Posted: June 4th, 2018
Regeneron Pharmaceuticals, Inc v Kymab Limited and Novo Nordisk A/S, UK Court of Appeal, 23 May 2018,  EWCA 1186 (Civ)
This is a judgment from the Court of Appeal on the appropriate form of order to be made following its finding that two of Regeneron’s patents are valid and infringed. At first instance, Henry Carr J had found these patents to be insufficient, but infringed by Kymab if valid. On appeal, Arden LJ, Kitchin LJ and Floyd LJ overturned the finding of insufficiency and upheld the finding of infringement. A headnote covering the substantive appeal can be found here, and a headnote on the first instance decision here.
Ordinarily, the form of order on appeal is agreed between the parties without the need for a judgment from the Court. However, on this occasion, this had not been possible. Having considered written submissions by the parties (and without the need for a hearing), the Court of Appeal found as follows:
Injunction and request for delivery up/destruction
The parties had agreed that it was appropriate for an injunction to be granted. They also agreed that this should not prevent Kymab from doing any acts for the purpose of a medicinal product assessment (pursuant to s60(6D)-(6E) Patents Act 1977), nor should it prevent Kymab from using infringing mice to produce non-infringing mice.
However, Kymab had resisted Regeneron’s requested order for delivery up of all mice, mouse embryonic stem cells, mouse eukaryotic cells and antibodies, which infringed the patents, arguing that it was entitled to retain some of these for exempt acts and for producing non-infringing products. Kymab also argued that in any event its products should not be delivered up to Regeneron as Regeneron could then learn aspects of Kymab’s confidential information. The Court of Appeal allowed Kymab to retain a necessary quantity of its products for approved purposes, and required delivery up of the remainder not to Regeneron, but to a third party.
Kymab further opposed Regeneron’s request that cells engineered to produce antibodies be delivered up, as these were not infringing products, and merely intermediaries in the claimed process. This submission was rejected, as the Court considered that the cells had no purpose other than to produce infringing antibodies, and that it was within the Court’s power to extend its order to cover such cells so as to make its injunction against infringement more effective.
Despite it not being specified in the claim form as a remedy sought, Regeneron sought extensive disclosure, requiring Kymab to identify infringing mice, antibodies and cells for the production of antibodies, which were anywhere in the world, whether or not they remained in Kymab’s control. Kitchin LJ ordered disclosure only in respect of products and antibodies which had been made or kept in infringement of Regeneron’s patents, and which, as a result of their disposal in the UK, were no longer in Kymab’s possession or control. Kitchin LJ held that Regeneron had no entitlement to disclosure in respect of territories where it held no patents, and accepted Kymab’s concern that an order requiring it to identify third parties would serve only to allow Regeneron to contact Kymab’s customers.
Stay pending application to appeal
The Court of Appeal chose to stay the injunction, order for delivery up and order for disclosure, pending an application to appeal to the Supreme Court. In doing so, Kitchin LJ placed emphasis on the collaborative work Kymab undertakes with a number of humanitarian bodies, including the Gates Foundation, helping to develop treatments for diseases with unmet clinical need, including in developing economies. He held that Kymab’s loss would be extremely difficult to quantify. In particular, he noted that much of its work would be brought to an end, or seriously disrupted, if a final injunction was imposed, and also that Kymab had made a significant investment in developing its own technology, much of which had nothing to do with the inventions of the patents in suit. Kitchin LJ also accepted that an injunction would cause Kymab serious reputational and financial harm, for example: (i) affecting Kymab’s ability to secure funding in the future; (ii) causing redundancies; and (iii) potentially causing a breach of Kymab’s licence under the Animal (Scientific Procedures) Act 1986.
Kitchin LJ noted Regeneron’s concern that it is in competition with Kymab, and that the partnerships and collaborations that Kymab has entered into represent significant lost opportunities for Regeneron. However, he held that on an assessment of the relative impact, the detriment to Kymab of immediate enforcement, in particular the unquantifiable loss, considerably outweighed the loss to Regeneron of a stay. In order to alleviate Regeneron’s concerns that such a stay would provide a springboard to Kymab in the event it was found by the Supreme Court to infringe, Kitchin LJ stated that he would accept Kymab’s offer to transfer any rights to products developed using infringing mice to the Gates Foundation, such that it could not benefit commercially from infringement. He also gave Regeneron liberty to apply for an injunction to restrain Kymab from securing any advantage from its infringing activities after the expiry of the patents (but expressed no view as to the merits of such an application, or whether they even had jurisdiction to make such an order).
The Court of Appeal refused to order that Kymab publicise the substantive judgment by disseminating the judgment to its customers and collaborators and placing a notice on its webpage. The Court noted that in such a highly specialised field it was unlikely that relevant third parties were not aware of the outcome of the litigation, and such an order would serve only to embarrass Kymab.
Novo contended that it was not jointly and severally liable for Regeneron’s costs in the appeal, as the infringement case against it had been dropped shortly before the first instance trial, and that it had no real interest in invalidating the patent. However, Kitchin LJ held that if Novo had not wanted to be liable for costs it should have discontinued its counterclaim at first instance and not contested the appeal. Accordingly he held it to be liable for 50% of relevant costs.
Ability to Pay
Regeneron also raised concerns about Kymab’s ability to pay any award in damages, and requested circa £30 million be ring-fenced for the purposes of any award. Kitchin LJ rejected this, considering that due to the nature of Kymab’s business, and the absence of any immediate commercialisation likely to cause damage to Regeneron, the argument by Regeneron considerably overstated the potential recoverable damages, and would serve only to jeopardise the ongoing viability of Kymab’s business. Kitchin LJ again identified the impact this would have on Kymab’s humanitarian work as a key concern.
A copy of the judgment can be found here.
Headnote by Rachel Mumby and Ben Millson, Bristows LLP