Monday, April 8, 2019

News on Preliminary Injunctions

1. A few weeks back Norman Siebrasse called my attention to a post on IPKat titled PI awarded following disagreement with EPO on added matter - Novartis v Dr Reddy's.  (Decision available here.)  Mr. Justice Birss granted the patent owner a preliminary injunction against the sales of a generic drug, subject to (as is usual) a cross-undertaking in damages.  Interestingly, he also invited the Department of Health and the NHS "to apply to be joined in relation to the cross-undertaking," noting that he had taken similar action in the past in Actavis v. Boehringer, [2013] EWHC 2927, and that the rationale for doing so is that if "it is possible that the entity which loses the most, if it turns out that the interim injunction should not have been granted, is not the generic supplier itself but hte Department of Health or the relevant NHS entities . . . who will be paying the price . . . ."  I don't think U.S. courts are authorized to do that; see, e.g., 11A Charles Alan Wright et al., Federal Practice & Procedure, § 2954 ("Courts at various times have been called upon to decide a number of other issues under [Federal Rule of Civil Procedure] 65(c). For example, there is authority for the proposition that someone who is not a party to the case or restrained or enjoined by order of the court is without standing to demand security for possible damages incurred as a result of any injunction issued.") (citations omitted).  I'd be interested in hearing if Mr. Justice Birss's practice is followed in other countries.  For previous discussion of injunction bonds on this blog, see, e.g., here.

2.  Hui Zhang, Jiao Yuxin, and Yi Wei have published an informative post on the Kluwer Patent Blog titled China: Comments on the New Rules on Preliminary Injunction and Representative Precedents.  The post details the "Provisions of the Supreme People's Court on Several Issues Concerning the Application of Laws in Adjudication of Action Preservation Cases Involving IP Disputes," which  took effect on January 1, 2019.  According to the authors, from 2014-18 Chinese courts issued only 150 pre-suit and 50 in-suit preliminary injunctions in total.  They anticipate, however, that by providing patentees with additional guidance, the new guidelines will spur an increase in requests for and grants of PIs.  Courts are obligated to consider four factors, analogous to those at issue in the U.S., but with "factual and legal basis" for the PI replacing "likelihood of success on the merits."  The guides set forth various subfactors to consider in this regard, and the authors predict that PIs will be available in a wider class of cases than in Germany. They also note the courts' discretion in assessing irreparable harm, and discuss some illustrative cases on this and other factors. Interestingly, there is no right to an interlocutory appeal, as in the U.S. and Germany.

Finally, and relevant to the issue of bonds, the authors state that Chinese law requires that "where a PI ruling is made in error, the moving party should compensate the opposing party's loss caused by the PI," and that this is a matter of strict liability.


  1. The critical issue on preliminary injunctions had historically been that the cases were counsidered to be motions prior to formal case acceptance. Thus, there is no published written record for the public and the "case acceptance division" or reviewing division operate in an atmosphere of relative secrecy. This has changed somewhat, but we still have very few published cases in this area. Chinese judges had typically referred to the high "grant" rate for PI motions, but the data on cases that were not "accepted" was not availability. There may have literally been thousands of cases that were never accepted or where the parties believed it was not worth the effort to seek "acceptance." Thus it is very difficult to estiamte what the future looks like - it may be getting better, but in general provisional relief has been a quantiative and transparency-related disappointment in terms of China's TRIPS implementation.