IP-2024-000024 - [2024] EWHC 951 (IPEC)

There was no dispute between the parties as to the relevant legal principles, although as is often the case, each side emphasised different points from the authorities.

The starting point is the well-known analysis in American Cyanamid v Ethicon [1975] AC 396. This was summarised by Floyd LJ in Neurim Pharmaceuticals (1991) Ltd v Generics UK Ltd (t/a Mylan) [2020] EWCA Civ 793, [2021] RPC 7 at [15] as follows:

• Stage 1: Is there a serious question to be tried?

• Stage 2: Are damages an adequate remedy for the claimant?

• Stage 3: If not, are damages (on the cross-undertaking in damages) an adequate remedy for the defendant?

• Stage 4: If damages are not an adequate remedy for either side, where does the balance of convenience lie?

As Counsel for the Defendant submitted, the following additional points can also be drawn out of the Court of Appeal Neurim decision:

Counsel for the Defendant also drew my attention to paragraphs [51]-[53] of the Court of Appeal Neurim decision. I do not consider that these paragraphs contain any additional points of principle, since they are specific to the facts of that case.

Counsel for the Claimant emphasised five points in his written and oral submissions. The first was that where the other factors are evenly balanced, it is a counsel of prudence to take such measures as necessary to maintain the status quo. In this context he referred me to Fellowes & Son v Fisher [1976] 1QB 122CA although the point was originally made by and is more often cited from Lord Diplock in American Cyanamid at p.396.

As an aside, I note that it was common ground that the status quo should be assessed as at the time immediately before the issue of proceedings or the application notice if substantially later, rather than at the time when the conduct complained of began. See Lewison LJ in Frank Industries Pty Ltd v Nike Retail BV [2108] EWCA Civ 497at [19].

Secondly, Counsel for the Claimant emphasised the relevance and importance of harm that may not sound in damages. He relied on the passage in the decision of Mellor J in Neurim Pharmaceuticals (1991) Ltd & Anr v Teva UK Ltd [2022] EWHC 954 (Pat) at [9]-[10] where the judge said:

9.

Mr Waugh QC for Neurim made an additional point in these terms:

'Damage for this purpose includes harm that is not normally recoverable in damages – see Terrell 19th ed'n at 14-175 - 14-178 citing SmithKline Beecham v Apotex Europe Ltd [2003] EWCA Civ 137 per Aldous LJ at [18].'

10.

This needs a bit of unpacking. Carnwarth LJ (as he then was) at [43] made the same point as Aldous LJ in [18] and, to my mind, in clearer terms (see the passage I have underlined below):

'Aldous LJ has also quoted from Lord Diplock's classic statement in American Cyanamid Co v Ethicon Ltd [1975] A.C. 396, 406, where he said:

'The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he would not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial …'

The purpose of an interlocutory injunction therefore is protection, not just against 'loss which would sound in damages', but against violation of any right where damages would not be adequate compensation. An obvious example of the need for that wider formulation is the case of trespass to land. A landowner whose title is not disputed is normally entitled to an injunction to restrain trespass on his land, even if the trespass does not harm him (see Patel v WH Smith (Eziot) Ltd [1987] 1W.L.R. 853, 858F).'

Counsel for the Claimant submitted that this passage was relevant to his case on unquantifiable damage which he said the Claimant will suffer if it loses its current exclusivity in the marketplace. I shall return to this further below.

Thirdly, counsel for the Claimant also drew my attention to paragraphs [6]-[8] of the decision of Mellor J in Neurim in relation to what the judge said about price depression. I summarise the salient points from those paragraphs as follows:

Fourthly, counsel for the Claimant reminded me of the passage in the Court of Appeal Neurim decision at [38] to the effect that the court should conduct a critical assessment of the evidence. In Neurim, the point arose in the context of the evidence about alleged consequential loss to the claimant in that case if the injunction was not granted. Floyd LJ held that the court was not bound to accept that evidence uncritically but instead should examine it with a critical eye and by reference to the relevant facts and circumstances of the case. In this case, the Claimant makes critical observations about parts of the Defendant’s evidence which it submits taints the evidence generally. I shall return to that below.

Finally, counsel for the Claimant referred me to the decision of the Supreme Court in Rugby Football Union v Consolidated Information Services Ltd (formally Viagogo Ltd) (in liquidation) [2012] UKSC 55 in support of a submission that it is legitimate for the court to take account of the deterrent effect which an injunction might have on third party potential entrants. He relied on the following paragraphs of the opinion of Lord Kerr:

33.

The appellant’s challenge to the Court of Appeal’s decision rests exclusively on the claim that it applied the wrong test in assessing the proportionality of the making of the Norwich Pharmacal order. Put succinctly, the appellant claims that, in assessing whether the order is proportionate, the court should evaluate the impact that the disclosure of the information will have on the individual concerned against the value to the applicant of the information that can be obtained about that particular individual. Expressed in simple terms which reflect the circumstances of this case, the court, according to the appellant, should confine its consideration to the individual transaction and ask, “What value will the information about this particular individual have to the RFU?”

34.

Mr Howe QC, who appeared for the appellant, submitted that Longmore LJ in the Court of Appeal had been wrong to suggest that it would “generally be proportionate” to make a Norwich Pharmacal order once it had been shown that there was arguable wrongdoing and that there was no realistic way of discovering the identity of the arguable wrongdoers other than by obtaining an order. Rather, Mr Howe claimed, the court should have asked whether obtaining information about a particular person who had sold a ticket at more than face value would benefit the RFU to an extent that outweighed that individual’s right to have his or her personal data protected from disclosure. It was suggested that the way in which the Court of Appeal had formulated the test involved a presumptive approach. On that basis it was to be assumed that the need to obtain the information in order to prosecute an action to vindicate the right to property would in virtually every instance trump any claim to privacy and protection of personal data. The appellant contended that this assumption was misplaced. The proportionality of the interference could only be assessed by concentrating the examination on the particular circumstances of the individual transaction. In this way, the appellant claimed, the weighing exercise involved assessing how much benefit would derive from obtaining information about a single individual as against the infringement of that particular person’s right to have his or her personal data protected.

…

36.

Mr Howe suggested that in these passages the CJEU had prescribed a clear principle that national courts, in dealing with a claim for disclosure of personal data must weigh the potential value to the party seeking the material against the interests of the data subject. This unexceptionable claim can be readily accepted; it is its refinement and development that causes greater difficulty. Mr Howe argues that in making that assessment, the court must conduct the examination solely by reference to the particular benefit that obtaining the information relating to an individual data subject might bring. Its value as part of a broader context is not to be considered. Thus, for instance, the fact that obtaining the information might deter others from selling or buying tickets for rugby internationals could not be taken into account.

37.

I find this approach somewhat artificial, not to say contrived. It is unrealistic to fail to have regard to the overall aim of the RFU in seeking this information. It is not simply to pursue individuals. It obviously includes an element of active discouragement to others who might in the future contemplate the flouting of rules which the RFU seeks to enforce. There is nothing, in my opinion, in the cited passages from the CJEU’s judgment that supports a restriction of the matters to be considered by a national court in the manner suggested.

…

40.

Mr Howe suggested that the use of the expression, “the facts of each case” in para 59 of the court’s judgment betokened a conclusion that the individual transaction between the internet provider and the subscriber was to be considered without reference to broader considerations that might motivate the applicant for disclosure of the information. I do not accept that submission. Of course the facts of each case must be considered. But this does not mean that they should be placed in a hermetically sealed compartment so that their possible impact on issues going well beyond their significance to the person whose personal data are sought is ignored. There is no logical or sensible reason to disregard the wider context in which the RFU wants to have access to this information. Their desire to prevent the future sale of tickets for international matches at inflated prices is intimately connected to the application for the Norwich Pharmacal order. The ability to demonstrate that those who contemplate such sale or purchase can be detected is a perfectly legitimate aspiration justifying the disclosure of the information sought. There is no coherent or rational reason that it should not feature in any assessment of the proportionality of the granting of the order.

As these paragraphs illustrate, that case concerned the grant of Norwich Pharmacal relief, specifically the disclosure of the identity of individuals who had sold RFU tickets at inflated prices via the Viagogo website. That is obviously different to the grant of interim injunctive relief. Counsel for the Claimant submitted that, nevertheless, since injunctions and Norwich Pharmacal orders are both discretionary remedies which concern questions of proportionality, the reasoning of theSupreme Court applies equally to both types of relief.

I accept, of course, that proportionality is a relevant consideration in respect of injunctive relief, albeit that it is not normally raised in the context of interim injunction applications in patent disputes. However, I do not accept that the deterrent effect which granting an injunction may have on third parties should be elevated to a point of principle. In my judgment, whether there will be a deterrent effect and whether that effect is relevant in any given case will be fact sensitive.

However, as the Defendant submitted, in the context of an action for patent infringement, the court must be careful not to assume that the patent is valid and infringed anymore than it should assume the opposite (unless it is a rare case where the merits are considered). As a result, a deterrent effect is unlikely to be relevant in most cases (since it assumes the former and not the latter). If it is relevant, it is most likely to fit in the analysis at Stage 4, in respect of the balance of convenience.

I have kept all these principles and points in mind in my analysis below.