Speed Read
In Merck Sharpe & Dohme Corporation v Clonmel Healthcare Ltd [2019] IESC 65, the Supreme Court found that adequacy of damages for a plaintiff is not, of itself, sufficient to justify the refusal of an interlocutory injunction.
'An injunction should not be granted merely because an applicant can tick the relevant boxes of arguable case, inadequacy of damages, and ability to provide an undertaking as to damages, and by the same token should not be refused merely because damages may be awarded at trial.'
Background
The plaintiff had monopoly rights over the sale of a combination of statin drugs under the brand name Inegy. Those rights derived from a patent and Supplementary Protection Certificate (SPC). The defendant claimed that the SPC was invalid, and sought to enter the market with a generic product before its expiration.
The plaintiff and sought and been denied an interlocutory injunction restraining the defendant from infringing its intellectual property rights in the High Court, and in the Court of Appeal.
In the High Court, Haughton J had considered that damages were an adequate remedy for the plaintiff, and thus did not proceed to consider the balance of convenience.
In the Court of Appeal, Peart J found that damages would be an adequate remedy for the plaintiff, but would not be an adequate remedy for the defendant, as it would lose its 'first mover' advantage as a generic supplier of an alternative to Inergy. Whelan J considered that the case should be approached on the basis that the grant of an interlocutory injunction would dispose of the case as a whole, but that any loss suffered by the plaintiff was pre-eminently a commercial loss, given that the SPC was so close to expiration. She agreed that the loss of 'first mover' status could not be adequately compensated by damages. Hogan J, dissenting, considered that the defendant's claim of invalidity of the SPC was unlikely to succeed, and thus would have granted the injunction.
Decision
O'Donnell J considered at length the status of the approach a court should take in determining applications for interlocutory injunctions as set out in American Cyanamid, as adopted in Campus Oil. He determined that that judgment '…should not, in my view, be approached as though it were the laying down of strict mechanical rules for the control of future cases.'
He discussed a conflict in the authorities about whether a consideration of the adequacy of damages for a plaintiff should be considered separately, and prior to the balance of convenience, or whether it forms part of the balance of convenience. He expressed a preference for the latter approach.
The court went on to consider that an interpretation of the case law that has followed Campus Oil to the effect that it must be completely impossible to assess damages before damages can be said to be an inadequate remedy for a plaintiff 'requires some qualification'.
O'Donnell J commented that: 'The fact that it is in theory possible to gather every feather does not mean that it is not more convenient to stop the pillow being punctured in the first place… The fact that it is not completely impossible to assess damages should not preclude the grant of an injunction to the plaintiff in an appropriate case'
The court held that there was an inconsistency in finding that, although both parties are large commercial entities, the plaintiff could be adequately compensated by damages, but the defendant could not. It found that in either case, damages would not be a fully adequate remedy, and that the likelihood if some irreparable harm was equally balanced between the parties. Thus, it allowed the appeal.
The court also noted that 'if the question of adequacy of damages is evenly balanced, it may not be inappropriate to consider the relative strengths and merits of each party's case as it may appear at the interlocutory stage'.
