What is an injunction?

What is an injunction?

An injunction is a court order, which either requires something to be done (a mandatory injunction) or prohibiting someone from doing something (a prohibitory injunction). They are in many ways the strictest court order, because they are usually accompanied by a penal notice. In short, that means, if someone breaches the injunction they can be imprisoned.

Injunctions are usually an “interim injunction”. That means they are in effect to maintain the status quo and protect assets, evidence or other materials that are important to the final determination of a claim. This brief basic guide gives some key points about injunctions, such as freezing injunctions or springboard injunctions.

What are the types of injunctions?

Common types of injunction include:

• Freezing orders.
• Search orders.
• Springboard Injunctions.

Injunctions are not limited to these however, nor are they to be seen in isolation. Often will something else from the court will be applied for at the same time, for example an order such as a Norwich Pharmacal Order* to disclose certain information.

Freezing orders (freezing injunctions)

A freezing order (sometimes referred to as a freezing injunction) is an interim injunction granted by the court restraining a party (the respondent) from disposing or dealing with assets. It can apply to both individuals and businesses.

A freezing order is discretionary and a court will exercise that discussion if the following tests can be met:

1. the applicant must have a cause of action, justiciable in England and Wales;
2. the applicant must have a good arguable case on the merits; and
3. there must be a real risk of the respondent’s assets being dissipated.

What can a freezing order be applied to?

Almost any asset can be frozen subject to meeting the tests. Commonly an order will cover things such as bank accounts, valuable machinery or vehicles or other valuable item. A freezing order is to prevent assets being dissipated; or in simple terms the freezing order is so that, in the event that the defendant needs to satisfy a court order following trial, the defendant has the funds to satisfy that very court order.

Search orders

A search order / injunction requires a defendant to allow the claimant’s representatives to enter premises and search for, copy, remove and detain documents, information or material. The key purpose of such an injunction is to preserve documents or materials that will constitute evidence in a claim to be determined later.

Invariably an independent solicitor (not associated with the case) will be appointed by the court to supervise the search and ensure that it is conducted fairly.

Springboard injunctions

This is an injunction to deprive a party of the benefit of an ongoing unfair competitive advantage obtained as a result of earlier unlawful conduct.

Commonly these have been used against former employees / contractors who have unlawfully taken confidential information from a business; however their use has grown in recent years to include breaches of fiduciary duties or breach of duties of fidelity.

Although it may seem to reverse matters in fact this again is to preserve the status quo – how matters would be if confidential information for example had not been taken and used. The test for a springboard injunction are:

• That there has been unlawful behaviour by the subject of the injunction;
• That an unfair competitive advantage has been obtained;
• That the nature and period of the competitive advantage justifies the court intervening;
• That the advantage still exists at the date when the springboard injunction is sought and will continue unless the relief is granted.

Each specific injunction has a number of special requirements BUT there are some key guiding principles that should be considered:

• If you are concerned about something and that there might be urgency seek advice immediately. Injunctions are always time critical. If you do not act and seek advice it can either be too late practically, because assets can have been disposed of or destroyed; or it can be too late legally. Act now or you may miss the chance
• If you are applying for an injunction, in a commercial case, an applicant for an interim injunction must typically undertake to pay the respondent whatever the court may later order by way of compensation, if it is later held that the interim injunction was wrongly granted.
• Whether to grant an injunction will usually depend upon whether it would be “just and convenient” to do so.
• The balance of convenience is very often the determining factor and there is a three-part test:
  • Would damages be an adequate remedy were the applicant to succeed at trial?
    • If yes then an interim injunction will not usually be granted.
    • If no, then would the applicant’s cross-undertaking in damages provide adequate protection for the respondent if, on final determination, it transpires that the interim injunction should never have been granted?

If no, that suggests interim relief will not be granted.

Injunctions are powerful weapons, and require expert assistance. If you are considering an injunction, or simply think you might have an urgent situation act and enquire immediately.

*  A Norwich Pharmacal Order (NPO) is an order which compels an innocent third party to provide information about another party who may have been mixed up in “wrongdoing

Injunctions in practice

The second half of 2021 saw a number of applications for patent trials to be expedited – in other words, to get a trial heard sooner than would normally be the case. This, and more particularly securing the injunctions that typically follow a successful outcome, are normally matters that a patent owner is keen to know about at the outset. Particularly with patent litigation, there can be an interplay between proceedings in other jurisdictions, including the European Patent Office (EPO), which can mean a party may wish to speed up (or slow down) litigation in one forum pending the outcome in another.

In the UK, the goal has been to have a period of not more than 12 months to trial from the time proceedings are issued. Even if the average is in fact a little longer, it remains the case that resolution in the UK still is relatively quick when compared to many other jurisdictions. So given this, the answer to the question as to why there has been a spate of applications for expedition is not obvious. No doubt it is a combination of various factors, including the fairly full state of the court lists of cases waiting to be heard, and possible COVID backlog, although as to the latter many cases have been heard satisfactorily through the pandemic, which reflects well on our court system.

The injunction ‘gap’

One reason for such applications to the UK courts which is clear is parties reacting to the so called “injunction gap” that can arise in German patent litigation. This ‘gap’ in time arises between the granting of an injunction by a German regional court, and the hearing as to the validity of the patent in question by the German federal court and arises because of the split nature of patent litigation in Germany. This position can be compounded further by the fact that under German law, a revocation action may not be commenced until opposition at the EPO, including any appeal to the Technical Board of Appeal (TBA), has been determined. It is quite possible that a lot of commercial damage could be inflicted during this ‘gap’, even if the patent is subsequently revoked.

Typically, once an alleged infringer realises he is about to be served with infringement proceedings in a regional court, he might seek to revoke the equivalent EP(UK) before the conclusion of said infringement proceedings with a view to influencing the German court in the event of a UK finding of revocation, or at least hope to put sufficient doubt in the mind of the judge of the regional court, such that an injunction might be avoided.

Three recent decisions

Three recent decisions have been given by one of the recently appointed patents judges, Mellor J, when this issue has been to the fore;

• Neurim & anr v Mylan ¹   –   expedition granted
• Abbott v Dexcom ²  –   expedition granted
• Advanced Bionics v Med-El ³ –   expedition granted

What are the principles the court will apply, given that granting expedition will inevitably mean other litigants will have to wait longer to have their case heard?

• • The leading case on such principles is Gore & Associates v Geox⁴. Neuberger LJ set out four factors to consider;
  • Is there a good reason for expedition?
  • Does allowing expedition interfere with the good administration of justice?
  • Does expedition cause prejudice to the other party?
  • Are there any other “special factors”?

It can be seen that the 2^nd to 4^th factors are typically balanced against the 1st.

• In Nicoventures v Philip Morris⁵ Birss J (as he then was) said the injunction gap was not enough on its own for expedition, and nor is a mere wish for the often cited “commercial certainty”. The “good reason” to justify an order for expedition must be established in evidence, which in practical terms means a well drafted witness statement with supporting exhibits.

How were these factors applied in the three recent Mellor J decisions and what can be learned from them?

• In Neurim, the urgency arose because the (divisional) patent in suit had a very short time until expiry. In an earlier action, the parent patent to the divisional was revoked by the TBA, after it had been found valid and infringed in the High Court. Neurim argued Mylan was estopped from arguing infringement and validity issues, they having already been decided in the earlier action. This estoppel argument was the only realistic way in which injunctive relief could have been granted before expiry of the divisional. Expedition was ordered, albeit without any comment on the strength of such estoppel arguments.⁶
• In Abbott, Mellor said this about the injunction gap “In spite of the available procedures in Germany… in theory the injunction gap problem in Germany is capable of producing some very unfair results.  If a patent is pretty clearly invalid, there is no problem because the infringement court grants a stay.  If a patent is weak but no stay is granted (because invalidity is not clear enough) and ultimately is declared invalid, it may suit a competitor to put up the required security.  As I understand matters, the security does not amount to a cross-undertaking in damages.  The competitor may calculate that he can inflict far more damage on his rival through an injunction than the value of the security he will lose.  Whether such unfairness can occur in practice lies in the hands of the German courts, who I am sure are aware of the scourge of weak patents which turn out to be invalid when scrutinised.”

The above mentioned “available procedures” following a regional court finding of infringement include requesting a stay of the injunction pending Opposition or Federal Court decision and asking the Patentee to put up security, in a manner similar to the cross undertaking in damages required in the UK. However, it is important to note that this security is not as wide ranging and comprehensive as the cross undertaking, so it may well suit a claimant to put up such security as the commercial advantage may be greater. Reform of German law in this respect is pending. However, notwithstanding these observations, the judge went on to say “This brings me back to the point made consistently in the caselaw – a desire to schedule a UK action in such a way that the outcome relating to validity is likely to be available and public before the German infringement court decides the matter is a factor to be taken into account but is not a strong factor and cannot justify expedition on its own… The UK court is not here to police European patents across Europe which may be perceived to be weak and may ultimately be proved to be invalid.”  [highlighting added].  Applying the principles, expedition was not granted. Nevertheless, it remains the case that it is entirely legitimate to bring a revocation action in the UK, and it is part of the role of the UK courts to hear such actions – the issue is rather whether such actions should be accelerated in the particular circumstances of each case.

• In Advanced Bionics, the injunction gap was again present, but this time expedition was granted. So what was different? The answer lies in the detailed evidence. In Abbott, the judge found Abbott’s primary reasons for expedition were protecting the German market and preventing interference with distribution networks across Europe, whereas Advanced Bionics’ concern was with disruption to the UK market, i.e. a market within the Court’s jurisdiction. Further, in Abbott, expedition would have created an asymmetrical position between the parties, whereas such concern did not arise with Advanced Bionics.

In summary

• A desire for expedition can often arise in actions where patents are being litigated across multiple jurisdictions – e.g. a finding in one court can prompt an application in another.
• The test for whether expedition should be granted is multifactorial, and the quality of evidence submitted is crucial.
• A 12 month lead in to trial is already relatively quick, and one needs a (really) good reason to be quicker and jump ahead of other litigants.
• The “injunction gap” can lend itself to unfair results, but that is not of itself enough for a successful application.

¹ [2021] EWHC 2198
² [2021] EWHC 2246
³ [2021] EWHC 2415
⁴ [2008] EWCA Civ 622
⁵ [2020] EWHC 1594
⁶ In a decision given very recently on the 24 January 2022, the High Court rejected said estoppel arguments.

The Court of Appeal restricts the use of injunctions against persons unknown

The courts usually strike a fair balance between these rights by restoring possession of occupied premises to the institution where trespassing students have alternative means of exercising their rights of assembly and/or expression that are less intrusive of the institution’s own rights.  It is rare that the only means by which a protest can be made is by occupying the particular location chosen by the protesting students.

The rights of institutions as landowners are also capable of protection in the context of very disruptive student protests by the courts granting injunctions against unknown persons in order to prevent further protests, where it is not possible to name the potential protesters/occupiers.  Some of our clients have had the benefit of injunctions of this kind. A recent judgment by the Court of Appeal, however, seeks to limit the circumstances in which such injunctions may be granted in future (Boyd & Anor v Ineos Upstream Ltd & Ors ([2019] EWCA Civ 515)).

Injunctions against unknown persons in the above case were applied to protect Ineos from the perceived risk of anti-fracking demonstrations becoming unlawful protests at various sites owned by Ineos.  The Court of Appeal counselled caution before granting injunctions against unknown persons “since the reach of such an injunction is necessarily difficult to assess in advance” (par 31).

Injunctions against persons unknown operate against the generality of the population until they are breached by individuals.  The Court of Appeal was clearly concerned that individuals would be deterred from engaging in perfectly lawful protest for fear of breaching the injunction. The injunction therefore could have a “chilling effect” on the exercise of the rights to freedom of expression and lawful assembly.

The Court of Appeal also acknowledged that it was not easy to formulate broad principles on which such an injunction could properly be granted.  It did however tentatively set out a number of requirements that would need to be met to warrant one, as follows:

• There must be a sufficiently real and imminent risk of wrongdoing (e.g. trespass, damage to property, blocking rights of way);
• It is impossible to name the persons who are likely to commit the wrongdoing unless restrained;
• It is possible to give effective notice of the injunction and the method of giving such notice is to be set out in the order (we have in the past obtained orders permitting service of injunctions via Facebook/Twitter on behalf of our clients);
• The terms of the injunction must correspond to the threatened wrongdoing and must not be so wide that they prohibit lawful conduct;
• The terms of the injunction must be sufficiently clear and precise as to enable persons potentially effected to know what they must not do; and
• The injunction should have clear geographical and temporal limits.

Commentators have construed this case as a significant restriction on landowners’ ability to protect their interests before any harm has occurred.  Though it is important to note that the judgment does not absolutely rule out injunctions against persons unknown, their scope has been narrowed in deference to the exercise of rights to freedom of expression and lawful assembly. The challenge posed is to those who draft the order to identify with precision the potential conduct that poses a threat to the landowner and to seek clear restraint that is the minimum necessary to manage that risk.