H Lundbeck A/S v Sandoz Pty Ltd

The High Court of Australia considered an appeal and cross-appeal concerning patent infringement and misleading or deceptive conduct. The dispute arose from a settlement agreement between H Lundbeck A/S (appellant) and Sandoz Pty Ltd (respondent) regarding a patent. A clause in the settlement agreement granted Sandoz a non-exclusive licence to exploit the patent, but this licence did not specify an end date. The patent's term was subsequently extended under the *Patents Act 1990* (Cth). Lundbeck, as the patentee and exclusive licensee, brought infringement proceedings against Sandoz for acts occurring during this extended term.

The central legal issues before the High Court were: (1) whether the non-exclusive licence granted to Sandoz applied to acts performed during the extended term of the patent; (2) whether the exclusive licensee had the right to bring infringement proceedings under section 79 of the *Patents Act 1990* for acts done during the extended term; and (3) whether Sandoz engaged in misleading or deceptive conduct by failing to disclose to its customers the possibility that the patent term might be extended. The Court also considered when a patentee's cause of action accrued for the purposes of section 51A(1)(a) of the *Federal Court of Australia Act 1976* (Cth).

The High Court reasoned that the non-disclosure of the remote possibility of a patent extension did not constitute misleading or deceptive conduct. The Court distinguished between an implied representation that parties are legally entitled to use a product and an implied representation that there is only a remote possibility of future patent proceedings. The remoteness of the possibility meant that Sandoz's sales did not involve misleading or deceptive conduct. The Court also addressed the rights of an exclusive licensee to bring infringement proceedings during an extended patent term, ultimately allowing the appeal in part and setting aside certain orders of the Full Court.

In Matter No S22/2021, the appeal was allowed with costs, and the orders of the Full Court were set aside and replaced with new orders. These included declarations that the second respondent did not have rights to bring proceedings under s 79 of the *Patents Act 1990*, that the first respondent was entitled to damages, and that the matter be remitted for recalculation of damages. In Matter No S23/2021, the appeal was dismissed with costs.