Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd (No 2)
[2019] FCA 657
•13 May 2019
FEDERAL COURT OF AUSTRALIA
Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd (No 2)
[2019] FCA 657
File number(s): NSD 2149 of 2016 Judge(s): BURLEY J Date of judgment: 13 May 2019 Catchwords: COSTS – application for preliminary discovery pursuant to r 7.23 of the Federal Court Rules 2011 (Cth) – where prospective applicant was substantially successful in application which was contested by prospective respondents – discretion in making costs orders pursuant to s 43(2) of Federal Court of Australia Act1976 (Cth) to be exercised judicially – contingent costs order not appropriate – prospective applicant awarded 50% of its costs
PRACTICE AND PROCEDURE – preliminary discovery – confidentiality – principles to be applied – restrictions imposed
Legislation: Federal Court of Australia Act 1976 (Cth) s 37AF, 37M, 37N
Federal Court Rules 2011 (Cth) r 7.23
Patents Act 1990 (Cth) s 97(3)
Cases cited: Aristocrat Technologies Australia Pty Limited v Ainsworth Game Technology Limited (No 2) [2019] FCA 511
C7 Pty Ltd v Foxtel Management Pty Ltd [2001] FCA 1864
Cappuccio v Australia & New Zealand Banking Group Ltd [1999] FCA 1188
Cobankara v Australia and New Zealand Banking Group Ltd [2017] FCA 419
Conor Medsystems Inc v University of British Columbia (No 4) [2007] FCA 324
Dallas Buyers Club LLC v iiNet Limited (No 3) [2015] FCA 422; 327 ALR 695
E D Oates Pty Ltd v Edgar Edmondson Imports [2012] FCA 356
Gearhart United Pty Ltd v Omni Oil Technologies (Asia) SDN BHD (No 2) [2010] FCA 558
Glencore International AG v Selwyn Mines Limited [2005] FCA 801; 223 ALR 238
Harman v Secretary of State for the Home Department [1983] 1 AC 280; 1 All ER 532
Hearne v Street [2008] HCA 36; 235 CLR 125
J & A Vaughan Super Pty Ltd v Becton Property Group Limited [2013] FCA 340
ObjectiVision Pty Ltd v Visionsearch Pty Ltd (No 3) [2015] FCA 304
Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd [2017] FCA 285
Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd [2017] FCAFC 193; 257 FCR 62
Procter v Kalivis (No 3) [2010] FCA 1194
Sabre Corporation Pty ltd v Russ Kalvin’s Hair Care Company [1993] FCA 841; 124 ALR 400
SmithKline Beecham plc v Alphapharm Pty Ltd [2001] FCA 271
Steffen v ANZ Banking Group [2009] NSWSC 883
Date of hearing: 3 April 2019 Date of last submissions: 25 April 2019 Registry: New South Wales Division: General Division National Practice Area: Intellectual Property Sub-area: Patents and Associated Statutes Category: Catchwords Number of paragraphs: 32 Counsel for the Prospective Applicants: Mr D. Shavin QC with Mr C. Dimitriadis SC and Ms C. Cochrane Solicitor for the Prospective Applicants: DLA Piper Australia Counsel for the Prospective Respondent: Mr B. Caine QC with Mr J. S. Cooke and Mr D. B. Larish Solicitor for the Prospective Respondent: Ashurst Australia ORDERS
NSD 2149 of 2016 BETWEEN: PFIZER IRELAND PHARMACEUTICALS
First Prospective Applicant
WYETH LLC
Second Prospective Applicant
PFIZER AUSTRALIA PTY LTD ACN 008 422 348
Third Prospective Applicant
AND: SAMSUNG BIOEPIS AU PTY LTD ACN 611 890 094
Prospective Respondent
JUDGE:
BURLEY J
DATE OF ORDER:
13 MAY 2019
THE COURT ORDERS THAT:
1.If either party desires to make a separate submission as to costs of the 3 April 2019 application, they must file and serve a written submission of no more than 4 pages within 7 days of these orders.
2.The other party may respond by filing and serving a written submission of no longer than 4 pages within 7 days thereafter.
3.Any reply submission of no more than 2 pages to be filed within 7 days thereafter.
4.The application will then be determined on the papers unless either party indicates a desire for a hearing.
5.If no party files written submissions in accordance with Order 1, Orders in accordance with those set out in Annexure A (and accompanying Annexure 1) will be made and the words “including the costs of the application of 3 April 2019” will be added to Order 19. If additional costs submissions are made, Orders in accordance with Annexure A (and accompanying Annexure 1) will be made 7 days after these Orders, and the question of costs of the 3 April 2019 application will be addressed in separate Orders.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
BURLEY J:
1. INTRODUCTION
By Originating Application dated 14 December 2016, the prospective applicants (collectively, Pfizer) sought orders for preliminary discovery under Pt 7 r 7.23 of the Federal Court Rules 2011 (Cth) (FCR), and an accompanying order against the prospective respondent (SBA) in accordance with the principles set out in Sabre Corporation Pty ltd v Russ Kalvin’s Hair Care Company [1993] FCA 841; 124 ALR 400. Those proceedings were heard in February 2017, and in March 2017 I delivered judgment, refusing to make the orders sought; Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd [2017] FCA 285. Pfizer appealed that decision and on 29 November 2017 the Full Court (Allsopp CJ, Perram and Nicholas JJ) allowed the appeal and made orders that SBA give Pfizer preliminary discovery on terms to be the subject of further orders and remitted to me the issues of the scope of preliminary discovery orders, confidentiality, and the costs of the application at first instance; Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd [2017] FCAFC 193; 257 FCR 62 (Appeal Judgment). In these reasons I adopt the abbreviations used in Pfizer Ireland.
After the Appeal Judgment was delivered, the parties made progress in attempting to agree on further orders, but several disputes remained and were listed for hearing in April 2019. The matters in dispute were:
(1)The scope of preliminary discovery, and whether SBA should be permitted to redact portions of documents that it contends are irrelevant;
(2)The form of the confidentiality undertakings to be provided by persons permitted to see any documents produced for inspection; and
(3)The costs of the application at first instance.
During the course of the hearing in April 2019, SBA provided a proposed order setting out the categories of documents that it proposed should be supplied in answer to issue (1). The parties have subsequently agreed to a form of order which resolves that issue. The scope of the discovery the subject of agreement was more confined than that sought by Pfizer in the Originating Application. This leaves issues (2) and (3) above for determination.
2. CONFIDENTIALITY
There is no dispute that documents concerning the process for making BRENZYS are highly confidential. The parties have sensibly agreed most of the terms of the orders and accompanying undertakings, but they remain apart in relation to the content of three paragraphs of the confidentiality undertaking. Before addressing these, it is necessary to describe the agreed regime.
In summary, the proposed orders agreed by the parties provide that all documents discovered and produced for inspection by SBA will be the subject of a suppression order pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) (FCA Act). Such documents may only be disclosed to external Australian solicitors and counsel for Pfizer and their staff, and only on the basis that they have provided confidentiality undertakings in the form attached. The documents may also be disclosed to Professor Milton Hearn, who is an independent expert, under the same conditions. The orders provide that such documents may only be used for the purposes of this proceeding, in determining whether to commence patent infringement proceedings, and the conduct of any such patent infringement proceeding that follows. Additionally, any of the persons to whom the documents are disclosed will be bound by the order. Stringent conditions are placed on the manner in which the confidential information is to be stored, kept and copied, as well as the manner in which evidence may be adduced as to the content of the documents, and the manner in which written submissions may refer to such content. If patent infringement proceedings are not commenced within 90 days from production of the last document, Pfizer's solicitors must take all necessary steps to retrieve all documents and other confidential material and return them to SBA, as well as ensure that all electronic copies of the documents and confidential material have been deleted. If patent infringement proceedings are commenced, then the same routine must be observed within 60 days of final determination of those proceedings.
The proposed confidentiality undertaking to the Court is to be signed by each person permitted to receive the documents. In summary, it includes undertakings that the person will treat the documents in accordance with the proposed orders, and that they will not be used except as reasonably required for the purpose of these proceedings, in determining whether to commence patent infringement proceedings, or in any such patent infringement proceedings. Obligations regarding: the copying of any documents; the taking and keeping of notes; and the return of documents and confidential material are set out. The person must notify the solicitors for SBA of any breach of which he or she becomes aware.
The three controversial parts of the undertaking are set out in paragraphs 9, 10 and 11 of SBA’s proposed confidentiality undertaking.
Proposed paragraph 9 is an undertaking that except with the express written consent of SBA, the person will not be directly or indirectly involved in: advising on, consulting on, preparing, prosecuting, drafting, editing and or/or amending patent applications, patent specifications, patent claims and/or responses to patent office actions; or otherwise affecting the disclosure in patent applications or specifications; or otherwise affecting the scope of claims relating to etanercept or biological medicinal products containing etanercept as an active ingredient before the Australia Patent Office or any foreign patent office.
Proposed paragraph 10 is an undertaking that except with the express written consent of SBA, the person will not be involved directly or indirectly in the conduct of any legal proceedings in any other jurisdiction to which the prospective respondent or any of its affiliates or marketing partners is a party which relates (wholly or in part) to etanercept or biological medicinal products containing etanercept as an active ingredient.
Proposed paragraph 11 is an undertaking that the obligations in proposed paragraphs 9 and 10 will end 2 years after the return of the confidential materials.
SBA submits that these proposed paragraphs are an appropriate means by which the confidentiality in its documents can be maintained. It submits that there is a real risk that the recipients of the information, if involved in the prosecution of patent applications, or proceedings in other jurisdictions relating to etanercept, may make inadvertent or unconscious use of information in the discovered material. It submits that the undertaking is necessary to prevent that risk from eventuating, citing Conor Medsystems Inc v The University of British Columbia (No 4) [2007] FCA 324 at [1], [12], [15] (Finkelstein J).
The persons to whom the confidential documents are to be disclosed are external legal practitioners and their staff and Professor Hearn. External legal practitioners and their staff may be expected to have a sophisticated understanding of the need to maintain the confidentiality of such materials. As a party, Pfizer, and its legal advisors, are bound by the implied undertakings identified in Harman v Secretary of State for the Home Department [1983] 1 AC 280; 1 All ER 532 at 304, 309, 319-321.
As Hayne J explained in Hearne v Street [2008] HCA 36; 235 CLR 125 at [95] – [97] (footnotes omitted):
[95] Before turning to the appellants' submissions in relation to the extent and enforceability of the "implied undertaking", it is desirable to set out some background legal principles which were not in controversy.
[96] Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence. The types of material disclosed to which this principle applies include documents inspected after discovery, answers to interrogatories, documents produced on subpoena, documents produced for the purposes of taxation of costs, documents produced pursuant to a direction from an arbitrator, documents seized pursuant to an Anton Piller order, witness statements served pursuant to a judicial direction and affidavits. The appellants did not dispute the existence of this principle, and in particular did not dispute its potential application to the affidavit of Mrs Hesse and the witness statement of Dr Tonin.
[97] It is common to speak of the relevant obligation as flowing from an "implied undertaking".
To the list set out in [96] should be added documents produced under compulsion from orders for preliminary discovery.
The legal advisors are also bound by the terms of the agreed aspects of the undertaking that lead up to proposed paragraph 9, which include repetition of their obligations under the proposed orders. Pfizer submits that the further effect of proposed paragraph 9 will be to impose an unreasonable and unnecessary restraint on those persons from conducting their professional work. It submits that such persons should be able to conduct work in the patent office or abroad, should the opportunity arise, in relation to etanercept and that SBA’s proposed confidentiality undertaking would prevent the current Australian legal team acting for Pfizer from acting on an application to amend any of the patents, or act on any re-examination of those patents under s 97(3) of the Patents Act 1990 (Cth).
I do not consider that the restraint set out in proposed paragraph 9 is necessary for external legal advisors. The express and implied undertakings applicable to the legal advisors impose a heavy burden on them not to use the information other than for the purpose of assisting their client to determine whether to commence patent infringement proceedings, and the conduct of any such patent infringement proceeding that follows. Proposed paragraph 9 would additionally restrain those practitioners from advising their own client on matters related to its own patents in relation to etanercept. The danger that they may inadvertently disclose confidential information in the course of doing so is, in my view, extremely remote, and does not warrant proposed paragraph 9.
The basis for proposed paragraph 10 is that Pfizer’s legal advisors in Australia may be involved in assisting Pfizer in legal proceedings in other jurisdictions relating to etanercept, and that they may inadvertently disclose information from the SBA documents. I accept that there is a risk that a person in possession of confidential information may, perhaps without realising it, be influenced by knowledge in his or her possession in making recommendations to the client arising from that knowledge. However, in the case of experienced legal practitioners I consider that the risk is extremely slight. I do not consider that proposed paragraph 10 is warranted.
It may be noted that the documents are not to be disclosed to any person from within Pfizer, including any in-house counsel. In that respect the position is different to that contemplated by Finkelstein J in Conor Medsystems.
The evidence reveals that Professor Hearn holds the title of Distinguished Emeritus Professor of Chemistry at Monash University, and is the Professor of Pharmaceutical Engineering at the University of Adelaide. He has previously held the role of “Lead Scientist – Victorian Centre for Sustainable Chemical Manufacturing, Deputy Director-Industry – Green Chemical Futures” at Monash University. Leaving aside his retainer in the current proceedings, he has no relationship with Pfizer. Nor does he have any relationship with any of the companies that Dr Lee has identified that compete with SBA in the production of biosimilar candidates for etanercept. Furthermore, he is not acting as a consultant with any company in respect of the development or manufacture of any biosimilar product. SBA makes no objection to his qualifications or his independence and accepts that he is an appropriate person who might be given the discovered documents.
The position of Professor Hearn is somewhat different to that of external legal advisors. If retained by Pfizer in the conduct of legal proceedings in other jurisdictions, it is likely to be much more difficult for him to divorce his knowledge of the SBA processes acquired as a result of production in Australia from knowledge acquired elsewhere. His involvement will be centred on factual questions, tied up with the technology. There is a greater risk that he may inadvertently be unable to separate knowledge acquired in Australian proceedings from knowledge acquired elsewhere. In this regard, I consider that proposed paragraph 10 is appropriate in his case. It is perhaps unlikely that Professor Hearn will be asked to assist Pfizer in relation to the activities identified in proposed paragraph 9. For this reason, the potential detriment to him of making such an order is reduced. In my view proposed paragraph 9 is also appropriate.
I consider that in the case of Professor Hearn the obligations in proposed paragraphs 9 and 10 should end two years following the return of the confidential materials, in accordance with proposed paragraph 11. However, should he, or any other person the subject of the undertakings seek the variation or discharge of these undertakings, they may apply to the Court for liberty to do so.
3. COSTS OF THE FIRST INSTANCE APPLICATION
The parties disagree as to the costs orders to be made. Pfizer contends that SBA should pay 50% of Pfizer’s costs of the application. Pfizer submits that the combined effect of the fact that it was successful in its application, and what it submits was the adversarial approach taken by SBA in opposing it, should lead to the result for which it contends. Pfizer submits that SBA put almost every aspect of the application in issue which led to what the Full Court described as a mini-trial rather than a summary hearing; Appeal Judgment at [2] (Allsop CJ). It further submits that the approach adopted by SBA did not accord with the requirements of s 37M and s 37N of the FCA Act.
SBA contends that if no patent infringement proceedings are commenced within 45 days of discovery and the inspection of documents, then Pfizer should pay all of the costs of the preliminary discovery application. However, if such proceedings are commenced in that time then:
(1)If the proceedings are for infringement of the 034 and/or the 036 patent, as well as for infringement of the 632 patent, then the costs be in the cause of the patent infringement proceeding;
(2)If the proceedings are for infringement of the 034 and/or the 036 patent, but not the 632 patent, Pfizer should pay 50% of the costs of the preliminary discovery application and 50% of the costs should be costs in the cause of the patent infringement proceeding;
(3)If the proceedings are for infringement of the 632 patent alone, then Pfizer should pay 50% of the costs of the preliminary discovery application and 50% of the costs should be costs in the cause of the patent infringement proceeding.
SBA submits that whilst there is no conventional approach to costs in cases such as the present, orders for costs contingent on whether or not proceedings are subsequently commenced are regularly made, and should be adopted in the present case.
Unsurprisingly, many single judge decisions consider the award of costs in applications for preliminary discovery. Without overcomplicating the analysis, which ultimately involves the exercise of the discretion conferred by s 43(2) of the FCA Act, the following propositions may be observed in relation to the making of such an award:
(1)The jurisdiction to order preliminary discovery is an extraordinary one since an order for preliminary discovery involves an invasion of the prospective respondent’s private affairs in order to determine whether or not a case can properly be brought against the prospective respondent; J & A Vaughan Super Pty Ltd v Becton Property Group Limited [2013] FCA 340 at [17] (Kenny J); C7 Pty Ltd v Foxtel Management Pty Ltd [2001] FCA 1864 at [50] (Gyles J).
(2)In considering where the balance lies in ordering costs, the exceptional nature of the jurisdiction is a matter to be taken into consideration and is a matter that may mean that a wholly successful prospective applicant is not entitled to an order for costs; ObjectiVision Pty Ltd v Visionsearch Pty Ltd (No 3) [2015] FCA 304 at [23] (Perry J); Cobankara v Australia and New Zealand Banking Group Ltd [2017] FCA 419 at [20] (Mortimer J).
(3)In Cappuccio v Australia & New Zealand Banking Group Ltd [1999] FCA 1188, a case where an application for preliminary discovery was resolved by consent, Burchett J at [3] considered that the appropriateness of the costs order:
…depends very much on the consequences of the discovery obtained. If the applicant for preliminary discovery uncovers enough to enable that applicant to bring proceedings which are successful, there may be much to be said for the proposition that the costs of the preliminary discovery should form part of the costs of the action. On the other hand, if the applicant proceeds, brings an action, fails, and is ordered to pay the costs of that action, there seems every reason why, generally speaking, the costs of the preliminary discovery should be included in the costs payable to the respondent.
(4)Following this approach, in a number of cases where a prospective applicant has been successful in procuring orders for preliminary discovery, courts have found it appropriate to order that the payment of costs be deferred to see whether the outcome of the production of documents yields the commencement of substantive proceedings (usually within a specified period of time following the preliminary discovery proceedings). When that has occurred, then the award of costs has been left to the decision-maker in the substantive proceedings; Cappuccio at [3] – [5]; SmithKline Beecham plc v Alphapharm Pty Ltd [2001] FCA 271 at [32] (Finkelstein J); E D Oates Pty Ltd v Edgar Edmondson Imports [2012] FCA 356 at [59] (Kenny J); Gearhart United Pty Ltd v Omni Oil Technologies (Asia) SDN BHD (No 2) [2010] FCA 558 at [24] (Besanko J); Procter v Kalivis (No 3) [2010] FCA 1194; Aristocrat Technologies Australia Pty Limited v Ainsworth Game Technology Limited (No 2) [2019] FCA 511 at [10] – [11] (Yates J).
(5)In other cases, the view has been expressed that the costs outcome should be determined at the time the outcome of the preliminary discovery application has been determined. It is a discrete issue and should not be deferred to an uncertain time; C7 Pty Ltd at [50]; Steffen v ANZ Banking Group [2009] NSWSC 883 at [31] (McDougall J); ObjectiVision at [17] – [21].
(6)Where an order for costs has not been deferred, some authorities indicate that the costs balance should favour the payment of costs by the prospective applicant. This is because there is no obligation on a prospective respondent to respond to requests for information, and a prospective respondent is entitled to remain passive and consequently put a prospective applicant to proof in preliminary discovery hearings: Glencore International AG v Selwyn Mines Limited [2005] FCA 801; 223 ALR 238 [15] (Lindgren J); C7 Pty Ltd at [50]; Vaughan Super at [18]; Procter at [17].
(7)However, where the prospective respondent takes an adversarial approach to the application, it exposes itself to an order for costs; Steffen at [32] – [33]; ObjectiVision at [23] – [24]; Dallas Buyers Club LLC v iiNet Limited (No 3) [2015] FCA 422; 327 ALR 695 at [3] (Perram J). In these cases, the courts have preferred not to defer the making of costs orders.
It is true to say, as has been observed in some of the authorities to date, that there has been no uniform approach to the award of costs in relation to preliminary discovery applications. However, an emerging thread is that where a prospective respondent takes an adversarial approach to the application, it may be required to bear some or all of the costs in the event that the prospective applicant is successful. The rationale behind that approach may be explained by the extraordinary nature of the preliminary discovery jurisdiction, which is intended to facilitate the making of sensible decisions concerning the commencement of proceedings, before proceedings have been formulated. Accordingly, whilst an adversarial approach is not prohibited, it is to be discouraged. Preliminary discovery is not a process by which potential parties are to open up new fronts for litigation warfare, but a procedure by which the efficient conduct of litigation is promoted; Appeal Judgment [2], [4] (Allsop CJ), [119] (Perram J).
Where a prospective respondent elects to enter the fray and vigorously contest the application, it becomes exposed to the risk that it should bear a costs consequence similar to the position it would be in were it a party to proceedings proper. Where the contest on an application is limited to the prospective applicant being put to proof of the elements of r 7.23, then even a successful prospective applicant may be liable to pay the costs. Conversely, where each point is hard fought, the prospective respondent is exposed to the risk that it will be visited with some or all of the costs in the event they are unsuccessful. In such circumstances, it may be inappropriate to defer a costs order to the outcome of any prospective litigation.
In the present case there is no doubt that the application for preliminary discovery was hard fought. SBA did more than simply put Pfizer to proof of the elements of r 7.23. It led expert evidence in opposition to the opinions expressed by the prospective applicant’s expert witness and, it might be said, took issue with every aspect of the case as presented. I do not accept Pfizer’s submission that in taking this approach SBA failed to act in a manner in accordance with the requirements of s 37M and s 37N of the FCA Act. In the circumstances, SBA was entitled to challenge the case brought, particularly having regard to its legitimate concerns regarding the confidentiality of the documents. But in doing so, it became exposed to an adverse order for costs.
Additionally, SBA’s argument did not correctly address the first limb of r 7.23. As the Chief Justice identified in the Appeal Judgment at [69], the relevant question posed by the rule is not whether one scientific view is more or less persuasive than another. Expert views may differ about scientific points; however, if the prospective applicant has a belief that is founded on considerations or views reasonably open – even if contested as incorrect by others – that may well found a conclusion that the applicant has the requisite belief required by r 7.23.
I do not consider that it is appropriate or convenient to defer the question of costs until it is apparent, one way or the other, whether Pfizer will commence proceedings for infringement. Whilst that approach might be appropriate where no adversarial approach had been taken, it is not suitable here. Instead, I consider that Pfizer’s submission that SBA should pay 50% of its costs of the application at first instance achieves the right balance. On the one hand, Pfizer has invoked the extraordinary jurisdiction of the court to achieve intrusive orders for the production by SBA of its highly confidential documents. In the ultimate form of Orders to which it agreed, Pfizer will obtain access to fewer documents that it initially sought. These factors are against Pfizer being awarded 100% of its costs. On the other, SBA conducted the application as a mini-trial, putting numerous matters into contest. It was not improper to do so, but in so doing it exposed itself to a cost consequence.
4. DISPOSITION
The Orders that I propose to make are set out in Annexure A to these reasons. Orders 1 to 18 are as agreed between the parties. The proposed confidentiality undertaking to which reference is made in draft Order 5(a)(i) is in a form suitable for external legal advisors. An amended form will be necessary for the undertaking to be provided by Professor Hearne, taking into account my conclusions in [20] and [21] above. Order 19 is that the prospective respondent pay 50% of the prospective applicants’ costs, as assessed or agreed. As explained below, these Orders will be made 7 days after the last of any submissions in relation to the costs of the application on 3 April 2019.
There remains the question of the costs of the application that was heard on 3 April 2019. Having regard to the result, one might think that an appropriate outcome is that the same costs order for the initial application also apply, namely that SBA pay 50% of Pfizer’s costs. However, I have not heard argument on this point. Accordingly, it is appropriate that I make the following orders:
(1)If either party desires to make a separate submission as to costs of the 3 April 2019 application, they must file and serve a written submission of no more than 4 pages in length within 7 days of these orders.
(2)The other party may respond by filing and serving a written submission of no longer than 4 pages within 7 days thereafter.
(3)Any reply submission of no more than 2 pages in length be filed and served within 7 days thereafter.
(4)The application will then be determined on the papers unless either party indicates a desire for a hearing.
(5)If no party files written submissions in accordance with Order 1, Orders in accordance with those set out in Annexure A (and accompanying Annexure 1) will be made and the words “including the costs of the application of 3 April 2019” will be added to Order 19. If additional costs submissions are made, Orders in accordance with Annexure A (and accompanying Annexure 1) will be made 7 days after these Orders, and the question of costs of the 3 April 2019 application will be addressed in separate Orders.
I certify that the preceding twenty-five (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Burley.
Associate:
Dated: 13 May 2019
ANNEXURE A
THE COURT ORDERS THAT:
Discovery
1.Pursuant to rule 7.23 of the Federal Court Rules 2011 (Cth), by 4.00 pm on the date that is 28 days after the date of these orders, the Prospective Respondent give discovery on affidavit by a director having knowledge of the facts, and inspection, to the Prospective Applicants of:
(a)a copy of those parts of submodules 3.2.S.2.2, 3.2.S.2.3, 3.2.S.2.5, and 3.2.S.2.6 of the Common Technical Document (CTD) submitted to the Therapeutic Goods Administration (TGA) in relation to each of the products the subject of the following registrations on the Australian Register of Therapeutic Goods (ARTG):
(i)ARTG No. 245253 for Brenzys etanercept (rch) 50 mg solution for injection auto-injector; and
(ii)ARTG No. 245252 for Brenzys etanercept (rch) 50 mg solution for injection pre-filled syringe
(together, the Brenzys Products), insofar as they concern:
A. starting medium concentrations and all added medium concentrations and starting amounts and added supplement amounts (if any), up until the time when the supernatant is harvested from the cells, of:
(1) each amino acid identified in the claims of the 034, 036 and/or 632 Patents (as defined below), being asparagine, glutamate, glutamine, histidine, isoleucine, leucine, methionine, phenylalanine, proline, serine, tryptophan and tyrosine;
(2) any other amino acid (in each case, identified as "other amino acid");
(3) glycylglutamine;
(4) each inorganic ion identified in the claims of the 034, 036 and/or 632 Patents (as defined below), being calcium, chloride, magnesium, phosphate, phosphorous and sodium;
(5) any other inorganic ion (in each case, identified as "other inorganic ion");
(6) trace elements;
(7) hormones and/or other growth factors;
(8) buffers;
(9) each vitamin identified in the claims of the 034, 036 and/or 632 Patents (as defined below), being thiamine hydrochloride, riboflavin, pyridoxine, pyridoxal, nicotinamide and calcium pantothenate;
(10) any other vitamin (in each case, identified as "other vitamin");
(11) nucleosides or nucleotides;
(12) lipids; and
(13) glucose or other energy source.
B. starting medium volume, added medium volumes and the final medium volume at the time when the supernatant is harvested from the cells;
C. the nature and point in time of any change that is applied to the culture conditions (for example, pH, temperature, osmolality, chemical inductant level) up until the time when the supernatant is harvested from the cells and the viable cell density when the change is applied;
D. initial cell density and viable cell density for the duration of the culture;
E. the level of protein glycosylation and the levels of lactate and ammonium produced for the duration of the culture;
F. pH and temperature at all times up until the time when the supernatant is harvested from the cells;
G. the amount of produced protein for the duration of the culture; and
H. the amount of misfolded and aggregated protein for the duration of the culture.
(collectively, the Relevant Matters),
(the CTD Submodules Extracts);
(b)a copy of those parts of all drug substance batch records insofar as they concern the Relevant Matters for the cell culture process used as part of the manufacture of all batches of etanercept drug substance for the Brenzys Products produced for the Australian market (Batch Record Extracts),
(the CTD Submodules Extracts and Batch Records Extracts collectively referred
to as the Discovery Documents).
2.Pursuant to section 23 of the Federal Court of Australia Act 1976 (Cth), to the extent that any of the Discovery Documents are not in the possession, custody or power of the Prospective Respondent (the Unavailable Discovery Documents), the Prospective Respondent, by 4.00 pm on the date that is 28 days after the date of these orders:
(a)take all reasonable steps available to it to obtain copies of the Unavailable Discovery Documents which are in the possession, custody or power of Samsung Bioepis Co Ltd;
(b)by a director having knowledge of the facts, file and serve an affidavit, deposing to the efforts made by the Prospective Respondent, pursuant to Order 2(a), to obtain the documents or copies thereof; and
(c)give discovery on affidavit by a director having knowledge of the facts, and inspection, to the Prospective Applicants of any documents obtained from Samsung Bioepis Co Ltd pursuant to Order 2(a), and the Prospective Respondent continue to give discovery and inspection to the Prospective Applicants of any further documents received from Samsung Bioepis Co Ltd pursuant to Order 2(a) within 72 hours of receipt.
Further Discovery Order
3.Should the Discovery Documents discovered by the Prospective Respondent pursuant to Orders 1 and 2 not provide sufficient information, in the Prospective Applicants' reasonable opinion, for the Prospective Applicants to determine whether to commence a Patent Infringement Proceeding (as defined in Order 5(c)(ii) below), then:
(a)the Prospective Applicants may make a further request for discovery to the Prospective Respondent, in writing, which must be received within 90 days of the date on which the last of the Discovery Documents is discovered to the Prospective Applicants (Further Discovery Request);
(b)Prospective Applicants make a Further Discovery Request in accordance with Order 3(a), then the Prospective Respondent must indicate within 14 days whether it agrees to give discovery in accordance with the Further Discovery Request by 4.00 pm on the date that is 28 days after the date of the Further Discovery Request;
(c)if the Prospective Respondent agrees to provide discovery pursuant to the Further Discovery Request, in accordance with Order 3(b), by 4.00 pm on the date that is 60 days after the date of the Further Discovery Request, the Prospective Respondent must give discovery on affidavit by a director having knowledge of the facts, and inspection, to the Prospective Applicants of the materials requested in the Further Discovery Request;
(d)if the Prospective Respondent does not agree to provide discovery (or agrees to provide partial discovery) pursuant to the Further Discovery Request, in accordance with Order 3(b), the Prospective Applicants may seek relisting before the Court, in accordance with Order 20.
Suppression and non-publication order
4.Pursuant to section 37AF of the Federal Court of Australia Act1976 (Cth), and on the basis that they are necessary to prevent prejudice to the proper administration of justice, Orders 5 to 18 apply to any and all documents discovered and produced for inspection by the Prospective Respondent pursuant to orders 1 and 2, above (Confidential Discovery Documents), until further Order.
Confidential Discovery Documents
5.Each Confidential Discovery Document, the contents thereof and information contained therein or information derived or notes taken or reports or other documents generated therefrom, including copies of such documents as may be made by the persons referred to below (Prospective Respondent Confidential Material) will be confidential in this Proceeding, and:
(a)may only be disclosed to:
(i)external Australian solicitors for the Prospective Applicants, external Australian counsel for the Prospective Applicants retained by its external Australian solicitors, secretarial staff, paralegals, litigation support personnel and other administrative staff employed or engaged by those persons provided that each such person has, prior to disclosure, signed a Confidentiality Undertaking in the form set out in Annexure 1 to this Order and provided it to the solicitors for the Prospective Respondent;
(ii)Professor Milton Thomas William Hearn, who is retained as an independent expert by the external Australian solicitors for the Prospective Applicants (Independent Expert) provided that the Independent Expert has, prior to disclosure, signed a Confidentiality Undertaking in the form set out [in Annexure 1 – as amended in accordance with [20] and [21] of the judgment] to this Order and provided it to the solicitors for the Prospective Respondent;
(iii)such other persons as to whom the Prospective Respondent consents in writing or the Court may order,
in each case who are required to have access to the Prospective Respondent Confidential Material for a Permitted Purpose (as defined in sub-paragraph (c) below),
(collectively Disclosure Persons);
(b)will not be open to public inspection, disclosed in open Court or disclosed in the open part of any Court transcript; and
(c)may be used only for the purposes of:
(i)this Proceeding;
(ii)the Prospective Applicants determining whether to commence a proceeding in the Federal Court of Australia for infringement (or threatened infringement) of Australian Patents 2005280034 (the 034 Patent), 2005280036 (the 036 Patent) and/or 2008242632 (the 632 Patent) by reason of the exploitation (or threatened exploitation) of the Brenzys Products in Australia (a Patent Infringement Proceeding); and
(iii)the conduct of the Patent Infringement Proceeding, including any appeal therefrom,
(each a Permitted Purpose).
6.Any of the Disclosure Persons to whom any of the Prospective Respondent Confidential Material is disclosed under this Order will be bound by this Order.
7.Prospective Respondent Confidential Material will be used, handled, kept and stored by the Disclosure Persons subject to the following directions:
(a)Prospective Respondent Confidential Material will be used, handled, kept and stored in such a manner as will at all times preserve its confidentiality;
(b)no copies of the Prospective Respondent Confidential Material will be made by any of the Disclosure Persons except as may be reasonably required for a Permitted Purpose;
(c)subject to Order 7(b), any copies of Prospective Respondent Confidential Material made by or on behalf of any of the Disclosure Persons will be subject to the provisions of this Order relating to Prospective Respondent Confidential Material (as if such copies were Prospective Respondent Confidential Material); and
(d)Prospective Respondent Confidential Material will, without the prior written consent of the Prospective Respondent or Order of the Court, be disclosed to or inspected by any person other than the Disclosure Persons.
Confidentiality – General
8.No affidavit filed in this Proceeding or in any Patent Infringement Proceeding may contain any Prospective Respondent Confidential Material, save in an annexure to such an affidavit marked "Confidential" and all such annexures will be confidential to the relevant parties, and will not be used, inspected or disclosed except as provided in this Order.
9.No written submissions filed in this Proceeding or in any Patent Infringement Proceeding, may contain any Prospective Respondent Confidential Material, save in an annexure to such submissions marked as "Confidential" and all such annexures will be confidential to the relevant parties, and will not be used, inspected or disclosed except as provided in this Order.
10.Nothing in this Order will prevent disclosure of any Prospective Respondent Confidential Material to:
(a)any judge, employee or other personnel of this Court; or
(b)any person associated with recording transcript at any hearing in this Proceeding or any Patent Infringement Proceeding,
for the purposes of this Proceeding or any Patent Infringement Proceeding.
11.Subject to Orders 8 to 10 above, nothing in this Order will prevent the Prospective Applicants from disclosing Prospective Respondent Confidential Material at any interlocutory or final hearing in this Proceeding or any Patent Infringement Proceeding, provided that any oral disclosure is made in closed court.
12.Where Prospective Respondent Confidential Material is orally disclosed in any interlocutory or final hearing in this Proceeding or any Patent Infringement Proceeding, the transcript of that portion of the hearing will be confidential, with access thereto limited to the persons who have liberty to view such material under this Order.
13.Subject to Order 15, within 90 days after the date of the last disclosure of any Confidential Discovery Documents pursuant to Orders 1 or 2, or pursuant to Order 3, if a Further Discovery Request is made by the Prospective Applicants (the Disclosure Date) the Prospective Applicants' solicitors will:
(a)take all necessary steps to retrieve from the Independent Expert and all other persons referred to in paragraph 5(a) of this Order all hard copy Prospective Respondent Confidential Material disclosed to or in their possession;
(b)deliver to the Prospective Respondent's solicitors all hard copy Prospective Respondent Confidential Material disclosed to or in the possession of any person referred to in paragraph 5(a) of this Order, with the exception of documents prepared in connection with the Proceedings containing summaries, abstracts or quotations from the Prospective Respondent Confidential Materials or annotated versions of any of the Prospective Respondent Confidential Materials, or extracts thereof (the Excluded Documents); and
(c)permanently destroy all hard copies of the Excluded Documents, except for one copy which they will retain on file and will maintain the confidentiality of such copy in accordance with these Orders.
14.Subject to Order 15, within 90 days of the Disclosure Date, the Prospective Applicants' solicitors will use their best endeavours to ensure that:
(a)the Independent Expert has permanently deleted all Prospective Respondent Confidential Material which has been stored electronically by the Independent Expert; and
(b)all Prospective Respondent Confidential Material which has been stored electronically by any other person referred to in paragraph 5(a) of this Order is permanently deleted, with the exception of one electronic copy of the Excluded Documents, which they will retain on file and will maintain the confidentiality of such copy in accordance with these Orders.
15.In the event that a Patent Infringement Proceeding is commenced within 90 days of the Disclosure Date, then the time for compliance with Orders 13 and 14 be extended to the date which is 60 days after the final determination of the Patent Infringement Proceeding, or any appeal therefrom or on the expiry of any applicable appeal period (whichever is later).
16.Nothing in this Order will prevent disclosure of any Prospective Respondent Confidential Material beyond the terms of this Order if the Prospective Respondent consents in writing to such disclosure, or if the Court orders such disclosure.
17.No obligation of confidentiality shall exist, or continue to exist as the case may be, in respect of any material that:
(a)becomes publicly available or public knowledge, otherwise than through the default of any person under an obligation of confidence;
(b)appears in any published patent or other printed or published document, otherwise than through the default of any person under an obligation of confidence;
(c)is subsequently received from a third party not under any obligation of confidentiality, otherwise than through the default of any person under an obligation of confidence;
(d)the parties to this Proceeding agree in writing, or the Court determines, is public knowledge; or
(e)in relation to which, the Prospective Respondent has, by notice in writing, notified the Prospective Applicants that the relevant material is no longer subject to these Orders.
18.The provisions of this Order will continue after the final determination of this Proceeding and this Court will retain jurisdiction to deal with any issues relating to this Order including without limitation, its enforcement.
Costs
19.The Prospective Respondent pay 50% of the Prospective Applicants’ costs, as assessed or agreed.
Other
20.There is liberty to apply on 3 days’ written notice.
ANNEXURE 1
Undertaking
I, [Name] of [address], [qualifications] do HEREBY ACKNOWLEDGE that I have read the Orders made on [insert date] 2018 in Proceeding NSD 2149 of 2016 before the Federal Court of Australia (Orders), a copy of which appear as an ANNEXURE to this undertaking, and that the following undertaking uses terms defined in those Orders, and I HEREBY UNDERTAKE the following to the Court with respect to the Prospective Respondent Confidential Material.
1.Each document comprising any of the Prospective Respondent Confidential Material that comes into my possession will be treated in accordance with the Orders.
2.I will not use any of the Prospective Respondent Confidential Material that comes into my possession except as may be reasonably required by me for a Permitted Purpose.
3.I will not make any copy of any document comprising or containing any Prospective Respondent Confidential Material that comes into my possession (Copy Confidential Material) except as may be reasonably required by me for a Permitted Purpose.
4.I will treat all Copy Confidential Material and information derived or notes taken or reports or other documents generated from the Prospective Respondent Confidential Material as subject to the obligations contained in the Orders and this undertaking.
5.Subject to any lawful obligations imposed on me to retain a copy of such material, within 14 days of receiving notice in accordance with Order 13 and/or 14 of the Orders, if I am not one of the solicitors of the Prospective Applicants, I will:
(a)deliver up to the solicitors of the Prospective Applicants all hard copies of such Prospective Respondent Confidential Material and documents described in the preceding paragraph as are in my possession and confirm in writing to the Prospective Applicants' solicitors that I have done so within the time stated in this paragraph; and
(b)use all reasonable efforts to permanently delete any Prospective Respondent Confidential Material and documents described in the preceding paragraph which has been stored electronically by me, and confirm in writing to the Prospective Applicants' solicitors that I have done so within the time stated in this paragraph.
6.Subject to any lawful obligations imposed on me to retain a copy of such material, and subject to paragraph 7 of these Undertakings, in accordance with Order 13 and/or 14 of the Orders, as subject to Order 15, if I am one of the solicitors of the Prospective Applicants, I will:
(a)deliver up to the solicitors of the Prospective Respondent all hard copies of the Prospective Respondent Confidential Material except for the Excluded Documents; and
(b)use all reasonable efforts to permanently delete any Prospective Respondent Confidential Material, including the Excluded Documents, which has been stored electronically by me.
7.The solicitors of the Prospective Applicants may retain one hard copy and one electronic copy of the Excluded Documents within their internal files, the confidentiality of which must be maintained in accordance with the Court's Orders.
8.I will promptly:
(a)notify the solicitors for the Prospective Respondent (or cause them to be notified) of any lawful obligations imposed on me that are referred to in paragraphs 5 and 6 above;
(b)notify the solicitors for the Prospective Respondent (or cause them to be notified) of any breach of this undertaking of which I become aware; and
(c)provide all reasonable assistance requested by the Prospective Respondent and/or its solicitors in relation to any action that the Prospective Respondent may take against any person for unauthorised use or disclosure of Prospective Respondent Confidential Material provided to me or created by me pursuant to this undertaking.
9.I acknowledge that my obligations in this undertaking will commence when I first receive any Prospective Respondent Confidential Material and will continue after the return of any Prospective Respondent Confidential Material to the solicitors for the Prospective Respondent.
10.I may only vary the terms of this undertaking with the written consent of the Prospective Respondent (including by its solicitors) or by order of the Court.
11.I irrevocably submit to the jurisdiction of the Court for the purposes of enforcing the terms of this undertaking, which are governed by the laws of the State of New South Wales.
Dated the _______
Name/Signature of person giving undertaking
Name/Signature of witness
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