Teva pays the price for premature marketing authorisation

The UK High Court has granted Merck and Bristol-Myers Squibb (jointly, “BMS”) an interim injunction preventing Teva from launching its generic version of blockbuster anti-retroviral SUSTIVA®. This pro-patentee decision sounds a warning to companies seeking marketing approval for generic drugs well in advance of expiry of the brand owner’s period of exclusivity ([2012] EWHC 627 (Pat)).

Facts
The facts were as follows:

• BMS holds a patent protecting efavirenz, the active of SUSTIVA®, which expires in August 2013. The associated supplementary protection certificate (SPC) expires in November 2013. 
• In October 2011 Teva applied for an EU marketing authorisation for its generic form of efavirenz (Efavirenz Teva), which was granted in January 2012. 
• BMS wrote to Teva in December 2011 and again in January 2012 seeking an undertaking that it would not market Efavirenz Teva in view of the patent. 
• When no response was received, BMS applied for an interim injunction to prevent the launch of Efavirenz Teva.

Arguments
BMS alleged that Teva’s actions amounted to a threat and intent to market Efavirenz Teva and thus to infringe the patent. Teva argued that BMS’s case had no reasonable grounds because no infringement had yet taken place and its actions did not amount to a threat to infringe. The questions of whether the launch of Efavirenz Teva would amount to infringement of the patent and whether the patent was valid were not considered in these proceedings.

BMS’s case rested on three main points: 

• The marketing authorisation granted in January 2012, acquired 22 months in advance of SPC expiry. 
• Teva’s failure to state its intentions in response to BMS’s letters in December 2011 and January 2012. 
• Teva’s actions in relation to the recent launch of atorvastatin, its generic version of Pfizer’s blockbuster cholesterol lowering drug LIPITOR®. In that case, Teva was criticised for “surreptitiously” launching atorvastatin before patent expiry despite previously providing the patentee with assurances that it would wait until patent expiry.

Decision
The judge held that it was not enough for BMS simply to fear that Teva might commit an infringing act. The key was the existence of a threat and an intention to infringe, and whether the court could infer the existence of such a threat in the absence of any infringing activities. 

Marketing authorisation granted 22 months before SPC expiry
On the facts, the judge held that BMS had sufficient basis to bring its claim for pre-trial relief. The presence of the marketing authorisation was the concrete basis for the inference that Teva threatened and intended to sell Efavirenz Teva at some point in the future. Crucially, when coupled with the fact that the marketing authorisation was obtained 22 months before SPC expiry, this was sufficient to infer that Teva threatened and intended to launch Efavirenz Teva before the patent expired.

Teva could not provide convincing reasons why it was normal commercial practice to obtain a marketing authorisation so far in advance of patent expiry, and so could not discharge the inference that this was done because there was intent to launch before expiry.

Teva’s silence
Teva’s failure to state its intentions following BMS’s letters in December 2011 and January 2012 was also considered to be highly relevant. The judge held that this silence alone would not have been determinative; however, the silence coupled with the marketing authorisation acquired 22 months in advance of patent expiry was sufficient for the court to draw an inference that Teva intended to launch before patent expiry and before full trial. The existence and timing of the marketing authorisation were critical.

Atorvastatin episode
The judge pointed out that the imminence of the threat was highly relevant in deciding whether to grant pre-trial relief in the form of an injunction. For example, if Teva’s intent was to launch as far in the future as October 2013 (which was still before SPC expiry), then an interim injunction would not be necessary because a normal trial could run its course and resolve the issues before October 2013. If the patentee succeeded at full trial, then a final injunction would be available to preserve its rights.

In connection with the question of imminence, Teva’s conduct in the atorvastatin litigation was considered to be important, as this showed that it was capable of “surreptitiously” launching a generic drug in advance of patent expiry, even when its stated intention was to the contrary.

Balance of convenience
In light of the above findings, the judge also held that the “balance of convenience” favoured BMS (ie, that not granting the interim injunction would cause greater unquantifiable damage to BMS than granting the injunction would cause to Teva).

BMS argued that launch of Efavirenz Teva would cause it serious and irremediable harm given the size of the market and the inevitable price drop that would occur following such a launch. Teva filed no evidence to counter this point or respond to the argument that it had taken no action to “clear the way” by seeking a declaration of non-infringement and/or revocation of the patent.

Conclusion
Generics manufacturers will need to be careful when applying for early marketing authorisations, especially when questioned by patent holders about their true intentions with regard to the launch of generic products. Additionally, companies should bear in mind the importance of dealing with “clean hands”, in view of the UK courts’ willingness to take into account equitable considerations, such as a company’s previous commercial actions.