FEDERAL COURT OF AUSTRALIA
Commonwealth of Australia v Sanofi (formerly Sanofi-Aventis)
[2015] FCAFC 172
Citation: Commonwealth of Australia v Sanofi (formerly Sanofi-Aventis) [2015] FCAFC 172 Parties: COMMONWEALTH OF AUSTRALIA v SANOFI (FORMERLY SANOFI-AVENTIS), SANOFI-AVENTIS US LLC and BRISTOL-MYERS SQUIBB INVESTCO LLC File number: NSD 1639 of 2007 Parties: COMMONWEALTH OF AUSTRALIA v WYETH and WYETH AUSTRALIA PTY LTD File numbers: VID 195 of 2009
NSD 596 of 2009
NSD 1124 of 2009Judges: DOWSETT, KENNY AND NICHOLAS JJ Date of judgment: 7 December 2015 Catchwords: PATENTS – where patentees obtain Australian Register of Therapeutic Goods (“ARTG”) registrations for therapeutic goods having particular active components – where such goods are later listed on the Schedule of Pharmaceutical Benefits (“PBS Sch”) – where suppliers of generic medicines provide certificates under s 26B(1) of the Therapeutic Goods Act 1989 (Cth) after expiration of data exclusivity period in order to obtain ARTG registrations in respect of their own products with same active components – where patentees obtain interlocutory injunctions restraining suppliers from supplying such products on basis that supply would infringe the patentees’ patents – where patentees provide usual undertakings as to damages – where interlocutory injunctions alleged to have prevented suppliers from obtaining listing of their products on PBS Sch – where relevant claims of patents subsequently held invalid – where Commonwealth of Australia seeks to recover from patentees on their undertakings as to damages for losses it claims to have suffered as a result of suppliers being prevented by interlocutory injunctions from obtaining listing of their products on PBS Sch – whether Commonwealth precluded from recovering on the undertakings as to damages by reason of the operation of s 26B, s 26C and s 26D of the Act
STATUTORY INTERPRETATION – whether on proper construction of Chapter 3, Part 3-2, Division 2 of the Therapeutic Goods Act 1989 (Cth) the Commonwealth is necessarily precluded from recovering compensation from patentees pursuant to their undertakings as to damages in circumstances where no declaration is or was sought pursuant to s 26D(4) of the Act – whether relevant statutory provisions establish an exhaustive statutory code limiting Commonwealth’s rights to recover under undertakings as to damages given to Court by patentees
PRACTICE AND PROCEDURE – purpose and scope of usual undertaking as to damages
Legislation: Acts Interpretation Act 1901 (Cth) ss 15AB(1), (2)(h) and (3)
Federal Court of Australia Act 1976 (Cth) ss 23, 25(6)
National Health Act 1953 (Cth) Pt VII
Patents Act 1990 (Cth) s 122, Sch 1
Taxes Management Act 1970 (UK) s 33
Therapeutic Goods Act 1989 (Cth) ss 9A, 23-30E
Therapeutic Goods Legislation Amendment Act 1998 (Cth)
US Free Trade Agreement Implementation Act 2004 (Cth)
US Free Trade Agreement Implementation Bill 2004 (Cth)Cases cited: Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249
Anthony Hordern and Sons Limited v The Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1
Attorney-General v De Keyser’s Royal Hotel [1920] AC 508
Beecham Group Ltd v…
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- AGLC
- Commonwealth v Sanofi [2015] FCAFC 172
- Case
- [2015] FCAFC 172
- Decision Date
CaseChat Overview and Summary
The primary legal issues revolved around the interpretation of the Therapeutic Goods Act and the scope of the Commonwealth's right to recover compensation from the patentees. Specifically, the court needed to determine whether the statutory provisions precluded the Commonwealth from recovering compensation under the undertakings as to damages, and whether the statutory provisions established an exhaustive statutory code limiting the Commonwealth's rights to recover. Additionally, the court considered the purpose and scope of the usual undertaking as to damages.
The court found that the Commonwealth was not precluded from recovering compensation under the undertakings as to damages, as the relevant statutory provisions did not establish an exhaustive statutory code limiting the Commonwealth's rights to recover. The court held that the purpose of the usual undertaking as to damages was to ensure that a defendant would receive compensation if it turned out that the plaintiff was not entitled to obtain the interlocutory injunction. The court further held that the remedies provided for in s 26D(5) were more generous than would otherwise be available, and that they were intended to deter patentees from engaging in abusive conduct.
The court answered the question raised in the case stated by stating that the Commonwealth of Australia was not precluded, as a matter of law, from recovering compensation pursuant to any of the Undertakings as to Damages by reason of Chapter 3, Part 3-2, Division 2 of the Therapeutic Goods Act 1989 (Cth). The court also made an order regarding the costs of the case stated, with the Sanofi Parties and the Wyeth Parties each paying 50% of the Commonwealth's costs on a party-party basis, and the Wyeth Parties paying the Generic Parties' costs of preparing a joint written submission.
Orders
Orders of the court
1. The question raised in the case stated, namely,
“Is the Commonwealth of Australia precluded, as a matter of law, from recovering compensation pursuant to any of the Undertakings as to Damages by reason of Chapter 3, Part 3-2, Division 2 of the Therapeutic Goods Act 1989 (Cth)?”
be answered,
“No”.
2. The costs of the case stated be paid as follows:
(a) the Sanofi Parties pay 50% of the Commonwealth’s costs on a party-party basis;
(b) the Wyeth Parties pay 50% of the Commonwealth’s costs on a party-party basis; and
(c) the Wyeth Parties pay the Generic Parties’ costs of preparing the joint written submission filed on 8 July 2015 on a party-party basis.
In this order:
· “the Sanofi Parties” means Sanofi (formerly Sanofi-Aventis), Sanofi-Aventis US LLC and Bristol-Myers Squibb Investco LLC;
· “the Wyeth Parties” means Wyeth and Wyeth Australia Pty Ltd;
· “the Generic Parties” means Alphapharm Pty Ltd, Sigma Pharmaceuticals (Australia) Pty Ltd and Generic Health Pty Ltd; and
· “the Commonwealth’s costs” means the Commonwealth’s combined costs of and incidental to the case stated in each of the following proceedings:
- NSD 1639 of 2007;
- VID 195 of 2009;
- NSD 596 of 2009; and
- NSD 1124 of 2009.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
1. The question raised in the case stated, namely,
“Is the Commonwealth of Australia precluded, as a matter of law, from recovering compensation pursuant to any of the Undertakings as to Damages by reason of Chapter 3, Part 3-2, Division 2 of the Therapeutic Goods Act 1989 (Cth)?”
be answered,
“No”.
2. The costs of the stated case be paid in accordance with order 2 made in proceeding NSD 1639 of 2007.
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
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Mr Gleeson SC, the Solicitor-General, submitted on behalf of the Commonwealth that s 26D operated to enlarge the Court’s power in situations where it was satisfied that the patentee had engaged in “abusive conduct” of the type described in s 26D(4)(c). He submitted that s 26D was not intended to restrict the ability of an applicant for registration who provides a certificate under s 26B(1)(a) or (b), the Commonwealth, the States and Territories, or any other person for that matter, from claiming on the undertaking as to damages. He submitted that the remedies provided for in s 26D(5) were more generous than would otherwise be available for the simple reason that they are intended to deter patentees from engaging in abusive conduct. He supported these submissions by reference to the text, purpose and legislative history of the relevant provisions.CONSIDERATIONThe usual undertaking as to damages The expression “usual undertaking as to damages” is not defined in the TG Act. However, it is clear that it is used in s 26D(5) to refer to an undertaking of the kind that is invariably required to be given by a patentee who obtains an interlocutory injunction restraining an alleged infringement, or threatened infringement, of its patent. The power of the Court to grant an interlocutory injunction is conferred by s 23 of the Federal Court of Australia Act 1976 which expressly allows for the making of such interlocutory orders as the Court thinks appropriate. The Court may, and often does, make such orders on terms. In proceedings for patent infringement, interlocutory injunctions are invariably granted on condition that the applicant for such relief provide the usual undertaking as to damages. The practice of requiring an applicant for an interlocutory injunction to provide an undertaking as to damages “is founded upon, and arises from, the discretion which the court has in such cases, to grant or not to grant, the injunction applied for”: Mansfield v Director of Public Prosecutions (WA) (2006) 226 CLR 486 at [32]-[33] citing Russell v Farley (1881) 105 US 433 at 438 where Bradley J, referring to the first edition of Kerr on Injunctions published in 1867, “explained the requirement of the undertaking as a response to the anxiety entertained by the court that otherwise its interlocutory order might lead to damage for which there could be no redress except by an order for costs” per French CJ, Gummow, Hayne, Heydon and Kiefel JJ in European Bank Ltd v Evans (2010) 240 CLR 432 (European Bank) at [15]. In Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249 (Air Express), in an appeal by a defendant against the decision of Aickin J refusing to award it damages pursuant to the plaintiff’s undertaking as to damages, the High Court explained the object of the usual undertaking and the circumstances in which a plaintiff may be ordered to make payment under it. Gibbs J said at 311:The object of requiring a plaintiff who seeks an interlocutory injunction to enter into an undertaking of this kind is to attempt to ensure that a defendant will receive compensation for any loss which he suffers by reason of the grant of the injunction if it appears in the event that the plaintiff was not entitled to obtain it. The insistence upon the giving of an undertaking is a very important, if not an essential, means of preventing injustice from being done by the court when it makes an order at an interlocutory stage, before the rights of the parties have been finally determined.Stephen J said at 318:What occurs when such an undertaking is extracted from a plaintiff is that the court, as a condition of its grant of interim or interlocutory injunctive relief, has ensured that, should it turn out that that relief should never have been granted, it will have the power, so far as monetary compensation allows, to make good the harm which the grant has done to the defendant. The court acquires powers to do justice between the parties which it would not otherwise possess.