Eli Lilly and Company v Pfizer Ireland Pharmaceuticals (No 3)

[2004] FCA 1085

FEDERAL COURT OF AUSTRALIA

Eli Lilly & Company v Pfizer Ireland Pharmaceuticals (No 3) [2004] FCA 1085

INTELLECTUAL PROPERTY – patents – application to rely on experiments conducted in the United States as experimental proof – whether applicants concealed experimental evidence – whether respondents would be prejudiced if experiments could be relied on

Federal Court Rules, O 58 r 31

ELI LILLY & COMPANY & ORS V PFIZER IRELAND PHARMACEUTICALS & ANOR
V604 OF 2002

HEEREY J
16 AUGUST 2004
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V604 OF 2002

BETWEEN:

ELI LILLY & COMPANY
FIRST APPLICANT/FIRST CROSS-RESPONDENT

ELI LILLY AUSTRALIA PTY LTD
ACN 000 233 992
SECOND APPLICANT/SECOND CROSS-RESPONDENT

ELI LILLY & COMPANY LIMITED
THIRD APPLICANT/THIRD CROSS-RESPONDENT

AND:

PFIZER IRELAND AND PHARMACEUTICALS
FIRST RESPONDENT/FIRST CROSS-CLAIMANT

PFIZER PTY LIMITED ACN 008 422 348
SECOND RESPONDENT/SECOND CROSS-CLAIMANT

JUDGE:

HEEREY J

DATE OF ORDER:

16 AUGUST 2004

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1. Leave be granted to the applicants/cross-respondents to rely on affidavits in admissible form substantially in accordance with the declarations of Dr Vincent Florio and Dr Philip Iverson annexed to the notice of motion dated 10 August 2004 as evidence derived from experimental proof of a matter as evidence in this proceeding.
2. The applicants/cross-respondents pay the applicants costs of the motion.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V604 OF 2002

BETWEEN:

ELI LILLY & COMPANY
FIRST APPLICANT/FIRST CROSS-RESPONDENT

ELI LILLY AUSTRALIA PTY LTD ACN 000 233 992
SECOND APPLICANT/SECOND CROSS-RESPONDENT

ELI LILLY & COMPANY LIMITED
THIRD APPLICANT/THIRD CROSS-RESPONDENT

AND:

PFIZER IRELAND AND PHARMACEUTICALS
FIRST RESPONDENT/FIRST CROSS-CLAIMANT

PFIZER PTY LIMITED ACN 008 422 348
SECOND RESPONDENT/SECOND CROSS-CLAIMANT

JUDGE:	HEEREY J
DATE:	16 AUGUST 2004
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. This is an application for leave to rely on evidence derived from experimental proof. Alternatively the applicants seek directions for the conduct of further experiments pursuant to O 58 r 31 of the Federal Court Rules.  The circumstances are described in the two affidavits of Mr Grant William Fisher sworn 10 and 11 August 2004 and the affidavit of Mr Stephen Marcus Stern sworn 16 August 2004.  I also refer to the applicants’ written submissions handed to me today.

2. In my view there is no reasonable basis for inferring a deliberate course of concealment on the part of Eli Lilly.  The experiments of Dr Florio seem to have been conducted for a purpose quite unrelated to the present proceeding, that is to say for US Patent Office re-examination proceedings.  I think also it is reasonable to draw the conclusion that it was not until the letter of 5 April 2004 that it became clear to Lilly that the construction of claim 10 of the patent in suit referred to in that letter was to be relied on by Pfizer in the Australian proceeding. 

3. It is true there has been less than admirable promptness between that date and 21 July on the part of Lilly in dealing with this issue, and I take that into account.  However, I am also influenced by the fact that it is common ground that it would be highly undesirable to vacate the trial date.  It is conceded that the evidence of this experiment is not at the moment in admissible form.  Certainly that is a matter that will have to be remedied.   Nevertheless, I think the shutting out of relevant evidence is a serious step which the court should be loathe to avoid if at all possible.

4. I am not persuaded that there is insuperable prejudice to be suffered by Pfizer if the primary relief sought by Lilly is granted.  It is said in Mr Stern’s affidavit that if Lilly is permitted to rely on the evidence, Pfizer’s legal team will have to (a) obtain instructions, including technical instructions from Pfizer's in-house scientists, (b) search for appropriate qualified experts to provide any answering evidence on the methodology used by Dr Florio and the conclusions which might be drawn from preparing such evidence and (c) work with the experts retained to prepare evidence in answer to the experiments conducted by Dr Florio.   If Lilly were to repeat the experiments giving Pfizer an opportunity to observe them, there would be an even greater burden.

5. It is fairly obvious, I think, that a firm with the technical resources of Pfizer would not be starting from scratch in searching for appropriate qualified experts.  Moreover, there is nothing raised specifically as to the experiments themselves which might indicate their prima facie invalidity or some obvious likely defects, such as reliance on subjective observations.  Overall I think it is reasonable that the relief sought in par 1 of the motion be granted.

I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey .

Associate:

Dated:             23 August 2004

Counsel for the Applicant:	Mr D K Catterns QC with Ms K J Howard
Solicitor for the Applicant:	Blake Dawson Waldron
Counsel for the Respondent:	Mr D Shavin QC
Solicitor for the Respondent:	Corrs Chambers Westgarth
Date of Hearing:	16 August 2004
Date of Judgment:	16 August 2004