Melatonin - UK

On Jun 03, 2020, UK high court denied Claimants, Neurim & Flynn’s application for interin injunction against Mylan.

Background:

Neurim owns patent, EP(UK) 1441702 which claims prolonged release pharmaceutical formulations of melatonin to improve the restorative quality of sleep in a patient suffering from primary insomnia characterised by non-restorative sleep. Flynn is the exclusive licensee under the Patent. The pharmaceutical formulation claimed by the Patent is sold under the brand name Circadin. More recently, Neurim has developed a paediatric version of prolonged release melatonin, Slenyto. The Patent is a “second medical use” patent & will expire on 12 August 2022. This patent was granted by EPO in May 2017 & was subsequently opposed by various opponents including Mylan. Patent was revoked by the EPO Opposition Division via written decision on 2 January 2020. Mylan intend to market a “generic” rival to Circadin as it got marketing authorisation in Dec. 2019.

Neurim and Flynn commenced proceeding for infringement and injunctive relief. Mylan counterclaims for revocation of the Patent on grounds of anticipation, obviousness and insufficiency. An expedited trial had been ordered, which is due to take place in a 5-day window floating from 26 October 2020. Hearing was held on the issue of interim injunction from May 20, 2020 to Jun 03, 2020.

Court’s analysis:

Neurim and Flynn argued that if an interim injunction were not granted, their losses would fall to be categorised under two broad heads, Period 1 (from hearing till trial i.e. from Jun. 2020 to Dec. 2020) and Period 2 (after trial till patent expiry i.e. Dec. 2020 to Aug. 2022). Mylan counterargued that the market would recover if Neurim and Flynn succeeded at trial and obtained a permanent injunction in Dec. 2020.

During hearing court heard both the parties & their respective submissions. Court said that the starting point for the current issue of interlocutory relief is the judgment given by Lord Diplock in “American Cyanamid Co v. Ethicon Ltd.” The court must weigh one need against another and determine where “the balance of convenience” lies. The balance of convenience involves a number of steps:.

Stage 1: A serious issue to be tried?

The applicant for interim relief, the claimant, must show that there is a “serious issue to be tried”.  Court said that looking simply at the issues in the proceedings, there is serious issue to be tried as to the validity of the Patent. In his oral submissions before me, Mr Vanhegan, QC, for Mylan, accepted that there was a serious issue to be tried.However, Mylan relied on the fact that the Patent had been revoked by the EPO Opposition Division in support of its contention that there was no serious issue to be tried. Mylan also argued that an interim injunction was refused in other jurisdictions. Court, however, said that in some cases, the decisions of courts of foreign jurisdictions or EPO are entitled to great weight but this is not one of those cases. The decisions of the these authorities are not binding on us.

Stage 2: Are damages an adequate remedy to the claimant?

If damages were an adequate remedy, a claimant should not obtain an interim injunction, even if the claim was very strong. Mylan contended that – even if, court found for the purposes of this application, the harm to Neurim and Flynn would extend beyond the period of competition between Circadin/Slenyto and the Generic Product in Period 1 – damages would nevertheless be an adequate remedy. Court agreed with Mylan and said that damages will prove to be an adequate remedy to both Neurim and Flynn for the following reasons:

    1.The general measure of damages in a patent infringement case is clearly stated. It is the standard tortious measure, the calculation of which was articulated in “Livingstone v. The Rawyards Coal Company”.

    2. Court see no reason why Neurim and/or Flynn’s losses during both Period 1 and Period 2 cannot properly be calculated. Clearly, Neurim and Flynn will have records of their sales to date of Circadin and Slenyto, and they will continue to keep such records. Equally, there is no difficulty in Mylan maintaining and (for the purposes of trial) providing to Neurim and Flynn records of its sales of the Generic Product.

    3. All of these losses/profits can be calculated by reference to information that is or will be in the hands of Neurim, Flynn & Mylan.

Stage 3: If damages are not an adequate remedy to the claimant, consider the adequacy of the undertaking in damages to the defendant?

If damages are an adequate remedy to the claimant, then the inquiry stops at Stage 2. However, the converse does not hold good. Court said that the question is whether Mylan’s loss, in being deprived of the opportunity of competing in the market for Circadin and Slenyto, is capable of being adequately compensated for in damages. Court said that Neurim and Flynn are prepared to offer the undertaking in damages; and that Neurim and Flynn are in a financial position to make good on that undertaking if called upon to do so. At first sight, just as in the case of Neurim and Flynn, this appears to be simply a case where damages can adequately be assessed. Instead of calculating what Neurim and Flynn lose by reason of Mylan’s competition, it is necessary in Mylan’s case to calculate what Mylan has failed to gain in being deprived of this opportunity. That said, there are a number of factors that render this assessment of damages more difficult. Therefore, it would be materially harder to assess Mylan’s loss than that of Neurim or Flynn.

Stage 4: no adequate remedy for either side

A court must consider all relevant factors when granting a discretionary remedy like an interim injunction. Court said that it already concluded that damages would be an adequate remedy for Neurim and Flynn, and a less adequate remedy for Mylan. Court said that it would merely go so far as to say that any award of damages to Mylan would be materially more uncertain than calculating Neurim and Flynn’s loss.

Court thus declined to grant interim injunction.