Alphapharm Pty Limited v Wyeth

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FEDERAL COURT OF AUSTRALIA

Alphapharm Pty Limited v Wyeth [2009] FCA 945

PATENTS – interlocutory injunctions – whether respondents/cross-claimants established prima facie case of infringement of patent to warrant injunction – whether prima facie case of infringement to warrant injunction displaced in circumstances where the applicant/cross-respondent has established a prima facie case that patent is invalid – question of balance of convenience.

PRACTICE AND PROCEDURE – interlocutory injunctions – principles applicable to patent cases.

Held: interlocutory relief granted.

Patents Act 1990 (Cth)

Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249
Aktiebolaget Hassle v Alphapharm Pty Ltd (2002) 212 CLR 411; [2002] HCA 59
Apotex Pty Ltd (formerly GenRx Pty Ltd) v Sanofi-Aventis (2008) 78 IPR 485; [2008] FCA 1194
Appleton Papers Inc v Tomasetti Paper Pty Ltd (1983) 3 NSWLR 208
Atlantis Corporation Pty Ltd v Schindler (1997) 39 IPR 29
Beecham Group Limited v Bristol Laboratories Pty Ltd (1968) 118 CLR 618
Bristol-Myers Squibb Company v F H Faulding & Co Ltd (2000) 97 FCR 524; [2000] FCA 316
Commissioner of Patents v Microcell Ltd (1959) 102 CLR 232
GenRx Pty Ltd v Sanofi-Aventis (2007) 73 IPR 502; [2007] FCA 1485
H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70
Interpharma Pty Ltd v Commissioner of Patents (2008) 79 IPR 261; [2008] FCA 1498
Jupiters Ltd v Neurizon Pty Ltd (2005) 222 ALR 155; [2005] FCAFC 90
Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1; [2001] HCA 8
Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2004) 217 CLR 274; [2004] HCA 58
Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2007) 235 CLR 173 [2007] HCA 21
Martin Engineering Co v Trison Holdings Pty Ltd (1988) 81 ALR 543
Merck & Co Inc v Arrow Pharmaceuticals Limited (2006) 154 FCR 31; [2006] FCAFC 91
Merck and Co Inc v GenRx Pty Ltd (2006) 70 IPR 286; [2006] FCA 1407
National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252
Prestige Group (Australia) Pty Limited v Dart Industries Inc. (1990) 26 FCR 197
Ranbaxy Australia Pty Ltd v Warner-Lambert Co LLC (2008) 77 IPR 449; [2008] FCAFC 82
Rehm Pty Ltd v Websters Security Systems (International) Pty Ltd (1988) 81 ALR 79
Sigma Pharmaceuticals (Australia) Pty Ltd (ACN 004 118 594) v Wyeth [2009] FCA 595
Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588
Williams Advanced Materials Inc v Target Technology Co LLC (2004) 63 IPR 645; [2004] FCA 1405
WM Wrigley Jr Company v Cadbury-Schweppes Pty Limited t/as Trebor Confectionary (2005) 66 IPR 298; [2005] FCA 1035

ALPHAPHARM PTY LIMITED (ACN 002 359 739) v WYETH and WYETH AUSTRALIA PTY LIMITED (ACN 000 296 211)

NSD 596 of 2009

JAGOT J
25 AUGUST 2009
SYDNEY


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 596 of…

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Details
Case
[2009] FCA 945
Decision Date

CaseChat Overview and Summary

Alphapharm Pty Limited (Alphapharm) brought proceedings against Wyeth in the Federal Court of Australia seeking a declaration of invalidity of Wyeth's method patent, which claimed a process for treating major depression or social anxiety disorder using modified release formulations of venlafaxine hydrochloride. Wyeth filed an interlocutory application seeking an interim injunction to prevent Alphapharm from marketing its generic product, Enlafax-XR, which it claimed would infringe the method patent. The Court had to decide whether Wyeth had established a reasonably strong prima facie case of patent infringement, and whether Alphapharm had established a prima facie case for invalidity of the patent on the grounds of impossibility, manner of manufacture and lack of inventive step. The Court also had to weigh the balance of convenience, considering the harm to both parties if the injunction was or was not granted.

The Court found that Wyeth had established a reasonably strong prima facie case of patent infringement by Alphapharm. However, Alphapharm had established a prima facie case for invalidity of the patent on the grounds of impossibility, manner of manufacture and lack of inventive step. The Court also considered the balance of convenience, taking into account the harm to both parties if the injunction was or was not granted. Alphapharm argued that there was no stable status quo to protect, given that Wyeth had altered its marketing strategy to shift the market from Efexor-XR to Pristiq, its new product. The Court found that Wyeth's actions in relation to Pristiq did not establish that there was no stable status quo to protect.

THE COURT ORDERS THAT:
1. Pending the determination of the proceeding or further order, Alphapharm Pty Limited (whether by itself, its directors, officers, servants, agents or otherwise) be restrained from infringing claims 4 and 27 (insofar as claim 27 is dependent on claim 4) of Australian Patent No 2003259586 (the method patent), including without limitation by, during the term of the method patent and without the licence or authority of Wyeth, importing, marketing, taking orders for, selling, supplying, offering to supply in Australia the Enlafax-XR Products or any other product comprising the same generic modified release formulation of venlafaxine hydrochloride for use by persons for the Registered Indications or otherwise exploiting the invention the subject of the method patent.
2. Alphapharm Pty Limited be restrained from applying to list the Enlafax-XR Products on the Schedule of Pharmaceutical Benefits.
3. Costs of the interlocutory application be costs in the cause.
4. The edited reasons for judgment published this day stand in lieu of the reasons provided to the parties and their legal advisers on 25 August 2009 and that the latter reasons be kept confidential and not published to any other person.

Orders

Orders of the court

UPON the cross-claimants by their counsel undertaking:

(a) to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by any operation of the orders below or any continuation (with or without variation) thereof; and

(b) to pay the compensation referred to in (a) to the person there referred to; and

(c) until further order, not to make any application to de-list Efexor-XR from the Pharmaceuticals Benefits Scheme.

THE COURT ORDERS THAT:

1. Pending the determination of the proceeding or further order, Alphapharm Pty Limited (whether by itself, its directors, officers, servants, agents or otherwise) be restrained from infringing claims 4 and 27 (insofar as claim 27 is dependent on claim 4) of Australian Patent No 2003259586 (the method patent), including without limitation by, during the term of the method patent and without the licence or authority of Wyeth, importing, marketing, taking orders for, selling, supplying, offering to supply in Australia the Enlafax-XR Products or any other product comprising the same generic modified release formulation of venlafaxine hydrochloride for use by persons for the Registered Indications or otherwise exploiting the invention the subject of the method patent.

2. Alphapharm Pty Limited be restrained from applying to list the Enlafax-XR Products on the Schedule of Pharmaceutical Benefits.

3. Costs of the interlocutory application be costs in the cause.

4. The edited reasons for judgment published this day stand in lieu of the reasons provided to the parties and their legal advisers on 25 August 2009 and that the latter reasons be kept confidential and not published to any other person.

In these orders:

Enlafax-XR Products means the generic modified release formulations of venlafaxine hydrochloride for which Alphapharm Pty Limited has obtained registration on the Australian Register for Therapeutic Goods.

Registered Indications means the indications of major depression and social anxiety disorder.

Note:

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

JAGOT J
In its particulars of invalidity, Alphapharm also challenges the novelty of the method patent, by reason of the publication of the Alza patent. However, consistent with Sigma’s approach in the Sigma proceeding (recorded at [44] of the Sigma decision), Alphapharm did not rely on this at the interlocutory stage.INTERIM CONCLUSION Wyeth has established a reasonably strong prima facie case that Alphapharm’s intended actions will infringe the method patent. Alphapharm has established a prima facie case for invalidity of the method patent on the grounds of the falsity of the impossibility representation, manner of manufacture and lack of inventive step. It is necessary, therefore, to turn to the balance of convenience, including the nature and extent of the harm involved.BALANCE OF CONVENIENCEAlphapharm’s case Alphapharm’s approach to this issue implicitly acknowledged the undeniable fact that Sundberg J had carefully analysed similar competing considerations in the Sigma decision in which his Honour concluded that an interim injunction should issue. Alphapharm, accordingly, emphasised key factors which were not in evidence before or relevant to the Sigma decision. One such factor is the identification of the status quo (given the purpose of an interlocutory injunction as being to maintain the status quo pending the final resolution of the rights between the parties) as a consequence of Wyeth’s actions in relation to Pristiq. Alphapharm said the evidence available on this application established that there is no stable status quo to protect. The “established trade” in Efexor-XR, on which Sundberg J relied in the Sigma decision at [59], was a result of Wyeth’s evidence when the true position is that, by Wyeth’s own hand, the market is being altered so as to shift it from Efexor-XR to Pristiq. Alphapharm supported this submission by reference to affidavits from Belinda Cowell, Alphapharm’s head of marketing, Peter Astles, Alphapharm’s business development manager, Mark Hurley, Alphapharm’s executive director, and Dr Stephen Downes, an independent marketing expert, as well as confidential documents produced by Wyeth. According to Alphapharm, Wyeth’s evidence in chief presented a picture of Efexor-XR as the leading antidepressant in Australia with annual sales of $115 million or about 25% of Wyeth Australia’s income. However, after December 2008 the picture has changed. The compound patent had expired. Wyeth became exposed to competition from generic venlafaxine products. According to Mr Hurley, if such a generic product is launched with a listing on the PBS, it may be able to secure 50% of the market. If launched without PBS listing, it may be able to secure about 13.5% of the market. Alphapharm said that Wyeth had altered its marketing strategy in anticipation of the ARTG approval for and PBS listing of its new product, Pristiq. Pristiq is not listed on the PBS in the same product code as Efexor-XR so that generic venlafaxine products cannot compete with Pristiq. By about January 2009 virtually all of Wyeth’s marketing efforts focused on Pristiq. Alphapharm said that confidential internal documents showed this focus on Pristiq, in effect, at the expense of Efexor-XR in terms of both new and existing patients. In other words, Alphapharm said that Wyeth is attempting to switch patients from Efexor-XR to Pristiq in circumstances where the latter is not exposed to competition from generic substitutes due to the Pristiq patent. The former, however, is exposed to competition due to the expiry of the compound patent. The consequence is to reduce the market for Efexor-XR (and thus the market in which generic substitutes can compete) by Wyeth’s own hand. This, , said Alphapharm, is supported by evidence about a range of measures known in the pharmaceutical industry including: - (i) frequency of detailing for Pristiq compared to Efexor-XR (that is, one-on-one visits to medical practitioners), (ii) share of voice (that is, detailing frequency for Pristiq as a proportion of the overall detailing frequency for all products), (iii) total marketing spend for Pristiq compared to that for Efexor-XR, (iv) priority given to Pristiq in visits by sales representatives, (v) provision of free samples of Pristiq compared to Efexor-XR, and (vi) Wyeth’s marketing message about Pristiq.

Ratio Decidendi

Legal Principle Established

Established by: JAGOT J

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