Interpharma Pty Ltd v Aventis Pharma SA [2011] FCA 32 (1 February 2011)

Last Updated: 2 February 2011

FEDERAL COURT OF AUSTRALIA

Interpharma Pty Ltd v Aventis Pharma SA [2011] FCA 32

Citation:		Interpharma Pty Ltd v Aventis Pharma SA [2011] FCA 32
Parties:		INTERPHARMA PTY LTD v AVENTIS PHARMA SA and SANOFI-AVENTIS AUSTRALIA PTY LTD; AVENTIS PHARMA SA, MAY & BAKER LIMITED and SANOFI-AVENTIS AUSTRALIA PTY LTD v INTERPHARMA PTY LTD HOSPIRA AUSTRALIA PTY LTD and HOSPIRA PTY LTD v AVENTIS PHARMA SA and SANOFI-AVENTIS AUSTRALIA PTY LTD; AVENTIS PHARMA SA, MAY & BAKER LIMITED and SANOFI-AVENTIS AUSTRALIA PTY LTD v HOSPIRA AUSTRALIA PTY LTD and HOSPIRA PTY LTD
File number(s):		NSD 1373 of 2010 NSD 1521 of 2010
Judge:		JAGOT J
Date of judgment:		1 February 2011
Catchwords:		PATENTS – interlocutory injunctions – where damages will be an adequate remedy – where there has been undue and inadequately explained delay. PRACTICE AND PROCEDURE – interlocutory injunctions.
Legislation:		Patents Act 1990 (Cth)
Cases cited:		General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457 Interpharma Pty Ltd v Commissioner of Patents (2008) 79 IPR 261; [2008] FCA 1498 Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2004) 217 CLR 274; [2004] HCA 58 Molnlycke AB v Procter & Gamble Limited (No 2) [1990] RPC 487 Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (2009) 81 IPR 339; [2009] FCA 595
Date of hearing:	24 and 25 January 2011
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	42
Counsel for the Applicant/ Cross-Respondent in NSD 1373 of 2010:	Mr D Shavin QC and Mr G Fitzgerald
Solicitor for the Applicant/ Cross-Respondent in NSD 1373 of 2010:	Griffith Hack Lawyers
Counsel for the Applicants/ Cross-Respondents in NSD 1521 of 2010:	Mr BN Caine SC and Mr T Cordiner
Solicitor for the Applicants/ Cross-Respondents in NSD 1521 of 2010:	Mallesons Stephen Jaques
Counsel for the Respondents/ Cross-Claimants:	Mr R Cobden SC and Mr AR Lang
Solicitor for the Respondents/ Cross-Claimants:	Allens Arthur Robinson

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1373 of 2010

BETWEEN:	INTERPHARMA PTY LTD Applicant/Cross-Respondent
AND:	AVENTIS PHARMA SA First Respondent/First Cross-claimant SANOFI-AVENTIS AUSTRALIA PTY LTD Second Respondent/Third Cross-claimant MAY & BAKER LIMITED Second Cross-Claimant

JUDGE:	JAGOT J
DATE OF ORDER:	1 FEBRUARY 2011
WHERE MADE:	SYDNEY

UPON THE UNDERTAKING AS SET OUT IN ANNEXURE A BEING GIVEN, THE COURT ORDERS THAT:

1. The cross-claimants’ application for interlocutory relief be dismissed.
2. Costs of the cross-claimants’ application for interlocutory relief be reserved.
   

ANNEXURE A

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1521 of 2010

BETWEEN:	HOSPIRA AUSTRALIA PTY LTD First Applicant/First Cross-Respondent HOSPIRA PTY LTD Second Applicant/Second Cross-Respondent
AND:	AVENTIS PHARMA SA First Respondent/First Cross-claimant SANOFI-AVENTIS AUSTRALIA PTY LTD Second Respondent/Third Cross-claimant MAY & BAKER LIMITED Second Cross-Claimant

JUDGE:	JAGOT J
DATE OF ORDER:	1 FEBRUARY 2011
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The cross-claimants’ application for interlocutory relief be dismissed.
2. Costs of the cross-claimants’ application for interlocutory relief be reserved.
   

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1373 of 2010

BETWEEN:	INTERPHARMA PTY LTD Applicant/Cross-Respondent
AND:	AVENTIS PHARMA SA First Respondent/First Cross-claimant SANOFI-AVENTIS AUSTRALIA PTY LTD Second Respondent/Third Cross-claimant MAY & BAKER LIMITED Second Cross-Claimant

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1521 of 2010

BETWEEN:	HOSPIRA AUSTRALIA PTY LTD First Applicant/First Cross-Respondent HOSPIRA PTY LTD Second Applicant/Second Cross-Respondent
AND:	AVENTIS PHARMA SA First Respondent/First Cross-claimant SANOFI-AVENTIS AUSTRALIA PTY LTD Second Respondent/Third Cross-claimant MAY & BAKER LIMITED Second Cross-Claimant

JUDGE:	JAGOT J
DATE:	1 FEBRUARY 2011
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. This is an application for interlocutory orders restraining alleged threatened infringements of Australian Patent No. 666859 (the patent).
2. Aventis Pharma SA (Aventis Pharma) is the patentee. May & Baker Limited (May & Baker) and sanofi-aventis Australia Pty Limited (sanofi-aventis) contend that they are the exclusive licensees of the patent and also entitled to maintain these proceedings. I refer to these parties as the Aventis parties. Interpharma Pty Limited (Interpharma) and Hospira Australia Pty Limited and Hospira Pty Ltd (together Hospira) are generic pharmaceutical companies and the alleged threatened infringers of the patent.
3. The patent concerns a pharmaceutical dosage form for two compounds of the taxane family known as Taxol (paclitaxel) and Taxotere (docetaxel) which are used in the treatment of cancers. The patent was granted on 17 June 1996 and has a priority date of 8 July 1991. It is due to expire on 3 July 2012.
4. The compound docetaxel is the subject of another patent, Australian Patent No. 591309 (the compound patent), in respect of which Aventis Pharma is also the patentee. The compound patent expires on 6 February 2011.
5. Interpharma and Hospira propose to supply their docetaxel dosage forms as soon as possible after expiry of the compound patent on 6 February 2011. The Aventis parties contend that supply as proposed will infringe claims 1 to 4 and 6 of the patent (which, as noted, does not expire until 3 July 2012). Interpharma and Hospira contend that their supply will not infringe the patent and that the patent is invalid in any event.
6. The intention of Interpharma and Hospira to supply their docetaxel products as soon as possible after 6 February 2011 caused the parties to agree that these interlocutory applications should be heard and determined, if possible, before that date. The applications were thus heard on 24 and 25 January 2011 with evidence in one application, as relevant, being evidence in the other. The parties relied on numerous affidavits in support of their contentions, including affidavits from experts. There was no cross-examination. The affidavits related to the grounds of alleged infringement and invalidity of the patent, the adequacy of damages as a remedy and a range of other factors relevant to the balance of convenience. The parties also made extensive written and oral submissions about these issues.
7. The evidence and submissions reflected the common position of the parties that these applications for interlocutory relief are to be assessed against the following three principles:

(1) Whether there is a serious question to be tried in that the Aventis parties have established a prima facie case (namely, if the evidence remains as it is there is a probability that at trial the Aventis parties would be entitled to relief).

(2) Whether the Aventis parties will suffer irreparable harm for which damages will not be an adequate remedy unless the injunction is granted.

(3) Whether the balance of convenience favours granting or refusing interlocutory relief.

8. Much of the expert evidence and many of the submissions concerned the alleged infringement and invalidity of the patent in the context of the question whether the Aventis parties had established a serious question to be tried. In this regard all parties relied on the analysis of Jessup J in Interpharma Pty Ltd v Commissioner of Patents (2008) 79 IPR 261; [2008] FCA 1498 at [17] as follows:

Another layer of complication is added to the deliberative exercise in cases in which the respondent (that is the non-moving party) goes further than a denial of the applicant’s case for relief, and pleads a positive point of defence. In such a situation, it will not be enough to ask whether the applicant has shown a serious question, or a probability of success, on his or her own case. While the answer to that question may be in the affirmative, it will then be necessary to consider whether that answer should be qualified by the apparent strength of the defence. In a patent case, the fact of registration constitutes prima facie evidence of validity: AB Hassle v Pharmacia (Aust) Pty Ltd (1995) 33 IPR 63 at 69–70 (AB Hassle); GenRx Pty Ltd v Sanofi-Aventis (2007) 73 IPR 502; [2007] FCA 1485 at [2]–[6] (GenRx). It has been said that it is for the respondent to show that want of validity is a triable question: AB Hassle at 69. This seems clear enough, but, in my opinion, the analysis needs to be taken a step further. Is it sufficient that the respondent does show a triable question on validity? In my view, if that is as far as the respondent goes, then, assuming always that the applicant has shown a triable issue on infringement, absent questions of validity, the conclusion would remain that the latter had a triable question. That is to say, as a matter of analysis, unless the case for invalidity is sufficiently strong (at the provisional level) to qualify the conclusion that, overall, the applicant has a serious question, or a probability of success, the court should move to consider the adequacy of damages, the balance of convenience and other discretionary matters. It is the applicant’s title to interlocutory relief which is under consideration, and the bottom-line question, as it were, is whether the applicant has a serious question, or a probability of success, not whether the respondent does in relation to some point of defence raised or foreshadowed.

9. Interpharma and Hospira submitted that their contentions of invalidity were “sufficiently strong” to undermine the conclusion that there was a serious question to be tried in respect of alleged infringement of the patent, thereby rendering the other questions (the adequacy of damages and balance of convenience) immaterial.
10. I have concluded that if there is a serious question to be tried the Aventis parties should not be granted interlocutory relief on two bases each of which, of itself, would be sufficient to deny those parties such relief. First, I am not persuaded that the Aventis parties will suffer irreparable harm for which damages will not be an adequate remedy. To the contrary, the evidence supports the conclusion that, on the facts of this case, damages will be an adequate remedy for those parties. Second, there has been undue and inadequately explained delay by the Aventis parties in seeking this relief. This delay, its consequences and the lack of an adequate explanation for it, when weighed with all other factors on which the parties relied, leads to the conclusion that the balance of convenience favours a refusal to grant relief.

Adequacy of damages as a remedy

11. Docetaxel is an anti cancer drug used in chemotherapy. It accounts for about 5% of the chemotherapy market in Australia. Before January 2011 sanofi-aventis supplied docetaxel (under the name Taxotere®) in a two vial dosage form to its customers (being a concentrated product in a single-dose vial accompanied by a sterile solvent). Customers are wholesalers, compounders and hospitals. In January 2011 sanofi-aventis launched a one vial docetaxel dosage form. By September 2011 sanofi-aventis intend to have phased out the two vial dosage from and to have replaced it with the new one vial dosage form.
12. Taxotere represents about 95% of sanofi-aventis’s oncology portfolio in Australia. sanofi-aventis proposes to expand that portfolio. It has two new oncology products in the pipeline scheduled for release in 2012 and 2013.
13. The entry of Interpharma and Hospira into the monopoly market for the supply of docetaxel after 6 February 2011 and before expiry of the patent on 3 July 2012 will cause sanofi-aventis to lose sales which it would otherwise make. I refer to the date of expiry of the patent (3 July 2012), because the cross-claim filed by the Aventis parties alleges infringement and seeks orders (including interlocutory orders) solely by reference to the patent. Consistent with this pleading the applications proceeded on the apparently common assumption (which I adopt), that there would be no impediment to any generic company entering the docetaxel market after 3 July 2012.
14. The evidence discloses (and I accept) that the lost sales represent substantial sums of money. In addition, I also accept that sanofi-aventis will lose money because it is likely the competing products will lead to substantial price discounting. As a result, May & Baker and Aventis Pharma will also suffer loss (due to the terms of the licensing agreements between the Aventis parties).
15. Insofar as these two consequences (substantial lost sales of and decreased profits from Taxotere) are concerned, I am satisfied that damages will be an adequate remedy for the Aventis parties. As noted, the compound patent expires on 6 February 2011 and the patent on 3 July 2012. Accordingly, on the available evidence, the time period for which the Aventis parties enjoy the benefit of a monopoly on the supply of docetaxel ends in about 18 months (assuming the validity of the patent). But for any entry into that market by a generic product (if not restrained by interlocutory injunction), every supply of docetaxel in Australia within that period will be a supply by the Aventis parties at a price which is known (at today’s date) or, I infer, could be evaluated readily (to take into account possible price changes over the limited period of 18 months). Hence, every supply of docetaxel by any generic company after 6 February 2011 will be a supply that the Aventis parties otherwise would have made for the 18 month period at the known or calculable price. Thereafter, the “head-start” the generic companies would have obtained assuming the patent to be valid (that is, by reason of the fact that they should not have entered the market until after 3 July 2012) is also susceptible to orthodox techniques for the assessment of damages. So too is any permanent reduction in price due to continued discounting.
16. Contrary to the Aventis parties’ submissions these conclusions are not premised on the mere fact that they currently control 100% of the market (a factor which will be present in all cases of threatened rather than actual patent infringement). These conclusions arise from the evidence about docetaxel. Docetaxel is a chemotherapy drug used to treat certain cancers. It is supplied in a vial (or vials) with a sterile solvent. Before it can be administered the drug and solvent must be combined (a process known as compounding) and then diluted in a perfusion fluid. The perfusion fluid may then be injected into the patient. Docetaxel is chemotoxic and thus must be compounded, diluted and administered by trained technicians. The primary prescribers of docetaxel are oncologists. Taxotere is the most widely used chemotherapy regimen for early breast and prostate cancers and the second to fifth most used for certain other cancers where other products are preferred as first line therapies. Sales of Taxotere have increased over the past three years. It is not apparent, however, whether that increase is due to increased cancer detection and thus treatment rates or changes in the assessment of the efficacy of Taxotere compared to other available chemotherapies.
17. This description discloses that there is no meaningful comparison available between the evidence about the market for Taxotere and, say, the market for anti-depressants as considered by Sundberg J in Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (2009) 81 IPR 339; [2009] FCA 595. In Sigma v Wyeth, at [55], Sundberg J referred to evidence about the market for anti-depressants as follows:

Mr Nobes, Wyeth Australia’s Director of Corporate Affairs and Health Strategy, gave evidence that the market for antidepressants is highly competitive and subject to influences such as socio-economic conditions. Accordingly it is difficult to predict changes to the size of the market or the individual market shares of particular products. Having regard to the fact that Efexor-XR is currently the largest selling antidepressant, any change will have a greater impact on it relative to any other antidepressant.

18. It is not apparent that the market for docetaxel is highly competitive. There is evidence of other and complementary chemotherapy regimes for the same cancers but the extent and basis of competition between them (in the sense of selection of one over the other) is unclear. It is not apparent that the market is subject to socio-economic conditions. Hence, there is not a sound evidentiary basis to infer that entry of generics will change the size of the market at all or the market shares of the potentially competing products. In summary, nothing in the evidence persuades me that the consequences of lost sales, price discounts (temporary or permanent) or the “head-start” which generics will gain if they enter the market after 6 February 2011 and before 3 July 2012 (assuming the patent to be valid) represent a form of irreparable harm for which damages will not be an adequate remedy for the Aventis parties. This is so in respect of not only the proposed supplies by Interpharma and Hospira but also if any other generic chooses to enter the market. Given the nature of the product and the market, the same considerations apply to other generics as well.
19. The Aventis parties identified other types of consequences which they described as unquantifiable. These were described in the affidavits of Leah Goodman, sanofi-aventis’s director of portfolio development. The principal consequences on which the Aventis parties relied were: - (i) although no price reduction under the Pharmaceuticals Benefits Scheme (PBS) will be required by entry of generic products onto the market, the PBS price disclosure regime will be triggered involving extensive reporting obligations and the prospect of ex- manufacturer approved price reductions, (ii) hospitals and others will be entitled to issue fresh tenders for supply agreements which will typically be awarded on the lowest price basis, (iii) due to losses the Aventis parties will have to cut back the services currently offered in association with Taxotere including trained marketing, medical, hospital and key accounts management teams thereby compromising the clinical and patient support offered, as well as in-house oncology expertise and ability to support oncology trials, having regard particularly to the large costs associated with oncology trials and the two new products scheduled for release in 2012 and 2013, (iv) re-assembling this team if the Aventis parties succeed at final hearing will involve unknown time and costs, and (v) as sole supplier of a significant product with substantial support services the Aventis parties enjoy significant goodwill which they will lose, including by reason of loss of the support services, doctor and patient confusion, loss of customer loyalty and reduction in brand visibility.
20. Although Ms Goodman was not cross-examined, on analysis, it is difficult to conclude that any of these potential consequences are a likely result of generic competitors entering the market after 6 February 2011 and before 3 July 2012. Hence:

(1) PBS consequences: the entry of generic competitors onto the market will not trigger an automatic price reduction. It will trigger price disclosure requirements. The effect will be that the Aventis parties must comply with those requirements earlier than otherwise would have been the case. Any further price consequence as a result of these disclosure obligations is speculative. The record keeping obligations will ensure that all suppliers have documents proving sales and thus assisting in any calculation of damages or an account of profits if required.

(2) Hospital and other tenders: the fact that the Aventis parties may be subject to fresh tenders is properly characterised as a species of lost sale which is quantifiable.

(3) Reduced support services: irrespective of the intentions of any generic supplier, the Aventis parties are confronting the loss of the monopoly on 3 July 2012. The evidence does not explain why the entry of generics onto the market eighteen months earlier than would otherwise be the case would have the effects identified as opposed to the foreseeable end of the monopoly. In any event, given the Aventis parties’ intention to increase their oncology portfolio, the two new drugs they have in the pipeline and the overall size and diversity of their Australian portfolio it is difficult to accept that the consequences will be anywhere near as dire as Ms Goodman predicts. Impacts on or compromise of the products scheduled for release in 2012 and 2013 (which must represent a substantial investment already) appears to be wholly speculative. Further, the consequences (if they occur) will be the direct result of management and administrative decisions that the Aventis parties themselves make and implement. Those parties control the allocation of their resources including to the support, patient, clinical and trial services in which they are currently involved. As such, they will be able to control these consequences, at least for the period for which they otherwise would have enjoyed the protection of the patent.

(4) Re-assembly of teams: this issue is answered by the same considerations as discussed under (3) above.

(5) Loss of goodwill: given the nature of the product and the market for it this class of loss also seems highly speculative. As to the support services, see above. As to doctor and patient confusion, the nature of the product and its means of administration suggest this is highly unlikely (in contrast, say, to anti-depressants as considered in Sigma v Wyeth). As to customer loyalty and brand visibility, again, the nature of the product suggests this issue lacks materiality.

21. In summary, the classes of unquantifiable losses on which the Aventis parties relied appear neither likely to occur nor as serious as suggested (if they do occur) given the nature of the product. Otherwise, the suggested consequences appear to be largely within the control of the Aventis parties themselves, in circumstances where the very same issues would need to be confronted by reason of expiry of the patent on 3 July 2012 in any event.
22. The evidence does not satisfy me that, if the interlocutory relief sought is not granted, the Aventis parties will suffer any irreparable harm for which damages will not be an adequate remedy. To the contrary the evidence indicates that on the facts of this case damages will be an adequate remedy for the Aventis parties.
23. An issue was raised about the financial capacity of Interpharma to meet any order to pay damages. Interpharma addressed that concern by proffering an undertaking to put in place a bank guarantee with the ANZ banking group in the sum of $10 million on the terms set out in Exhibit B (reproduced as Annexure A to the orders in NSD 1373 of 2010). The giving of the undertaking is required in order to support the conclusion that damages would be an adequate remedy and the orders will be framed to ensure it is given.
24. For these reasons, the Aventis parties should not be granted interlocutory relief.

Balance of convenience

25. The parties relied on numerous competing factors to support their positions on the balance of convenience. Insofar as the Aventis parties are concerned they stressed: - (i) the inadequacy of damages (addressed above), (ii) that the patent was a long-standing one, (iii) Interpharma and Hospira had acted with awareness of the patent (and the compound patent expiring on 6 February 2011 the validity of which was not in contest), (iv) Interpharma and Hospira had delayed in taking revocation proceedings in respect of the patent, and (v) the lack of any real impacts on Interpharma and Hospira.
26. As noted, I accept that refusing to grant the Aventis parties interlocutory relief is likely to result in them sustaining harm in the form of substantial lost profits by reason of lost sales and price discounting. I consider this harm to be such that damages will be an adequate remedy. The other factors on which the Aventis parties relied in respect of the balance of convenience (even assuming all of these factors are sustainable on the evidence which – in the case of at least the alleged lack of impact on Interpharma and Hospira – is doubtful) failed, however, to acknowledge or adequately explain their own serious delay in the seeking of this relief. The purported explanation for the delay (described below) is that there was no clear and imminent threat of infringement so as to found the application for interlocutory relief until the revocation proceedings taken by Interpharma and Hospira in association with their intention to have their products listed on the PBS. Without PBS listing, supply of the products is not commercially viable. Hence, submitted the Aventis parties, they could not have taken proceedings for this relief any earlier than they in fact did so. Given the evidence described below, I do not accept this explanation.
27. The facts are these.
28. As to Interpharma: On 11 February 2010 the Aventis parties’ solicitors, Allens Arthur Robinson (Allens), wrote to Interpharma about its generic docetaxel products as listed on the ARTG on 1 February 2010. Allens requested information about the generic products to ascertain if the Aventis parties had a “proper basis for commencing proceedings for infringement” of certain patents including the patent. Allens reserved its clients’ rights to seek relief including interlocutory relief if the information was not provided and demanded extensive undertakings not to infringe the patents. After various time extensions, on 3 March 2010 Allens received only an agreement by Interpharma to notify it of any application to list its generic docetaxel product on the PBS. None of the other undertakings sought were given. By 28 April 2010 Allens were alleging breach of the one undertaking (about notice before PBS listing) that Interpharma had given. In response Allens sought more undertakings and asked if Interpharma’s solicitors had instructions to accept service. Interpharma’s solicitors denied that PBS listing had been sought but said that the Pharmaceuticals Benefits Advisory Committee (PBAC) had recommended funding (that is, PBS funding) for its product. Interpharma’s solicitors refused to give any of the further undertakings sought. By letter dated 30 April 2010 Allens alleged that obtaining a PBAC recommendation for funding involved making an application for PBS listing. By another letter of 4 May 2010 Allens repeated this and said its client would “have no choice but to apply for an interlocutory injunction to protect its rights”. Interpharma’s solicitors denied the allegation of PBS listing by letter of 6 May 2010. This letter noted that they had been informed that Allens had prepared Court documents and requested a copy. On the same day Allens sent Interpharma’s solicitors a letter saying that they understood Interpharma proposed to launch its product by mid 2010 which would further infringe the patents of its client which reserved “its rights to take action at any time”. By 7 May 2010 Allens asked again if Interpharma’s solicitors had instructions to accept service. Interpharma’s solicitors said they had such instructions also by letter of 7 May 2010. Thereafter, by letter dated 19 October 2010 Interpharma’s (new) solicitors advised Allens of Interpharma’s intention to launch its generic docetaxel product in Australia as soon as possible after 7 February 2011 and provided Allens with a copy of documents filed in Court seeking to revoke the patent. By its cross-claim filed on 7 December 2010 the Aventis parties sought interlocutory relief based on the patent.
29. As to Hospira: Hospira’s solicitors wrote to sanofi-aventis advising of Hospira’s intentions to market its generic docetaxel product in Australia after 6 February 2011 by letter dated 16 February 2010. This letter confirmed that Hospira’s Australian product was the same as Hospira’s European product and provided a copy of the ARTG approval application for Hospira’s generic docetaxel product. The letter requested confirmation that Hospira’s acts would not infringe certain patents. By letter dated 2 March 2010 Allens confirmed that the Aventis parties considered that Hospira’s product did infringe certain patents including the patent. By letter dated 15 March 2010 Hospira’s solicitors confirmed that it had no intentions to manufacture in or import into Australia its product before 6 February 2011. On 19 May 2011 Hospira’s solicitors sent a detailed letter giving reasons why the Hospira product did not infringe various patents including the patent and reasons why the patent was invalid in any event. This letter requested a substantive response by 8 June 2010. On 8 June 2010 Allens confirmed its clients’ position that the patents were valid and Hospira’s product would infringe the patents. After reasons for this position were requested, the position was confirmed, without reasons, on 30 June 2010. Nothing then happened until 5 November 2010 when Hospira’s solicitors served the revocation proceedings commenced on the same day. On 23 November 2010 Allens advised that its clients intended to seek interlocutory relief based on all the patents in issue in the revocation proceedings. By 7 December 2010 it was apparent from the cross-claim that alleged infringement and relief (including interlocutory relief) concerned the patent only.
30. While Hospira also emphasised the concession of the Aventis parties in relation to an overseas patent (namely, that the Hospira product would not infringe that patent which was thereafter revoked by consent) it is not necessary to give weight to that aspect of the evidence in order to conclude that the Aventis parties have substantially delayed in moving for interlocutory relief. The fact that neither Interpharma nor Hospira had applied to list their products on the PBS (without which they could not viably supply their products) is not material. From February 2010 it was apparent to the Aventis parties that Interpharma and Hospira were intending to launch their own docetaxel products in Australia after 6 February 2011. Hospira said they intended to do so expressly. Interpharma said as much by its consistent refusal to do other than agree to let the Aventis parties know before it made its application for PBS listing. The correspondence from Allens to the solicitors for Interpharma and Hospira communicated the position of the Aventis parties – namely, that given the intentions conveyed by Interpharma and Hospira the Aventis parties were entitled to seek relief at any time. That position was legally correct; from February to March 2010 onwards the Aventis parties were confronted with a clear and imminent threat of infringement of the patent immediately after 6 February 2011. The Aventis parties did not have to wait until an application for PBS listing was made to enforce their rights. The Aventis parties chose to do so for what can be inferred to be their own commercial interests. In so doing the Aventis parties sat on their hands for more than 10 months knowing that Interpharma and Hospira planned to act in respect of their own products as soon as possible after 6 February 2011 (that is, expiry of the compound patent) and knowing that its own position was that so doing would constitute an infringement of the patent. It was not incumbent upon Interpharma or Hospira to move to revoke the patent. They had made their intentions clear – in the case of Hospira in express terms on 16 February 2010 and in the case of Interpharma by obvious implication from 3 March 2010. Aventis Pharma holds the patent. If the Aventis parties believed (as they apparently did by early 2010) that Interpharma and Hospira intended to infringe the patent after 6 February 2011 then it was for the Aventis parties to move with all due expedition to protect their rights against that threatened infringement.
31. It is not the case that this delay has had no real consequence in that the compound patent (not the patent) has kept Interpharma and Hospira out of the market until 6 February 2011. The claim of infringement is limited to the patent alone. Final and interlocutory relief are thus based on the patent alone. If the Aventis parties had moved for interlocutory relief based on threatened infringement of the patent without unreasonable delay then the question of interlocutory relief itself could have been moot. The validity of the patent could have been determined on a final basis before 6 February 2011. As matters currently stand, by the Aventis parties’ unreasonable delay in seeking interlocutory relief, the risk is that the matter may not be finally determined until close to the expiry of the patent on 3 July 2012. By their own unreasonable delay the consequence is that interlocutory relief in favour of the Aventis parties may be the equivalent or near equivalent of final relief in their favour.
32. The delay in question is lengthy. In my view, by mid April 2010 at the latest the Aventis parties should have moved to protect their rights by proceedings in order to avoid a finding of unreasonable delay upon thereafter seeking interlocutory relief. In fact such relief was not sought until early December 2010. The delay is not adequately explained by reference to the Aventis parties waiting until applications for PBS listing had been made. The delay has had the undesirable consequence of requiring this application to be heard and determined urgently and at a time when a decision in favour of the Aventis parties may be the equivalent or near equivalent of final relief in their favour. Accordingly, I am satisfied that the delay is of such a character and nature that, in all of the circumstances, the balance of convenience is against the granting of interlocutory relief.

Serious question to be tried

33. Having regard to the conclusions above, and the fact that these reasons are dealing with an application for interlocutory relief on an urgent basis, it is neither necessary nor appropriate to give extensive reasons in support of the conclusion which I have reached about this issue. Adopting the language of Jessup J in Interpharma v Commissioner of Patents, although I consider that Interpharma and Hospira have good arguable cases on invalidity I cannot conclude, at least on this provisional basis, that their cases are sufficiently strong so as to negate the conclusion that there is a serious question to be tried in respect of the alleged infringements of the patent. I reach this conclusion irrespective of the proposed amendments to the patent under both ss 104 and 105 of the Patents Act 1990 (Cth). The amendments proposed do not make the existing claims of the patent unenforceable (in contrast to the result in Molnlycke AB v Procter & Gamble Limited (No 2) [1990] RPC 487). Nor are they sufficiently certain at this stage so as to weaken the good arguable contentions of Interpharma and Hospira as to invalidity of the patent. More than that about the amendments cannot usefully be said. On this basis, I deal as briefly as possible with the competing contentions on invalidity by reference to the claims of the patent as they currently exist. Suffice to say that none of these matters affect the conclusion I have reached that the Aventis parties should not be granted interlocutory relief for the reasons set out above.
34. The Aventis parties’ allegation of infringement depends on s 117 of the Patents Act (infringement by supply of the products for use by others). Although the alleged infringements are based on claims 1 to 4 and 6 of the patent the issue in dispute in that regard is the same. An essential integer of each of those claims is “compositions suitable for injection comprising” nominated elements (in effect, a taxane derivative dissolved in a surfactant containing less than a nominated percentage by volume of ethanol not exceeding 5% or 2%). The dispute is whether the “compositions comprising” means only a stock solution or includes both a stock solution and a perfusion. If the former, the Interpharma and Hospira products do not infringe the patent (they are stock solutions containing a percentage by volume of ethanol exceeding 5%). If the latter, the Interpharma and Hospira products infringe the patent (as the stock solutions are to be supplied for use, the use being dilution with a saline or glucose or other appropriate infusion agent into a perfusion ready for injection into a patient which accords with the essential integers of the relevant claims of the patent).
35. This dispute involves a question of construction said to turn on whether “comprising” as it appears in the claims is exhaustive or inclusive (in that the stock solutions contain only the nominated elements but perfusions necessarily contain other elements – the saline or glucose or other appropriate infusion agent to dilute the solution and make it suitable for injection into a patient). The Aventis parties rely on the principle that a claim expressed in clear terms is not to be read down by reference to the specification. Interpharma and Hospira rely on the ambiguity of the word “comprising” and the principle that a claim should be construed in a manner that ensures validity rather than invalidity. According to Interpharma and Hospira, if construed to include perfusions, the relevant claims are invalid as they lack any fair basis in the specification. While the arguments of Interpharma and Hospira are prima facie persuasive (particularly relating to lack of fair basis on the construction proffered by the Aventis parties), the competing submissions disclose that the resolution of this apparently narrow question of construction is likely to be influenced by the close analysis of the experts for each of the parties none of whom were cross-examined. In these circumstances, the contentions of Interpharma and Hospira are not sufficiently strong at this provisional stage to undermine the characterisation of the Aventis parties’ case as raising a serious question to be tried on infringement. The same conclusion applies to each of the grounds of invalidity relied upon by Interpharma and Hospira.
36. As to novelty, the requirement is for the prior art to contain “clear and unmistakable directions” to the claimed invention (General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457 at 486). Between them Interpharma and Hospira contend that the claims in suit are anticipated by the compound patent (a composition example therein), an article referred to in the patent (Rowinsky EK et al, “Taxol: A Novel Investigational Antimicrotubule Agent” (1990) 82 (No 15) Journal of the National Cancer Institute 1247-1259) and an article by Legha SS et al (“Phase I Study of Taxol using a 5-Day Intermittent Schedule” (1986) 4 (No 5) Journal of Clinical Oncology 762-766). The competing submissions again highlight the importance of the expert evidence not only in terms of how the skilled addressee would read the claims (particularly whether they convey a requirement for clinical efficacy as the Aventis parties apparently contend) but also whether the directions in the prior art do or do not identify a composition containing less than 2% (in contrast to 5%) ethanol (which is an integer of claim 2). The arguments of Interpharma and Hospira have persuasive force, particularly on the composition example in the compound patent, but are not sufficiently strong at this provisional stage to undermine the characterisation of the Aventis parties’ case as raising a serious question to be tried on infringement.
37. As to lack of inventive step, it is probably sufficient to record Hospira’s (correct) acknowledgment that this is quintessentially an issue for trial. Given the numerous questions of considerable complexity to which this issue gives rise (of both principle and fact) and the substantial expert evidence in dispute, I am not satisfied that the case on invalidity undermines the characterisation of the Aventis parties’ case as raising a serious question to be tried on infringement.
38. The same conclusion applies to the false suggestion contentions. That of Hospira (relating to the specification’s alleged false suggestion of prior art stock solutions giving rise to manifestations of alcoholism) is arguable but not manifestly strong at this provisional stage. The evidence appears to be limited to the experts’ own awareness of the alleged problem which is a limited basis upon which to found a false suggestion claim of this nature. That of Interpharma (relating to a description in the specification of the outcomes identified in the Rowinsky article) depends on the construction of the alleged representation (does the 8g per 100 ml of solution relate to ethanol and Cremophor or Cremophor only) and – at least insofar as the requirement that the representation be a material inducing factor is concerned – must confront the fact that the representation is nothing more than a description of a piece of prior art equally available to the examiner. Again, the case is arguable but not manifestly strong at this provisional stage. Neither leads me to conclude that the Aventis parties have not established a serious question to be tried on infringement.
39. As to fair basis and the requirement for a real and reasonably clear disclosure in the specification of the invention claimed (Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2004) 217 CLR 274; [2004] HCA 58 at [69]), there are arguments of construction about the specification (including whether certain descriptions are mere preferred embodiments of the invention or identify its essential elements). At this provisional stage it is sufficient to observe that, reading the specification as a whole, the arguments of Interpharma and Hospira have considerable persuasive force. Again, however, I am unable to conclude on this basis that there is no serious question of infringement to be tried.
40. As to utility, raised as a ground of invalidity by Interpharma, the same questions of construction arise (particularly whether certain descriptions are mere preferred embodiments of the invention or identify its essential elements). So too does the principle that ineffectiveness of some embodiments is immaterial to validity. The same overall conclusion results – there is a good arguable case of lack of utility but it is not such as to undermine the characterisation of the case on infringement as one raising a serious question to be tried.
41. Interpharma also disputed the standing of May & Baker and sanofi-aventis as exclusive licensees. Resolution of this argument turns on the construction of a number of agreements. Given my conclusion that interlocutory relief should not be granted on other grounds, this is a matter appropriately left for resolution at the trial. I record only that, for present purposes, I have assumed that May & Baker and sanofi-aventis are exclusive licensees and thus have standing to sue and claim damages.

Conclusion

42. For the reasons given the applications for interlocutory relief should be dismissed.
    

I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.

Associate:

Dated: 1 February 2011