Bayer Pharma Aktiengesellschaft v Genentech, Inc

Case [2012] FCA 1467

FEDERAL COURT OF AUSTRALIA

Bayer Pharma Aktiengesellschaft v Genentech, Inc. [2012] FCA 1467

Citation: Bayer Pharma Aktiengesellschaft v Genentech, Inc. [2012] FCA 1467
Parties: BAYER PHARMA AKTIENGESELLSCHAFT v GENENTECH, INC.; GENENTECH. INC. v BAYER PHARMA AKTIENGESELLSCHAFT, BAYER AUSTRALIA LIMITED ACN 000 138 714 and REGENERON PHARMACEUTICALS INC.
File number: NSD 904 of 2012
Judge: BENNETT J
Date of judgment: 20 December 2012
Catchwords:

PRACTICE & PROCEDURE – Service outside Australia – whether there is a prima facie case of joint tortfeasorship by common design to infringe patent

PATENTS – whether there is a prima facie case of joint tortfeasorship by common design to infringe patent – where overseas entity had entered into agreement to collaborate to develop and commercialise product in Australia – prima facie case of infringement under s 117(2)(c) of the Patents Act 1990 (Cth) – where the product information document contained instructions for use

Legislation: Federal Court Rules 2011 (Cth) rr 10.24, 10.42, 10.43, 10.62 to 10.68
Patents Act 1990 (Cth) ss 13(1), 117, 120 and 154
Cases cited:

Apotex Pty Ltd v Les Laboratoires Servier (No 2) [2012] FCA 748 cited
Australian Competition and Consumer Commission v Yellow Page Marketing BV [2010] FCA 1218 cited
BeechamGroup Ltd v Bristol Laboratories Ltd [1978] RPC 153 cited
Bell v Steele (2011) 198 FCR 291 at 295 cited
Bray v F Hoffman-La Roche Ltd (2003) 130 FCR 317 cited
British American Tobacco Australasia Limited v Taleb (No 1) [2012] FCA 1065 cited
Century Insurance (in provisional liquidation) v New Zealand Guardian Trust [1996] FCA 376 cited
Ho v Akai Pty Ltd (in liq) (2006) 24 ACLC 1526; [2006] FCAFC 159 cited
Morton-Norwich Products Inc v Intercen Limited [1978] RPC 501 cited
SaccharinCorp Ltd v Anglo-Continental Chemical Works Ltd (1900) 17 RPC 307 cited
Unilever Australia Ltd v PB Foods Ltd [2000] FCA 798 cited
Date of hearing: 17 December 2012
Place: Sydney
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 47
Counsel for the Cross-Claimant: Mr T Cordiner
Solicitor for the Cross-Claimant: Corrs Chambers Westgarth

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 904 of 2012
BETWEEN:

BAYER PHARMA AKTIENGESELLSCHAFT
Applicant

GENENTECH. INC.
Cross-Claimant
AND:

GENENTECH, INC.
Respondent

BAYER PHARMA AKTIENGESELLSCHAFT
First Cross-Respondent

BAYER AUSTRALIA LIMITED ACN 000 138 714
Second Cross-Respondent

REGENERON PHARMACEUTICALS INC.
Third Cross-Respondent

JUDGE:

BENNETT J

DATE OF ORDER:

20 DECEMBER 2012

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The Cross-Claimant have leave pursuant to Rule 10.43 of the Federal Court Rules 2011 (the Rules) to serve its Notice of Cross-Claim and Statement of Cross-Claim on the Third Cross-Respondent, Regeneron Pharmaceuticals Inc., at 777 Old Saw Mill River Road, Tarrytown, New York in the United States of America, in accordance with the Hague Convention and Rules 10.63 to 10.68 of the Rules.

2.In addition to the method of service in Order 1, the Cross-Claimant have leave to serve the Notice of Cross-Claim and Statement of Cross-Claim on the Third Cross-Respondent by delivering those documents:

(a)to…

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Details
AGLC
Bayer Pharma Aktiengesellschaft v Genentech, Inc [2012] FCA 748
Case
[2012] FCA 1467
Decision Date

CaseChat Overview and Summary

Bayer Pharma Aktiengesellschaft v Genentech, Inc was a case before the Federal Court of Australia. Genentech, Inc, an American pharmaceutical company, initiated proceedings against Bayer Pharma Aktiengesellschaft, a German pharmaceutical corporation, and others, alleging infringement of its innovation patent in Australia. The primary dispute centred on the impending promotion and sale of the product "Eylea" in Australia by Bayer Australia, a subsidiary of Bayer Pharma. Genentech claimed that the use, promotion, and sale of Eylea in Australia would infringe various claims of its innovation patent, which pertains to a method for treating wet form age-related macular degeneration.

The central legal issues in the case involved the determination of whether there was a prima facie case of joint tortfeasorship by common design to infringe the patent. Genentech argued that the agreement between Bayer HealthCare, a US subsidiary of Bayer Pharma, and Regeneron, another pharmaceutical company, constituted a common design to infringe the patent in Australia. The court had to consider whether the agreement between Bayer HealthCare and Regeneron, which was made outside Australia, could establish a prima facie case of joint tortfeasorship by common design to infringe the patent.

The court found that there was indeed a prima facie case of joint tortfeasorship by common design to infringe the patent. The evidence presented, including the license and collaboration agreement between Bayer HealthCare and Regeneron, demonstrated a concerted effort to develop and commercialise the product in Australia, which infringed Genentech's patent. The court held that the agreement between Bayer HealthCare and Regeneron, even if made outside Australia, was sufficient to establish a common design to infringe the patent in Australia.

The court granted Genentech leave to serve its notice of cross-claim and statement of cross-claim on Regeneron Pharmaceuticals Inc. in the United States, in accordance with the Hague Convention and the relevant Federal Court Rules. Additionally, Genentech was permitted to serve the documents by delivering them to the office of Phillips Ormonde Fitzpatrick Lawyers in Melbourne and by email to a specified address. This decision allowed Genentech to proceed with its legal action against Regeneron and others for patent infringement in Australia.

Orders

Orders of the court

1. The Cross-Claimant have leave pursuant to Rule 10.43 of the Federal Court Rules 2011 (the Rules) to serve its Notice of Cross-Claim and Statement of Cross-Claim on the Third Cross-Respondent, Regeneron Pharmaceuticals Inc., at 777 Old Saw Mill River Road, Tarrytown, New York in the United States of America, in accordance with the Hague Convention and Rules 10.63 to 10.68 of the Rules.

2. In addition to the method of service in Order 1, the Cross-Claimant have leave to serve the Notice of Cross-Claim and Statement of Cross-Claim on the Third Cross-Respondent by delivering those documents:

(a) to the office of Phillips Ormonde Fitzpatrick Lawyers at Level 23, 367 Collins Street, Melbourne, marked to the attention of “Malcolm Bell”; and

(b) by email to malcolm.bell@pof.com.au.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

A person may be a joint tortfeasor in another’s infringement of a patent. The agreement which is the basis of a common design to infringe in Australia can take place overseas. Genentech draws particular attention to the decision of Graham J in Morton-Norwich Products Inc v Intercen Limited [1978] RPC 501 at 514–515. His Honour recited the activities of the Dutch company and the English company and concluded that there was a ‘concerted design’ to sell the product in question in England. His Honour held that if there is a concerted design to sell goods which in fact infringe the English patent, then the parties who have such design and do so sell are in fact joint tortfeasors and both infringe the patent. His Honour continued to say that provided that the tort is committed in the United Kingdom and there is a common design, it is not relevant that the agreement was made within or outside the jurisdiction. For present purposes, Genentech accepts the identification of the principles of joint tortfeasorship by common design set out in Apotex at [22] to [26]. In short, it must be found that one party acted with another in an enterprise pursuant to a common design in the course of which a patent infringement is committed. Evidence of joint tortfeasorship The evidence upon which Genentech relies to establish a prima facie case of joint tortfeasorship is, in terms of corporate structure and involvement, incomplete, as is not unusual for such an ex parte application. In evidence is a license and collaboration agreement between Bayer HealthCare LLC (Bayer HealthCare) a US company and Regeneron, dated 18 October 2006. It is a detailed Agreement which sets out, inter alia, the following:·Regeneron owns and has licensed certain Patents, Know-How and other rights related to the VEGF Trap in all countries of the world excluding the USA.·Bayer HealthCare and its “Affiliates” possess knowledge and expertise in, and resources for, developing and commercialising pharmaceutical products in, relevantly, Australia, in the relevant Field being shortly the treatment and/or diagnosis of ocular disease or disorder through local administration to the eye.·“Affiliate” is defined to include a company controlled by or under common control with any Person, which in turn includes a limited liability company or corporation.·The subject matter of the Agreement includes “Regeneron Patent Rights” and “Regeneron Products” which includes, without limitation, the VEGF Trap.·Pursuant to the Agreement, Regeneron grants to Bayer HealthCare the ‘co-exclusive [with Regeneron and its Affiliates] right and license under the Regeneron Intellectual Property to make, have made, use, develop, import and export Licensed Products’ for use inter alia in Australia, and the ‘exclusive right and license under the Regeneron Intellectual Property to sell and offer to sell Licensed Products’ in the Field inter alia in Australia, ‘subject to Regeneron’s right to supply Licensed Products to [Bayer HealthCare], as contemplated by this agreement’.·Bayer HealthCare has the right to grant sub-licenses with the prior written consent of Regeneron, except that Bayer HealthCare may sub-license its rights to an Affiliate for the purposes of meeting its obligations under the agreement without Regeneron’s consent.·Bayer HealthCare is responsible for the promotional materials including filing promotional materials with regulatory authorities. Regeneron retains the right to review and comment on all major promotional materials. All rights to all promotional materials are jointly owned, including copyright.·Bayer HealthCare is the lead party responsible for approvals and registration filings in, relevantly, Australia and owns approvals and registration filings for any Company Products. Bayer HealthCare oversees and co-ordinates regulatory actions, communications, filings and submissions with regulatory authorities in, relevantly Australia.·Bayer HealthCare and Regeneron agree to establish procedures to ensure that they exchange all necessary information to enable the other party and its licensees to comply with regulatory obligations in connection with the development, manufacture and/or commercialisation of the products.·Decisions with respect to any recall, market withdrawal or other corrective action related to a licensed product should be made only upon mutual agreement of the parties.·Regeneron is to be the supplier of the product and the parties together agree to identify which party or third party will perform the filling, packaging, labelling and testing of the formulated bulk product to supply the finished product for clinical supply requirements and commercial supply requirements.·Each party agrees to notify the other party of any allegation of infringement or violation of intellectual property rights and they agree jointly to consider the appropriate course of action with respect to allegations of infringement. While each party shall have the right to defend any action naming it, the parties agree to co-operate and provide reasonable assistance to each other.·The parties agree that neither will enter into any settlement of any suit involving licensed products that materially affect the other party’s rights or obligations with respect to the product without the other party’s prior written consent.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

It is not necessary to consider whether the requirements for substituted service are made out, as Genentech accepts that an order should be made under r 10.43 of the Rules for service on Regeneron in the US. Genentech does not seek substituted service as an alternative to service out of the jurisdiction in accordance with the Rules. It seeks an order additionally, to permit an additional pathway that may notify Regeneron of the notice of cross-claim and statement of cross-claim in a more timely fashion. ConsiderationLeave to serve outside Australia – accompanying affidavit (r 10.43(3)) I am satisfied that each of the matters in r 10.43(3) are each dealt with in the evidence in support of Genentech’s application.Leave to serve outside Australia – Jurisdiction (r 10.43(4)(a)) The Court has jurisdiction pursuant to ss 120 and 154 of the Patents Act 1990 (Cth) (the Patents Act) to determine a claim for infringement of the Innovation Patent. As such, r 10.43(4)(a) of the Rules is satisfied.Leave to serve outside Australia – Proceeding of a kind (r 10.43(4)(b)) The proceeding against Regeneron is ‘based on a cause of action arising in Australia’ (r 10.42, item 1) and ‘based on a tort committed in Australia’ (r 10.42, item 4). Genentech seeks ‘relief or remedy under an Act…’ (r 10.42, item 15). Accordingly, the proceedings are of a kind mentioned in r 10.42 and r 10.43(4)(b) of the Rules is satisfied.Leave to serve outside Australia – a prima facie case (r 10.43(4)(c))Eylea, the Innovation Patent and Regeneron This case concerns the impending promotion and sale of the product “Eylea” in Australia by Bayer Australia. A Regeneron press release, dated 8 March 2012, stated that Bayer HealthCare plans to launch Eylea in Australia in the second half of 2012 and Regeneron’s Chief Executive is reported to have stated that Eylea would be launched beginning by the end of this year in Australia. Bayer Australia is the sponsor of the Australian Register of Therapeutic Goods (ARTG) listing for Eylea. Genentech alleges that various claims of its Innovation Patent will be infringed by the use, promotion and sale of Eylea in Australia. Claim 1 of the Innovation Patent is:A method for treating wet form age-related macular degeneration in a human, the method comprising:(a)administering intravitreally to the human two or three first individual doses of a VEGF antagonist at one month intervals; followed by,(b)administering intravitreally to the human a number of second individual doses of the VEGF antagonist,wherein the second individual doses are administered less frequently than the first individual doses, and wherein the VEGF antagonist is a protein that binds to VEGF. Claim 3 is:A method according to claim 1 or use according to claim 2, wherein the protein that binds to VEGF is an anti-VEGF antibody or a VEGF-Trap. A VEGF antagonist is defined in the specification of the Innovation Patent as including ‘fusions proteins, eg., VEGF-Trap (Regeneron)’.