News

Court of Appeal hands down reasons for awarding AZ an interim injunction in the UK against Glenmark’s generic dapagliflozin for type II diabetes

24 April 2025

News

Court of Appeal hands down reasons for awarding AZ an interim injunction in the UK against Glenmark’s generic dapagliflozin for type II diabetes

Chapter

Chapter
Chapter 1
The decision at a glance Check this option
Chapter 2
The findings on the legal principles Check this option
Chapter 3
The decision on AZ’s grounds Check this option

Just under two weeks ago, we reported the Court of Appeal had awarded AstraZeneca (AZ) a preliminary injunction in the UK against Glenmark’s generic dapagliflozin (dapa) product for type II diabetes, until the hearing following judgment on the validity of the SPC. This ruling reversed the decision of the lower court refusing the same. The Court of Appeal’s reasons for making that award are now out. Arnold LJ gave the leading judgment (with which the other two Lord Justices agreed). Here’s our round-up of the key points.

Chapter 1 The decision at a glance

AZ won on two of its grounds of appeal. There were four grounds of appeal (ground 1 being in two parts) which were that the first instance judge:

Ground 1a - applied too high a standard when considering whether damages would be adequate for AZ and did not take into account the relevant uncertainties;

Ground 1b - should have considered the adequacy of damages as part of the balance of convenience;

Ground 2 - failed to take into account the loss to AZ that would occur after the form of order hearing;

Ground 3 - incorrectly assessed the adequacy of damages to Glenmark; and

Ground 4 - in any event aspects of the first instance judge's assessment had been vitiated by new evidence.

Ground 4 bolstered the other arguments but was not a free standing point of appeal. In the end, the Court found in AZ’s favour on grounds 1a and 2. Grounds 1b and 3 failed. (Judgment paragraph 55)

Chapter 2 The findings on the legal principles

Arnold LJ’s three factors for a successful pharma PI. The Court found that previous successful pharma PI applications were distinguished by three factors in particular. The first factor was that single generic entry often leads to multiple generic entry which is liable to lead to price-cutting and a resultant downward spiral. The second factor was that the practical ability of a patentee to restore its previous price if the patent is found valid is generally limited. Pausing there, Arnold LJ said the first two factors can lead to the conclusion damages will not be adequate for the patentee because of uncertainty but it is usually the case that damages are not an adequate remedy for the generic either (which means that, following American Cyanamid, the court goes on to consider the balance of convenience). Arnold LJ’s third factor was that it is proper for the court to take into account whether the generic could have cleared the way when considering the balance of convenience. (Judgment paragraphs 22-33).

When in doubt as to adequacy of damages the Court can take into account all relevant factors. There is presently a debate whether the 4-step American Cyanamid test for granting an interim injunction in the UK should be applied sequentially (with the result that if damages are an adequate remedy for the patentee or the generic, the balance of convenience factors are not taken into account) or whether a holistic approach should be adopted. In Neurim I (an application by Neurim to the UK Supreme Court for permission to appeal the refusal of a preliminary injunction) the UK Supreme Court commented (obiter) that the matter is a “point of law of public importance” but ultimately refused permission to appeal including because the trial was imminent. (Judgment paragraphs 34-36). The lower courts in this country remain bound to follow American Cyanamid. For this reason, ground 1B of AZ’s appeal failed (Judgment paragraphs 34 and 74). Nevertheless Arnold LJ found that when in doubt as to the adequacy of damages to either party, it is open to the Court to take into account all other relevant factors in deciding which path is least likely to cause irremediable prejudice to one party or another. (Judgment paragraphs 34-36).

Chapter 3 The decision on AZ’s grounds

The generic landscape had evolved since the first instance hearing. As we noted previously, AZ had new evidence on the position of the other MA holders for generic dapa products: both Teva and so-called Generic X had secured commitments with wholesalers for an immediate launch of their generic dapa products onto the UK market in similar volumes. The Court found this new evidence made multiple generic entry before the form of order hearing not just a real risk but a certainty; established multiple generic entry was likely to happen sooner than the first instance judge had anticipated; and it followed a downward price spiral as a consequence of competition between the 3+ generic entrants was inevitable. (Judgment paragraphs 56-58).

There was real doubt about whether damages would be an adequate remedy for AZ. Now that multiple generic entry was a certainty and likely to happen quicker than previously anticipated, there was room for doubt about whether AZ would be forced to permanently reduce their price in the period before the form of order hearing. (Judgment paragraphs 60-73). Further the first instance judge had erred in not considering the damage that might result to AZ after the form of order hearing as a consequence of changing the status quo by allowing Glenmark onto the market (which would make it more difficult for AZ to secure a permanent injunction pending appeal if the patent was found valid resulting in AZ being subjected to a longer period of price erosion). (Judgment paragraphs 75-80). Taken together this meant there was real doubt about whether damages would be an adequate remedy for AZ. Ground of appeal 1a and 2 were allowed on this basis. (Judgment paragraph 81).

Damages were not an adequate remedy for Glenmark (or the NHS) either - but it was prudent to preserve the status quo. AZ’s arguments on ground 3 (including an argument that Glenmark no longer benefitted from first mover advantage) failed. The Court found that, although there was real doubt as to adequacy of damage to Glenmark and the NHS, it was not possible to form a reliable view as to which side was more at risk. In those circumstances, it was prudent to preserve the status quo given the likely shortness of the injunction period. (Judgment paragraphs 82-87).

The lower court should not have disregarded Glenmark’s failure to clear the way nor disregarded Glenmark launching mid-trial without regard for due process. The Court’s decision to preserve the status quo was reinforced by two points. The first point was that the first instance judge had been wrong to discount Glenmark’s failure to clear the way. The Court found that if judgment before launch cannot be achieved it is incumbent on the party seeking to clear the path to apply for expedition and to furnish the Court with good reason for that expedition (the latter Glenmark had not done). The second point was that the first instance judge should not have disregarded Glenmark launching mid-trial without waiting for judgment (in Arnold LJ’s words, “jumping the gun”). As we noted previously, the first instance judge found this behaviour on Glenmark’s part was not a significant factor when considering whether to preserve the status quo. The Court disagreed, finding that this conduct would inevitably make it more difficult for the court to do justice to all the parties (including relevant third parties) should it be asked to consider applications for permission to appeal and permanent injunctive relief later down the line after the validity of the SPC had been determined. (Judgment paragraphs 88-89).

Glenmark’s conduct. Arnold LJ ended his judgment by stressing “it is important that parties should behave in a manner which is conducive to an orderly resolution of disputes of this kind, and not attempt to gain a commercial advantage by disrupting such orderly resolution. The effect of Glenmark’s conduct in this case has been to require a day of argument in the Patents Court and a day of argument in this Court to be devoted to, and very considerable costs to be expended on, the question of what is to happen during a period of one to three months. That is not a good use of the parties’ resources, still less a good use of scarce court resources.”

Authored by Helen Poulson.

The injunction will remain in place until the hearing following judgment in the validity action. It is anticipated this hearing will take place by no later than mid-June (though it could happen earlier or later depending on the timing of the validity judgment which has not yet been handed down).

The Court stressed its decision did not dictate the outcome of any application that AZ might make for a further injunction after judgment on validity and that any such application would need to be considered on its merits in light of the relevant circumstances at that stage.