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Quia timet, de minimis and Novartis v Hospira: Mr Justice Arnold speeds through Napp v Dr Reddy pain dispute
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| The IPKat is ready for a busy end of term |
Talented Kat friend Amy Crouch (Simmons & Simmons) brings readers up to speed:
"First Judgment – No Threat to Infringe
Background
Napp commenced infringement proceedings against both Sandoz and Dr Reddy’s in February 2016 for threatening to infringe its patent by preparing to launch generic buprenorphine transdermal patches. Buprenorphine is an opioid indicated for the treatment of non-malignant pain, Napp’s buprenorphine transdermal patch, “BuTrans” is its most important product. At the same time as commencing its actions, Napp applied for a preliminary injunction against Sandoz who had already obtained a marketing authorisation for its product. As a result, Sandoz provided undertakings not to launch pending the first instance decision. Arnold J ordered an expedited trial for early June 2016. Validity was not challenged by either Defendant.
The Patent
The invention lay in the use of certain penetration-enhancing excipients which are solid at room temperature and were therefore thought to be of limited use in assisting diffusion out of the matrix into the skin. The patent disclosed that on melting and cooling, these excipients formed so called “supercooled melts”, which have a melting point above room temperature, but remain liquid after cooling to room temperature.
It was only necessary to consider claim 1:
“A buprenorphine transdermal delivery device comprising a polymer matrix layer containing buprenorphine or a pharmaceutically acceptable salt thereof, for use in treating pain in humans for a dosing interval of at least 7 days, wherein the transdermal delivery device comprises 10 %-wt buprenorphine base, 10 to 15 %-wt levulinic acid, about 10 %-wt oleyloleate, 55 to 70 %-wt polyacrylate, and 0 to 10 %-wt polyvinylpyrrolidone.”
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| buprenorphine |
The main issues on construction were (i) whether the percentage values in the claim related to input or output values and (ii) the correct interpretation of the numerical ranges.
Arnold J preferred the Defendants’ arguments on both issues, finding that the skilled person would have understood the claim to mean (i) output values and (ii) values to be expressed in terms of whole numbers applying the conventional rounding approach e.g. to extend “10 %-wt” to ≥9.5 to < 10 .5 % wt. The word "about" should be taken to mean "a small degree of permitted imprecision over and above that implied by the usual rounding convention", although in Arnold J's view the inclusion of this word mean that the claim lacked clarity and he would have been tempted to find such a claim insufficient.
Infringement - The de minimis principle in quia timet actions
The de minimis principle has been considered in previous patent authorities (Hoechst v BP [1998], Monsanto v Cargill [2007], Napp v Ratiopharm [2009], Lundbeck v Norpharma [2011]). In the present case Arnold J commented that the court was forced, as a matter of practical reality, to draw a line somewhere and referred to a hypothetical scenario in which only 0.01% of products fall within a claim as “precisely the kind of situation covered by the de minimis principle”.
In relation to quia timet actions, it was clear that if what the defendant threatens to do would only involve infringement on a de minimis scale, then that threat does not justify the commencement of proceedings by the patentee (whether to seek an injunction or a financial remedy). However, if there is a clear threat to do acts which fall within the claim sufficiently often that they cannot be discounted as de minimis then that is sufficient to justify bringing quia timet proceedings. In this case (i.e. where any infringement would be on a very small scale – see below), he concluded that even if the level of infringement cannot be discounted as de minimis, an injunction would be “both disproportionate and a barrier to legitimate trade”.
Both Defendants had served confidential PPDs which provided results of testing samples of their products. Uncertainty stemmed from the fact that the manufacturing processes for transdermal products are inherently variable and for this reason, it is not known how representative the tested samples are of future products.
Statistical evidence was put forward by experts by all parties and evaluated by Arnold J on the basis of his findings on construction. In relation to Sandoz’s product, even on Napp’s evidence, both of their figures of “1 in 69 million patches” (which was based on a confidence interval of 50%, which was accepted by Arnold J to be the correct interval for the balance of probabilities standard of proof) and “1 in 25,600 patches” (based on Napp’s argued confidence interval of 95%) would be de minimis and accordingly there was no threat by Sandoz to infringe.
Dr Reddy’s had provided a less detailed PPD but stated that to avoid infringement they would implement a testing regime based on a statistical protocol devised by its expert which would incorporate the Court’s findings as to what proportion of infringing patches amounts to de minimis. The protocol to be used by Dr Reddy’s was dependent upon the Court’s construction of the claims and required a finding of (i) the correct confidence interval and (ii) the threshold for the de minimis principle, which Arnold J found to be no more than 1 in 10,000 products falling within the claim. Arnold J concluded that Dr Reddy’s testing regime was sufficient to ensure its products would not fall within the claim other than to a de minimis extent. Accordingly, there was no threat by Dr Reddy’s to infringe either.
Second Judgment – Injunction Pending Appeal Granted
The findings of no threat of infringement were dependent upon the findings on construction and permission to appeal was granted on construction alone.
Napp applied for an injunction pending the Court of Appeal decision. Arnold J considered the criteria set down by the Court of Appeal in Novartis v Hospira [2013], but noted that it was of concern that Lord Hoffman’s judgment in the Privy Council case National Commercial Bank Jamaica v Olint [2009] had not been cited. Whilst the Novartis guidelines state that “it will not usually be useful to attempt to form a view” on the prospects of the appeal, Lord Hoffman had stressed in Olint the need to consider “the relative strength of the parties’ cases” on appeal. Whilst this factor troubled Arnold J, and he considered Napp to have a weak case on appeal, based on Novartis this factor could not outweigh others.
The Novartis factors that persuaded Arnold J to grant an injunction in this case where:
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| The test for a preliminary injunction in life sciences... |
Dr Reddy’s solicitors had made enquiries to the effect that the Court of Appeal could, if it granted expedition, hear a one day appeal before the end of July 2016. On this basis, Arnold J decided to only grant an injunction until 16 August 2016. It is of note that, if such an expedited appeal does happen within this timeframe, then these proceedings will have progressed from Claim Form to Court of Appeal judgment in only 6 months!
ii) Balance of hardship to each party.
Damages would not be an adequate remedy for Napp in respect of either Sandoz or Dr Reddy’s. This is a market where a price war is inevitable which will lead to significant price depression for Napp. Further, Sandoz had already effectively lost its first mover advantage due to the undertakings it had provided (in relation to which the correct remedy was a claim on the cross undertaking in damages).
Overall granting the injunction was the “lesser of two evils” and in such circumstances it is prudent to preserve the status quo. Echoing the Court of Appeal’s additional comments in Novartis, Arnold J provided a further warning to generic manufacturers by including in his reasoning the fact that the
“Defendants could have avoided the problem if they had cleared the path for their products”.
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Tag : claim construction, de minimis, dr reddy's, Mr Justice Arnold, napp, patent infringement, quia timet, sandoz, UK patents court,
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