Sanofi-Aventis Australia Pty Ltd v Apotex Pty Ltd (No 2)
[2011] FCA 213
•7 March 2011
FEDERAL COURT OF AUSTRALIA
Sanofi-Aventis Australia Pty Ltd v Apotex Pty Ltd (No 2) [2011] FCA 213
Citation: Sanofi-Aventis Australia Pty Ltd v Apotex Pty Ltd (No 2) [2011] FCA 213 Parties: SANOFI-AVENTIS AUSTRALIA PTY LTD ACN 008 558 807, SANOFI-AVENTIS DEUTSCHLAND GMBH and AVENTISUB II INCORPORATED v APOTEX PTY LTD ACN 096 916 148 File number(s): NSD 1664 of 2008 Judge: JAGOT J Date of judgment: 7 March 2011 Catchwords: PRACTICE AND PROCEDURE – leave to file second further amended defence and cross-claim and further amended particulars of invalidity – whether proposed amendments raised hypothetical issue – whether proposed amendments redundant or obscure – whether applicants prejudiced by lost opportunity to gather expert evidence in light of respondent’s whole case Cases cited: AON Risk Services Australia Limited v Australian National University (2009) 239 CLR 175
Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589Date of hearing: 7 March 2011 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 21 Counsel for the Applicants: Mr R Cobden SC with Mr A R Lang Solicitor for the Applicants: Jones Day Counsel for the Respondent: Mr N R Murray 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 ApplicantSANOFI-AVENTIS DEUTSCHLAND GMBH
Second ApplicantAVENTISUB II INCORPORATED
Third ApplicantAND: APOTEX PTY LTD ACN 096 916 148
Respondent
JUDGE:
JAGOT J
DATE OF ORDER:
7 MARCH 2011
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1. The respondent/cross-claimant be granted leave to file a Second Further Amended Defence and Cross-Claim and Further Amended Particulars of Invalidity in substantially the form annexed to its Notice of Motion dated 21 February 2011.
2.The respondent/cross-claimant pay any costs of the applicants/cross-respondents thrown away by reason of the amendments, as agreed or taxed.
3.The respondent/cross-claimant’s costs of the motion be costs in the cause.
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 ApplicantSANOFI-AVENTIS DEUTSCHLAND GMBH
Second ApplicantAVENTISUB II INCORPORATED
Third ApplicantAND: APOTEX PTY LTD ACN 096 916 148
Respondent
JUDGE:
JAGOT J
DATE:
7 MARCH 2011
PLACE:
SYDNEY
REASONS FOR JUDGMENT
This is a notice of motion by the respondent and cross-claimant, Apotex Pty Ltd (Apotex), to amend its defence and cross-claim and its particulars of invalidity. There are three classes of amendment proposed.
The first is a series of amendments to the defence by which the respondent seeks to say, in addition to the admissions it has made in respect of its product information document (the Initial Apotex PI) that (in further answer), if it is restrained from distributing the Initial Apotex PI by Court order, it intends to distribute a revised product information document. This is the document in the form of Annexure A to the Court’s Orders of 8 June 2010 (the Revised Apotex PI). As part of these amendments, the respondent also seeks a declaration that it will not infringe, or authorise or procure the infringement of, claim 1 of the patent in suit (the patent) by supplying or offering to supply in Australia any product containing leflunomide for the treatment of active rheumatoid arthritis during the term of the patent.
The second type of amendment relates to the section of the respondent’s particulars of invalidity which concerns its allegation of a lack of inventive step. Specifically, para 4(c)(ii) of the particulars of invalidity is proposed to be amended so as to state that rheumatoid arthritis and seronegative arthritis “could not be distinguished at the priority date” (as opposed to “cannot be distinguished”) in a significant proportion of patients with arthritis.
The third type of amendment relates to the section of the particulars of invalidity which concerns lack of fair basis. The respondent seeks to amend para 6(a) in order to allege that if (which the respondent denies) “the alleged invention as claimed in claim 1 of the patent claims the treatment or prevention of psoriasis occurring incidentally in the use of leflunomide to treat arthritis, including psoriatic arthritis, then the claim travels beyond the matter disclosed in the specifications”.
The applicants object to the proposed amendments. The amendments are sought late in the day. The matter is fixed for hearing commencing this Thursday, 10 March 2011. The notice of motion was filed on 21 February 2011, following initial correspondence in early January 2011 notifying the applicants of the proposed amendments. Without recording the history of this proceeding, it is sufficient to say that it has been on foot for a long period of time, measured in years rather than months.
I will deal with the three groups of amendments separately, because they raise different issues.
As to the first group, the applicants’ essential objection is that the proposed amendments raise an issue which is hypothetical. In short, as the affidavit of Shaun McVicar, sworn on 21 February 2011 in support of the motion, discloses, the Revised Apotex PI was submitted to the Therapeutic Goods Administration (TGA) on 22 June 2010. On about 13 October 2010, the TGA advised Apotex that its application had been checked and accepted for evaluation. Under the relevant legislative scheme, the TGA has a maximum of 255 working days from that date in which to evaluate the Revised Apotex PI and notify Apotex of its decision. No decision has been made to date.
As set out at para 15 of Mr McVicar’s affidavit, the TGA can:
·refuse to approve the Revised Apotex PI;
·approve the Revised Apotex PI;
·seek further information from Apotex, which will have the effect of extending the evaluation time; or
·direct that certain amendments be made to the Revised Apotex PI in order for it to be approved.
According to para 16 of Mr McVicar’s affidavit Apotex’s intention, if the Revised Apotex PI is approved by the TGA and if Apotex is not restrained from doing so by the Court, is to distribute leflunomide for the indication of active rheumatoid arthritis with the Revised Apotex PI.
The applicants’ basic submission is that the amendments propose to qualify admissions already made in relation to the Initial Apotex PI, and constitute a gratuitous statement of intention which is contingent on a particular finding being made by this Court in relation to other matters in issue in the proceeding. Furthermore, the amendments are said to be too uncertain to render the situation sufficiently concrete for determination, having regard to the fact that the Revised Apotex PI has not been and may not be approved by the TGA (or may be approved but with different wording).
While there might be some issue as to whether the proposed amended defence and cross-claim raises a matter appropriate for the making of a declaration (or for any other form of formal relief), a number of other important factors, as the respondent submitted, are established. The Revised Apotex PI has been prepared and submitted. Apotex’s intention is clear, and does not appear to be in dispute. While the role of the TGA presents a contingency, it does not render what might be a controversy between the parties about the Revised Apotex PI a mere hypothetical situation involving the Court in the impermissible giving of an advisory opinion. No issue other than the allegedly hypothetical nature of the relief sought is put forward by the applicants in opposition to the making of this group of amendments.
The respondent advanced a number of arguments in favour of granting leave to amend. These included the public interest in ensuring that all issues in controversy between the parties are resolved, if at all possible, in a single set of proceedings; and the cost and inconvenience which might be involved in taking a contrary course, including the risk of Anshun estoppel (see Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589) being raised against the respondent. In light of these matters, I consider it appropriate to grant leave for this group of amendments to be made. Any arguments about the particular form of relief (if any) that should be granted, including arguments about the utility of a declaration or the way in which any injunctive relief might be shaped, can be dealt with in the context of the proceeding as a whole. The same applies to any arguments as to the consistency or otherwise of the proposed declaration with the evidence to be given by Professor Brooks. I do not consider the existence of these potential areas of dispute to be a sufficient reason to deny the respondent the opportunity to seek a declaration in the terms proposed.
The second amendment, which relates to para 4(c)(ii) of the respondent’s particulars of invalidity, is also opposed on a single ground: namely, that the proposed amendment is either redundant or, if not redundant, obscure. It is true that para 4(c) should be read as relating to the circumstances existing at the priority date, and in that sense the proposed amendment is to a certain extent redundant. This does not, however, lead to any insuperable obscurity. The amendment appears relatively clear. The applicants identify no prejudice they would suffer if it were permitted and, if the worst that can be said is that it suffers from some level of redundancy, I consider this to be an insufficient reason to preclude its being made in circumstances where the party seeking to make it considers that it better accords with the evidence as it now exists.
This brings me to the third type of amendment, which I consider to be at the heart of the present dispute. These amendments involve proposed changes to the particulars of invalidity as they relate to the allegation of lack of fair basis. As I have said, these amendments are sought late in the day. Under these circumstances, the applicants refer to the decision of the High Court in AON Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27, and in particular the observation at [111] that there is no entitlement to amend a pleading to raise an arguable claim, subject only to payment of costs by way of compensation, because “all matters relevant to the exercise of the power to permit the amendment should be weighed”.
The applicants make three essential points in relation to this group of amendments. First it is said that, apart from the question of lateness, had the allegation of lack of fair basis been put on the basis that it is now proposed to be put, the applicants could have approached the preparation of their expert evidence having regard to that case. According to the applicants’ written submissions, “it is not necessary to explore all the possible dimensions of that to appreciate the prejudice to the applicants”.
In oral submissions it was explained that expert evidence in patent cases is prepared very carefully. The late raising of the new issue, if the amendment were allowed, would effectively deprive the applicants of the opportunity to conceive of and construct their entire forensic approach in the knowledge that it would be raised.
The difficulty with this submission is that, as pointed out by the respondent, there is simply no evidence that the applicants would have approached the preparation of their expert evidence in a different way in light of this particular amendment. At its highest the applicants’ submission is that, had they known earlier that this case would be put by the respondent, they could have done so – and even this is put by way of submissions rather than by way of evidence from any person involved in the preparation of the proceeding. As such, this submission rises no higher than speculation that the applicants’ preparation of expert evidence might have been different. The applicants have not identified what form this difference might have taken; nor have they shown it would have resulted in the leading of any additional evidence. These considerations must be taken into account and weighed with the following matters:
·the respondent proposes to call no further evidence if the amendment is permitted;
·there has been no suggestion that the applicants will call further evidence if the amendment is permitted; and
·resolving the question of fair basis essentially involves a process of technical reconciliation on the part of the Court rather than expert evidence.
In light of all these factors, it is difficult to place any real weight on the applicants’ claim of prejudice. Ultimately I consider that the prejudice to the respondent if it is denied the opportunity to raise this issue by amendment of its particulars of invalidity far outweighs the speculative nature of the prejudice the applicants say they might suffer.
The second aspect of the objection to this group of amendments is that they are less than straightforward, in that the allegation the respondent wishes to make is that the patent claim is not fairly based only in given circumstances. While this may be true, it does not seem to me to weigh strongly against the granting of leave to make the amendment.
The same conclusion applies to the third aspect of the applicants’ objections, namely that the amendment should be seen as either futile or useless because the applicants are unable to discern from the proposed amended particulars of invalidity the precise nature of the case asserted by the respondent. I have difficulty accepting that submission, as it seems to me that the particular as proposed to be amended does identify precisely the case which the respondent wishes to make, even though that is framed as a negative proposition.
In circumstances where the amendment is late but there has been an explanation for that lateness insofar as any allegation of prejudice has been raised, and where the prejudice to the party seeking the amendment would far outweigh any prejudice the applicants might suffer, I can see no reason why these amendments should not be permitted.
I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. Associate:
Dated: 11 March 2011
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