Commonwealth v Sanofi

In the case of Commonwealth v Sanofi, the Commonwealth of Australia sought to recover compensation from the patentees, Sanofi and Wyeth, pursuant to their undertakings as to damages. These undertakings were provided in connection with interlocutory injunctions that restrained suppliers from supplying generic medicines that infringed the patentees' patents. The Commonwealth argued that it was entitled to compensation due to losses it suffered because the suppliers were prevented from obtaining listing of their products on the Schedule of Pharmaceutical Benefits (PBS Sch). The patentees, in turn, argued that the Commonwealth was precluded from recovering compensation due to the provisions of the Therapeutic Goods Act 1989 (Cth).

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.