Neurim Pharmaceuticals (1991) Ltd & Anor v Generics UK Ltd (t/a Mylan) & Anor

INTRODUCTION

Over the course of four days in October and November 2020, I heard the trial of a patent claim brought by Neurim Pharmaceuticals (1991) Limited (Neurim) and Flynn Pharma Limited (Flynn) against Generics UK Limited and Mylan UK Healthcare Limited (collectively, unless the context otherwise requires, Mylan). The issues before me concerned the validity of a patent, EP (UK) 1,441,702 B1 (the Patent). Infringement was not a separate issue before me: Mylan accepted and admitted infringement if the Patent was valid.

For the reasons given in my judgment (the Judgment), handed down on 4 December 2020 under Neutral Citation Number [2020] EWHC 3270 (Pat), I concluded that the Patent was valid, and so infringed by Mylan. I do not propose, in this Consequentials Judgment, to repeat the Judgment, which I take as read for the purposes of this Consequentials Judgment. I also propose to adopt the terms and abbreviations used in the Judgment, as set out in Annex 1 to the Judgment.

For reasons that it will be necessary to explore in this Consequentials Judgment, the orders consequential on my Judgment are by no means straightforward and I have heard detailed submissions from both the Claimants and Mylan as to the orders I should make. At first sight, to a reader of the Judgment only, that might seem surprising. Apart from one point – the question whether Flynn was an exclusive licensee within the meaning of sections 67 and 130 of the Patents Act 1977, which I shall term the Exclusive Licence Point – I found in favour of the Claimants and concluded that Mylan’s challenges to the validity of the Patent all failed, and that Mylan was either threatening to, or was, infringing the Patent. (Footnote: ¹) On the face of the Judgment, therefore, one might expect an injunction enjoining Mylan from infringing the Patent to follow; and for the Claimants to obtain an order for all – or substantially all – their costs.

No order in these terms presently exists, although orders along these lines were made in the immediate aftermath of the Judgment on 16 December 2020 (the 16 December 2020 Orders).

It is necessary, before describing the matters at issue before me, to set out the facts in some detail. I do so in the next section, Section B.

THE FACTS (1) The history of these proceedings

The claim was commenced by the Claimants under a Part 7 Claim Form on 14 February 2020. Pleadings and amendments to pleadings followed, in the usual course, and it is unnecessary to consider these in any great detail. Paragraph 1 of the Amended Particulars of Infringement provided that:

“The Defendants [i.e., Mylan] threaten and intend to infringe the Patent by threatening and intending to do the following acts in the United Kingdom without the consent of the Claimants, namely: keep, use, dispose of and/or offer to dispose of a prolonged release melatonin product obtained directly by means of a process as claimed in at least claim 1 and being a product within the scope of claim 4 of the Patent.”

There was, from the Claimants’ perspective, considerable urgency in ensuring that Mylan did not infringe the Patent. The threat to the Claimants’ United Kingdom monopoly, arising out of the Patent, and the threat to the market that the Claimants’ had established in reliance upon the Patent, were – to the Claimants – both obvious and urgent. The urgency was exacerbated, in the Claimants’ eyes, by two factors:

As I have noted, the Claim Form was issued on 14 February 2020. It was served on Generics UK Limited (as the sole defendant, and now the First Defendant) on 17 February 2020. Thereafter:

The matter came before Nugee J on 19 March 2020. At this hearing:

The Interim Relief Application came before me on 20 May 2020. The application was refused for the reasons given in my judgment of 3 June 2020 ([2020] EWHC 1362 (Pat)). Mylan continued to give the undertakings it had given to Nugee J so as to enable the Claimants to appeal my decision to the Court of Appeal. The appeal was heard by the Court of Appeal (Floyd, Males and Arnold LJJ) on 18 June 2020, and the outcome, affirming my order, was notified to the parties on 19 June 2020. The judgment of the Court of Appeal, explaining its decision, was handed down on 24 June 2020 ([2020] EWCA Civ 793). Permission to appeal to the Supreme Court was not given, although it was sought by the Claimants.

The consequence is that Mylan was not enjoined from (allegedly) infringing the Patent and was free to import into the United Kingdom, and sell, Infringing Products. In fact, although there was a clear suggestion by Mylan that the sale of Infringing Products was imminent – and certainly that was the Claimants’ concern and understanding – the importation and/or sale of Infringing Products did not occur until rather later in the year, towards the end of 2020, in about September. (Footnote: ⁴) Thus, importation and/or sale of Infringing Products had only just begun and/or was truly imminent at about the time I handed down the Judgment.

Proceedings in the European Patent Office

The Patent was granted to Neurim on 10 May 2017. Mylan filed a notice of opposition to the Patent on 9 February 2018. This procedure – which operates post-grant – enables any third party to challenge the validity of a patent at the European Patent Office (the EPO). Mylan was not the only opponent of the Patent: notices of opposition were also filed by Aspire Pharma Limited and Teva Pharmaceutical Industries Limited.

The Opposition Division of the EPO published a preliminary opinion on the Patent on 8 March 2019, expressing the view that the Patent was invalid for lack of novelty. The precise reasons for this preliminary opinion do not matter.

There was an oral hearing before the Opposition Division on 20 November 2019. Mylan (as well as Neurim) attended: the other opponents did not. The Opposition Division confirmed the preliminary opinion that it had expressed, giving that decision orally at the conclusion of the hearing on 20 November 2019. In his evidence before me, Dr Royle (a partner at Taylor Wessing LLP, solicitors for Mylan) described the position as at 20 November 2019 as follows: (Footnote: ⁵)

“...The [Opposition Division] found that the Patent was invalid for lack of novelty over Haimov and its decision was given orally at the conclusion of the hearing on 20 November 2019. Other grounds of invalidity were raised by Mylan, but the EPO does not necessarily consider all grounds of invalidity as it stops the assessment once a patent is held to be invalid and there is no further claim set to consider. For this reason, in the present case, inventive step and sufficiency were not considered by the [Opposition Division] as the Patent had been found to be invalid for lack of novelty over Haimov. The written decision of the [Opposition Division] was issued on 2 January 2020...”

Neurim appealed this decision. There is an automatic right of appeal from a decision of the Opposition Division to the Technical Boards of Appeal of the EPO: permission to appeal does not have to be sought from, or given by, any organ within the EPO. A notice of appeal must be sent by the appellant. This simply states an intention to appeal; there is then a period within which substantive grounds of appeal have to be filed. The deadlines for these two stages are within two months and within four months of the written decision under appeal. In this case, a notice of appeal was sent by Neurim well within the applicable time limit on 14 January 2020; the substantive grounds of appeal were filed on 12 May 2020, shortly before the expiry of the applicable deadline.

The effect of an appeal against a decision of the Opposition Division to revoke a patent is suspensive. Thus, in this case, the Opposition Division’s decision to revoke the Patent was not operative pending the outcome of the appeal by Neurim. The Patent would be treated as validly granted pro tem.

Appeals to the Technical Boards of Appeal can take some time. Without expedition, Neurim’s appeal of the decision of the Opposition Division might have been heard as late as the first quarter of 2022. As it happens, both parties sought expedition of the appeal. It is entirely unsurprising that there was a coincidence of interest between the parties in having the appeal resolved quickly. (Footnote: ⁶)

Although I was told (at the hearing before me on 20 May 2020) that both parties had sought expedition, the parties were not able to tell me, at that time, whether their representations would bear fruit. My decision of 3 June 2020 (Footnote: ⁷) records that the Opposition Division’s decision “has been appealed, but it is unlikely that a final decision on the

Until after the handing down of the Judgment, my understanding continued to be that the trial and determination of the proceedings in this court would pre-date – by months, and possibly a year or more – the hearing before the Technical Boards of Appeal. Much of what follows concerns the inter-relationship between these two sets of proceedings, which I shall refer to as the UK Proceedings and the EPO Proceedings.⁹

As it happens, the parties would have been aware before the trial of the UK Proceedings before me (but, to be clear, after the hearing on 20 May 2020) that their requests for expedition in the EPO Proceedings had borne fruit. On 3 June 2020, a summons was issued by the Technical Board of Appeal for oral proceedings to be held on 17 and 18 December 2020. Those dates were then lost (on 11 November 2020, the hearing was rescheduled by the Technical Board of Appeal to 20 and 21 July 2021) and then reinstated by the Technical Board of Appeal (on 20 November 2020).

I will come to the question of whether and, if so, how the parties should have kept the court in the UK Proceedings apprised of what was going on in the EPO Proceedings. That failure – and I say this without criticism – meant that when I handed down Judgment on 4 December 2020, I was immediately faced with a situation where a possibly inconsistent outcome in the EPO Proceedings was imminent (that is, would very likely occur at the end of the 18 December 2020). In a very real sense, this is the single factor that has resulted in two sets of consequential hearings and this, extremely lengthy, Consequentials Judgment.

That said, I fully acknowledge the difficult position the parties were in:

[2020] EWHC 1362 (Pat) at [8].

In their corrections to the draft of this Judgment, the Claimants stated that the position regarding the

As I have described, the Judgment was handed down on 4 December 2020. I shall describe the events consequential on that Judgment in due course in Section B(3) below. To conclude the events in the EPO Proceedings, written submissions were made by both parties, and the hearing took place (by “mixed mode”, that is part in person and part remotely) before the Technical Board of Appeal on Thursday 17 and Friday 18 December 2020.

It is not appropriate – for reasons that I will come to – to set out in any detail the events that took place before the Technical Board of Appeal. It is sufficient to say that during the course of the hearings, the Technical Board of Appeal expressed their opinion orally that the Patent lacked sufficiency (meaning that the appeal would be dismissed). Neurim was offered the opportunity to consider its position in a short adjournment of about an hour. After this adjournment, Neurim formally withdrew its appeal of the Opposition

It is important that I stress that the withdrawal of an appeal before a Technical Board of Appeal – even during the course of the hearing of the appeal itself – is entirely normal and envisaged by the processes of the EPO. These processes were helpfully described by Mr Thomas Leonard, a partner in Kilburn & Strode LLP and a qualified European Patent Attorney: (Footnote: ¹⁰)

The effect of an unsuccessful appeal and the effect of the withdrawal of an appeal is – unsurprisingly – exactly the same. The earlier decision of the Opposition Division to revoke the Patent would become final and the Patent would be revoked. That revocation is ab initio. It is as if the Patent never was. (Footnote: ¹¹) That is what occurred on 18 December 2020.

In the course of argument, I was invited to speculate as to the thinking and strategy that might have informed Neurim’s conduct. It seems to me that it would be very difficult to do so without invading clearly privileged matters. Furthermore, for reasons that I give later on in this Consequentials Judgment, to do so would not assist me in determining the matters before me. Accordingly, I consider this question no further.

Matters consequential on the Judgment

My Judgment was handed down on 4 December 2020, and had been circulated in draft for several days before then. As I have stated, (Footnote: ¹²) Neurim was (with the exception of the Exclusive Licence Point) the successful party. By the Judgment, I had found the Patent to be valid and (because there was no self-standing argument on infringement) infringed.

Given the threat of infringement and the absence of an interim injunction enjoining infringement, (Footnote: ¹³) Neurim was concerned to put in place final injunctive protection as soon as possible, and in any event before the end of term, which was Monday 21 December 2020. Given the absence of an interim injunction, it seemed to me that if Neurim was pressing for an early hearing of consequential matters, a hearing ought to be accommodated, if at all possible. Given the diaries of all concerned – and, in particular, the diaries of leading counsel and the court – the hearing was fixed for Wednesday 16 December 2020, which was later than I would have liked.

By this time, I had been informed of the imminent hearing before the Technical Board of Appeals on Thursday 17 and Friday 18 December 2020. In an ideal world, given that the outcome of the appeal before the Technical Board of Appeal was anticipated on Friday evening, the consequentials hearing would have been held on the last day of term, Monday 21 December 2020. But that was not possible. (Footnote: ¹⁴)

Accordingly, with all parties and the court appreciating that the Patent, which I had found to be valid and infringed, might (some 48 hours after the hearing consequential on Judgment on 16 December 2020) be revoked ab initio in the EPO Proceedings, the hearing consequential on my Judgment in the UK Proceedings came on. At my instance, the hearing covered all outstanding consequential matters, and not just the question of an injunction. (Footnote: ¹⁵)

Mylan’s position was stated very clearly in its written submissions on this occasion:

“2.

There was no urgency for the form of order hearing to occur prior to the end of term. Neurim’s appeal against the decision of the EPO Opposition Division revoking the Patent as invalid by anticipation by Haimov is fixed to be heard by the Technical Board of

Appeal (“TBA”) in oral proceedings on either 17 or 18 December 2020. On 27 November 2020, the TBA issued a provisional opinion which suggests that at the oral hearing the TBA will consider all grounds of invalidity, not just novelty as was considered by the Opposition Division...

3.

Unless Neurim are successful with their appeal, the Patent will be revoked ab initio for all European countries, including the UK. If found invalid, it would be as if the Patent (including all designations) had never been granted. In accordance with the usual practice it is expected that the TBA’s decision will be announced at the oral proceedings on 17 or 18 December 2020 with written reasons to follow...

4.

Should it transpire that the Patent is found invalid by the TBA, then the Claimants will not be entitled to any substantive relief by way of injunctions or any financial remedies. Mylan will also contend that it should be entitled to its costs of these UK proceedings. However, if following this hearing this Court were to have ordered any such relief, the parties would be required to return to Court to rectify the situation. The procedural way forward is not necessarily straightforward and may depend on whether this Court has become functus officio. These procedural difficulties could have been avoided had Neurim taken a sensible approach and agreed for the final order hearing to be listed early in Hilary Term in 2021.”

Granted the premiss that Neurim’s appeal would fail, and the Patent be revoked, there is much to agree with in these paragraphs. But the premiss was in dispute: Neurim’s position was that its appeal would succeed, and that there was real need to set in place an injunctive regime that would commence as soon as possible after the Judgment for the life of the Patent.

I was in no position to anticipate the outcome of the EPO Proceedings, and I regard the parties’ contentions on this point as no more than informed crystal-ball-gazing. Accordingly, it seems to me that the premiss in Mylan’s written submissions that there was “no urgency” for the hearing to occur before the end of term is, and was, wrong in the most fundamental sense, in that it disregarding entirely:

I quote from these paragraphs in Mylan’s written submissions, not to highlight my disagreement with Mylan’s basic premiss (although I do disagree with it, for the reasons I have given), but because they articulate extremely clearly the basis upon which the hearing on 16 December 2020 proceeded. All parties (and the court) were aware of the potential significance of the hearing before the Technical Board of Appeals in the EPO Proceedings. Mylan’s written submissions were making crystal clear that any order made on 16 December 2020 might have to be revisited in light of the outcome of the appeal before the Technical Board of Appeal. Indeed, Mylan’s point – anticipating the failure of Neurim’s appeal – was that any order seeking to implement the consequences of my Judgment would have to be revisited and “the parties would be required to return to court to rectify the situation”.

At the hearing, the usual matters – the injunction, permission to appeal and costs – were debated and I made a series of orders (which I have termed the 16 December 2020 Orders (Footnote: ¹⁶)). As to these:

The hearing envisaged by paragraph 2 of the 30 December 2020 Order took place remotely on 22 February 2021, and I reserved my judgment. This is that judgment.

JURISDICTION TO VARY THE 16 DECEMBER 2020 ORDERS, AND THE EXERCISE OF THAT JURISDICTION

The Claimants’ logically first submission was that the 16 December 2020 Orders were made after a final judgment – the Judgment – had been handed down and that either I did not have jurisdiction to vary those orders or – if I did – I could not properly exercise that jurisdiction, and should not do so. The Claimants’ position was that the 16 December 2020 Orders operated perfectly well on their own terms, and that the provisions in those orders (particularly the “sunset” provisions regarding the injunction) anticipated the fact that the appeal before the Technical Board of Appeal in the EPO Proceedings might fail, and that there was no need to re-visit the 16 December 2020 Orders at all.

On this basis, of course, the 30 December 2020 Order was wrongly made. I do not consider that the fact that the 30 December 2020 Order was made precludes me from considering this, Neurim’s first, point. (Footnote: ²¹) Although paragraph 1 of the 30 December 2020 Order revokes the 16 December 2020 Orders, it does so “without prejudice to any contention that (after a further hearing) the same or similar orders may be made”. Accordingly, if I conclude that the Claimants are right, and that the 16 December 2020 Orders were wrongly revoked, I shall simply re-make them pursuant to this paragraph.

Rule 40.7(1) of the Civil Procedure Rules (CPR) provides that a “judgment or order takes effect from the day when it is given or made, or such later date as the court may specify”. (Footnote: ²²) In this case, the 16 December 2020 Orders were generally made on that date, albeit that there were a number of cases where I specified a later date. In particular, the injunction would not enter into force until 9:00pm on Friday 18 December 2020 and – if the “sunset” provisions were satisfied – would never enter into force.

It is, however, clear law that an order (Footnote: ²³) can be varied by the judge at any time until the order is drawn up and perfected. (Footnote: ²⁴) However, that is a jurisdiction that cannot be exercised capriciously and represents an exceptional jurisdiction. In Re Barrell Enterprises, Russell LJ stated: (Footnote: ²⁵)

“When oral judgments have been given, either in a court of first instance or on appeal, the successful party ought, save in the most exceptional circumstances, to be able to assume that the judgment is a valid and effective one. The cases to which we were referred in which judgments in civil courts have been varied after delivery (apart from the correction of slips) were all cases in which some most unusual element was present.”

The Supreme Court in Re L (Children) appeared to consider that this stated the law too narrowly, and that the test was not exceptionality but the need to deal with cases justly. (Footnote: ²⁶) Of course, an important part of dealing with cases justly is for decisions, once made, to stand, so that they can be relied upon. It may be, therefore, that there is little difference between a test of exceptionality and the need to deal with cases justly. In Cie Noga d’Importation et d’Exportation SA v. Abacha, (Footnote: ²⁷) Rix LJ (sitting in the Commercial Court) referred to the need to balance the concern for finality against the “proper concern that courts should not be held by their own decisions in a straitjacket pending the formality of drawing up the order”. He went on:³⁰

“Provided that the formula of “exceptional circumstances” is not turned into a straitjacket of its own, and the interests of justice and its constituents as laid down in the overriding principle are held closely to mind, I do not think that the proper balance will be lost. Clearly, it cannot be in every case that a litigant should be entitled to ask the judge to think again. Therefore, on one ground or another, the case must raise considerations, in the interests of justice, which are out of the ordinary, extraordinary or exceptional. An exceptional case does not have to be uniquely special. “Strong reasons” is perhaps an acceptable alternative to “exceptional circumstances”. It will necessarily be in an exceptional case that strong reasons are shown for reconsideration.”

In their submissions to me, the Claimants did not refer me to this law regarding the Barrell jurisdiction. Instead, they relied upon the case law that relates to the variation of orders after they have been drawn and sealed. That is, of course, not this case. I will, however, consider the law in this area, first because it formed the basis of Mr Waugh, QC’s submissions to me on behalf of the Claimants, and secondly (as the Supreme Court noted in Re L (Children)) it would be curious if sealing made “all the difference” and that the law regarding the changing of orders was radically different depending on the happenstance of when the order was sealed. (Footnote: ²⁸)

CPR 3.1(7) provides that “[a] power of the court under these Rules to make an order includes a power to vary or revoke the order”. Although there is a great deal of case law relating to CPR 3.1(7) – to which I shall come – it does appear at first blush that CPR 3.1(7) is a codification of the power to vary orders, covering both the case of an unsealed order and that of a sealed order.

Turning, then, to the law in this area, the starting point is the judgment of Rix LJ in

Although the jurisdiction is widely stated, it is one that is to be exceptionally exercised, bearing in mind of course that the term “exceptional” is, indeed, a dangerous and sometimes misleading word. I use it in the sense used by Rix LJ himself in Abacha, quoted in paragraph 42 above. It is clear that, generally speaking, the jurisdiction will only be exercised where (i) there has been a mistake in drawing up or expressing the order, (ii) there has been a material change of circumstance or (iii) the facts on which the original decision was made were (innocently or otherwise) misstated in a material way.

There has been some case-law on what constitutes a material change of circumstance. In Optis v. Apple, (Footnote: ³⁰) Birss J stressed that the mere existence of a new factor that could be called “material” in the sense that it would have played a part in the balance when the order was originally made would not be sufficient to cause the order to be re-visited: (Footnote: ³¹)

“14.

The correct approach is that when assessing materiality there must be a relationship between the change in circumstances relied on and the conclusion reached, in this case, to list Trial F separately. In saying that, I am following the judgment of Jefford J in Processing Centre v. Pitney Bowes, [2012] EWHC 3903 (QB). In particular I agree with the following sentence, which is part of [25]:

“Rather, the question I should ask myself is whether the change in circumstance is such that it seems to me either that Slade J would have reached a different conclusion or that it is such that in my judgment the injunction must be varied.”

15.

I will approach this application by asking if the change relied on makes a sufficient difference to justify changing the order made. In other words would it, taking all the circumstances into account, justify rescheduling Trial F to be heard with Trial E.”

It is also important to note that there is a difference between varying an interlocutory order and varying a final order. Tibbles expressly did not consider the question of a final order, but the point was addressed in Allsopp v. Banner Jones, (Footnote: ³²) where it was clearly stated that whilst CPR 3.1(7) might on its wording extend to final orders (as clearly it does) the justification for disturbing a final order needed to be even greater than in the case of an interlocutory order:

“24.

There is, thus, a particular form of finality that attaches to final decisions at first instance. It is important to differential final decisions from interlocutory decisions, and appeals from decisions at first instance.

i)

CPR 3.1(7) lists as one of the court’s general powers of case management the power to vary or revoke a prior order made. It is very clear that this provision cannot generally be used to vary or revoke final orders (that is, orders that give rise to a res judicata estoppel) and equally clear that even interlocutory decisions will generally only be varied or revoked where either (a) there has been a

material change of circumstance since the original order was made or (b) where the facts on which the original decision was made were (innocently or otherwise) misstated: Tibbles v. SIG plc...

ii)

The proper route for reviewing a decision – particularly a final decision – is through the appeal process. It is trite, however, that appeals are not generally rehearings but reviews of the lower court...New factual evidence, not before the lower court, will generally only be admitted where “special grounds” are met. In the civil courts, these are described in Ladd v. Marshall, [1954] 1 WLR 1489. These “special grounds” are: (a) the evidence could not have been obtained with reasonable diligence for use at the trial; (b) the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; and (c) the evidence must be such as is presumably to be believed: it must be apparently credible, although it need not be incontrovertible. Family courts apply a more liberal version of this rule, but the general point holds good.

The Claimants’ point, shortly stated, was that the 16 December 2020 Orders were final (and not interlocutory) orders of this court and that the normal justifications for varying an order of the court – (i) mistake in drawing up or expressing the order, (ii) a material change of circumstance or (iii) the facts on which the original decision was made misstated in a material way (in the case of interlocutory orders) and (iv) fraud or (v) new facts fundamentally changing the complexion of the case (in the case of final orders) – simply did not exist.

I agree. However, the jurisdiction under CPR 3.1(7) and – if different – the Barrell jurisdiction in relation to unsealed orders, is a generally expressed jurisdiction, where examples of how that jurisdiction should be exercised have helpfully been framed, but where (to adopt the words of Rix LJ in Tibbles) “[t]he cases all warn against an attempt at an exhaustive definition of the circumstances in which a principled exercise of the discretion may arise”. Mylan’s position was that this was an exceptional case even amongst exceptional cases, and the fact that this sort of situation had, to the knowledge of both leading counsel, never arisen before should not, in and of itself, prevent me from re-visiting the 16 December 2020 Orders. I agree with this proposition also. I consider that: (i) the jurisdiction to vary the 16 December 2020 Orders exists (Footnote: ³³) and (ii) (more importantly) that it is a jurisdiction that, in my discretion, I should exercise on the (very special) facts of this case. My reasons are as follows:

that the Patent was invalid; and

exceptionally, that the matter would not be finally determined.

This was discussed at some length in the context of the discussions about the framing of the injunction, see the transcript at p.110 line 24 to p.115 line 9. What is clear that both parties and the Court had in mind and expressly addressed the possibility of the Patent being invalid in the light of the TBA hearing.

This ought to be the end of the matter. In fact, all that has happened is that one of the anticipated outcomes of the 16 December Order has been realised (or “crystallised”). This is the very opposite of a material change of circumstances.”

The only provision which sought to deal with all contingencies was the injunction. That was because Neurim wanted an injunction in place from as early a point in time as the court was prepared to give it. Indeed, Neurim sought an immediate injunction, which I did not grant because that would involve Mylan in taking irrevocable steps which – if the appeal in the EPO Proceedings was not successful – should not be ordered. I granted an injunction from when the outcome of the appeal would be known, and only on terms that it would come into effect if the Patent was not revoked in the EPO Proceedings. The reason, therefore, for the covering of all contingencies was that Neurim wanted the guarantee of an injunction operating from 9:00pm on Friday night, and Mylan needed the assurance that such an injunction would only bite if the Patent continued unrevoked.

All of the other provisions did not deal with the contingencies arising out of the concurrent UK and EPO Proceedings. Thus, as I have said, the orders for delivery up or destruction of Infringing Products did not contain provisions as to their expiry in the event of the Patent being revoked. (Footnote: ⁴¹) Nor were the undertakings given by Mylan so limited: they were withdrawn with the consent of Neurim and with my approval.

The need to revisit the orders for delivery up and destruction makes clear that Neurim’s contention that the 16 December 2020 Orders are

“set in stone” is unsustainable. The only reason Neurim’s submissions have any plausibility is because these orders do not exist as formal, sealed orders; and so the need for their revocation by my Order of 30 December 2020 is less obvious.

The orders that Neurim seeks to maintain – the costs order and the permission to appeal the Exclusive Licence Point – were similarly predicated on the Patent not being revoked. Again, it might have been possible to craft contingent orders, covering all future eventualities in the EPO, but there was not the time for this on 16 December 2020. It would not have been possible to agree or resolve, without extensive argument, what the appropriate costs order would be if the Patent were revoked. As I have noted, I raised the question of what the

For all these reasons, I conclude that I have the jurisdiction to re-visit the 16 December 2020 Orders and that that jurisdiction should be exercised in favour of re-visiting them.

As it is, I turn to the question of whether, and if so to what extent, the (revoked) 16 December 2020 Orders should be re-made.

VARIATION OF THE 16 DECEMBER 2020 ORDERS (1) Introduction

As I have described in paragraph 36(4) above, a considerable number of orders were made on 16 December 2020. Of these, there are a number that not even Neurim contends should be re-made. Thus, and without attempting to be comprehensive, Neurim does not seek:

The orders that Neurim seeks to maintain are:

At the 16 December 2020 hearing, I refused Mylan permission to appeal my findings in relation to validity/revocation of the Patent. Mylan does not ask me to re-visit the question of permission to appeal on this point. That was because orders and not judgments are appealed; (Footnote: ⁴²) and there is no order on the question of revocation for Mylan to appeal. The order made on 16 December 2020 has been revoked by the 30 December 2020 Order, and (as I have said) Neurim does not invite me to re-make that order.

I therefore only need to consider the two orders described in paragraph 54 above.

Permission to appeal the Exclusive Licence Point

The point at issue before me was whether Flynn was the exclusive licensee of the Patent. The point was important because it was only if Flynn was the exclusive licensee of the Patent that it had standing to bring these proceedings as one of the Claimants. (Footnote: ⁴³) I concluded that – for the reasons I gave in Section H of the Judgment – Flynn was not an exclusive licensee and that it had no standing in these proceedings. (Footnote: ⁴⁴)

As is clear from the terms of my Judgment, this was not an easy point, and I indicated early on in the hearing on 16 December 2020 that – subject to any points that Mr Vanhegan, QC might make on behalf of Mylan – I was minded to give Neurim permission to appeal on this point. Mr Vanhegan, QC did not seek to dissuade me.

My view on the difficulty of the point is unchanged. Indeed, it is very difficult to see how the outcome of the appeal before the Technical Board of Appeals could cause that view to change. The problem is that the Exclusive Licence Point presumes the existence of the Patent. By way of example, section 67(1) of the Patents Act 1977 refers to the “holder of an exclusive licence under a patent”. The Patent having been revoked ab initio, Flynn is the exclusive licensee of, quite literally, nothing.

This situation is not going to change: the Patent has been revoked once and for all, and there is going to be no (further) appeal of this outcome.

In these circumstances, it is extremely difficult to identify the order that Neurim would seek to appeal. I suppose I could give a declaration that “Flynn would not be the exclusive licensee of the Patent, had the Patent itself not been revoked”, but that exposes the essentially pointless and artificial nature of the matter that Neurim now seeks to appeal.

The question of whether permission to appeal should be granted generally turns on whether the appeal against the order would have a real prospect of success. Here, there is either no order that can be sensibly framed at all or else, if an order can sensibly be framed, the appeal has zero prospect of success because – whatever construction the appellate court gives to the licence, Flynn will never be an exclusive licensee of a patent, because there is no patent. Critically, as I have said, the point that there is no patent cannot be appealed.

It would, therefore, seem to be the case that Neurim is contending that I should give permission to appeal because there is some other compelling reason for the appeal to be heard.

Mylan helpfully referred me to the decision of Lord Neuberger MR in Hutcheson v. Popdog Limited which considered the factors that ought to be borne in mind where a party to a private dispute was seeking to appeal a matter which had been rendered academic: (Footnote: ⁴⁵)

“12.

The mere fact that a projected appeal may raise a point, or more than one point, of significance does not mean that it should be allowed to proceed where there are no longer any real issues in the proceedings as between the parties. In Gawler v. Raettig, [2007] EWCA Civ 1560, the Court of Appeal refused permission to appeal on the ground that the issue it would raise was academic as between the parties. In his judgment, Sir Anthony Clarke MR gave helpful guidance as to the correct approach in such cases. He said, at [36], that before an appeal could proceed in those circumstances, the court must be satisfied that it would be in the public interest for the projected appeal to proceed, but he added that it would be “a very rare event, especially where the rights and duties to be considered are private and not public”. Nonetheless, in the following paragraph he emphasised that all must “depend upon the facts of the particular case” and that he did not “intend to be too prescriptive”.

…

15.

Both the cases and general principle seem to suggest that, save in exceptional circumstances, three requirements have to be satisfied before an appeal, which is academic as between the parties, may (and I mean “may”) be allowed to proceed: (i) the court is satisfied that the appeal would raise a point of some general importance; (ii) the respondent to the appeal agrees to it proceeding, or is at least completely indemnified on costs and is not otherwise inappropriately prejudiced; (iii) the court is satisfied that both sides of the argument will be fully and properly ventilated.”

With this guidance in mind, I turn to the reasons the Claimants advance to justify giving permission to appeal in this case:

In short, I am entirely unpersuaded that there is any proper purpose to be served by giving permission to appeal on this point. Turning to the Popdog criteria referenced above, there is no point of general importance; and there has been no offer to hold Mylan harmless against the costs of the appeal. I do not know whether both sides of the argument would properly be ventilated in the Court of Appeal: much would depend on whether Mylan would choose to incur costs in resisting the appeal. I can see a real prospect of it not doing so, in which case the Court of Appeal would be presented with a very one-sided appeal.

If permission to appeal is to be given, this is one of those cases where permission to appeal should be sought from, and (if the Court of Appeal considers appropriate) given by, the Court of Appeal.

Costs

Introduction

The Civil Procedure Rules provide – in CPR 44.2 – as to the discretion of the court in relation to costs. The court has a general discretion, (Footnote: ⁴⁸) but if it decides to make an order about costs “the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party”. (Footnote: ⁴⁹) However, the court can make a different order. (Footnote: ⁵⁰)

In this case, both sides contended that they were the successful party. It is easy to see why. Absent the outcome of the EPO Proceedings, Neurim is self-evidently the successful party, as Mylan acknowledged at the hearing on 16 December 2020. Quite properly, Mr Vanhegan, QC there accepted that, on the basis of the Judgment (and disregarding the EPO Proceedings), Neurim was the winner, and Mylan the loser.

However, as I have described, Mylan’s written submissions on 16 December 2020 put down the clearest of markers that Mylan considered that the appropriate costs order would be different if the Patent should be found to be invalid by the Technical Board of Appeals. Mylan said in terms that it would “contend that it should be entitled to its costs of these UK proceedings”. That is exactly what Mylan has contended for in its submissions to me on this, second, consequentials hearing.

Neurim’s primary point was that I could not re-visit the costs order made on 16 December 2020. For the reasons I have given, I have rejected that contention.

In their submissions, the parties contended for a costs order in their favour for three distinct (and fairly broad) reasons:

Who is the “winner”?

The courts have long noted that where a party is a successful party, that fact is an important one to which proper weight must be attached when making any costs order. Costs should, all other things being equal, “follow the event”.

That said, it is often difficult to identify the “successful” party. This is often a contentious matter, and that is not surprising given the multifarious circumstances in which civil proceedings may arise, and the complexity of this litigation. In Roache v. Newsgroup Newspapers Limited, (Footnote: ⁵¹) Sir Thomas Bingham MR said: “The judge must look closely at the facts of the particular case before him and ask: who, as a matter of substance and reality has won?” “Success” is not a not technical term – it is the “result in real life”, to be determined “with the exercise of common sense”. (Footnote: ⁵²)

As I have noted, but for the outcome of the EPO Proceedings, it was uncontroversial that Neurim was the winner, and Mylan the loser. Mr Waugh, QC, for Neurim, contended that the adverse outcome (for Neurim) of the EPO Proceedings, and the fact that the Patent had – by reason only of the withdrawal of Neurim’s appeal before the Technical Board of Appeal, and not by reason of anything done in this jurisdiction, where Neurim had succeeded – been revoked ab initio could not and should not alter this conclusion as to who the winner was. The “UK proceedings are separate and distinct from those at the EPO”, according to Neurim. That, of course, is a contention previously made by Neurim as an argument for not revisiting the 16 December 2020 Orders at all. For the reasons I have given, I have rejected that contention and – as it seems to me – the contention is untenable in the context of costs. As I noted previously, of course, the UK Proceedings and the EPO Proceedings are separate and distinct, but that does not mean to say that they do not inter-relate and are not inter-connected. They obviously do and are.

So, I do not consider that it can rightly be said that the “twin-tracks” of revocation in UK Proceedings and revocation in EPO Proceedings can be treated as hermetically sealed, one from the other. I consider that the effect of the EPO Proceedings on the outcome of the UK Proceedings is a relevant factor that I must bear in mind.

Viewing the matter from the point of view of outcome, it is obvious that Mylan is the winner and Neurim the loser. Referring to the issues arising on the pleadings, Neurim contended that the Patent was valid and infringed; Mylan contended that the Patent was invalid, and should be revoked. Viewing the matter through the prism of the pleadings, Mylan is clearly and unequivocally the winner. The oddity – if it can be called that – is that this outcome has been achieved despite and not because of the Judgment in the UK Proceedings, which (as I have said) went more or less entirely Neurim’s way.

I conclude that, given the interaction that exists between the EPO Proceedings and the UK Proceedings, which is fully taken into account when considering whether a stay of the UK Proceedings should be granted, (Footnote: ⁵³) the “result in real life” in this case is to be determined by comparing the remedies and relief sought by the parties to the UK Proceedings with what they have actually obtained. As I have said, viewed through this prism, there is only one winner: although Neurim contended that the Patent was valid and infringed, the recitals to the 30 December 2020 Order (Footnote: ⁵⁴) make clear that this outcome has not been achieved. By contrast, Mylan’s contention that the Patent should be revoked

Accordingly, at this stage of the analysis, I conclude that Mylan is – and is very clearly – the successful party. However, I consider that this is, in the circumstances of the present case, a “soft” and not a “hard” conclusion, and that I need to consider most carefully whether – and if so to what extent – a different costs order ought to be made to reflect the extremely unusual circumstances of this case. In short, I treat this as the costs order that I should make unless it is displaced by other factors (to which I shall come).

I should say that I do not consider that the usual alternative of an issues-based costs order to be appropriate here. The fact is that the issues all go one way or they all go the other way depending on whether one looks at the outcome as stated in the Judgment or the outcome as it will appear in the new consequential order that I will, in due course, make. In other words, an issues-based costs order is not, in my judgment, a particularly helpful tool in the present case, extremely useful though it normally is.

Nor do I consider that it would be appropriate to make an order along the lines of “everyone’s a winner, and everyone’s a loser”. Tempting though it is to make no order as to costs, I consider that that would be inconsistent with my provisional finding that Mylan is the winner. What I must do is consider whether there are other specific factors in play that can properly justify a different costs order.

The significance of the EPO Proceedings

Obviously, I have attached and do attach considerable significance to the outcome of the appeal before the Technical Board of Appeals in the EPO. In essence, it is the outcome of the appeal that has rendered Mylan the successful party and Neurim the unsuccessful party.

Both parties sought to persuade me that the conduct of the EPO Proceedings and, in particular, the events on 17 and 18 December 2020, which resulted in Neurim withdrawing its own appeal, were in themselves significant in terms of their effect on my decision as to the costs in the UK Proceedings. Thus:

For all these reasons, there is nothing in the EPO Proceedings, nor in the effect of points taken in the EPO Proceedings on hypothetical appeals in this jurisdiction, that assists me on the question of costs.

Conduct of these proceedings

This was hard-fought patent litigation. Each side suggested that the other had spurned one or more opportunities of saving costs by (for instance) avoiding, or rendering unnecessary, the trial before me in the UK Proceedings. Thus – and I raise these purely by way of example – Neurim contended that Mylan’s failure to “clear the way” by an early revocation action (instead of merely opposing the Patent in the EPO) would have rendered the trial (at least in the form it took) unnecessary. For what it is worth, that is probably right: on this basis, there would have been a far earlier trial, with an outcome (at least in the UK) well-before the time my Judgment was handed down.

To take another example, Neurim suggested that if Mylan had – at some point, but even as late as June/July 2020, when the hearing before the Technical Board of Appeal was expedited – undertaken not to import or sell Infringing Product, the trial in the UK Proceedings might have been avoided or at least adjourned pending the outcome in the EPO Proceedings. Again, that is probably right: had Mylan offered such an undertaking, and the parties jointly approached the court with an agreement to adjourn pending the outcome of the appeal to the Technical Board of Appeal, then an adjournment of the UK

I am unsure whether such “what if” questions are particularly helpful unless they evidence, clearly and distinctly, conduct that goes beyond hard-fought litigation and strays into what might be called the “blameworthy” or, perhaps, the “reprehensible”. (Footnote: ⁵⁶) The cases use different words and the test might be:

I am satisfied – subject to one point, which I will come to – that there is nothing in the conduct of either party – and, specifically, in the conduct of Mylan, which is presumptively the “successful party” – to cause me to alter the incidence of costs that I have provisionally concluded should fall in favour of Mylan and against Neurim. In reaching this conclusion, I remind myself that although Neurim repeatedly described

That is subject to this one, final, point. As I have found, (Footnote: ⁵⁷) both Neurim and Mylan knew, in early June 2020, that the hearing before the Technical Board of Appeals had been expedited and was due to be heard on 17 and 18 December 2020. Had the parties jointly sought an adjournment, I suspect it would have been granted. As it is, I infer that one or both of the parties did not want an adjournment, and one can understand why: Mylan, for its part, would have wanted its two bites of the revocation cherry; and Neurim, having failed to obtain an interim injunction, would have wanted a final injunction in place as soon as possible in the event of it succeeding in both the UK and the EPO Proceedings. The quickest way of achieving that was by way of maintaining the expedited trial in the UK Proceedings, whilst pressing on with the EPO Proceedings.

Without in any way wishing to criticise or be prescriptive, whilst the parties may very well have had their own reasons for wanting the EPO and the UK Proceedings to proceed in parallel, their conduct (in not referring the matter to the court) deprived the court of considering whether a stay of the UK Proceedings was or was not appropriate. In effect, the parties prevented the court from re-visiting, or considering re-visiting, Nugee J’s order expediting the trial. Nugee J’s order would have been premised on an appeal in the EPO Proceedings in the first quarter of 2022: an appeal in the EPO actually listed for hearing and determination on 17 and 18 December 2020 is a very different matter.

I remind myself of Floyd LJ’s twelfth proposition or guidance in IPCom: in weighing the balance of staying or not staying English proceedings, it is material to take account of costs liable to be wasted. In this case, the picture changed dramatically between March 2020 (when expedition was ordered by Nugee J) and June 2020 (when, in my judgment, there was a material change, such that a party would have been justified in bringing the matter back before the court for re-consideration). As I see it, the following possibilities existed as at June/July 2020:

I should make clear that I am in no way singling out Neurim for particular blame. Had the outcome of the interaction between the EPO Proceedings and the UK Proceedings favoured Neurim, then I would have considered that a provisional costs order in the UK Proceedings ought to favour Neurim, and I would have considered Mylan’s failure to raise the matter of an adjournment in June/July 2020 in exactly the same way as I have considered Neurim’s.

An interesting question

At paragraph 50(6) above, I raised, but did not answer, the difficult hypothetical question of what might have happened had the trial of the UK Proceedings gone ahead, with the outcome those proceedings had (as per the Judgment), but with the hearing before the Technical Board of Appeal not taking place until the first quarter of 2022. In those circumstances, the 16 December 2020 Orders would have been formalised and an injunction enjoining Mylan against infringement would have been operating against Mylan for around 14 months. For that period of time, Mylan would have been prevented (and, given the outcome of the EPO Proceedings I am hypothetising, which is the actual outcome only later, wrongly prevented) from bringing the Infringing Product (now clearly not an infringing product) to market in the UK. Furthermore, Mylan would, in accordance with those orders, have delivered up or destroyed Infringing Product; and Mylan would have paid substantially all of the costs of the UK Proceedings.

It is an open question what the legal position is, in such circumstances. Goff & Jones would appear to suggest that this would be a case of the recovery of benefits by Mylan conferred on Neurim under an order (namely the 16 December 2020 Orders) subsequently reversed or set aside by reason of the outcome of the EPO Proceedings. If so, then one of the benefits conferred would or might be any costs that Mylan in fact paid to Neurim. (Footnote: ⁵⁸)

If that is right, then that outcome would confirm the costs order that I am minded to make in Mylan’s favour. However, I write these paragraphs to make clear that I did not hear full argument on this point (although the point was touched upon in the course of argument) and I am emphatically not deciding it. I have placed no weight on the fact that – if the law is as I have suggested it might be – it confirms the conclusion I have reached on costs. To the contrary, even if there were no restitutionary (or other) remedy enabling Mylan to recover benefits conferred in obedience to the 16 December 2020 Order, I consider the outcome that I have reached, both on the question of costs and the question of permission to appeal, to be the correct one. In short, I have reached my conclusions without this point being taken into account, either way.

DISPOSITION

For reasons I have given: