American Cyanamid v Ethicon [1975]

American Cyanamid Co v Ethicon Ltd [1975] UKHL 1 is a landmark case in English law that laid down important principles regarding the granting of interlocutory injunctions, which is an interim court order issued during the course of a legal proceeding before the case reaches a final judgment. This type of injunction is designed to preserve the status quo or prevent irreparable harm until the court can make a final decision on the merits of the case.

Background: American Cyanamid, the claimant, held a patent for absorbable surgical sutures. Ethicon Ltd, the defendant, was a British company that intended to launch a similar surgical suture in the British market, which American Cyanamid claimed infringed on its patent. American Cyanamid sought an interim injunction to prevent Ethicon from using this type of surgical suture until the patent infringement case could be fully tried.

Trial: At the initial trial, American Cyanamid was granted an interim injunction, preventing Ethicon from using the surgical suture in question until the full patent infringement case could be heard.

1. Appeal: Ethicon appealed this decision, and the Court of Appeal discharged the interim injunction, allowing Ethicon to continue its activities.
2. Final appeal: American Cyanamid then appealed to the House of Lords. The House of Lords used this case to establish detailed guidelines on when courts should grant interlocutory injunctions:
3. Serious matter to be tried: The court must be satisfied that there is a serious and substantial matter to be tried at the full trial of the case. In other words, the applicant must have a strong case with a real prospect of success at trial.
4. Adequacy of damages as a remedy: The court should consider whether monetary damages would be sufficient to compensate the claimant if an injunction is not granted. If damages can adequately compensate the claimant for their losses, the court may be less inclined to grant an interim injunction.
5. Undertaking in damages: If damages are not considered an adequate remedy, the court should assess whether the claimant can provide an undertaking to compensate the defendant for any losses suffered due to the injunction if it is later determined that the injunction should not have been granted.
6. Balance of convenience: The court should weigh the balance of convenience between the parties. This means considering which party would suffer more harm if the injunction is granted or refused.
7. Maintaining the status quo: If the factors above are evenly balanced, the court should consider maintaining the status quo, which means not granting the injunction and allowing the parties to continue as they were until the full trial.

Effect: The second factor, the adequacy of damages as a remedy, has been discussed and applied in subsequent cases. The case clarified that even if a contract contains a damages clause, an interim injunction may still be granted if damages are not an adequate remedy due to the primary obligations of the parties.

In summary, the case established essential guidelines for the grant of interlocutory injunctions in English law, emphasising the need for a serious case, the consideration of damages, the balance of convenience, and the potential for maintaining the status quo when making such decisions. These guidelines are known as the American Cyanamid Principles and have continued to be influential in English legal practice and beyond.