Sanofi-Aventis Australia Pty Ltd v Apotex Pty Ltd

[2010] FCA 601

FEDERAL COURT OF AUSTRALIA

Sanofi-Aventis Australia Pty Ltd v Apotex Pty Ltd [2010] FCA 601

Citation:	Sanofi-Aventis Australia Pty Ltd v Apotex Pty Ltd [2010] FCA 601
Parties:	SANOFI-AVENTIS AUSTRALIA PTY LTD ACN 008 558 807, SANOFI-AVENTIS DEUTSCHLAND GMBH and AVENTISBUB II INCORPORATED v APOTEX PTY LTD ACN 096 916 148
File number(s):	NSD 1664 of 2008
Judge:	JAGOT J
Date of judgment:	8 June 2010
Legislation:	Patents Act 1990 (Cth)
Cases cited:	Adam P Brown Male Fashions Pty Limited v Philip Morris Incorporated (1981) 148 CLR 170 Northern Territory of Australia v Collins (2008) 235 CLR 619
Date of hearing:	8 June 2010
Date of publication of reasons:	15 June 2010
Place:	Sydney
Division:	GENERAL DIVISION
Category:	No catchwords
Number of paragraphs:	31
Counsel for the Applicants:	Mr AJL Bannon SC and Mr AR Lang
Counsel for the Respondent:	Mr N Murray
Solicitor for the Applicants:	Jones Day
Solicitor for the Respondent:	Freehills

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1664 of 2008

BETWEEN:

SANOFI-AVENTIS AUSTRALIA PTY LTD ACN 008 558 807
First Applicant

SANOFI-AVENTIS DEUTSCHLAND GMBH
Second Applicant

AVENTISBUB II INCORPORATED
Third Applicant

AND:

APOTEX PTY LTD ACN 096 916 148
Respondent

JUDGE:	JAGOT J
DATE OF ORDER:	8 JUNE 2010
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.By consent, the Orders of 30 October 2008 be varied by adding the following words to the end of Order 2 “AND PROVIDED that it will not be a breach of this Order for the respondent to reproduce, distribute or otherwise deal with a Product Information in the form of Annexure A to this Order”.

2.The amended notice of motion filed on 8 June 2010 (and notice of motion filed 19 April 2010) otherwise be dismissed.

3.The respondent pay the applicant’s costs in connection with the amended notice of motion filed 8 June 2010 (and notice of motion filed 19 April 2010), as agreed or as taxed.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1664 of 2008

BETWEEN:

SANOFI-AVENTIS AUSTRALIA PTY LTD ACN 008 558 807
First Applicant

SANOFI-AVENTIS DEUTSCHLAND GMBH
Second Applicant

AVENTISBUB II INCORPORATED
Third Applicant

AND:

APOTEX PTY LTD ACN 096 916 148
Respondent

JUDGE:	JAGOT J
DATE:	8 JUNE 2010
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. This is a notice of motion to vary interlocutory orders made by Lindgren J on 30 October 2008.  On that day, according to a transcript of the hearing, short minutes of orders were proffered by the parties by consent.  Lindgren J (relevantly) made orders 1 and 2 as follows:

   1.Until the hearing and determination of this proceeding or further order, the Respondent, whether by itself, its directors, officers, servants, agents or otherwise, be restrained from infringing Australian Patent No 670,491 by, without the authority of the Second Applicant, supplying, or offering to supply, in Australia, any product containing Leflunomide, where the Respondent has reason to believe that the product may be used for the treatment of psoriatic arthritis.

   2.Until the hearing and determination of this proceeding or further order, and subject to the Respondent’s rights under s 43 of the Copyright Act 1968, the Respondent, whether by itself, its directors, officers, servants, agents or otherwise be restrained from, in Australia:

   (a)  reproducing in any material form or communicating to the public, or authorising such reproduction or communication, of the Arava PI or the Apotex PI referred to in paras 7 and 21 respectively of the Statement of Claim; or

   (b)  distributing or otherwise dealing with copies of the Arava PI or the Apotex PI without the licence of the Applicants,

   provided that it shall not be a breach of these orders for the Respondent to make no more than 10 copies of the Arava PI and of the Apotex PI for purposes other than:

   (a)  supply to patients, hospitals, medical practitioners, pharmacists, wholesalers or distributors; or

   (b)  obtaining approval for the marketing (or re-imbursement) of any product containing Leflunomide in Australia, or in any other territory.

2. The amended notice of motion seeks to vary order 1 as follows:

   Until the hearing and determination of this proceeding or further order, the Respondent, whether by itself, its directors, officers, servants, agents or otherwise, be restrained from infringing Australian Patent No 670,491 by, without the authority of the Second Applicant, supplying, or offering to supply, in Australia, any product containing Leflunomide, in conjunction with any instructions or inducement given or published by the Respondent to use the product for the treatment of psoriasis or psoriatic arthritis. For the avoidance of doubt, it will not be a breach of this Order for the Respondent to supply, or offer to supply, Leflunomide where the Registered Indications do not include psoriatic arthritis or psoriasis AND the Applicable Product Information is substantially in the form of annexure A to this Order.

3. Annexure A to the proposed order is a revised product information document which makes no reference to psoriatic arthritis or psoriasis and instead, in its indications, refers only to the treatment of active rheumatoid arthritis. 

4. The amended notice of motion also seeks that order 2 of Lindgren J’s orders of 30 October 2008 be varied by adding the following words at the end of the order:

   AND PROVIDED THAT it will not be a breach of this Order for the Respondent to

   (i)    reproduce the Apotex PI solely for the purpose of seeking the approval of the

   TGA to change the Product Information for the Respondent’s Leflunomide to the form of Annexure A to this order; or

   (ii) reproduce, distribute or otherwise deal with a Product Information in the form of annexure A to this Order.

5. There is no dispute about the variation of Lindgren J’s orders insofar as proposed in paragraph (2)(ii) of the amended notice of motion.  Accordingly, there are two issues: – (i) whether the proposed variation should be made to order 1, and (ii) whether the variation should be made as set out in proposed order 2(i).

   Apotex’s submissions

6. Apotex’s position on the notice of motion can be summarised as follows.

   Section 117(2)(c)

7. According to Apotex, because the amended product information document contains no reference to psoriatic arthritis or psoriasis, and no instruction to use Apotex’s Leflunomide for the treatment or prevention of either of these conditions, s 117(2)(c) of the Patents Act 1990 (Cth) is not engaged. That section refers to infringement by the supplier of products and relevantly provides that:

   (1)If the use of a product by a person would infringe a patent, the supply of that product by one person to another is an infringement of the patent by the supplier unless the supplier is the patentee or licensee of the patent.

   (2)A reference in subsection (1) to the use of a product by a person is a reference to…

   (c) in any case--the use of the product in accordance with any instructions for the use of the product, or any inducement to use the product, given to the person by the supplier...

8. Therefore, Apotex submits, there is no longer a serious question to be tried in respect of any alleged infringement of s 117(2)(c) of the Patents Act, which was previously in issue by reason of para 48 of Sanofi-Aventis’ further amended statement of claim. Paragraph 48 alleges that the “use of the Apotex Leflunomide Products… will be use in accordance with instructions for the use of the products given by Apotex to such persons” with the particulars to that paragraph referring to the Apotex Product Information in its original form, that is the form which included all indications and not just rheumatoid arthritis.

   Section 117(2)(b)

9. In relation to s 117(2)(b) of the Patents Act, (that is, the provision which extends the use of a product to mean “if the product is not a staple commercial product – any use of the product, if the supplier had reason to believe that the person would put it to that use”), Apotex makes two submissions.

10. First, according to Apotex, Leflunomide is a staple commercial product.  Apotex relies on the decision of the High Court in Northern Territory of Australia v Collins (2008) 235 CLR 619; [2008] HCA 49 and specifically the reasons of Hayne and Crennan JJ (at [41]-[50], [57] and [144]-[145]), to the effect that the phrase “staple commercial product” means “a product supplied commercially for various uses” (at [145] per Crennan J) and “should not be read as directing attention to the economic significance of the product concerned. Rather, it should be read as inviting attention to the variety of uses to which the product both can be, and is in fact, put. It is that variety of uses which, when the product is supplied commercially, makes the product a staple commercial product” (at [48] per Hayne J).

11. Apotex also emphasises the relationship between s 117(2)(c) which applies “in any case” and s 117(2)(b) which only applies “if the product is not a staple commercial product”. In [43] of Collins Hayne J explained this distinction in the context of the legislative history of the provision and said that “‘staple commercial product’ should not be given a narrow meaning. To do so would expand the classes of supply which are reached by s 117, thus expanding the rights of the patentee where, by hypothesis, the act of supply is not otherwise an infringement of the patentee’s monopoly”. Therefore, Apotex says, Leflunomide is a “staple commercial product” and s 117(2)(b) is not engaged.

12. Second in relation to s 117(2)(b) Apotex’s submits that if it is found that Leflunomide is not a “staple commercial product” then the s 117(2)(b) requirement (that the “the supplier had reason to believe” that a person would use the product for an infringing use) is not established. Apotex says that its new Product Information document makes no reference to psoriatic arthritis or psoriasis but only to rheumatoid arthritis. Sanofi-Aventis’ current pleading is based on Apotex’s existing and not proposed Product Information. Therefore, according to Apotex, “the pleaded case that the [Product Information] demonstrates the requisite ‘reason to believe’ falls away”.

13. Apotex contends that on either submission, s 177(2)(b) is not engaged.  On this basis, there is no longer a serious question to be tried in relation to the further amended statement of claim as applied to the current factual situation, that is, Apotex’s amended Product Information (as opposed to the position prevailing when the matter came before Lindgren J on 30 October 2008). 

    Evidence of Professor Brooks

14. Apotex submits that interlocutory relief is based upon the existence of a serious question to be tried which, in turn, raises for consideration whether, if the evidence remains as it is, the party seeking interlocutory relief will be likely to obtain final relief at the hearing.  That is, an interlocutory restraint can only be justified on the basis of the case that an applicant for interlocutory relief has made.  For these reasons, Apotex submits that it is not open to Sanofi-Aventis to purport to rely on the evidence of Professor Peter Brooks which Apotex itself has filed in the proceedings. 

15. Professor Brooks, in his evidence, has expressed the conclusion that there is an overlap between rheumatoid arthritis and seronegative arthropathies.  He describes psoriatic arthritis as a form of seronegative arthropathy.  Professor Brooks continues:

    Sometimes patients are first diagnosed as having seronegative arthritis, but then 3 or 4 years later they develop positive rheumatoid factors indicative of rheumatoid arthritis.  In about 5 to 10% of patients presenting with moderate to severe arthritis I could not (and cannot today) be sure if they have true rheumatoid arthritis or seronegative arthritis…

16. Apotex’s position is that if Sanofi-Aventis wishes to rely upon Professor Brooks’ evidence, then it would have to amend its pleading to that effect.  However, Apotex says that Sanofi-Aventis would not do so because, at least on Apotex’s case, that would be effectively to concede invalidity of the patent as claimed in Apotex’s particulars of invalidity.  These particulars of invalidity include an alleged lack of inventive step.  The particulars to the alleged lack of inventive step on which Apotex relies include that the common general knowledge as at the priority date include:

    (i)rheumatoid arthritis and seronegative arthropathies are associated conditions of inflammatory arthritis;

    (ii)rheumatoid arthritis and seronegative arthritis overlap and cannot be distinguished in a significant proportion of patients with arthritis;

    (iii)in some patients, rheumatoid arthritis can transition to psoriatic arthritis and vice

    versa; …

    (ix)the available treatments for rheumatoid arthritis and psoriatic arthritis also treated psoriasis associated with psoriatic arthritis...

17. According to Apotex, its changed position means that the court’s discretion to vary the interlocutory orders is enlivened in circumstances where there is no serious question to be tried on the pleadings on the basis of Apotex’s proposed Product Information document.  According to Apotex it would be unjust not to vary the orders as sought.  In this regard, Apotex emphasises that it is not seeking a discharge of Lindgren Js orders but is merely seeking to vary those orders, having regard to a change in circumstances. 

    Discussion

18. There was no dispute about the relevant principles which apply to this application.  Both parties accepted that there is a power to vary interlocutory orders and that such a variation may be appropriate whenever “new facts come into existence or are discovered which render…enforcement unjust” (Adam P Brown Male Fashions Pty Limited v Philip Morris Incorporated (1981) 148 CLR 170 at 178).

19. In this case the circumstance which is said to have changed is that Apotex has decided to alter its Product Information and its proposed supply of the Apotex Leflunomide product so as to limit its proposed use to rheumatoid arthritis (as opposed to a use for indications including psoriatic arthritis and psoriasis). 

20. The first observation I make is that while in one sense this is a new fact coming into existence or a change of circumstance, it is a change which has taken place in Apotex’s own commercial decision-making.  The same decision could have been made by Apotex at any time before the making (by consent) of the interlocutory orders on 30 October 2008.  While this is not to say that the discretion is necessarily not enlivened, it is a relevant factor when considering whether continued enforcement of the orders in their current form would work an injustice against Apotex. 

21. Having regard to the submissions which have been made, I do not consider it necessary to address s 117(2)(c) of the Patents Act. It is sufficient to deal with s 117(2)(b).

22. As Sanofi-Aventis submits, the restraint in order 1 of the orders made by Lindgren J on 30 October 2008 operates where Apotex has a “reason to believe that the product may be used for the treatment of psoriatic arthritis”. That is, order 1 makes sense only when considered against the statutory background of s 117(2)(b) of the Patents Act. There is an implicit assumption underlying the form of order 1 that, at the least, there was a serious question to be tried as to whether or not the product was a staple commercial product. On this basis, it is inappropriate for Apotex to seek now to depart from that implicit assumption. There has been no relevant change of circumstances relating to that matter.

23. If this is incorrect, I am also not persuaded that there is not a serious question to be tried on that issue.  The decision in Collins is not readily applicable in terms of any general statement of principle.  It is true that there are references in the reasons, particularly of Hayne and Crennan JJ, to a product supplied commercially for various uses - but the precise meaning of “various uses”’ and its application to any particular factual situation (such as the factual situation here where the Leflunomide product appears to be used for three possibly related conditions) remains to be determined.  Therefore, I am satisfied that there is a serious question to be tried on whether or not the product is a staple commercial product. 

24. This means that the question whether there is a reason to believe that the person would put the product to an infringing use is in play.  Again I find Sanofi-Aventis’s submissions on this issue persuasive.  The further amended statement of claim (at paras 44 to 45) alleges that “Apotex intends to supply and offer to supply… the Apotex Leflunomide Products for the treatment of active psoriatic arthritis” and that the use by a person of that product for that treatment would infringe claim 1 of the Patent.  On its own case Apotex plainly does have the relevant reason to believe that its product would be used for the treatment of psoriatic arthritis.  That is the very point of its particulars of invalidity, specifically the claim that “rheumatoid arthritis and seronegative arthritis overlap and cannot be distinguished in a significant proportion of patients with arthritis” and that “the available treatments for rheumatoid arthritis and psoriatic arthritis also treated psoriasis associated psoriatic arthritis”. 

25. Given Sanofi-Aventis’s submission that these are admissions to the pleadings as opposed to admissions to the particulars of the pleadings (which I accept), I am not satisfied that there has been a relevant change in circumstances such as to justify revisiting the terms of the orders Lindgren J made.  This is a case where Apotex comes to the court seeking a variation of an interlocutory order which has been in place since 30 October 2008.  In these circumstances it is also difficult to accept that there would be any injustice to Apotex flowing from enforcement of the orders in their current form.  Further, I am not satisfied that there has been a sufficient change to reach the conclusion (which Apotex concedes I would need to reach) that there is no longer a serious question to be tried on the pleadings as currently framed.  Therefore this part of the amended notice of motion must be dismissed.

    Proposed order 2(i)

26. There is a further issue remaining, namely, the amendment to the order in relation to providing a marked up copy of the original Apotex Product Information to the Therapeutic Goods Administration (the TGA) for the purposes of obtaining approval of the amended Product Information document. 

27. This seems to raise a potentially hypothetical issue for determination.  As Sanofi-Aventis says, I do not have any evidence before me whether more or less than 10 copies of the Apotex Product Information have been made.  Further, I do not have evidence sufficient to satisfy me that there is a requirement of the TGA that a marked up copy be provided.  Sanofi-Aventis submits, and I agree, that the variation which Apotex seeks would constitute, in effect, “an application for a court-sanctioned infringement of copyright”.  In these circumstances it does not seem appropriate that I determine whether Apotex’s proposed action would be a breach of the orders of Lindgren J.  I am not persuaded, on the evidence, that any such alteration to the order should be made.

28. For these reasons this part of the amended notice of motion must also be dismissed.

I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.

Associate:

Dated:        15 June 2010