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American Cyanamid Vs. Ethicon Limited - Court Judgment

LegalCrystal Citation
CourtHouse of Lords
Decided On
Reported in[1975]UKHL1; [1975]1ALLER504
AppellantAmerican Cyanamid
RespondentEthicon Limited
Excerpt: granted, the opportunityfor opposition at that stage and the provisions for appeal to the patent appealtribunal in the person of a patent judge of the high court, make the grantof a patent nowadays a good prima facie reason, in the true sense of thatterm, for supposing the patent to be valid, and have rendered obsolete theformer rule of practice as respects interlocutory injunctions in my view the grant of interlocutory injunctions in actions forinfringement of patents is governed by the same principles as in other actions.i turn to consider what those principles lords, when an application for an interlocutory injunction to restraina defendant from doing acts alleged to be in violation of the plaintiff's legalright is made upon contested facts, the.....

Lord Diplock

MY LORDS,This interlocutory appeal concerns a patent for the use as absorbablesurgical sutures of filaments made of a particular kind of chain polymerknown as " a polyhydroxyacetic ester " (" PHAE ").

These are sutures ofa kind that disintegrate and are absorbed by the human body once theyhave served their purpose.

The Appellants (" Cyanamid "), an AmericanCompany, are the registered proprietors of the patent.

Its priority datein the United Kingdom is October 2nd, 1964.

At that date the absorbablesutures in use were of natural origin.

They were made from animaltissues popularly known as catgut.

The Respondents (" Ethicon "), a sub-sidiary of another American Company, were the dominant suppliers ofcatgut sutures in the U.K.

market.Cyanamid introduced their patented product in 1970.

The chemical sub-stance of which it is made is a homo-polymer, i.e.

all the units in the chain,except the first and the last (" the end stabilisers"), consist of glycolideradicals.

Glycolide is the radical of Glycolic acid, which is another namefor hydroxyacetic acid.

By 1973 this product had succeeded in capturingsome 15 per cent, of the U.K.

market for absorbable surgical sutures.

Facedwith this competition to catgut, Ethicon who supplied 80 per cent, of themarket were proposing to introduce their own artificial suture (" XLG ").The chemical substance of which it is made is not a homopolymer but acopolymer, i.e.

although 90 per cent, by weight of the units in the chainconsist of glycolide radicals, the remaining 10 per cent, are lactide radicals,which are similar in chemical properties to glycolide radicals but not identicalin chemical composition.Cyanamid contend the XLG infringes their patent, of which the principalclaim is " A sterile article for the surgical repair or replacement of living" tissue, the article being readily absorbable by living tissue and being formed" from a polyhydroxyacetic ester." As is disclosed in the body of the patent,neither the substance PHAE nor the method of making it into filaments wasnew at the priority date.

Processes for manufacturing filaments from PHAEhad been the subject of two earlier U.S.

patents in 1953 (Lowe) and 1954(Higgins).

The invention claimed by Cyanamid thus consisted of thediscovery of a new use for a known substance.On 5th March, 1973, Cyanamid started a quia timet action against Ethiconfor an injunction to restrain the threatened infringement of their patent bysupplying sutures made of XLG to surgeons in the United Kingdom.

Onthe same day they gave notice of motion for an interlocutory injunction.Voluminous affidavits and exhibits were filed on behalf of each party.

Thehearing of the motion before Graham J.

lasted three days.

On 30th July,1973, he granted an interlocutory injunction upon the usual undertakingin damages by Cyanamid.Ethicon appealed to the Court of Appeal.

The hearing there took eightJays.

On 5th February, 1974, the Court of Appeal gave judgment.

Theyallowed the appeal and discharged the judge's order.

Leave to appealfrom that decision was granted by Your Lordships' House.

It was estimatedthat the hearing in this House of the appeal at which leave to adduce moreaffidavit evidence was to be sought would last twelve days.The question whether the use of XLG as an absorbable surgical sutureis an infringement of Cyanamid's patent depends upon the meaning to begiven to the three words " a polyhydroxyacetic ester " in the principal claim.2Cyanamid's contention is that at the date of publication of the patent thosewords were used as a term of art in the chemistry of polymerisation not onlyin the narrower meaning of a homopolymer of which the units in the chain,apart from the end stabilisers, consisted solely of glycolide radicals but alsoin the broader meaning of a copolymer of which up to 15 per cent, of theunits in the chain would be lactide radicals; and that what was said in thebody of the patent made it clear that in the claim the words were used inthis wider meaning.Ethicon's first contention is that the words " a polyhydroxyacetic ester "in the principal claim bear the narrower meaning only, viz.

that they arerestricted to a homopolymer of which all the units in the chain except theend stabilisers consist of glycolide radicals.

In the alternative, as commonlyhappens where the contest is between a narrower and a wider meaning ina patent specification, they attack the validity of the patent, if it bears thewider meaning, on the grounds of inutility, insufficiency, unfair basis andfalse suggestion.

These objections are really the obverse of their argumentin favour of the narrower construction.

They are all different ways of sayingthat if the claim is construed widely it includes copolymers which will nothave as surgical sutures the characteristics described in the body of the patent.Ethicon also attack the validity of the patent on the ground of obviousness.Both Graham J.

and the Court of Appeal felt constrained by authority todeal with Cyanamid's claim to an interlocutory injunction by consideringfirst whether, upon the whole of the affidavit evidence before them, a primafacie case of infringement had been made out.

As Russell L.J.

put it inthe concluding paragraph of his reasons for judgment with which the othermembers of the court agreed: —" If there be no prima facie case on the" point essential to entitle the plaintiff to complain of the defendant's" proposed activities, that is the end of any claim to interlocutory relief."" Prima facie case " may in some contexts be an elusive concept, but thesense in which it was being used by Russell L.J.

is apparent from an earlierpassage in his judgment.

After a detailed analysis of the conflicting experttestimony he said: —" I am not satisfied on the present evidence that on the" proper construction of this specification, addressed as it is to persons" skilled in the relevant art or science, the claim extends to sterile surgical" sutures produced not only from a homopolymer of glycolide but also from" a copolymer of glycolide and up to 15 per cent, of lactide.

That is to say" that I do not consider that a prima facie case of infringement is established."In effect what the Court of Appeal was doing was trying the issue ofinfringement upon the conflicting affidavit evidence as it stood, withoutthe benefit of oral testimony or cross-examination.

They were saying " If we" had to give judgment in the action now without any further evidence we" should hold that Cyanamid had not satisfied the onus of proving that their" patent would be infringed by Ethicon's selling sutures made of XLG." TheCourt of Appeal accordingly did not find it necessary to go into the questionsraised by Ethicon as to the validity of the patent or to consider where thebalance of convenience lay.Graham J.

had adopted the same approach as the Court of Appeal; but,upon the same evidence he had come to the contrary conclusion on the issueof infringement.

He considered that on the evidence as it stood Cyanamidhad made out a " strong prima facie case" that their patent would beinfringed by Ethicon's selling sutures made of XLG.

He then went on todeal briefly with the attack upon the validity of the patent and came to theconclusion that upon the evidence before him none of the grounds ofinvalidity advanced by Ethicon was likely to succeed.

He therefore feltentitled to consider the balance of convenience.

In his opinion it lay infavour of maintaining the status quo until the trial of the action.

So hegranted Cyanamid an interlocutory injunction restraining Ethicon frominfringing the patent until the trial or further order.The grant of an interlocutory injunction is a remedy that is both temporaryand discretionary.

It would be most exceptional for your Lordships to giveleave to appeal to this House in a case which turned upon where the balance3of convenience lay.

In the instant appeal, however, the question of thebalance of convenience, although it had been considered by Graham J.

anddecided in Cyanamid's favour, was never reached by the Court of Appeal.They considered that there was a rule of practice so well established as toconstitute a rule of law that precluded them from granting any interiminjunction unless upon the evidence adduced by both the parties on the hear-ing of the application the applicant had satisfied the court that on the balanceof probabilities the acts of the other party sought to be enjoined would, ifcommitted, violate the applicant's legal rights.

In the view of the Court ofAppeal the case which the applicant had to prove before any question ofbalance of convenience arose was "prima facie " only in the sense that theconclusion of law reached by the court upon that evidence might need to bemodified at some later date in the light of further evidence either detractingfrom the probative value of the evidence on which the court had acted orproving additional facts.

It was in order to enable the existence of any suchrule of law to be considered by your Lordships' House that leave to appealwas granted.The instant appeal arises in a patent case.

Historically there wasundoubtedly a time when in an action for infringement of a patent that wasnot already " well established ", whatever that may have meant, an interlocu-tory injunction to restrain infringement would not be granted if counsel forthe defendant stated that it was intended to attack the validity of the patent.Relics of this reluctance to enforce a monopoly that was challenged, eventhough the alleged grounds of invalidity were weak, are to be found in thejudgment of Scrutton L.J.

as late as 1924 in Smith v.

Grigg, Limited ([1924]1 K.B.

655); but the elaborate procedure for the examination of patentspecifications by expert examiners before a patent is granted, the opportunityfor opposition at that stage and the provisions for appeal to the Patent AppealTribunal in the person of a patent judge of the High Court, make the grantof a patent nowadays a good prima facie reason, in the true sense of thatterm, for supposing the patent to be valid, and have rendered obsolete theformer rule of practice as respects interlocutory injunctions in infringementactions.

In my view the grant of interlocutory injunctions in actions forinfringement of patents is governed by the same principles as in other actions.I turn to consider what those principles are.My Lords, when an application for an interlocutory injunction to restraina defendant from doing acts alleged to be in violation of the plaintiff's legalright is made upon contested facts, the decision whether or not to grant aninterlocutory injunction has to be taken at a time when ex hypothesi theexistence of the right or the violation of it, or both, is uncertain and willremain uncertain until final judgment is given in the action.

It was to mitigatethe risk of injustice to the plaintiff during the period before that uncertaintycould be resolved that the practice arose of granting him relief by way ofinterlocutory injunction ; but since the middle of the nineteenth century thishas been made subject to his undertaking to pay damages to the defendantfor any loss sustained by reason of the injunction if it should be held at thetrial that the plaintiff had not been entitled to restrain the defendant from doingwhat he was threatening to do.

The object of the interlocutory injunction isto protect the plaintiff against injury by violation of his right for which hecould not be adequately compensated in damages recoverable in the action ifthe uncertainty were resolved in his favour at the trial; but the plaintiff'sneed for such protection must be weighed against the corresponding need ofthe defendant to be protected against injury resulting from his having beenprevented from exercising his own legal rights for which he could not beadequately compensated under the plaintiff's undertaking in damages if theuncertainty were resolved in the defendant's favour at the trial.

The Courtmust weigh one need against another and determine where " the balance of" convenience " lies.In those cases where the legal rights of the parties depend upon facts thatare in dispute between them, the evidence available to the court at the hearingof the application for an interlocutory injunction is incomplete.

It is givenon affidavit and has not been tested by oral cross-examination.

The purpose4sought to be achieved by giving to the court discretion to grant such injunctionswould be stultified if the discretion were clogged by a technical rule forbiddingits exercise if upon that incomplete untested evidence the court evaluated thechances of the plaintiff's ultimate success in the action at 50 per cent, or less,but permitting its exercise if the court evaluated his chances at more than 50percent.The notion that it is incumbent upon the court to undertake what is in effecta preliminary trial of the action upon evidential material different from thatupon which the actual trial will be conducted, is, I think, of comparativelyrecent origin, though it can be supported by references in earlier cases to theneed to show " a probability that the plaintiff is entitled to relief " (Preston v.Luck 27 Ch.D.

497 per Cotton L.J.

at p.

506) or " a strong prima facie case" that the right which he seeks to protect in fact exists " (Smith v.

GriggLimited [1924] 1 K.B.

655 per Atkin L.J.

at p.


These are to be contrastedwith expressions in other cases indicating a much less onerous criterion, suchas the need to show that there is " certainly a case to be tried " (Jones v.Pacaya Rubber and Produce Company, Limited [1911] 1 K.B.

445 perBuckley L.J.

at p.457) which corresponds more closely with what judgesgenerally treated as sufficient to justify their considering the balance ofconvenience upon applications for interlocutory injunctions, at any rate upto the time when I became a member of your Lordships' House.An attempt had been made to reconcile these apparently differingapproaches to the exercise of the discretion by holding that the need to showa probability or a strong prima facie case applied only to the establishmentby the plaintiff of his right, and that the lesser burden of showing an arguablecase to be tried applied to the alleged violation of that right by the defendant(Donmar Productions Ltd.


Bart [1967] 1.


740 per Ungoed ThomasJ.

at p.

742 Harmon Pictures Ltd.


Osborne [1967] 1 W.L.R.

723 per GoffJ.

at p.


The suggested distinction between what the plaintiff mustestablish as respects his right and what he must show as respects its violationdid not long survive.

It was rejected by the Court of Appeal in Hubbard v.Vosper ([1972] 2 Q.B.

84)—a case in which the plaintiff's entitlement to copy-right was undisputed but an injunction was refused despite the apparent weak-ness of the suggested defence.

The Court, however, expressly deprecated anyattempt to fetter the discretion of the court by laying down any rules whichwould have the effect of limiting the flexibility of the remedy as a means ofachieving the objects that I have indicated above.

Nevertheless this authoritywas treated by Graham J.

and the Court of Appeal in the instant appealas leaving intact the supposed rule that the court is not entitled to take anyaccount of the balance of convenience unless it has first been satisfied thatif the case went to trial upon no other evidence than is before the court at thehearing of the application the plaintiff would be entitled to judgment for apermanent injunction in the same terms as the interlocutory injunction sought.Your Lordships should in my view take this opportunity of declaring thatthere is no such rule.

The use of such expressions as " a probability ", " a" prima facie case ", or " a strong prima facie case " in the context of theexercise of a discretionary power to grant an interlocutory injunction leads toconfusion as to the object sought to be achieved by this form of temporaryrelief.

The court no doubt must be satisfied that the claim is not frivolousor vexatious; in other words, that there is a serious question to be tried.It is no part of the court's function at this stage of the litigation to try toresolve conflicts of evidence on affidavit as to facts on which the claims ofeither party may ultimately depend nor to decide difficult questions of lawwhich call for detailed argument and mature considerations.

These arematters to be dealt with at the trial.

One of the reasons for the introductionof the practice of requiring an undertaking as to damages upon the grantof an interlocutory injunction was that " it aided the court in doing that" which was its great object, viz.

abstaining from expressing any opinion upon" the merits of the case until the hearing " (Wakefield v.

Duke of Buccleugh[1865] 12 L.T.


628 at 629).

So unless the material available to the courtat the hearing of the application for an interlocutory injunction fails to5disclose that the plaintiff has any real prospect of succeeding in his claim fora permanent injunction at the trial, the court should go on to consider whetherthe balance of convenience lies in favour of granting or refusing the inter-locutory relief that is sought.As to that, the governing principle is that the court should first considerwhether if the plaintiff were to succeed at the trial in establishing his rightto a permanent injunction he would be adequately compensated by an awardof damages for the loss he would have sustained as a result of the defendant'scontinuing to do what was sought to be enjoined between the time of theapplication and the time of the trial.

If damages in the measure recoverableat common law would be adequate remedy and the defendant would be ina financial position to pay them, no interlocutory injunction should normallybe granted, however strong the plaintiff's claim appeared to be at that stage.If, on the other hand, damages would not provide an adequate remedy forthe plaintiff in the event of his succeeding at the trial, the court should thenconsider whether, on the contrary hypothesis that the defendant were tosucceed at the trial in establishing his right to do that which was sought to beenjoined, he would be adequately compensated under the plaintiff's under-taking as to damages for the loss he would have sustained by being preventedfrom doing so between the time of the application and the time of the trial.If damages in the measure recoverable under such an undertaking would bean adequate remedy and the plaintiff would be in a financial position to paythem, there would be no reason upon this ground to refuse an interlocutoryinjunction.It is where there is doubt as to the adequacy of the respective remedies indamages available to either party or to both, that the question of balance ofconvenience arises.

It would be unwise to attempt even to list all thevarious matters which may need to be taken into consideration in decidingwhere the balance lies, let alone to suggest the relative weight to be attachedto them.

These will vary from case to case.Where other factors appear to be evenly balanced it is a counsel ofprudence to take such measures as are calculated to preserve the status quo.If the defendant is enjoined temporarily from doing something that he has notdone before, the only effect of the interlocutory injunction in the event of hissucceeding at the trial is to postpone the date at which he is able to embarkupon a course of action which he has not previously found it necessary toundertake ; whereas to interrupt him in the conduct of an established enter-prise would cause much greater inconvenience to him since he would haveto start again to establish it in the event of his succeeding at the trial.Save in the simplest cases, the decision to grant or to refuse an interlocutoryinjunction will cause to whichever party is unsuccessful on the applicationsome disadvantages which his ultimate success at the trial may show he oughtto have been spared and the disadvantages may be such that the recovery ofdamages to which he would then be entitled either in the action or under theplaintiff's undertaking would not be sufficient to compensate him fully forall of them.

The extent to which the disadvantages to each party would beincapable of being compensated in damages in the event of his succeedingat the trial is always a significant factor in assessing where the balance ofconvenience lies; and if the extent of the uncompensatable disadvantage toeach party would not differ widely, it may not be improper to take intoaccount in tipping the balance the relative strength of each party's case asrevealed by the affidavit evidence adduced on the hearing of the application.This, however, should be done only where it is apparent upon the facts dis-closed by evidence as to which there is no credible dispute that the strengthof one party's case is disproportionate to that of the other party.

The courtis not justified in embarking upon anything resembling a trial of the actionupon conflicting affidavits in order to evaluate the strength of either party'scase.I would reiterate that, in addition to those to which I have referred, theremay be many other special factors to be taken into consideration in theparticular circumstances of individual cases.

The instant appeal affords oneexample of this.6Returning, therefore, to the instant appeal, it cannot be doubted that theaffidavit evidence shows that there are serious questions to be tried.


and the Court of Appeal have already tried the question of infringementon such affidavit evidence as was available and have come to contraryconclusions.

Graham J.

has already also tried the question of invalidity onthese affidavits and has come to the conclusion that the defendant's groundsof objection to the patent are unlikely to succeed, so it was clearly incumbentupon him and on the Court of Appeal to consider the balance of convenience.Graham J.

did so and came to the conclusion that the balance of con-venience lay in favour of his exercising his discretion by granting an inter-locutory injunction.

As Patent Judge he has unrivalled experience ofpharmaceutical patents and the way in which the pharmaceutical industryis carried on.

Lacking in this experience, an Appellate Court should behesitant to over-rule his exercise of his discretion, unless they are satisfied thathe has gone wrong in law.The factors which he took into consideration and, in my view properly,were that Ethicon's sutures XLG were not yet on the market; so they had nobusiness which would be brought to a stop by the injunction ; no factorieswould be closed and no work-people would be thrown out of work.

Theyheld a dominant position in the United Kingdom market for absorbent surgicalsutures and adopted an aggressive sales policy.

Cyanamid on the other handwere in the course of establishing a growing market in PHAE surgical sutureswhich competed with the natural catgut sutures marketed by Ethicon.

IfEthicon were entitled also to establish themselves in the market for PHAEabsorbable surgical sutures until the action is tried, which may not be fortwo or three years yet, and possibly thereafter until the case is finallydisposed of on appeal, Cyanamid, even though ultimately successful inproving infringement, would have lost its chance of continuing to increaseits share in the total market in absorbent surgical sutures which the continua-tion of an uninterrupted monopoly of PHAE sutures would have gained forit by the time of the expiry of the patent in 1980.

It is notorious that newpharmaceutical products used exclusively by doctors or available only onprescription take a long time to become established in the market, that muchof the benefit of the monopoly granted by the patent derives from the factthat the patented product is given the opportunity of becoming establishedand this benefit continues to be reaped after the patent has expired.In addition there was a special factor to which Graham J.


This was that, once doctors and patients had got used toEthicon's product XLG in the period prior to the trial, it might well becommercially impracticable for Cyanamid to deprive the public of it byinsisting on a permanent injunction at the trial, owing to the damaging effectwhich this would have upon its goodwill in this specialised market andthus upon the sale of its other pharmaceutical products.I can see no ground for interfering in the Learned Judge's assessment ofthe balance of convenience or for interfering with the discretion that heexercised by granting the injunction.

In view of the fact that there areserious questions to be tried upon which the available evidence is incomplete,conflicting and untested, to express an opinion now as to the prospects ofsuccess of either party would only be embarrassing to the Judge who willhave eventually to try the case.

The likelihood of such embarrassmentprovides an additional reason for not adopting the course that both GrahamJ.

and the Court of Appeal thought they were bound to follow, of dealingwith the existing evidence in detail and giving reasoned assessments of theirviews as to the relative strengths of each party's cases.I would allow the appeal and restore the order of Graham J.Viscount DilhorneMY LORDS,I have had the advantage of reading the speech of my noble and learnedfriend, Lord Diplock.

I agree with it and that this appeal should beallowed and the Order of Graham J.

restored.7Lord Cross of ChelseaMY LORDS,For the reasons given by my noble and learned friend Lord Diplock inhis speech, which I have had the advantage of reading in draft, I would allowthis appeal.Lord SalmonMY LORDS,I agree with the opinion of my noble and learned friend Lord Diplock, andfor the reasons he gives I would allow the appeal and restore the order ofGraham J.Lord Edmund-DaviesMY LORDS,For the reasons given by my noble and learned friend, Lord Diplock,I would also allow this appeal.

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