Patent power play: the growing importance in Ireland of ‘clearing the path’
Michael Finn and Denis Halton of Bird & Bird consider recent Irish case law regarding preliminary injunctions and find that the balance of power has shifted from generic entrants to patentees
Rising trend for Irish injunctions
In a series of recent decisions, a clear trend has emerged in the Irish courts that preliminary injunction (PI) applications now strongly favour patentees, and generic entrants have many hurdles to overcome to resist a PI. This is in stark contrast to the situation that existed in Ireland less than five years ago, when the case law favoured generic entrants.
The injunction test in Ireland comprises a number of elements to be weighed up. However, this article reviews the development of the principle of ‘clearing the path’ and what this means for PI applications.
The leading Irish authority on preliminary injunctions
In 2019, the Irish Supreme Court clarified the injunction test in Ireland, following on from a series of decisions in which PIs had been refused on the basis that damages would be an adequate remedy for the patentee. The leading Irish authority on PIs is now the Supreme Court decision in Merck Sharp & Dohme v Clonmel Healthcare (the MSD Decision). In deciding that case, the Supreme Court set out eight steps that a court should follow in determining whether to grant an injunction. Distilled down, the key questions a court will consider are:
Is there a fair/serious issue to be tried?
What does the balance of convenience favour?
In its judgment, the Supreme Court highlighted that the most important element in the balance of convenience assessment is, in most cases, the question of adequacy of damages. However, the Supreme Court also commented that weight should be given to the clearing the path argument but warned that it could not be accepted without qualification as dispositive of the issue. It was part of the balance of convenience limb of the injunction test, with the Supreme Court remarking that the fact that the supplementary protection certificate in question “is valid until otherwise declared invalid by a court […] is also relevant to the balance of convenience”.
Interestingly, in relation to the argument that a generic challenger should always clear the path, the Supreme Court observed that clearing the path poses problems for generics, since any such invalidity proceedings would clear the path not just for the applicant, but for any other generic, which would essentially be given a free ride on the application.
Recent Irish case law following the MSD Decision
More recent cases of the Irish courts applying the principles set out in the MSD case shed light on what expectations the courts now have as to the lengths that a generic entrant must go to in order to sufficiently clear the path to resist a PI. In March 2023, the Court of Appeal ruled in Biogen MA Inc. & Biogen International GMBH v Laboratorios Lesvi SL & Neuraxpharm Ireland Ltd. (Biogen) that, when assessing clearing the path arguments in the balance of convenience, “the threshold test is that the case for invalidity must be strong and/or that there have been successive determinations on the merits invalidating the right” and only then “it might weigh against the grant of an injunction” (court’s emphasis).
In a more recent Court of Appeal decision, Bristol-Myers Squibb Holdings Ireland Unlimited Company v Norton (Waterford) Limited T/A Teva Pharmaceuticals Ireland, the principle of clearing the path was given further consideration. In this case, the generic producer had issued a revocation action on the grounds of invalidity and lack of priority. The purpose of the revocation action was to clear the path. When notice was given during the proceedings of intention to launch, the patentee sought an interlocutory injunction restraining entry. The High Court granted a PI, which was appealed.
In its judgment, the Court of Appeal was firmly of the view that if a generic producer seeks to clear the path, it must do so until “all arguable objections from the patentee have been eliminated”, including the conclusion of any appeal. Furthermore, in response to the argument that a generic entrant should get credit for the steps that it had taken to attempt to clear the path, the court dismissed this argument, commenting that no cogent argument was advanced as to what weight, if any, should be given to a generic manufacturer that has tried to clear the path but has ultimately not yet done so.
It is clear that the principle of clearing the path is a significant and evolving concept in the realm of PI law in Ireland. While the principle has been applied in several Irish patent cases since the MSD Decision, it is the Court of Appeal’s most recent decision, involving Bristol-Myers Squibb, that highlights the lengths that generic producers will be expected to go to clear the way in order to fend off a PI.
To comply with the most recent jurisprudence, generic producers must undertake the costly and time-consuming processes of clearing the path in the first instance and resisting any subsequent appeals, which, as the Court of Appeal remarked, are virtually guaranteed to be brought by the unsuccessful party.
This makes Ireland a very favourable venue to patentees with regard to PIs. Given the current trend, it is expected that PI law will eventually wind its way back to the Supreme Court, where the principle of clearing the path will need to be considered in further detail. In the meantime, it is difficult to imagine a scenario where the Irish courts will not grant a PI unless the generic entrant has knocked out the patent in every possible sense.