American Cyanamid v Ethicon – Case Summary

American Cyanamid Co v Ethicon Ltd

House of Lords

Citations: [1975] AC 396; [1975] 2 WLR 316; [1975] 1 All ER 504; [1975] FSR 101; [1975] RPC 513; (1975) 119 SJ 136.

Facts

American Cyanamid held a patent for surgical sutures. Ethicon planned to launch their own line of sutures. American Cyanamid claimed this breached their patent. Ethicon responded by challenging the validity of the patent. American Cyanamid sought an interim injunction to stop the sutures being sold until the issues of infringement and validity could be determined at trial. The High Court granted the injunction, but the Court of Appeal discharged it on the grounds that there was no prima facie case of infringement made out. American Cyanamid appealed to the House of Lords.

Issue(s)
  1. What must the claimant establish to acquire an interim injunction?
Decision

The House of Lords held in favour of American Cyanamid and reinstated the injunction.

This Case is Authority For…

The House of Lords set out a new general test for the grant of an interim injunction:

  1. There must be a serious issue to be tried. This will be established unless the claim is completely frivolous or vexatious.
  2. The court should then consider whether the claimant, if successful at trial, would be adequately compensated by damages if no interim injunction is made. If damages would be adequate, ordinarily no injunction should be granted.
  3. If the answer to (2) is yes, the court should consider whether the defendant, if successful at trial, would be adequately compensated by damages if an interim injunction is made.
  4. If either of the two previous issues are ambiguous, the court should consider where the balance of convenience lies.

The starting point is that the balance of convenience favours preserving the status quo. If the defendant has not yet started acting in the allegedly illegal manner, then the balance of convenience will normally favour the grant of an injunction. If they have begun acting, then the balance of convenience will favour not granting the injunction.

Other

The House of Lords noted that the courts should not be trying to resolve issues of conflicting evidence at the interim stage. Such issues should be for the trial only.

The House of Lords stated that factors relevant to the balance of convenience include (but are not limited to):

  • The apparent merits of each party’s case – but only if one party very clearly has a stronger case;
  • The extent to which granting/not granting the injunction would affect each party;
  • Whether the claimant would lose some or all of the value of a time-limited property right (such as a patent) if the injunction is not granted.