High Court: Injunction restraining the sale of generic drug refused on the basis that taxpayer would save €8m

About this case:

• Citation:
  [2022] IEHC 592
• Judgment:
  External link
• Court:
  High Court
• Judge:
  Mr Justice Michael Twomey

The drug was used to treat multiple sclerosis and was the subject of a patent which expired in 2015, but which expiration was only confirmed on appeal in 2022.

Delivering judgment in the case, Mr Justice Michael Twomey held that the court was entitled to weigh the cost to the taxpayer when considering the balance of convenience test for granting an injunction.

The court also determined that the defendant’s case that the original patent was invalid was strong and that the plaintiff company had an unlawful monopoly in the Irish market for seven years.

Background

The plaintiff was Biogen International GmbH which held a patent for a drug (Tecfidera) that was used to treat MS. The second defendant, Neuraxpharm Ireland Limited, sought to launch a competing generic drug in the Irish market. The advantage of generic drugs is that they are cheaper but have the same medicinal effects.

Biogen issued proceedings against Neuraxpharm, claiming that the generic drug infringed an underlying patent for Tecfidera. The patent was known as the 873 Patent which was based on a parent patent knows as the 537 Patent.

The 537 Patent came into effect in May 2013 which authorised the patent for Tecfidera. However, in June 2016, the 537 Patent was revoked by the Opposition Division of the European Patents Office on the basis that the 537 Patent did not involve any inventive step.

The revocation was appealed by Biogen and the appeal was only determined in January 2022. There, the Technical Board of Appeal affirmed the revocation of the parent patent. The decision of the Board of Appeal was final.

However, in July 2022, Biogen was granted the 873 Patent, which was based on the 537 Patent, by the Examining Division of the EPO. The application was a divisional application and the 873 Patent was referred to as a Divisional Patent. The Divisional Patent would expire in February 2028, granting Biogen a monopoly over the sale of Tecfidera.

Neuraxpharm intended to sell its generic drug in the Irish market from August 2022. However, just before the drug was sold on the market, Biogen obtained an interlocutory injunction from the High Court restraining the sale. Neuraxpharm was not represented at the interim injunction hearing due to the lateness of Biogen’s application and the tight timeframes for service which had been imposed by the listing judge. These factors meant that the company was unaware of the hearing until after it had occurred.

The trial judge in the first interlocutory injunction hearing granted the order but gave Neuraxpharm liberty to apply since they had not attended the hearing. Neuraxpharm duly sought to discharge the interlocutory injunction before the High Court, while Biogen sought to have the injunction continue.

High Court

Having considered the reasons for Neuraxpharm not appearing at the first injunction hearing, the court was satisfied to discharge the original interlocutory injunction. There was no reason why Neuraxpharm would not have attended if they knew about the proceedings and there were very tight timeframes provided by the listing judge, the court held.

As such, the court turned to the substantive issue of whether to grant the interlocutory injunction in the face of opposition from Neuraxpharm. The court outlined the well-established principles contained in Merck Sharpe and Dohme v. Clonmel Healthcare [2019] IESC 65 regarding whether a permanent injunction might be granted in a successful trial for the plaintiff, whether there was a fair issue to be tried and whether the balance of justice favoured the grant of the injunction. As part of this exercise, the court noted the importance of the adequacy of damages for either party.

No issue arose in relation to the first two aspects of the injunction test and so the court turned to consider the balance of justice. Considering the arguments relating to the adequacy of damages, the court pointed out that both companies were large international commercial entities who would definitely be in a position to fulfil a damages award at trial. Additionally, the court noted that it should be “robustly sceptical” of any claim that damages were not an adequate remedy.

Since damages were not dispositive of the balance of justice, the court considered other issues in the case. The court noted that there were strong arguments that Tecfidera with the subject of a legal monopoly (which favoured the grant of the injunction) but also that the Divisional Patent was invalid due to the revocation of the parent patent.

The court determined that the matter was finely balanced, but said that it would refuse the injunction application. The court emphasised that Biogen had an unlawful monopoly in Tecfidera for seven years because it had been determined in 2016 that the 537 Patent was invalid. The court noted that any injustice to Biogen for ending the monopoly would be lessened by the seven year windfall of an unlawful monopoly.

Further, the court noted that the case for the invalidity of the Divisional Patent was strong because the parent patent was very similar to the Divisional Patent. However, it was also noted that the Divisional Patent was presumed to be valid (Case C-44/21 Phoenix Contact GmbH & Co. KG v. Harting Deutschland GmbH & Co. KG).

The court did not place significance weight on the plaintiff’s claim that Neuraxpharm failed to “clear the way” for the generic drug by commencing invalidity proceedings in Ireland because the defendant had already obtained determinations of invalidity from the Opposition Division and the Technical Board of Appeals.

Further, the court observed that in France and Germany, injunction applications brought by Biogen had been refused, although an injunction was granted in Sweden. It was also noted that Biogen was not relying on the Divisional Patent in the United Kingdom to defend its monopoly until 2028, rather than the current expiration date in 2024.

Finally, the court noted that there was a public interest element to the case, since the drugs were to be used by the HSE to treat MS patients. As such, the financial interests of the taxpayer were involved in the proceedings. Although not determinative in the case, it was clearly relevant to determining the balance of justice, the court said.

Even if the court was wrong to refuse the injunction, it was reasoned that the taxpayer would save €8 million in the 18-month period prior to the hearing of the trial. Since there was already an injustice committed against the taxpayer for the unlawful monopoly which existed for seven years, there was no injustice for Biogen in the refusal of the injunction.

Conclusion

The court emphasised that the benefit to the taxpayer was not decisive in the case and that it was the combination of all the cited reasons that the injunction was refused.

Biogen MA Incorporated and Anor. v. Laboratorios Lesvi SL and Anor. [2022] IEHC 592