Permanent Injunction Not Available as of Right

Abbvie Corp v Janssen Inc / Injunction 2014 FC 489 Hughes J
            2,365,281 / anti-IL-12 antibodies / STELARA

This decision raises a number of important points relating to the availability of a permanent injunction to a successful patentee. Hughes J makes it clear that a permanent injunction is discretionary in principle, though it will normally be awarded to a successful patentee absent unusual circumstances. Such unusual circumstances are not a purely theoretical possibility; on the facts, a complete permanent injunction was refused. The decision also shows that the question is not simply whether a permanent injunction should be granted or refused; the question is how a permanent injunction should be crafted to balance the relevant interests. On the whole, this case shows that Canadian law related to permanent injunctions is well-placed to deal with issues such as injunctions sought by non-practising entities and standard-essential patents, if and when those questions surface in Canadian litigation, but without over-reacting against patentees generally. An equivalent to eBay Inc v MercExchange (2006) 547 US 388, is not necessary or desirable in Canada.

This trial has been not just bifurcated, but trifurcated. In the first part on infringement and invalidity, Hughes J held that AbbVie’s 281 patent was valid and infringed by Janssen’s STELARA [1]: 2014 FC 55, blogged here. The remedies portion was further bifurcated into the question of injunctive relief, and damages or profits. Consequently, this AbbVie / Injunction decision deals only with the issue of whether the successful plaintiff, AbbVie, is entitled to a permanent injunction, and if so, on what terms.

Hughes J reviewed the law relating to the grant of permanent injunctions, and held that “An injunction normally will follow once the Court has found that a patent is valid and has been infringed” [35]” The word “normally” is important here, as it is clear from the permissive wording of the s 57 [34], the prior case law [35]-[38], and equitable nature of injunctive relief [35], that injunctive relief is a discretionary remedy, which is not available as of right, even though it will be granted except in “rare circumstances” [36]-[37].

(Hughes J also held at [38] that the RJR-MacDonald [1994] 1 SCR 311 test for an interlocutory injunction is not the test which should be applied in respect of a permanent injunction, citing the Ontario and BC Courts of Appeal: 2014 ONCA 125, 2010 BCCA 396. For what it’s worth, I agree with the reasoning expressed in those decisions, and in the passage quoted by Hughes J at [38].)

The facts in this case were indeed very unusual. AbbVie does not practice the 281 patent, but neither is it a patent assertion entity or “troll.” Janssen’s infringing product is STELARA, a biologic used to treat psoriasis, which, in its severe form, can be disabling [17]. Three other biologics are also approved in Canada for treating proriasis: HUMIRA, sold by AbbVie, REMICADE (Janssen) and ENBREL (Amgen) [21]. All four treatments have significant market share, and none except STELARA fall within the scope of the 281 patent [15]. By keeping STELARA off the market, AbbVie is seeking to preserve the largest possible “footprint” for HUMIRA in the market for prosiasis treatments [45]. The twist is that these products are not perfect substitutes. STELARA operates by inhibiting IL-12, while the other three target TNF-α [21]. Even the TNF-α drugs are not perfects substitutes with one another, and it was a common treatment scenario for the physician to switch the patient among the TNF-α drugs before going to the sole IL-12 drug (STELARA) [23].

A permanent injunction would therefore have allowed AbbVie to prevent the sale of drug which AbbVie itself does not supply, and which for some patients is the only effective treatment for a disabling condition. On these unusual facts, AbbVie, no doubt wisely, did not even seek a complete permanent injunction. In broad terms, AbbVie sought an injunction, with an exception for existing patients, and restrictions on new patients. All the sales permitted under the exception would be subject to an continuing royalty [43]. Nonetheless, the discretionary nature of a permanent injunction was squarely at issue because Hughes J refused to grant the injunction in precisely the terms sought by Abbvie. As Hughes J put it:

[16] Thus, the Court is required to balance on the one hand, the rights of a patentee to the exclusive use of their claimed invention, including the right to control, by licence, others who wish to use the claimed invention, with the commercial desire of the Defendant to sell the infringing drug and, with a medical need by some members of the Canadian public to have continued access to the infringing drug.

In particular, AbbVie has sought to require physicians to formally certify that the patient has a medical need for Stelara that cannot be met by Humira before prescribing Stelara to new patients [63], and Hughes J refused to impose this requirement [66]. AbbVie did not seek to restrain dissemination of technical information regarding STELARA [68], but it sought to restrain active marketing by sales reps or a “detail” person. Hughes J agreed to this [71]. AbbVie proposed that Janssen be required to approach the formularies with new critiera for listing [73], and that Janssen be ordered to comply only with lawful requests from Health Canada [77], and to write a letter to physicians stating that STELARA infringes AbbVie’s patent [78] Hughes J refused all of these requests. With respect to the letter, Hughes J noted that a “forced” letter implicates freedom of expression, and such a letter “is an exceptional thing” [81]. On the other hand, Hughes J did order a prohibition on Phase IV studies of STELARA in Canada, although this apparently turned, at least in part, on the fact that none were planned [87].

While the details of the injunction may no doubt be debated, in my view Hughes J’s decision represents a sound approach to balancing the various interests. At this point, I have to point out the theoretical counter-argument. In principle, if AbbVie were granted a complete injunction, prohibiting any sales of STELARA without AbbVie’s permission, this does not mean, at least in theory, that patients who need STELARA would be forced to go without. If a patient is not responding to AbbVie’s HUMIRA, and does respond to STELARA, it would be in AbbVie’s own interest to allow Janssen to sell the STELARA, subject to a royalty negotiated with AbbVie. The general point here is that injunctive relief does not necessarily mean that the prohibited activity will not take place; it just means that the terms on which it takes place will be dictated by the patentee. If a complete injunction were granted, AbbVie would decide the royalty payable on sales of STELARA to patients who did not respond to HUMIRA, while given the limited injunction that was granted, the royalty will be decided by the court in the third stage of this trial.

The obvious rejoinder to this analysis is that the question is not just as to the royalty: if an injunction were granted, AbbVie, and not the patient’s physician, would ultimately be responsible for deciding whether STELARA was medically necessary for the patient. It is an interesting theoretical question as to whether, in principle, there is a divergence between AbbVie’s interests and those of the patient, such that we should expect sub-optimal outcomes if an injunction were granted, assuming that AbbVie acted purely rationally. But whatever the outcome of such an analysus, it would take a compelling practical argument that the patient’s health would not suffer, and not merely a theoretical one, before the courts should be willing to put a patient’s health in the hands of a patentee.