England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		22/07/2011

MR. JUSTICE FLOYD :

1. This is an application by the lead defendant in a patent action, Teva UK Limited, for an expedited trial. The action relates to the drug atorvastatin, which is protected by SPC GB 97011. The drug atorvastatin is marketed by Warner-Lambert Company LLC (the claimant) as Lipitor. Lipitor is one of the world's most successful drugs. In the last year for which figures are given in the evidence, the turnover in Lipitor exceeded £350 million.
2. When the action was started, on 21st June 2011, the SPC was due to expire later that year but a paediatric extension has now been granted so that the SPC will now expire in May 2012.
3. Teva launched generic atorvastatin, without notice to Warner-Lambert, on 20th June 2011. Their commercial reason for doing so is that the alternative of giving the patentee notice and seeking revocation of the patent in advance of the launch prevents Teva from gaining a marketing advantage over other generic companies. It is reasonably well established from this and other cases that the price of a drug protected by a patent can be sustained at or near the monopoly price when a first generic company enters the market, but after this period of so-called duopoly there is a more rapid fall in price. That means that participation in the market becomes much less profitable.
4. Teva's strategy for getting on the market in advance of its competitors has thus far proved to be unsuccessful. I granted a without notice injunction on 21st June to restrain further sales. That injunction has now been continued to trial by consent. The question of a speedy trial was not addressed in the evidence on the application. It was raised once the application for the interim injunction had been compromised.
5. Teva, therefore, seek a trial of this action in November 2011. Warner-Lambert are not in principle opposed to an order for a speedy trial, provided that they are given adequate time to prepare their case properly without having to compromise. They would be content if the trial were in February 2012, a date which, as they point out, itself involves a degree of expedition.
6. Teva's case that an expedited trial is justified is explained by Mr. Cohen, their solicitor, in his witness statement.. In paragraph 2 and 3, he says:

"The claimant (Warner-Lambert) agrees that there should be a speedy trial (see A & O's letter of 10th July) and indeed it is well established that a speedy trial should follow where an interim injunction is granted. The only issue here is how speedy the trial should be."

7. Whilst I accept that the existence of an injunction is a factor to be taken into account in setting a timetable for trial, I am very far from accepting that wherever there is an injunction in an intellectual property case, a speedy trial should follow as a matter of course.
8. In paragraph 4 Mr. Cohen says:

"The SPC for EP 633 expires on 6 May 2012. Therefore, if the trial is not until February 2012, it is possible that judgment will not be handed down until April or even later, thus coming extremely close to the date of SPC expiry. If judgment was not handed down until close to or after expiry, the result of this would be that all the generic companies would launch at much the same time and the benefit of invalidating the patent would have been greatly diminished. Bearing in mind that the defendants are the subject of an interim injunction, it seems only fair that a trial date is ordered for as early a date as possible, so long as the parties are not prejudiced in any way."

9. The corollary of what Mr. Cohen says in that paragraph is that if judgment is handed down invalidating the patent after a speedy trial in November 2011, as opposed to February 2012, all the generic companies will not launch at the same time, and that Teva will still gain a head start over its competitors.
10. Mr. Meade QC, for Warner-Lambert, points out that this does not follow at all. The evidence for the interim injunction showed that Teva's estimate was that a generic company could be ready to launch within a five-month period from a standing start, or considerably less if all that was involved was diverting product from elsewhere. That means that from June 2011, when Teva signalled its intention to launch an attack on the validity of the patent, one could expect other generic companies to be ready by November 2011. All the more, says Mr. Meade, given that the SPC was originally due to expire in November 2011, before the paediatric extension was granted. He relies on the evidence of a Mr. Tudor of Teva, given on the interim application, which confirms these periods, and also that generic companies would have had tentative plans to launch in November 2011.
11. Mr. Watson QC, submits, for Teva that there is a contrast between the expiry of the SPC when there is a free for all and a first instance order revoking the patent. Not every generic company would be prepared to launch before the Court of Appeal decision had been obtained. He therefore puts a case of urgency on the basis that there is a chance, albeit not a guarantee, that if the patent is revoked in November, then his client will enjoy a period of duopoly.
12. The principles upon which I should act are conveniently summarised by Warren J in CPC Group Limited and Qatari Diar Real Estate Investment Company [2009] EWHC, 3204 (Ch) as follows:

"The Law




83. Before expressing my conclusion on whether there should be an expedited trial, I should briefly mention the law.

84. In Wembley National Stadium v Wembley (unreported, CA, 28 November 2000) Jonathan Parker LJ (with whom the other Lords Justice agreed) confirmed at paragraph 54 that 'the issue whether to grant expedition, and if so how much and on what terms, was a matter essentially for the discretion of the judge'. That case was a fairly clear case of urgency, concerning the rectification of a lease which if not rectified prevented work commencing on the new stadium for 2 years. The consequences of delay could have been disastrous and the trial would result in the final resolution of the dispute between the parties.

85. Like any discretion, that discretion must of course be exercised judicially. It is 'partly a question of principle and partly a question of practice': Daltel v Makki ….Lloyd J at paragraph 11, a case where an expedited trial was not, in fact, ordered.

86. The general principle under the CPR is that cases are to be brought to court as soon as reasonably possible, consistently, of course, with the overriding objective: See Daltel at paragraph 12; to similar effect, see also Law Debenture Trust v Elektrim , Morgan J at paragraph 11.

87. The Court has a wider responsibility. It must also take into account 'the requirements of other litigants': See Elektrim at paragraph 11 and Daltel at paragraph 11. This is because

'Any order for expedition involves a disturbance of the normal procedure of a case to be got to trial. It involves giving preference to one case in the allocation of court time over other cases; it also involves requiring the lawyers on both sides to give preference to the tasks of preparation of a trial for that case as over tasks of a similar nature in relation to the affairs of other clients.'

This is an aspect which is of even more weight in relation to appeals to the Court of Appeal: See the remarks of Sir Thomas Bingham MR in Unilever plc v Chefaro Ltd. (Practice Note) [1995] 1 WLR 243, recognising that it was necessary to impose 'a high threshold which a party must cross before its application will be granted' because of the potential disruption and unfairness to other litigants caused by postponing their hearing until after the hearing in a matter which was commenced later.

88. The applicant must therefore satisfy the Court that there is an objective urgency to deciding the claim: See Daltel at paragraph 13.

89. The procedural history in any case is a relevant factor to take into account. Delay in seeking an order is a factor which may count against an applicant although it is not necessarily conclusive. Urgency, however, is a question for the court. The respondent's attitude is not really of importance. It is only if he can show some real prejudice to him if a trial is expedited that he has a part to play. Morgan J put it this way in Elektrim at paragraph 9:

'….he has no particular locus to oppose expedition and to draw my attention to and emphasise the claimant's earlier different attitude to the timing of these proceedings.'

90. That is a point which has some resonance in the present case since Mr Smouha has drawn my attention to what he says is the changing attitude of CPC and its attitude to urgency. That is not to say that a respondent has no standing to make submissions, as Mr Smouha has helpfully done, about why the nature of the dispute makes expedition inappropriate or unnecessary.

91. It should be noted that the first question is whether urgency is justified at all. In this context, urgency does not necessarily mean a need for the case to be heard in the immediate future. A case may be urgent in the sense that an answer is needed to a question before a date some weeks or even months away, but at a time before the hearing date would, in the ordinary course of proceedings, arrive. That sort of urgency is enough to justify expedition, although the actual timetable – the extent of expedition – can reflect the need for a decision only by that date; it is not necessary to impose a timetable of the most stringent sort. As it is put in Elektrim at paragraph 18, the court should resolve timetabling 'in a way that is the least unjust to all the interests concerned'."

13. This is not, in my judgment, a case where one can say that it is absolutely essential that any party have a judgment by a particular date. An early trial may well not achieve that which Teva seek to achieve and they might find themselves launching simultaneously with their competitors in any event. Nevertheless, Teva have a reasonable desire to release themselves from the injunction as soon as reasonably practical and a chance of maintaining a period of duopoly. From their perspective, there is a degree of urgency which justifies bringing the trial on fairly promptly.
14. Warner-Lambert point out three areas where they contend there is a real risk of prejudice to them if a trial is held in November. Before turning to those, I should say something about the issues. The first of these is an allegation of obviousness of the basic patent over a recent and more general Warner-Lambert patent. The difference between that patent disclosure and the compounds protected by the SPC lies principally, it would appear, in the substitution of one of the groups with an amide group. The second issue concerns an allegation that the basic patent does not sufficiently describe the resolution of the compounds claimed into their separate enantiomers. It is suggested that, to the extent that the claim which is in more general terms covers the individual enantiomer, atorvastatin, then the patent does not sufficiently describe how to arrive at it. Thirdly, there is a legal argument over the validity of the grant of the SPC itself, following on from the opinion of the Advocate General in the Georgetown University and Medeva cases.
15. By the standards of patent actions, these issues do not appear to me to be unduly complex. Teva has already served the bulk of its evidence on which it intends to rely on the first two of the issues. The third issue is a legal one and does not require anything other than an exposition of the basic facts.
16. Warner-Lambert say that they intend to call expert evidence of their own, as one might expect. They point out that they need to find an expert in each field who is suitably qualified, who was in the field at the time, who was available for the trial, would make a satisfactory witness and who is not conflicted by other engagements. They have commenced this exercise but have not completed it. A November trial would, submits Mr. Meade, involve a real risk that they would be forced to go with a witness who was not the best.
17. The second area relied on is disclosure. The disclosure exercise has already taken place in connection with litigation in the United States. Ms. Dagg, for Warner-Lambert, explains that the documents in question will need to be processed for the purposes of the English litigation and this will take some three months, rendering a November trial impractical. Mr. Watson submitted that this period was longer than was necessary and could be shortened. He said a route map already exists from the United States litigation. Finally, he said that, if I thought that disclosure was effectively the straw which prevented a November trial, then he had instructions from his clients either to waive disclosure altogether or seek only disclosure confined to specific documents.
18. Much has been said about the value of documentary disclosure in patent actions. In rare cases, it can give a valuable insight into contemporary thinking on obviousness or insufficiency. More often it results in a disproportionate burden and expense, with little to show for it by way of benefit.
19. The third area relied on is that of experiments. The only specific experiments mentioned were those already relied on before the European Patent Office. Mr. Watson said his clients would not object to reliance on those experiments, as he submitted they were irrelevant. Neither side said they would need to do other experiments. Experiments can have a significant effect on timetabling but unless, and until, any side claim there is a need to do experiments to prove a fact, which the other side is not prepared to admit, I do not propose to allow the possibility of experiments to influence timetabling.
20. As the passages I have cited from CTC make clear, this is a discretionary exercise. I do not think that justice could be done to Warner-Lambert with a November trial if there is to be standard disclosure. The exercise described by Ms. Dagg cannot be foreshortened simply by throwing additional manpower at the task. Mr. Watson's intermediate offer of specific documents was not really sufficiently defined for me to consider its impact or for Mr. Meade to deal with it, but if I were to accept his clients' offer of waiver of disclosure altogether, something which Mr. Meade rather trailed as a normal quid pro quo of a speedy trial, then the problem over disclosure goes away. That would also allow the workforce at the defendants' solicitors to concentrate on the preparation of the expert evidence. I cannot believe that the time from now until November does not provide enough time for that to be done, given that they already have the bulk of the evidence to be relied on by Teva. I therefore consider that a trial in November could be achieved without prejudice to Warner-Lambert if there is no disclosure.
21. There was some discussion about the legal argument on the validity on the SPC itself. The CJEU has not yet given judgment, although it is hoped that it would have done so by January 2012. Warner-Lambert pray that factor in aid in favour of a February trial. It is, of course, true that the court should arrange matters so far as possible that all matters are dealt with at a single hearing, but in the present case I do not regard it as a strong factor against a speedy trial. The point may not arise at all if the patent is otherwise invalid, as Teva contend. If it is held valid over the obviousness and insufficiency attacks, the court can still go on to decide the legal point. If it does not feel able to do so, it can defer giving final judgment until judgment of the CJEU is received and can continue the interim injunction in the meantime.
22. There remains the question of whether that degree of expedition is justified by the urgency of the case. It is here that I have to consider the interests of other court users. I am just about persuaded, in the circumstances of this case, that the existence of the interim injunction and the fact that the defendants will continue to suffer a degree of uncompensatable harm for as long as it runs, and the potential loss to the defendant of a period of duopoly, point in favour of that degree of expedition.
23. It is true that, in a way, the defendants have brought this situation upon themselves, but that is not a reason, in itself, at this stage, for visiting injustice on them if it turns out that the patent is indeed invalid. I propose, therefore, to accept Mr. Watson's offer to waive disclosure altogether and order an expedited trial to come on in the second half of November 2011. In the event of a change of circumstances, all parties have permission to apply.

MR. WATSON: My Lord, just early on, when you come to check the judgment, you said that the SPC was due to expire in June. It is November. I think you got it right later on. It was very early on in your judgment. I do not think it alters in any way its flow.

MR. JUSTICE FLOYD: Yes, you are quite right. It was the extension that was granted in June.

MR. WATSON: Yes. My Lord, as far as the directions are concerned, obviously disclosure goes and inspection. I do not know if my learned friend, Mr. Delaney, has any other problems with the directions?

MR. DELANEY: My Lord, there was a draft order at the back of our skeleton. Perhaps we can work from that.

MR. JUSTICE FLOYD: I have a loose one here. Is that the one, with bits of red in it?

MR. DELANEY: Yes. The only other suggestion, in light of the November trial date, was for independent validity. We would suggest October for that. That is per paragraph 1.

MR. JUSTICE FLOYD: So I am working from this marked-up order. Do we revert to the uncrossed out?

MR. DELANEY: The uncrossed out is what had been proposed. The one in mark-up is what we have been suggesting, in the event that there was to be a February trial, but none the less ----

MR. JUSTICE FLOYD: So paragraph 1? MR. DELANEY: Paragraph 1, we would still like in October. Paragraph 2 can come out. MR. JUSTICE FLOYD: The list of documents goes out altogether. MR. DELANEY: Paragraph 3 can come out, as can paragraphs 4-6. MR. JUSTICE FLOYD: I think the order should say that there are no experiments without leave.

MR. DELANEY: Indeed.

MR. JUSTICE FLOYD: And perhaps it should clarify the EPO experiments, in so far as they are deemed to be experiments. So then paragraph 7 renumbered would be October; is that right?

MR. DELANEY: Yes. Regarding paragraphs 8-11, I do not know if my learned friend has any comments on that. That was our suggestion just to clarify that, amongst them, the defendants could call two experts, that the reports that would be served would stand as their evidence-in-chief and that they have liberty to supplement those.

MR. JUSTICE FLOYD: At the moment, paragraph 10 says 3rd December and paragraph 8 should be shortly after the trial.

MR. DELANEY: Paragraph 10 should be in the same form as paragraph 7, which is now October. Regarding complexity, we suggest that rather than being 3/4, it should be a category 4 trial. I think that is everything.

MR. JUSTICE FLOYD: Mr. Watson, does that do it?

MR. WATSON: On independent validity, my Lord, I think we need to know that before exchange of expert reports so perhaps that could be two weeks beforehand. It is only going to be potentially an extra claim or two, which would need to be dealt with, but we

need to know that before the reports are exchanged.

MR. JUSTICE FLOYD: Finalised, yes. What do you say about that, Mr. Delaney?

MR. DELANEY: Yes that is fine.

MR. JUSTICE FLOYD: Can you tidy it up? Sorry, you have another one.

MR. WATSON: Sorry, my Lord, the other point is probably as broad as it is long. It is whether the expert reports that have been put in evidence are supplemented or whether fresh comprehensive ones are put in. I do not know that it makes much difference. It might simply be easier for the court to have one report rather than the existing one plus supplemental, but again I do not think it makes much difference.

MR. JUSTICE FLOYD: I would leave them as they are, plus supplemental.

MR. WATSON: Yes. The only other question, my Lord, is costs. I am conscious that we have succeeded.

MR. JUSTICE FLOYD: But at cost.

MR. WATSON: At cost, yes. My Lord, it is either costs in the cause or, because we have essentially succeeded, I would say that it should be defendants' costs in the cause.

MR. JUSTICE FLOYD: Mr. Delaney?

MR. DELANEY: I would suggest this is a good example where it should be costs in the case in respect of the fact that the defendant has not won.

MR. JUSTICE FLOYD: Both sides have achieved a measure of success. I will make both sides' costs costs in the case.

MR. WATSON: Thank you, my Lord, for dealing with it so expeditiously and enthusiastically on a Friday.

MR. JUSTICE FLOYD: It will make the weekend all the more enjoyable as a result.

MR. WATSON: We will produce a minute and get it to you as soon as possible.

MR. JUSTICE FLOYD: Thank you both very much.