Merck Sharp & Dohme Corporation v Pfizer Inc

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FEDERAL COURT OF AUSTRALIA

Merck Sharp & Dohme Corporation v Pfizer Inc [2021] FCA 57  

File number: NSD 774 of 2019
Judgment of: BURLEY J
Date of judgment: 3 February 2021
Catchwords: PRACTICE AND PROCEDURE – application for hearing to be adjourned – where one of a party’s two expert witnesses is unable to participate in the proceedings –application to adjourn opposed – balancing of considerations – whether retaining hearing dates would cause undue prejudice to the respondent – application granted   
Legislation:

Federal Court of Australia Act 1976 (Cth) s 37M

Federal Court Rules 2011 (Cth) r 1.32

Cases cited:

Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; 239 CLR 175

Luck v Chief Executive Officer of Centrelink [2015] FCAFC 75

Merck Sharp & Dohme Corp v Wyeth LLC (No 4) [2020] FCA 1719

Merck Sharp & Dohme Corporation v Wyeth LLC (No 3) [2020] FCA 1477

Federal Court of Australia, Expert Evidence Practice Note (GPN-EXPT), 25 October 2016

Federal Court of Australia, Intellectual Property Practice Note (IP-1), 20 December 2019

Division: General Division
Registry: New South Wales
National Practice Area: Intellectual Property
Sub-area: Patents and associated Statutes
Number of paragraphs: 20
Date of hearing: 28 January 2021
Counsel for the Applicants: Ms K J Howard SC with Mr D B Larish and Mr R J Boadle
Solicitor for the Applicants: Corrs Chambers Westgarth
Counsel for the Respondent: Ms C L Cochrane with Mr R W Clark
Solicitor for the Respondent: Norton Rose Fulbright

ORDERS

NSD 774 of 2019
BETWEEN:

MERCK SHARP & DOHME CORPORATION

First Applicant

MERCK SHARPE & DOHME (AUSTRALIA) PTY LTD

Second Applicant

AND:

PFIZER INC

Respondent

ORDER MADE BY:

BURLEY J

DATE OF ORDER:

3 FEBRUARY 2021

THE COURT ORDERS THAT:

Trial date

1.Order 13 of the Orders of Justice Burley made on 13 December 2019 be vacated.

2.The matter be listed for trial from 18 to 29 October 2021 and for closing legal submissions from 1 to 3 December 2021.

Separate question

3.Order 6 of the Order of Justice Burley made on 22 December 2020 be amended to replace the reference to the hearing commencing 1 March 2021 with the date for trial in Order 2 above.

Pfizer update in relation to expert availability

4.The Respondent (Pfizer) is to provide an update to the Court and the Applicants (MSD) on or before 28 March 2021 regarding Dr Michon’s availability to participate in any joint expert conclave, joint expert report and concurrent evidence session at trial.

Pfizer’s expert evidence

5.If, pursuant to Order 4 above, Pfizer indicates that Dr Michon is unavailable, Pfizer is to file and serve any additional expert affidavit in answer on MSD’s invalidity claim by 15 June 2021 (not to exceed 35 pages, excluding any annexures and exhibits).

MSD further expert evidence in reply

6.If, pursuant to Order 6 above, Pfizer files an additional expert affidavit, MSD is to file and serve any expert affidavits in reply by 15 August 2021 (each affidavit…

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Details
Case
[2021] FCA 57
Decision Date

CaseChat Overview and Summary

In the Federal Court of Australia, Merck Sharp & Dohme Corporation (MSD) and Pfizer Inc are embroiled in a patent dispute that has previously led to MSD being restrained from launching its MSD vaccine until the expiration of Pfizer's 013 patent on 31 March 2026. The present application concerns an interlocutory matter, specifically an application by Pfizer to adjourn the hearing of the substantive proceedings. The application arises because one of Pfizer's expert witnesses, Dr Michon, has been diagnosed with COVID-19 and is unable to participate in the proceedings. The legal issue before the Court was whether the hearing should be adjourned to accommodate Pfizer's inability to call Dr Michon as an expert witness.

Justice Burley considered the principles governing the grant of an adjournment and held that the application should be granted. He noted that the Court has both inherent and statutory power to adjourn a hearing, and must exercise that discretion judicially. His Honour balanced the various considerations, including the reason for the adjournment, the timing of the application, the detriment to Pfizer and MSD if the adjournment was not granted or was granted, and the public interest. Ultimately, Justice Burley concluded that it would cause undue prejudice to Pfizer if the hearing proceeded without Dr Michon's evidence, and therefore granted the application.

The Court made orders that the hearing be vacated and listed for a new date in October 2021. It also made orders concerning expert evidence, joint expert reports, the Court Book, the statement of issues, and the exchange of authorities, amongst other things. Finally, the Court ordered Pfizer to pay MSD's costs of the interlocutory application and those thrown away by reason of the adjournment.

Orders

Orders of the court

Trial date

1. Order 13 of the Orders of Justice Burley made on 13 December 2019 be vacated.

2. The matter be listed for trial from 18 to 29 October 2021 and for closing legal submissions from 1 to 3 December 2021.

Separate question

3. Order 6 of the Order of Justice Burley made on 22 December 2020 be amended to replace the reference to the hearing commencing 1 March 2021 with the date for trial in Order 2 above.

Pfizer update in relation to expert availability

4. The Respondent (Pfizer) is to provide an update to the Court and the Applicants (MSD) on or before 28 March 2021 regarding Dr Michon’s availability to participate in any joint expert conclave, joint expert report and concurrent evidence session at trial.

Pfizer’s expert evidence

5. If, pursuant to Order 4 above, Pfizer indicates that Dr Michon is unavailable, Pfizer is to file and serve any additional expert affidavit in answer on MSD’s invalidity claim by 15 June 2021 (not to exceed 35 pages, excluding any annexures and exhibits).

MSD further expert evidence in reply

6. If, pursuant to Order 6 above, Pfizer files an additional expert affidavit, MSD is to file and serve any expert affidavits in reply by 15 August 2021 (each affidavit not to exceed 15 pages, excluding any annexures and exhibits).

Topics for joint expert report

7. The parties, by their lawyers, are to confer with a view to reaching agreement by no later than 6 September 2021 in relation to the topics that the expert witnesses are to discuss by way of the following procedure:

(a) on or before 30 August 2021, MSD is to provide Pfizer with any suggested revisions to the topics for experts previously approved by the Court;

(b) on or before 3 September 2021, Pfizer is to provide a response to MSD’s suggested revisions, indicating any areas of disagreement;

(c) if there remains disagreement with the document set out in (a), the parties’ counsel are to confer on or before 6 September 2021 with a view to reaching agreement; and

(d) on or before 5.00pm on 6 September 2021, the parties are to provide to the Associate to Justice Burley the agreed topics for the experts.

Conclave and joint expert report

8. Order 7 of the Orders of Justice Burley made on 26 February 2020, as amended by Order 3 of the Orders of Justice Burley made on 19 August 2020 and Order 2 of the Orders of Justice Burley made on 4 January 2021, be vacated.

9. The parties’ expert witnesses participate in joint expert conference(s) during the period between 13 to 24 September 2021, such conferences to be conducted in accordance with Part 7 of the General Practice Note Entitled “Expert Evidence Practice Note (GPN-EXPT)”, and, by 27 September 2021, produce a joint report that identifies areas of agreement, partial agreement and disagreement, in respect of any matters in which they have expertise, and, where there is partial agreement or disagreement, short reasons for the partial agreement or disagreement.

10. A Registrar be appointed to facilitate the joint expert conference(s) referred to in paragraph 9 above, said conference(s) to commence at a time to be notified by the Registrar after consultation with the parties and/or the experts.

Court Book

11. Order 8 of the Orders of Justice Burley made on 8 December 2020 be vacated.

12. By 3 September 2021, MSD’s solicitors are to provide to Pfizer’s solicitors a draft revised Court Book index.

13. By 7 September 2021, the parties are to agree on the Court Book index.

14. By 13 September 2021, MSD is to:

(a) deliver two hard copies of the Court Book to the Registry marked to the attention of the Associate to Justice Burley;

(b) deliver four hard copies of the Court Book to Pfizer’s solicitors; and

(c) provide an electronic copy of the Court Book to the Associate to Justice Burley and Pfizer’s solicitors, which:

(i) is a single PDF document in searchable (OCR) format;

(ii) includes an index with individual hyperlinks to each document included in the index, with separate hyperlinks for each affidavit, exhibit and annexure;

(iii) includes appropriate bookmarks to each document, including separate bookmarks for each affidavit, exhibit and annexure.

Statement of issues

15. Orders 9 and 10 of the Orders of Justice Burley made on 8 December 2020 be vacated.

16. The parties are to seek to agree upon a statement of issues by 24 September 2021 (noting, if necessary, any issues on which there is disagreement) by way of the following process:

(a) on or before 6 September 2021, MSD is to provide Pfizer with a revised statement of issues;

(b) on or before 13 September 2021, Pfizer is to provide MSD with a mark-up reflecting any areas of disagreement with the document set out in (a);

(c) on or before 17 September 2021, MSD is to provide Pfizer with a mark-up reflecting any areas of disagreement with the document set out in (b); and

(d) if there remains disagreement with the document set out in (c), the parties’ counsel are to confer on or before 24 September 2021 with a view to reaching agreement.

17. The statement of issues prepared in accordance with Order 16 above is to be provided to the Associate to Justice Burley by 5.00pm on 24 September 2021.

Notices of cross-examination

18. Orders 11, 12, 13 and 14 of the Orders of Justice Burley made on 8 December 2020 be vacated.

19. By 4.00pm on 3 September 2021, MSD is to notify Pfizer of the affidavits (or parts thereof), on which it intends to rely at the trial.

20. By 4.00pm on 3 September 2021, Pfizer is to notify MSD of the affidavits (or parts thereof), on which it intends to rely at the trial.

21. If a party requires a deponent whose affidavit is proposed to be read at the trial, as advised in accordance with paragraph 19 and 20 above, to be made available for cross-examination by video-link, that party must give written notice of that requirement to the party who filed the affidavit on or before 7 September 2021.

22. Unless written notice is given in compliance with paragraph 21 above, a deponent is not required to attend the trial by video-link for cross-examination and the deponent’s affidavit will be read into evidence, subject to any objections as to admissibility.

Written outlines of opening submissions

23. Orders 16, 17 and 18 of the Orders of Justice Burley made on 8 December 2020 be vacated.

24. By 5.00pm on 22 September 2021 the parties are to agree to a list of headings to be used in each party’s written outline of opening submissions and provide that list to the Associate to Justice Burley.

25. By 4.00pm on 3 October 2021, MSD is to file and serve a written outline of opening submissions in chief (of no more than 15 pages in length).

26. By 4.00pm on 10 October 2021, Pfizer is to file and serve a written outline of opening submissions in answer (of no more than 15 pages in length).

Objections to evidence

27. Orders 19, 20 and 21 of the Orders of Justice Burley made on 8 December 2020 be vacated.

28. By 4.00pm on 8 October 2021, the parties are to exchange written notices identifying any objections to any parts of the affidavits filed by the other party and the joint expert report with a brief statement identifying in each case the basis of the objection.

29. By 4.00pm on 14 October 2021, counsel are to confer in relation to the notices of objection exchanged pursuant to order 18 and endeavour to resolve the parties’ respective objections.

30. By 4.00pm on 15 October 2021, the parties are to file a document indicating:

(a) the objections which the parties agree are to be upheld; and

(b) any remaining objections on which a ruling by the Court is required.

Bundle of authorities

31. Orders 22 and 23 of the Orders of Justice Burley made on 8 December 2020 be vacated.

32. By 4.00pm on 13 October 2021, the parties are to exchange lists of the authorities and legislation on which they intend to rely in accordance with the General Practice Notice entitled “Lists of Authorities and Citations Practice (GPN:AUTH)”.

33. By 4.00pm on 15 October 2021, MSD is to file and serve an electronic joint bundle of the authorities and legislation on which the parties intend to rely. The electronic joint bundle is to:

(a) include an index with individual hyperlinks to each authority;

(b) comprise individual PDF searchable (OCR) documents for each authority; and

(c) for each individual document, include in the file name the corresponding tab number in the index, followed by an abbreviated description of the authority, for example “01. Myriad (2015) 258 CLR 334”.

Costs

34. Pfizer is to pay MSD’s costs of Pfizer’s interlocutory application dated 25 January 2021.

35. Pfizer is to pay MSD’s costs thrown away by reason of the adjournment of the hearing listed to commence on 1 March 2021.

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

The present parties are not unknown to each other. On 14 October 2020 I delivered lengthy reasons in Merck Sharp & Dohme Corporation v Wyeth LLC (No 3) [2020] FCA 1477 (October judgment) concerning allegations that MSD would, by the launch of the MSD vaccine, infringe three other patents owned by Wyeth LLC (Wyeth is now owned by Pfizer). I found that the relevant claims of two of those patents were not valid, but that those of one, no 2006235013 (013 patent) was valid and threatened to be infringed by the MSD vaccine. Following the October judgment, the parties had a dispute about the form of orders that should be made, which gave rise to a further judgment in which I determined that MSD should be restrained from launching the MSD vaccine for the term of the 013 patent, which expires on 31 March 2026: Merck Sharp & Dohme Corp v Wyeth LLC (No 4) [2020] FCA 1719 (November judgment). The relevance of this background is that at present MSD is the subject of orders restraining it from launching the MSD vaccine until 31 March 2026. In the usual way, Pfizer and MSD have each filed appeals from the October Judgment and the November judgment. Pfizer’s Notice of Appeal was lodged on 23 December 2020. MSD filed its Notice of Appeal on 19 January 2021. The principles concerning the grant of an adjournment of a hearing are not in dispute. The Court has an inherent power and also a power under r 1.32 of the Federal Court Rules 2011 (Cth) to adjourn the hearing of any matter in appropriate circumstances. The discretion to do so must be exercised judicially, having regard to relevant matters including the reason for the adjournment and the timing of the application for the adjournment, the detriment to Pfizer if the adjournment is not granted, the detriment to MSD if the adjournment is granted, the detriment to the Court and other litigants, and public interest considerations: Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; 239 CLR 175 at [5] (French CJ), at [93], [95], [100] and [103] (Gummow, Hayne, Crennan, Kiefel and Bell JJ). It is of course necessary to have regard to the overarching purpose of the civil practice and procedure provisions set out in the Federal Court of Australia Act 1976 (Cth), which is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible: s 37M; see Luck v Chief Executive Officer of Centrelink [2015] FCAFC 75 at [42] (Collier, Griffiths and Mortimer JJ). At the hearing of the interlocutory application I indicated that in my view it is appropriate to grant the adjournment sought by Pfizer and that the proceeding will be listed for hearing from 18 October 2021. My reasons for doing so are briefly summarised below. I note that it is not impossible that Dr Michon will at some point in the coming two months feel capable of resuming his role. However, no evidence supports that proposition and what is set out below assumes that he will not. The orders that I will make include provision for Pfizer to update the Court and MSD on Dr Michon’s position in two months’ time. However, it is clear that in any event the 1 March 2021 hearing must be vacated.

Ratio Decidendi

Legal Principle Established

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