that a party is entitled to come to this court and ask for a commercially important case to be dealt with speedily. If the court is able to deal with the issue speedily, and there are good reasons why it should do so, then it should help the party to achieve that objective. APS does not want to have the decision of whether it is safe to market its generic product held back to a time which suits its competitors, Merck, Synthon, Ivax and Niche. Its aim, I take it, is to get into the market as soon as possible. If that discomforts all four of its competitors, so be it.

This case can easily be dealt with in a hearing at the end of March or the beginning of April. In my view, it is appropriate for it to be allowed to come on at that time. In saying that, I have borne in mind not only the factors I have mentioned already but also a letter of objection which I have received from solicitors acting for Synthon. As it happens, they are members of the same firm as act for APS, although they constitute an entirely separate team and Chinese walls have been erected between the two teams. Synthon objects to APS’s proceedings coming on early because it does not want arguments advanced early which it may wish to argue in a different way in the June hearing.

As I say, I do not see any good reason why APS should have its right to market its product held back because of the interest of its competitors. In my view, the matter should come on at the end of March or the beginning of April. That is not, however, an end of the matter. I have already indicated that the court has power to limit the duration of a hearing. There is in the Patent Court Guide a provision for what is called a simplified trial. That was introduced, I believe, by Aldous J. (as he then was) when he was head of the Patents Court. That is a voluntary procedure, but I think it is only right to point out that because of the court’s extensive case management powers it can and will impose a simplified trial if the circumstances justify doing so.

It is not necessary at this stage to impose terms on the conduct of this action. I will allow the parties a little time to see if they can agree directions, but, on the basis of the material before me today, it is clear that this case should be set to come on with a limit on the duration of the hearing of one day. The directions should be agreed or, if not agreed, will be ordered to ensure that that happens. I am conscious that other generic manufacturers, including Synthon, Ivax and Niche, may decide that since the issue of construction, which will be determined in March or April, involves them, they may wish to intervene in APS’s proceedings. I do not say at the moment whether that would be appropriate or not, or whether it would be appropriate to apply for an order that the determination of the issue of construction in their actions be treated as a separate issue to come on with the APS action. If any such application is made by those defendants, that will have to be considered on the merits. Even if such an application is made and succeeds, it is unlikely that it will be allowed to expand the hearing of APS’s trial beyond a comparative small hearing window. In other words, these parties should proceed on the basis that these proceedings will come on for determination in March or April whether or not Synthon, Ivax and Niche, or any of them, apply to join in.