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

Loss of Market Exclusivity

I did not understand the Claimant’s case to be that losing market exclusivity per se was the reason for alleged unquantifiable damage. If that were so, then it would be raised by the patentee in every interim injunction application to restrain alleged patent infringement, but it is not. Indeed, I am not aware of an authority where it has been argued as a free-standing point, and counsel for the Claimant did not refer me to one. In most cases, the market exclusivity which the patentee enjoys results in a monopoly over price, and it is normally arguments about the potential impact that refusing an injunction will have on price (whether in the form of price depression or a price spiral) which feature heavily in the evidence on damage.

However, counsel for the Claimant submitted that there were two additional features unique to this case which relate to market exclusivity (beyond arguments about price depression which are addressed as a different (third) point, considered below) and which would result in unquantifiable damage to the Claimant if an injunction was refused.

First, the Claimant submitted that, by virtue of the market exclusivity which it currently enjoys, it has control over the way in which the ClearPetra Sheath (and the surgical technique to which it relates) is introduced into the market and the way in which surgeons and other medical professionals are educated in relation to it.

There was some evidence from the Claimant about its efforts to educate the market through marketing and promotional activities, summarised as follows:

There was also some evidence that the market for suction UASs was evolving. Mr Cox provided UK sales figures for the period from July 2023 to February 2024 (1,110 ClearPetra units, of which 815 or 73% were Flexi sheaths), and said that sales had increased since the launch of the Flexi ClearPetra Sheath. He also said that the Claimant and its distributor were continuing their efforts to establish the Flexi ClearPetra “as the gold standard” for suction UASs and that the exclusivity in educating the market as to its benefits was crucial in that regard. He did not provide any further details as to what steps were being taken to educate the market.

It is difficult for me to assess the extent to which the Claimant’s sales have increased since the launch of the Flexi ClearPetra Sheath since I have not been provided with earlier sales figures. Nevertheless, it is entirely plausible that the market has grown since the Flexi sheath was launched and I accept that evidence in general terms.

However, there is no evidence that the Claimant’s marketing efforts are causing the market to grow or why, assuming they are, those efforts will be in any way undermined by virtue of the Defendant also being on the market. There was no evidence that the Defendant’s activities in respect of the Seplou Sheath (threatened or actual) will interfere with the Claimant’s ability to market and promote the ClearPetra (original and flexi) or to educate the medical community as they see fit.

In my judgment, even allowing for the fact that the suction UAS market may be a growing one, there is no evidence to support an argument that loss of market exclusivity to the Claimant if an injunction is refused will damage its ability to educate the market at all, let alone in a way which is unquantifiable.

Second, the Claimant submitted that, by virtue of the market exclusivity which it currently enjoys, third parties are currently deterred from entering the market, but that deterrent will dissipate if an injunction is refused.

The evidence about possible third-party entrants can be summarised as follows:

So, the upshot of this evidence is that, as things stand, Ingles Medical is the only third party who appears to be threatening to sell and supply a suction UAS in the UK (albeit that it cannot yet sell or supply to NHS hospitals as it is not on the NHS Framework). I was told by Mr Davis KC on instructions that the Claimant was in the process of obtaining a sample of the Innovex UAS. At the time of the hearing, it had not yet engaged in correspondence with Ingles Medical but intends to do so, depending on the outcome of the inspection of the Innovex UAS once one has been obtained.

The Claimant submitted that it was inevitable that, if the injunction was refused, third parties will be encouraged to enter the market before judgment at trial. Since there is no specific evidence about any third parties being likely to enter the UK market beyond Ingles Medical, I reject this submission at the general level at which it is made. There is simply no way of knowing one way or the other from the evidence before me whether third parties generally will try to enter the UK market or when. The evidence fell a long way short of establishing that it was likely or inevitable.

As for Ingles Medical specifically, I accept that it is likely that it could enter the market in the foreseeable future with the Innovex UAS product. However, there is no evidence that it is waiting to see the outcome of this application before it decides what to do. It seems more likely that it is waiting for the Innovex UAS to get on to the NHS Framework. Similarly, there is no evidence that an interim injunction against the Defendant would serve as a deterrent against Ingles Medical; it might, but it might not. That would depend on a range of factors, including its appetite for risk. In my judgment, the potential deterrent effect that an injunction against the Defendant would have in respect of Ingles Medical is not a sufficient basis for granting it on the facts of this case. The Claimant has other mechanisms available to it to try to prevent Ingles Medical from getting on to the market if that is what it wants to do, and the court would have to consider any application against Ingles Medical on its merits.

The Claimant also submitted in its skeleton that, assuming it prevails at trial, third party entrants “will not be directly prevented from continuing activities and so the Claimant’s present market exclusivity will be irredeemably undermined”. It was said that this was just the kind of non-compensatable damage contemplated at paragraph [10] of the Mellor J Neurim judgment referred to above. I confess that I did not understand this submission. Whether third parties will be prevented from continuing activities or not will depend on what those activities are, whether they infringe any valid right of the Claimant and what steps the Claimant takes to prevent infringement. In my judgment, the hypothetical risk of third-party entrants per se cannot be enough to justify injunctive relief, certainly not on the facts of this case.