Novartis Ag v Hospira UK Ltd

This is an application for an interim injunction. I will say now that I am not going to grant an interim injunction and the reasons for that are as follows.

The application arises as follows. Novartis have two patents, United Kingdom EP (UK) 1296689 and EP (UK) 1591122. They cover the use of zoledronic acid for the treatment of osteoporosis. The point of the invention is that zoledronic acid can be administered as a single intravenous injection half-yearly or even annually. Other older bisphosphonate compounds in this class are administered orally, which would seem to be more convenient than by injection. However, the problem with oral administration is gastric intolerance. Thus, when a patient takes the tablets, they have to remain standing for half an hour after taking the tablets to seek to mitigate the side effects. The tablets also have to be taken relatively frequently.

Although it was known that intravenous administration would avoid the gastric side effects, the problem was that it was thought that the bisphosphonate injections would have to be given frequently, which is also undesirable. The invention in this case was based on the discovery that zoledronic acid, a known bisphosphonate, could be effective when administered intravenously half-yearly or yearly.

5 mg of zoledronic acid is authorised by the relevant medicines authority for osteoporosis. Zoledronic acid is also authorised for two other indications. The 5 mg presentation is authorised for Paget’s disease and a 4 mg presentation is authorised for certain uses relating to cancer.

Novartis also has a compound patent and an SPC covering zoledronic acid. The SPC expires on 15th May 2013. The two patents in this case have a number of years to run after the SPC expires. The date of the expiry of the SPC has been known for a long time. In 2011, a generic pharmaceutical supplier, Hospira, decided that it wished to launch a generic zoledronic acid. Hospira’s view was that the two patents were invalid and it applied to revoke. The proceedings are commenced in sufficient time to ensure that the trial was heard before the SPC on the compounds expired. That took place and the trial was heard by Arnold J in February of this year, with judgment given in March. The hearing to settle the final order and deal with costs and permission to appeal took place on 12th April.

Arnold J held that the two patents were invalid. Although he held the invention was not obvious, he also held that the claims were not entitled to claim priority from the relevant priority document, and Novartis accepted that as a result of a publication in the intervening priority year, if the claims lost priority, they could not survive.

Arnold J gave permission to Novartis to appeal. In doing so, he commented: “Notwithstanding Mr. Tappin’s eloquence, I am just about persuaded [the] proposed grounds of appeal have a real (as opposed to fanciful) prospect of success, and accordingly I will grant permission to appeal.”

The proceedings were an action for revocation. There was no counterclaim for infringement. In late November 2012, Hospira obtained a marketing authorisation for zoledronic acid. This would include the 4 mg presentation and also the 5 mg presentation for osteoporosis and Paget’s disease. Novartis asked Hospira what their plans were. On 18th December 2012, Novartis’ solicitors wrote asking about Hospira’s plans. Amongst other things, they said:

“So that our client knows where it stands, we request that you confirm that, if any of the claims of either of the Patents asserted as having independent validity is held valid by the Court following the trial in February, your client will undertake not to launch its Zoledronic Acid Hospira 5 mg/100ml solution for infusion medicine in the UK after 15 May 2013.”

We now know that Hospira are in a position to and wish to launch their generic zoledronic acid as soon as possible after 15th May when the SPC expires. The position today is that Hospira wish to launch the product in accordance with their marketing authorisation. Novartis, on the other hand, seek an interim injunction to restrain that launch pending appeal. Novartis offer a cross-undertaking in damages. In addition, I should note that the Secretary of State for Health has written asking that the court should require that any cross-undertaking given by Novartis extends to cover losses suffered by the NHS in the interim. Novartis are prepared to offer a cross-undertaking in the form required.

Dr. Turner, who appears for Novartis, leading Mr. James Whyte, and instructed by Bristows, argues as follows. First, he focuses on claim 7 of the ‘689 patent. That claim calls for a 2 to 10 mg dose administered by intravenous injection for osteoporosis once a year. He says Hospira would plainly infringe that claim if the patent was valid and so the only issue is invalidity.

Second, he says that if one examines the judgment of Arnold J in this case the obviousness attack was unsuccessful. There was a good invention here. Validity of claim 7 turns only on the priority question. On that point, Novartis will say that Arnold J’s judgment is flawed. Before me Dr. Turner says that all I have to do is see that the appeal on priority turns on an issue of construction, which he says is plainly arguable, and that I am not in a position to say who will win the appeal. As I have said already, he draws a distinction from the position on an appeal in relation to a finding of obviousness.

Third, Dr. Turner submits that there is a good arguable case on appeal and thus, he says, I should turn to the balance of convenience as in American Cyanamid, and on that basis the familiar arguments arise. The market is still a (perfectly lawful) monopoly, the Novartis 5 mg osteoporosis presentation is a called Aclasta. That earned something like £5.7 million worth of sales in the United Kingdom last year. It is essentially a hospital prescribed medicine and the customer is the NHS. If Hospira start selling 5 mg zoledronic acid for osteoporosis there is a real risk of a downward price spiral. That will be irreversible and in practice it will not be possible to raise the price again even if Novartis win the appeal. So I should grant an interim injection pending appeal just as in similar circumstances the court would be likely to grant an interim injunction pending trial.

Mr. Speck, who appears leading Mr Thomas Mitcheson instructed by Taylor Wessing, argues to the contrary. He accepts that as a matter of jurisdiction the court can grant the order sought, but he says it would be extraordinary to grant an injunction in this case when the patent has been found invalid. He says as a matter of principle the fact that we have had a trial is not something which can be ignored. The merits of the case are a matter to be given considerable weight. He points out that taking into account the merits on an application for an interim injunction is entirely permissible in an appropriate case and that American Cyanamid, when properly understood, does not say differently.

Mr. Speck refers to the well-known judgment of Laddie J in Series 5 Software Limited v Philip Clarke and Others [1996] FSR 273 and also to paragraph 18 of the judgment of Walker LJ in Guardian Media Group plc, greater Manchester Newspapers Limited, Manchester Morning News Limited v Associated Newspapers Limited [2000] EWHC 461 (Ch) (CA) 20th January 2000 (unreported). I will quote paragraph 18 of that judgment:

“I take these four main points in that order. The American Cyanamid principles have a degree of flexibility and they do not prevent the court from giving proper weight to any clear view which the court can form at the time of the application for interim relief (and without the need for a mini-trial on copious affidavit evidence) as to the likely outcome at trial. That is particularly so when the grant or withholding of interim relief may influence the ultimate commercial outcome. It is not necessary to consider today whether the court’s entitlement to give effect to its provisional view of the merits goes quite so far as Laddie J sought in Series 5 Software v Clarke [1996] 1 All ER 853. In the end, there was not any significant difference between counsel on that point.”

Mr. Speck argues that the litigation up till now has been on the basis that if Hospira won at trial it would be free to launch when the SPC expires on 15th May. He points to the 18th December letter as an example of this. He says it would be wrong to force generics such as his clients to start cases like this so far before the SPC expires that an appeal to the Court of Appeal or even the Supreme Court will automatically be able to be done in advance.

On the question of the quantifiability of the loss and adequacy of damages as a remedy, Mr. Speck says that this case would not merit an interim injunction even if we were at the outset of proceedings at first instance. First, he says the interim injunction would deprive Hospira of what has been described as a first mover advantage. The point is that if Hospira are, as they believe, the only generic ready and able to launch 5 mg zoledronic acid for osteoporosis immediately on expiry of the SPC, they will stand to earn considerable profits even if other generics come on the market later, even only a few weeks later. Once the appeal is heard, other generics who do have marketing authorisations will almost certainly be ready to launch and so the generic launch at that point in time, if it takes place, will involve multiple generics. Prices will fall very quickly and the first mover advantage will be lost.

Second, he says the rational thing for Novartis to do in these circumstances is not to drop their price and chase it down with the generic competitors, but simply allow the generics to take a market share and then if Novartis win on appeal, their price has not fallen and the other market entrants will have to be removed from the market by an injunction, leaving the market to Novartis with the price they always had. So he says the harm will not be uncompensatable or unquantifiable.

Third, he says in fact Novartis will be able to restore pricing in this case if, contrary to Hospira’s case, Novartis win the appeal. That, he says, is because there are only a few months at stake and there is evidence that prices for the other 4 mg presentation for cancer indications, which were reduced by advance at one stage, were then increased again. Mr. Speck says I should not grant an interim injunction.

The parties could not agree about the principles applicable in this situation. They cited a number of cases. In no case has the court granted an interim injunction pending the full appeal to restrain what would be infringement of a patent when the patent has been found invalid. Nevertheless, there are some points which can be derived from the cases.

First is Erinford Properties Ltd and another v Cheshire County Council [1974] Ch 261. In this case Megarry J refused an application for an interim injunction pending trial but granted a shorter interim injunction pending the appeal of the applicant for the injunction against that refusal. Counsel submitted that this was inconsistent, but Megarry J did not agree. He said as follows:

“I can see no real inconsistency in any of these cases. The questions that have to be decided on the two occasions are quite different. Putting it shortly, on a motion the question is whether the application has made out a sufficient case to have the respondent restrained pending the trial. On the trial, the question is whether the plaintiff has sufficiently proved his case. On the other hand, where the application is for an injunction pending an appeal, the question is whether the judgment that has been given is one upon which the successful party ought to be free to action despite the pendency of an appeal. One of the important factors in making such a decision, of course, is the possibility that the judgment may be reversed or varied. Judges must decide cases even if they are hesitant in their conclusions; and at the other extreme a judge may be very clear in his conclusions and yet on appeal be held to be wrong. No human being is infallible, and for none are there more public and authoritative explanations of their errors that for judges. A judge who feels no doubt in dismissing a claim to an interlocutory injunction may, perfectly consistently with his decision, recognise that his decision might be reversed, and that the comparative effects of granting or refusing an injunction pending an appeal are such that it would be right to preserve the status quo pending the appeal. I cannot see that a decision that no injunction should be granted pending the trial is inconsistent, either logically or otherwise, with holding that an injunction should be granted pending an appeal against the decision not to grant the injunction, or that by refusing an injunction pending the trial the judge becomes functus officio quoad granting any injunction at all.

“There will, of course, be many cases where it would be wrong to grant an injunction pending appeal, as where any appeal would be frivolous, or to grant the injunction would inflict greater hardship than it would avoid, and so on. But subject to that, the principle is to be found in the leading judgment of Cotton L.J. in Wilson v Church (No. 2), 12 Ch.D. 454, where, speaking of an appeal from the Court of Appeal to the House of Lords, he said, at p. 458, ‘... when a party is appealing, exercising his undoubted right of appeal, this court ought to see that the appeal, if successful, is not nugatory.’ That was the principle which Pennycuick J. applied in the Orion case [1962] 1 W.L.R. 1085; and although the cases had not then been cited to me, it was on that principle, and not because I felt any real doubts about my judgment on the motion, that I granted Mr. Newsom the limited injunction pending appeal that he sought. This is not a case in which damages seem to me to be a suitable alternative.

“I accept, of course, that convenience is not everything, but I think that considerable weight should be given to the consideration that any application for a stay of execution must be made initially to the trial judge. He, of course, knows all about the case and can deal promptly with the application. The Court of Appeal will not be troubled with it unless one of the parties is dissatisfied with the decision of the judge, in which case the Court of Appeal will at least have whatever assistance is provided by knowing how the judge dealt with the application. Although the type of injunction that I have granted is not a stay of execution, it achieves for the application or action which fails the same sort of result as a stay of execution achieves for the application or action which succeeds. In each case the successful party is prevented from reaping the fruits of his success until the Court of Appeal has been able to decide the appeal. Except where there is good reason to the contrary ( and I can see none in this case), I would apply the convenience of the procedure for the one to the other. Accordingly, for these reasons Mr. Finlay’s motion to discharge the injunction fails and the ex parte injunction stands. I decide nothing on whether it ought to be extended: that I leave for argument and any evidence that may be adduced if an extension is sought.”

In Ketchum International plc v Group Public Relations Holdings Ltd and others [1997] 1 WLR 4, a plaintiff who lost at trial sought an injunction pending appeal to restrain the winning defendant from disposing some money which the plaintiff claimed was the fruits of a breach of an agreement. The Court of Appeal held that the Court of Appeal itself had an original jurisdiction to grant such an injunction as well as the trial judge. In the Court of Appeal’s judgment there was reference to Wilson v Church (1879) 11 Ch.D. 567, CA, which had also been cited by Megarry J, to Polini v Gray (1879) 12 CH.D. 438, CA, (the judgment Cotton LJ) and to Orion Property Trust Ltd v Du Cane Court Ltd [1962] 1 W.L.R. 1085; [1962] 3 All E.R. 466, (the judgment of Pennycuick J). Then Stuart-Smith LJ said the following:

“In my judgment, this jurisdiction is not limited, as the judge thought, to cases concerned with the preservation of a fund or property the subject of the action, but is based on the wider principle enunciated by Cotton LJ that justice requires that the court should be able to take steps to ensure that its judgments are not rendered valueless by an unjustifiable disposal of assets. Moreover, I cannot see any reason in principle why the considerations which are applicable when the court is considering the grant of a Mareva injunction should not be applied in favour of a plaintiff, even if he has lost in the court below, though the question will not be ‘Does he have a good arguable case?’ but ‘Does he have a good arguable appeal?’ This is likely to be a more difficult test to satisfy, and, if the case turns upon questions of fact which the judge has resolved against the plaintiff, may well be insuperable. This threshold must be at least as high as that which has to be satisfied when the court considers whether or not to grant leave to appeal where that is required.

“That analogy with a stay of execution is appropriate. Where an unsuccessful defendant has to obtain leave to appeal and seeks a stay of execution, for example, in a possession action, this court will normally grant a stay if it grants leave to appeal, since otherwise a successful appeal will be of no effect. Where leave is not required to appeal the substantive judgment, as in this case, injunctive relief of the type sought should not be granted unless leave to appeal would be granted, had it been required. In my opinion the judge was in error in thinking that he did not have jurisdiction to make the order sought.”

Next in Servier v Apotex (unreported hearing of 6 July 2007), a similar question arose. There was no approved judgment in Servierv Apotex, but the parties have access to a transcript of the argument and the ruling of Pumfrey J in that case. Here the patent was for a crystal form of a drug. The patentee had obtained an interim injunction in against the defendant generic up to a trial and the patent was then held invalid. Pumfrey J held that there was no arguable case on appeal, but he granted permission on the basis of the Pozzoli authority. The patentee asked for an interim injunction pending appeal. Pumfrey J refused to grant an interim injunction pending appeal, but he did grant the patentee a very short injunction to facilitate renewal of that application before the Court of Appeal.

His full judgment was as follows:

“This is an application to continue an interim injunction made by Mann J independently of this action for infringement of patent. The Claimants, to whom I shall refer as Servier, are the proprietors of European patent 1296947, and alleges an infringement and threatened infringement by the Defendants, to whom I shall refer to as Apotex. Before Mann J, the issues as to infringement and as to validity were seriously argued. Apotex had brought those issues on, by Mr. Watson, Queen’s Counsel’s phrase, their ‘clearing of the undergrowth’, and Mann J was satisfied that the grant of an interlocutory injunction was justified by the manner in which the balance of convenience then stood.

“I have now heard the action, and my conclusions are set out in my judgment. I find that the Patent was indeed infringed, but that the Patent was invalid. I have in my judgment, also delivered today upon an application for permission to appeal, expressed the view that the points on appeal are not seriously arguable, in the sense that there is no real prospect of success. I have nevertheless granted permission to appeal following the guidance given in the case to which I referred in that judgment and which I shall now refer to as Pozzoli. I am very conscious that while I have had the advantage of not only considering all the written evidence and the documents which have been exhibited to that written evidence and seen the witnesses cross-examined - to the extent they were cross-examined - I am accordingly in a much better position than the Court of Appeal would be if they themselves were required to decide whether permission to appeal should be granted. Nevertheless, on the material available to me, I am satisfied that this is not an arguable appeal. In those circumstances, the question arises as to the principles upon which any continuation of this injunction must be based. Mr. Watson, Queen’s counsel, was inclined to submit that in these, I believe, unprecedented circumstances, the only possible grounds for continuing the interim relief would be that the appeal would be rendered nugatory if the relief were not continued, and for that submission, he bases himself upon Ketchum International PLC v. Group Public Relations Holdings Limited, 1997, 1 WLR 4. I am very doubtful that the jurisdiction of the Court is so circumscribed. I accept Mr. Purvis QC’s submission that the jurisdiction is to be exercised under section 37 of the Supreme Court Act is a wide one limited only by the authorities of that wide discretion.

“In circumstances such as the present, I can see no reason why the familiar principles of American Cyanamid v Ethicon, with necessary qualification that the question is no longer whether there is a triable issue, but whether there is a prospect of an arguable appeal should [not be] the principles to apply. And so in a case in which I thought there was a real prospect of success on an appeal, I would myself be inclined to continue the injunctive relief if it had been granted before trial. Whilst I accept entirely the force of the submission by Mr. Watson that essentially the determining factors in many cases in which - the determining factor in many cases in which the interlocutory injunctions have been granted before trial has been a failure by the Defendant to clear the undergrowth of patents before entering the market, and once the Defendant has indeed succeeded in this endeavour, the conditions for the exercise of discretion should be otherwise, I do not find it helpful to re-exercise existing discretions on the hypothesis that one and one only of the relevant factors has changed in a material respect.

“This is a case, however, which is wholly out of the ordinary. I am satisfied, for the reasons I have expressed in the judgment which I have already delivered, that there is no argument for appeal here. I granted permission to appeal because I do not think it is right to impose upon the Court of Appeal the burden of placing itself in the same position as I was on all the material available, before deciding whether permission should be granted or not. In those circumstances, I must exercise this discretion upon the basis that there is no reasonable arguable case on appeal. In those circumstances, it follows, it seems to me, that I should not continue the interlocutory relief granted. The position is entirely straightforward. The basic requirement for the Court to intervene is not satisfied and, in those circumstances, I can only refuse the relief sought.

“Had I been satisfied that there was a serious, a real prospect of success on this appeal, I would have intervened by way of interim relief. While Mr. Watson’s, as I indicated, Mr. Watson’s submission is a forceful one, I am greatly influenced by the uncompensated ability in damages of the loss suffered on both sides when on the usual hypotheses as to the eventual outcome of the case and in the normal case, I think the Court will normally be in favour of the right owner. This is not such a case and I do not intend to pursue that discussion further.

“It follows therefore that this application to continue interim relief must fail. This is not quite the end of the question. It is obvious that the Claimants should have an opportunity to apply to the Court of Appeal. What I propose to do is to, today being Friday, is to continue the injunction presently in force until midday on Monday. If application is made to the Court of Appeal for interim relief, then that injunction will continue on the condition that an application is made to the Court of Appeal to expedite the hearing on any application for interim relief and that the application and the appeal are prosecuted with all possible despatch.”

These are all cases concerned with an application in circumstances in which the claimant has lost. There is another circumstance which is related to this in my judgment. That is the case of a winning claimant who is faced with a defendant who has lost who seeks to in some way alter or reduce the relief or stop it all together, which the claimant would ordinarily expect. An example of this was in Kirin-Amgen v Transkaryotic Therapies (No. 3) [2005] FSR 41. It is the judgment of Neuberger J, as he then was. In that case Neuberger J referred to the well-known passage from the decision of Buckley LJ in 3Mv Johnson & Johnson Ltd [1976] RPC 671. He said at paragraphs 16 and 17:

“16.

As a matter of principle, when a first instance court is considering how to fashion relief pending appeal, the guiding principle must be that it should, as far as possible, and subject to any special circumstances, so ‘arrange matters that when the appeal comes to be heard, the appellate court may be able to do justice between the parties whatever the outcome of the appeal may be’ - see per Buckley LJ in Minnesota Mining and Manufacturing Co v Johnson v Johnson Ltd [1976] RPC 671 at 676, 11.11 to 13. The learned Lord Justice went on in the following terms on the same page at 11.11 to 36:

“‘Where an injunction is an appropriate form of remedy for a successful plaintiff, the plaintiff, if he succeeds at first instance in establishing his right to relief, is entitled to that remedy upon the basis of the trial judge’s findings of fact and his application of the law. This is, however, subject to the defendant’s right of appeal. If the defendant in good faith proposes to appeal, challenging either the trial judge’s findings or his law, and has a genuine chance of success on his appeal, the plaintiff’s entitlement to his remedy cannot be regarded as certain until the appeal has been disposed of. In some cases the putting of an injunction into effect pending appeal may very severely damage the defendant in such a way that he will have no remedy against the plaintiff if he, the defendant, succeeds on his appeal. On the other hand, the postponement of putting an injunction into effect pending appeal may severely damage the plaintiff. In such a case a plaintiff may be able to recover some remedy against the defendant in the appellate court in respect of his damage in the event of the appeal failing, but the amount of this damage may be difficult to assess and the remedy available to the appellate court may not amount to a complete indemnity. It may be possible to do justice by staying the injunction pending the appeal, the plaintiff’s position being suitably safeguarded. On the other hand it may, in some circumstances, be fair to allow the injunction to operate on conditions that the plaintiff gives an undertaking in damages or otherwise protects the defendant’s rights, should he succeed in his appeal. In some cases it may be impossible to devise any method of ensuring perfect justice in any event, but the court may nevertheless be able to devise an interlocutory remedy pending the decision of the appeal which will achieve the highest available measure of fairness. The appropriate course must depend on the particular facts of each case.’”

“17.

In other words, if possible, I should arrange mattes so that if the appeal is dismissed, Amgen will be in the same position as if there had been no appeal, and so that, if the appeal succeeds, TKT will be in the same position as if they had succeeded at first instance. That must be right. If the appeal fails, it would be unjust if TKT were better off or Amgen worse off, by TKT having pursued an unmeritorious appeal than if they had not appealed. Similarly, if the appeal succeeds, it would be undesirable that TKT should be worse off or Amgen better as a result of a first instance decision on invalidity and/or infringement which turned out to be wrong.”

What I take from all these cases is this. The grant or refusal of relief like this is an exercise of the court’s discretion. Consideration of the risks of harm which cannot be compensated in damages are highly relevant. However, what is also relevant is the nature of the proceedings. This is not a case in which the court has not yet been able to decide at a full trial on the parties’ respective legal rights. In this case the parties’ rival cases have been heard at a full trial and a detailed judgment has been given.

Once the court has given a ruling on the merits, of course a party needs a good arguable case on appeal before the court would be at all likely to grant an injunction pending full appeal. But I do not think it would be right to mechanically equate the existence of a real prospect of success on an appeal by someone who has lost at trial with the presence of a good arguable case on the merits at the outset of the proceedings a long way from trial so that one could say that if the facts were such that it would justify an interim injunction in the claimant’s favour at the outset of proceedings before the parties’ rights had been decided those facts would automatically justify an interim injunction pending the claimant’s appeal.

This is the reason why the cases I have referred to described a situation in which an in injunction might be granted in favour of the appellant as being to prevent an appeal from being nugatory. That is not the standard applied in the usual proceedings before trial in an American Cyanamid sort of case. It is a reflection of the fact that after trial things are different. I should say that the jurisdiction cannot be limited to an injunction to prevent an appeal from being nugatory. The point I am making is simply that this language reflects the rather different considerations which apply once a trial has taken place.

Dr. Turner does not invite me to say that the trial judge, Arnold J, got the decision on priority wrong. He invites me to hold that the question of priority turns on a point of construction which is plainly arguable and that I am not in a position to say one way or another who will prevail. Mr. Speck submits that the issue of priority was a squeeze and that some findings of fact which help Novartis on obviousness work against them on priority. He supports the judgment of Arnold J and points out that part of his reasoning arises from evidence of Novartis’ own expert. He refers to what Arnold J said in granting permission to appeal.

I am not sitting on appeal from this trial, nor am I the trial judge. I agree with Dr. Turner that the appeal is plainly arguable, but I also agree that I cannot conclude who will win. To that extent, it might be said I am differing from the view expressed by Arnold J in his comment about permission to appeal. Perhaps I am. Whether or not I am, however, I am in no position to delve into the merits any further than that, and I decline to do so.

The arguments and evidence on this issue covered familiar territory. I will start with some of the matters which I find were not of significant weight on the facts of this case. They were (1) the argument that Hospira’s infusion bag raises a point of any significance; (2) the argument that the possibility of parallel exports from the United Kingdom raises a point of any material weight; (3) the fact that zoledronic acid will be available in a 4 mg form for cancer and even a 5 mg form for Paget’s disease; I do not regard these points as important. On the latter point, the Paget’s disease market is a very small market; (4) the interests of the public, given that the state is the purchaser of these medicines; Mr. Speck raised this, but I reject it since the Secretary of State for Health will be protected by the cross-undertaking; (5) the fact that this is a market subject to tendering. I reject the argument that this might somehow prevent a downward price spiral and I also reject the argument that this means that the reputation of parties is of any less importance than it would be in any other kind of market.

The matters which I do regard as of weight are as follows. On first mover advantage the evidence does not allow me to be sure that Hospira will be the only generic able to launch immediately after the SPC expires. But I find there is a real possibility that that is true. There are others with marketing authorisations. Although some appear to have agreed to limit themselves to Paget’s disease on 5 mg, there is some evidence of tendering into the 5 mg osteoporosis market by unnamed generic suppliers. However, the evidence is not enough to conclude that there definitely is another generic who is ready and able to launch immediately. I am satisfied, however, that by the time the appeal is over other generics will be ready to launch. Thus the injunction is capable of depriving Hospira of a real commercial prize, being the first generic on the market. If the injunction was granted, but the appeal is successful, so that there will be an inquiry on a cross-undertaking, we may never be able to tell with any certainty what other generics were able to do. I find there is a real risk that an injunction now will cause direct loss to Hospira which is difficult to quantify.

As far as the loss to Novartis, I reject the idea that the price will not fall. A price fall is very likely if Hospira launch alone, although it may not be immediate if Hospira are the only generic. On the other hand, if multiple generics do launch then a fast large price drop is inevitable. I do not regard Sandoz, Novartis’ in-house generic organisation, as a relevant comparison. If the actions of Novartis’ own generic cause loss to Novartis by reducing the price, then that is not something I should take into account.

I accept the argument that once the price has dropped Novartis will have a real difficulty in restoring prices if they win. There was some evidence that Novartis were able to restore prices to some extent in the 4 mg market. Novartis point to the reputation or damage caused to them by this. I reject Mr. Speck’s argument, however, that this shows that the sort of price drop which will be likely to be caused by generic entry into the 5 mg osteoporosis market could readily be restored after a successful appeal.

I think the risk of the event which causes the loss to occur in these two cases I have considered is rather higher for Novartis than it is for Hospira. In other words, I think that if no injunction is granted and the appeal succeeds, it is very likely that Novartis will be unable to restore their prices fully without significant harm to their reputation. On the other hand, if an injunction is granted but the appeal fails, there is a real risk that I will deprive Hospira of first mover advantage which would be very difficult to calculate.

In terms of numbers, the loss to Novartis will probably be a larger sum than the loss to Hospira. The magnitude of the loss is not the same thing as the magnitude of the uncertainty in the calculation. Moreover, both sides are good for any damages in this case. I think the uncertainty associated with Hospira’s losses assessed on a cross-undertaking is higher than the uncertainty associated with Novartis’ losses assessed as damages if no injunction is granted but they win the appeal. If an injunction is granted we will never know whether Hospira lost first mover advantage. It can be analysed as a loss of a chance, but that is imperfect. On the other side, some measure of the effect of the price drop is calculable. Dr. Turner pointed to sales figures in the market. It is a growing one and a general trend is clear. There is no reason why the measure of damages on a cross-undertaking may not include a sum for future losses as a result of an inability to restore prices into the future.

Looking at uncompensatable harm overall, I am quite satisfied that taking either course will lead to a risk of significant unquantifiable loss. If this case was at the outset of proceedings months or even a year before trial, then as long as all I could say about the merits was what I can now say about the merits of the appeal, I would probably grant the interlocutory injunction. On its facts this is a case like many others in the pharmaceutical field. The magnitude and significance of the unquantifiable harm is such that the best way of holding the ring pending trial might well be to grant an interim injunction. That is where the idea of clearing the way comes from. The generic knows more about its plans than the innovator, so the generic ought to arrange things to have the merits tried before it launches.

However, now that the merits have been decided I believe the overall balance is different. If they win the appeal Novartis’ lawful monopoly in zoledronic acid will be restored after a lapse of about 6 to 8 months; I should say 6 to 8 months is what I understand is the likely listing of this appeal. They will have suffered loss which will be a large sum in financial terms, but the damages they recover can all be paid by Hospira and any other generics who launch in the period. Quantification is not at all easy, but an assessment can be made.

These proceedings have been conducted on the footing that the trial on the judgment of first instance would be concluded before the SPC expired. The point was obviously to clear rights which might subsist after the SPC expired out of the way. If Novartis had wanted to say that the case should be scheduled to allow an appeal to the Court of Appeal to take place before 15th May, that could have been sought a long time ago; it was not. The letter of 18th December was clearly written on the basis that the trial was going to determine the position vis-a-vis launching after 15th May. Novartis argued that the letter was written on an assumption that the patent was valid. I do not accept that that takes away the significance of the letter. In my judgment, it shows that these proceedings have been arranged, as I say, so that the trial will be in a position to have been decided by the time of the launch date on 15th May.

If an injunction was needed to avoid rendering this appeal nugatory, then the prospects of success which I have found -- that is to say, plainly arguable, but no more than that -- would no doubt justify an interim injunction, but that is not the position I am in. Equally, if the merits of this appeal were such that one could say it had strong prospects of success, then that might be enough to tip the balance in Novartis’ favour, but I am not in that position either. I am faced with an arguable appeal and a real risk of inflicting significant uncompensatable harm on either side by the grant or refusal of an injunction. I think the risk in this case should be borne by the appellant. I will refuse the injunction.