FEDERAL COURT OF AUSTRALIA
InterPharma Pty Ltd v Hospira, Inc (No 4) [2018] FCA 45
File number: VID 885 of 2017 Judge: KENNY J Date of judgment: 5 February 2018 Catchwords: COSTS – costs of interlocutory injunction application – costs of interim injunction application – costs of interlocutory application to discharge interim injunction. Legislation: Federal Court of Australia Act 1976 (Cth) Cases cited: Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249
Commonwealth of Australia v Sanofi [2015] FCAFC 172; 237 FCR 483
Dibeek Holdings Pty Ltd v Notaras & Anor (1998) 143 FLR 132
Eli Lilly and Company v Generic Health Pty Ltd [2013] FCA 1254
Reckitt Benckiser Healthcare (UK) Ltd v GlaxoSmithKline Australia Pty Ltd (No 2) [2013] FCA 736
Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2009] FCA 595
Date of hearing: Determined on the papers Registry: Victoria Division: General Division National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Category: Catchwords Number of paragraphs: 15 Counsel for the Cross-Claimants: Mr T Cordiner QC with Ms K Beattie Solicitor for the Cross-Claimants: Minter Ellison Counsel for the Cross-Respondent: Ms H Rofe QC with Mr C Thompson Solicitor for the Cross-Respondent: Stephens Lawyers & Consultants ORDERS
VID 885 of 2017 BETWEEN: INTERPHARMA PTY LTD (ACN 099 877 899)
Applicant
AND: HOSPIRA, INC
Respondent
AND BETWEEN: HOSPIRA, INC (and another named in the Schedule)
First Cross-Claimant
AND: INTERPHARMA PTY LTD (ACN 099 877 899)
Cross-Respondent
JUDGE:
KENNY J
DATE OF ORDER:
5 FEBRUARY 2018
THE COURT ORDERS THAT:
1.Each party’s costs of the application for interlocutory injunctive relief dated 18 August 2017 be its costs in the cause.
2.The costs of the cross-claimants’ application for interim injunctive relief dated 6 September 2017 be the cross-claimants’ costs in the cause.
3.The cross-respondent pay the cross-claimants’ costs of the cross-respondent’s interlocutory application dated 17 October 2017.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
KENNY J:
On 18 December 2017, on the application of Hospira, Inc and Pfizer Australia Pty Ltd (collectively, Pfizer), the Court granted an interlocutory injunction restraining InterPharma Pty Ltd (InterPharma) from, amongst other things, marketing its Generic Dexmedetomidine Product. The Court had earlier granted an interim injunction in essentially the same terms, with costs reserved. Also on 18 December 2017, the Court dismissed InterPharma’s application dated 17 October 2017 to discharge the interim injunction.
On 18 December 2017, with respect to costs, the Court also ordered that, unless they could agree, the parties were to file and serve submissions on costs and that costs issues were to be dealt with on the papers. The parties have filed written submissions on the costs orders they seek. These reasons are concerned with the disposition of the costs of Pfizer’s application for interlocutory injunctive relief, a re-visiting of the costs reserved order in respect of Pfizer’s application for interim injunctive relief, and with InterPharma’s application to discharge the…
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- Case
- [2018] FCA 45
- Decision Date
CaseChat Overview and Summary
The court held that the appropriate order for the costs of the interlocutory applications would be for each party to bear its own costs. This decision was grounded in the understanding that interlocutory applications are often provisional assessments of the merits and the balance of convenience, and that the ultimate outcome at trial may differ significantly. The court referred to precedents such as JT Stratford & Son Limited v Lindley, ACD Tridon Inc v Tridon Australia Pty Ltd, and Jadwan Pty Ltd v Rae & Partners, which support the principle that costs should reflect the provisional nature of interlocutory decisions. The court also acknowledged that, in cases involving pharmaceutical patents, it is common practice to reserve costs for the final determination of the case, as seen in cases like Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth and Reckitt Benckiser Healthcare (UK) Ltd v GlaxoSmithKline Australia Pty Ltd.
Given the complexity of the issues and the volume of evidence presented during the interlocutory hearings, the court concluded that an order for each party to bear its own costs was the most equitable approach. This decision ensures that neither party is unduly prejudiced by the provisional nature of the interlocutory relief granted. The court's reasoning reflects a careful consideration of the principles of costs allocation and the practical realities of patent litigation.
The final orders of the court were that each party bear its own costs for the interlocutory application dated 18 August 2017, that the cross-claimants bear their own costs for the interim injunctive relief application dated 6 September 2017, and that the cross-respondent pay the cross-claimants' costs for the interlocutory application dated 17 October 2017. These orders were made in accordance with Rule 39.32 of the Federal Court Rules 2011.
Orders
Orders of the court
1. Each party’s costs of the application for interlocutory injunctive relief dated 18 August 2017 be its costs in the cause.
2. The costs of the cross-claimants’ application for interim injunctive relief dated 6 September 2017 be the cross-claimants’ costs in the cause.
3. The cross-respondent pay the cross-claimants’ costs of the cross-respondent’s interlocutory application dated 17 October 2017.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Finally, InterPharma submitted that if the Court was of the view that, regardless of the outcome of the trial, Pfizer should not in the circumstances be at risk of paying InterPharma’s costs, then the appropriate order would be that Pfizer’s costs be its costs in the cause. In this event, Pfizer would only be entitled to recover its costs of the interlocutory application if it succeeded at trial, and that if InterPharma were ultimately successful, InterPharma would be required to bear its own costs of opposing the interlocutory application. In this regard, InterPharma referred to JT Stratford & Son Limited v Lindley (No 2) [1969] 3 All ER 1122 at 1123 (Lord Denning MR); ACD Tridon Inc v Tridon AustraliaPty Ltd [2003] NSWSC 357 at [8] (Austin J); and Jadwan Pty Ltd v Rae & Partners (No 2) [2015] TASSC 17 at [15] (Holt AsJ). CONSIDERATION Under s 43(2) of the Federal Court of Australia Act 1976 (Cth), the disposition of costs is at the discretion of the Court, although it is well-established that this discretion must be exercised judicially, having regard to the relevant principles and the justice of the case in all the circumstances. It may be accepted that, as Pfizer submitted, referring to Dibeek Holdings Pty Ltd v Notaras & Anor (1998) 143 FLR 132 (Dibeek) at 140–141, a party successful in an interlocutory application may be entitled to its costs in any event, or to its costs only on the basis that they are that party’s costs in the cause. It may also be accepted that, generally speaking, an order for costs in any event will be made where a party’s success reflects some act or omission by the opposing party: Dibeek at 140–141. It may also be accepted that, as Pfizer submitted, interlocutory applications differ in their nature and purpose, and a consequential order for costs may reflect this difference. Nonetheless, as InterPharma submitted, and I accept, Pfizer’s success in its applications for interim and interlocutory relief was based on a provisional assessment of the merits, particularly of the parties’ cases on invalidity, and the balance of convenience. The ultimate outcome after trial may lead the Court to declare the Patent invalid, in which case the basis on which injunctive relief was granted would be found to have failed. It is for this reason, as InterPharma submitted, that interlocutory injunctions are invariably granted, as in this case, on the condition that the patentee give the usual undertaking as to damages in an attempt to ensure that a party in InterPharma’s position will receive compensation for any loss that is suffered by reason of the grant of the injunction in the event it appears that Pfizer is not ultimately entitled to relief: see Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249 at 311 (Gibbs J), 318-20 (Stephen J) and 324-25 (Mason J) and Commonwealth of Australia v Sanofi [2015] FCAFC 172; 237 FCR 483 at [68]-[74] (Kenny and Nicholas JJ). Further, the possibility that the predicate of the grant of interlocutory relief – that by marketing and the like its Generic Dexmedetomidine Product, InterPharma would infringe Pfizer’s valid patent claim – may be shown upon trial to be ill-founded is reflected in an order that each party’s costs be its costs in the cause. As InterPharma noted, such an order has been made with respect to other contested applications for interlocutory injunctions where issues of pharmaceutical patent infringements and validity have arisen: see, for example, Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2009] FCA 595; 81 IPR 339. InterPharma also noted, correctly, that in other contested applications for interlocutory injunctions involving pharmaceutical patent infringements, costs have been reserved, as in Reckitt Benckiser Healthcare (UK) Ltd v GlaxoSmithKline Australia Pty Ltd (No 2) [2013] FCA 736; 103 IPR 472 (appeal allowed: [2013] FCAFC 102) and Eli Lilly and Company v Generic Health Pty Ltd [2013] FCA 1254. Each of these two cases differed, however, from the present case, including in terms of the complexity of the issues and arguments raised at the interlocutory hearings and the volume of substantive evidence adduced.