Warner-Lambert v Actavis: lessons from ‘the case of the year’

On September 10, 2015 Mr Justice Arnold gave his judgment in the Lyrica (pregabalin) case at the English High Court. UK legal commentators have described this dispute between Warner-Lambert (Pfizer) and Actavis and Mylan as ‘the case of the year’. The litigation has already spawned five previous judgments, mainly interim skirmishes between Warner-Lambert and Actavis, but also a related application against NHS England.

In his judgment disposing of the case at first instance, Arnold held that the relevant claims asserted against Actavis were invalid and that, in any event, Actavis was not infringing the patent. He also held that Warner-Lambert had made groundless threats of patent infringement proceedings against superintendent pharmacists, Murrays Pharmacy and clinical commissioning groups, among others. Warner-Lambert has a potential defence to this last finding but that will be heard separately.

The judgment is likely to be appealed so this is hardly the end of the story, but what lessons can be learned so far?

Have a bullet-proof patent

It sounds obvious (pun intended) but if a patentee is intending to robustly enforce its patent and involve third parties in a dispute which would ordinarily be a fairly private battle between two commercial competitors, the patentee had better be certain its patent is valid. The litigation itself provoked the kind of PR backlash against Warner-Lambert which is normally reserved for non-practising entities, and the financial consequences of losing will be considerable.  Always keep an eye on the vulnerability of your patent, particularly when the procedural side of the dispute seems to take on a life of its own.

Consider your budget and potential losses

If the invalidity finding is upheld, Warner-Lambert will have lost its exclusivity over pregabalin for treating pain even though this is not what Actavis’s product was originally targeted to treat. Following the judgment, other generic manufacturers will be looking to launch pregabalin for all indications—subject, of course, to the risk that the invalidity finding is overturned.

If you are intending to litigate a Swiss form second medical use patent, ensure that the board understands the greater risks involved and the financial consequences of losing. As the overall commercial loser of the case (so far), Warner-Lambert will be liable for a large proportion of Actavis’s costs, as well as its own. You only have to look at the number of QCs involved (seven, just for the trial—and that’s not counting the other assorted QCs involved at the interim stages) to appreciate that the bill will run into millions. In addition, Warner-Lambert will be liable for other financial compensation as a result of including third parties in the case, whether that was by way of sending threatening letters to them or by obtaining interim relief to control the way in which pregabalin is prescribed.

Think carefully before seeking an interim injunction

Warner-Lambert ultimately failed in obtaining interim relief against Actavis but readers may remember that Warner-Lambert did obtain an interim injunction against NHS England requiring it to issue guidance on how to prescribe pregabalin for pain. This guidance was largely agreed by the parties, but in return for granting that injunction Warner-Lambert had to undertake to compensate Actavis for any damage if it was later held that the injunction should not have been granted. Now that the patent has been found invalid, Actavis will be seeking a payment under that undertaking

This part of the action is likely to be suspended pending a decision by the English Court of Appeal (and, later, by the Supreme Court) but the sums involved could be significant if Arnold’s judgment is upheld.

If possible, avoid involving third parties

Patent litigation is always hard-fought but it is usually ‘behind closed doors’ until the trial, and rarely involves third parties, let alone public bodies, like this case. While Warner-Lambert could not help the fact that healthcare organisations such as NHS England, which are outside the control of the parties, are involved in guiding how pregabalin is prescribed, Warner-Lambert also took it upon itself to contact many of these parties directly. As Arnold said, the independent steps taken by Warner-Lambert to influence the prescribing of pregabalin was a complicating factor in the case.

“If you are intending to litigate a Swiss form second medical use patent, ensure that the board understands the greater risks involved and the financial consequences of losing.”

By contacting the Department of Health, superintendent pharmacists and private pharmacy chains, Warner-Lambert’s grievances against Actavis became very public. Further, Warner-Lambert’s perceived aggressive approach against NHS England also attracted significant criticism. It provoked a call by GPs to ban second medical use patents in the NHS altogether. To its credit, Warner-Lambert tried to answer this by publishing an open letter explaining its reasoning, but perhaps it would not have raised so many hackles had it restricted its complaints to the generic manufacturers.

Be proportionate

There must be a mechanism which allows generic manufacturers to market drugs for the non-patented market. Once Actavis was notified of Warner-Lambert’s complaints, Actavis offered to take a series of steps to assuage the concerns around prescribing for the patented indication. However, Warner-Lambert wanted more: stricter controls on contractual arrangements between Actavis and its customers, and a warning on the packet. Perhaps it should have settled for the proposal suggested by Actavis. This would have avoided so many interim hearings which are now looking like very expensive satellite disputes.

Lobby for change

Work with the secretary of state, NHS England and the prescribing software providers to come up with a pragmatic solution. This is really the plea from Arnold at the end of his judgment. He believes that the best way forward is for centralised and authoritative guidance on when the brand name should be used to prescribe for the patented indication and when the international nonproprietary name can be used for the non-patented indication. He suggests the secretary of state should lead to effect the change he advocates.

This article is written with the benefit of hindsight. Undoubtedly, Warner-Lambert and Actavis thought very carefully before taking each step in this litigation. Swiss form second medical use patentees and generics alike should be grateful that so many issues were capable of being determined in a single case. This has resulted in a carefully considered and thought-provoking judgment.

It was clearly a tough case for all involved and those of us sitting on the sidelines should be pleased that even more interesting and sometimes surprising results are likely to unfold.

Arty Rajendra is a partner at  Rouse Legal in London. She can be contacted at: arajendra@rouse.com