Cipla Agrimed (Pty) Ltd v Merck Sharp Dohme Corporation

Cipla Agrimed (Pty) Ltd is the proprietor of South African Patent 92/7457 (1992 patent). Merck Sharp Dohme Corporation (first respondent) and Merial Limited (second respondent) are joint proprietors of South African Patent 98/10975 (1998 patent). Merial South Africa (Pty) Ltd (third respondent) is a registered licensee of the 1998 patent. Cipla brought a revocation application against the 1998 patent on grounds of anticipation and obviousness based on the 1992 patent. Merck instituted an infringement action against Cipla. The parties agreed to stay the infringement action pending the revocation application. In the revocation application, Cipla only argued the anticipation point. The Court of the Commissioner of Patents (Teffo J) upheld the anticipation point and granted revocation. On appeal, the Supreme Court of Appeal reversed this finding on 27 November 2015, dismissing the revocation application and certifying all claims of the 1998 patent as valid. Following this judgment, Merck demanded that Cipla consent to final relief in the infringement action. Cipla instead served notice to amend its plea to pursue the obviousness point (previously pleaded but not argued) and to add a new inutility point. Merck responded by alleging res judicata based on the SCA judgment. In January 2016, Merck launched an urgent application for an interim interdict pending final determination of the infringement action. Louw J granted the interim interdict on 4 March 2016, finding that validity was res judicata, and adding a proviso that the interdict would lapse on the patent expiry date (3 December 2018) if the action was not finally determined by then. Cipla appealed with leave.

• Whether an interim interdict pending final determination of an action is appealable
• Whether an interdict interim in form but allegedly final in effect is appealable
• What test determines whether an order is 'final in effect' for purposes of appealability
• Whether an interim interdict is final in effect where the underlying legal right (patent) will expire before the final action can be determined
• Whether the principles in BHT Water Treatment (Pty) Ltd v Leslie render an interim interdict final in effect and thus appealable

The appeal was struck from the roll with costs including the costs of two counsel.

An interim interdict pending final determination of an action is not appealable unless it is final in effect. An order is 'final in effect' only if it definitively resolves an issue in the suit such that the issue cannot be revisited by the court of first instance or the court hearing the action. Prejudice arising from the fact that 'time run cannot be recalled' or that an underlying right (such as a patent) may expire before final determination does not render an interim interdict 'final in effect' and therefore appealable. The test for whether an order is final in effect requires examination of whether the order disposes of an issue in the suit in a manner not susceptible to alteration, not merely whether a party suffers prejudice from the temporary operation of the interdict. An interdict that is interim in form and which does not finally determine any issue in the pending action, and which can be reconsidered by the trial court based on changed circumstances, is interim in both form and effect and therefore not appealable.

Rogers AJA, without deciding the point, discussed the circumstances in which the BHT Water Treatment approach (treating an interim interdict as final if the trial court will not have opportunity to make a final determination before a time-limited restraint expires) might apply if it is correct in principle. He suggested that if BHT is correct, it should be confined to cases where it is clear at the time the interdict is granted that the trial court will not have opportunity to finally adjudicate the matter before the restraint expires. He emphasized that trial courts cannot be expected to engage in speculative crystal ball-gazing and that the relevant consideration is whether the trial court (not an appellate court) will have opportunity to decide the case finally. Rogers AJA noted that the correctness of BHT versus the competing line of authority in Radio Islam was not fully argued and should be left for determination in another case. Gorven AJA similarly declined to express a view on the correctness of BHT, noting that this issue did not arise on the facts of the case as argued. He noted that policy considerations favor limiting appeals from interim interdicts to avoid undermining the necessarily imperfect but efficient procedure for obtaining temporary relief. He also observed that allowing appealability to turn on ex post facto predictions about when matters will be finalized would place appellate courts in an invidious position. Both judgments suggest that the question of BHT's correctness remains open for determination in a future case where it is squarely raised and fully argued.

This case provides important guidance on the appealability of interim interdicts in South African law. It restates and clarifies the test for determining when an order is 'final in effect' and therefore appealable despite being interlocutory in form. The judgment emphasizes that an order must be definitive of an issue and not susceptible to alteration by the court of first instance to be appealable. The case addresses the tension between the BHT Water Treatment approach (which treated certain interim interdicts as final where the underlying right would expire before final determination) and the established line of authority from cases like Cronshaw. While Rogers AJA's judgment provides analysis of when BHT might apply (if correct), Gorven AJA's concurring judgment maintains the traditional approach without deciding BHT's correctness. The case is significant for patent litigation and other matters involving time-limited rights, clarifying that mere expiry of the underlying right before final determination does not automatically render an interim interdict appealable. The judgment underscores the policy considerations behind limiting appeals from interim interdicts, including avoiding undermining the necessarily imperfect but efficient procedure for obtaining interim relief. The case also illustrates the importance of how a trial court characterizes and decides an application in determining appealability.