Tuesday, 10 June 2014

Will interim injunctions become unpopular in Finnish pharmaceutical patent litigations?

Dear all,

Splendid summer for everyone! While we already have enjoyed this beautiful whether full of sunshine, we still need to work hard for a couple of weeks before the well-earned holidays. This year we are heading to Mallorca with a big group of kids, so lots of fun ahead!
This time I would like to write about patent litigations and interim injunctions as a result of a recent news. Pfizer was ordered by a Finnish court to pay 16.5 MEUR plus 270.000 EUR as a compensation for legal fees to Ranbaxy, an Indian generic manufacturer, which was later acquired by Sun Pharma making the conglomerate world’s fifth largest specialty generic pharma company. But to beging with, if you are planning an interim injunction in Finland, let me first guide you through the process very briefly and then we talk about this case.
What do you need to know about Finnish interim injunctions?
In Finland preliminary injunctions may be granted in patent cases either by virtue of the Code for Judicial Procedure or the Patent Act, both before and during the main proceedings. Preliminary injunctions may also be granted provisionally on an ex parte basis. An interim injunction is a summary proceeding and commences by filing of an application to the Market Court (previously this was the district court of Helsinki). The issue is handled urgently and a preliminary injunction may be granted very quickly (typically from the minimum of two days to one month).
The following requirements must be fulfilled in order to grant a preliminary injunction and generally: i) right holder shall establish that he/she has a right enforceable against the counterparty. The evaluation of the fulfillment of the claim requirement is based on probability assessment; ii) Danger requirement: it is required that the counterparty by deed, action, or negligence, or in some other manner, hinders or undermines the realization of the right holder’s right or decreases essentially the value or significance of said right. Actual existence of danger is generally not required to be proven, a claim thereof usually suffices; and iii) Comparison of interest / undue inconvenience: the court considers the interests of both parties and assesses whether the defendant would suffer undue inconvenience in comparison to the benefit to be secured interim injunction.
Typical evidence in this interim injunction phase includes approximately the same material as in the main proceeding with the exception of oral evidence that is provided later phases. Additional documentation includes the official patent documentation, cease-and-desist letters, if any, expert evidence, technical drawings and similar, financial analysis on the harm to the patent holder (e.g., in the form of sales statistics or similar), and for example, supporting foreign judgements, if available.
No damages are awarded in the preliminary injunction phase. The cost of litigation in this interim injunction phase generally varies between 10,000 and 15,000 €. Interim injunction is a summary proceeding and commences by filing of an the application to the Market Court.
What happened in Pfizer – Ranbaxy?
We have ordered the litigation files and decision of the district court, but we have not received those yet. Therefore, our comments here are based on facts which have been written in the press (Helsingin Sanomat). Helsingin Sanomat mentions that the district court of Helsinki held that Pfizer unnecessarily sought for interim injunction and caused 25M loss to Ranbaxy’s sales, 47 percent of which were the amount of profit. The district court noted that the question was about creation of intentional damage to the counterparty which may result in significant economical losses. Pfizer had admitted during the trial that the interim injunction was unnecessary, but Pfizer held that there was no connection of causality between the events and the damage.
Conclusions and considerations?
I remember having a discussion with the late Justice Laddie once about interim injunctions and patent litigations in general, and he said that he always knew the result of a patent litigation before he filed the case and personally I have always tried to follow the same principle. This so-called "avoiding courtrooms strategy" may in many cases be a bad thing for the invoicing of law firms (if not to anyone else), but at least we have had enough work so far believing that this is the right way forward. All of the facts are not disclosed here so we will go these through in detail after we have received all the files, but in any case this case clearly creates a need for IP litigators such as us to carefully reconsider whether there are valid grounds for filing interim injunction applications and, if such grounds turn out to be non-existing, there may be consequences like in this case. Naturally if a generic company is under no pressure to pay patent and R&D costs, the profit margin is very high as indicated also in this decision. Moreover, we will discuss some open questions further in our later posts, e.g., Finnish pharmaceutical patents in general and analogical method claims which were used prior to 1995, the role of courts in case of "unnecessary interim injunctions" and the concept of "unnecessary" itself is fascinating. So we return to this shortly, but in the meantime I hope relaxing summer break for everyone!
Regards,
Jan