Sanofi-Aventis Deutschland GmbH v Alphapharm Pty Ltd (No 3)
[2018] FCA 2060
•19 December 2018
FEDERAL COURT OF AUSTRALIA
Sanofi-Aventis Deutschland GmbH v Alphapharm Pty Ltd (No 3) [2018] FCA 2060
File number(s): NSD 1502 of 2018 Judge(s): BURLEY J Date of judgment: 19 December 2018 Catchwords: PRACTICE AND PROCEDURE – patents – interlocutory injunction application – prima facie case – validity of patents – novelty – balance of convenience – application refused Legislation: Competition and Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)), ss 18, 29
National Health Act 1953 (Cth), ss 85, 99ACB, 99ACD
Patents Act 1990 (Cth), ss 7, 105
Cases cited: Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199
Australian Broadcasting Corporation v O’Neill [2006] HCA 46; 227 CLR 57
Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; 118 CLR 618
Décor Corporation Pty Ltd v Dart Industries Inc [1988] FCA 682; (1988) 13 IPR 385
F. Hoffman-La Roche AG v Sandoz Pty Ltd [2018] FCA 874; (2018) 134 IPR 172
Flexible Steel Lacing Company v Beltreco Ltd [2000] FCA 890; (2000) 49 IPR 331
H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70; (2009) 177 FCR 151
Hill v Evans (1862) 4 De GF & J 288; 1A IPR 1
Interpharma Pty Ltd v Commissioner of Patents [2008] FCA 1498; 79 IPR 261
Janssen Sciences Ireland UC v Alphapharm Pty Ltd [2017] FCA 1399
Jupiters Ltd v Neurizon Pty Ltd [2005] FCAFC 90; (2005) 65 IPR 86
Lynx Engineering Consultants Pty Ltd v The Pilbara Infrastructure Pty Ltd [2016] FCAFC 19; (2016) 243 FCR 263
Merck Sharp & Dohme Corp v Apotex Pty Ltd [2012] FCA 928; 97 IPR 414
Molnlycke AB v Procter & Gamble Limited (No 2) [1990] RPC 487
Organic Marketing Australia Pty Ltd v Woolworths Ltd [2011] FCA 279
Pharmacia Italia SPA v Mayne Pharma Pty Ltd [2005] FCA 1078; (2005) 222 ALR 552
Samsung Electronics Co Ltd v Apple Inc [2011] FCAFC 146; 217 FCR 238
Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2018] FCA; (2018) 136 IPR 8
Warner-Lambert Company LLC v Apotex Pty Ltd [2017] FCAFC 58; (2017) 249 FCR 17
Date of hearing: 2 November 2018 Registry: New South Wales Division: General Division National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Category: Catchwords Number of paragraphs: 189 Counsel for the Applicants: Mr C Dimitriadis SC with Mr A.R. Lang Solicitor for the Applicants: Jones Day Counsel for the Respondent: Mr T.D. Cordiner QC with Mr J.S. Cooke Solicitor for the Respondent: MinterEllison ORDERS
NSD 1502 of 2018 IN THE MATTER OF SANOFI-AVENTIS DEUTSCHLAND GMBH & ANOR V ALPHAPHARM PTY LTD
BETWEEN: SANOFI-AVENTIS DEUTSCHLAND GMBH
First Applicant
SANOFI AUSTRALIA PTY LTD
Second Applicant
AND: ALPHAPHARM PTY LTD
Respondent
JUDGE:
BURLEY J
DATE OF ORDER:
19 December 2018
THE COURT ORDERS THAT:
1.The Applicants’ interlocutory application dated 20 August 2018 be dismissed.
2.Until further order, pursuant to s 37AF and s 37AI of the Federal Court of Australia Act 1976 (Cth), and on the grounds set out in s 37AG(1)(a), access to and disclosure (by publication or otherwise) of Confidential Annexure A to these reasons be restricted to the Court, and persons:
(a)allowed to access the document by the party on whose behalf the information was disclosed; and
(b)who have provided a confidentiality undertaking in the form agreed between the parties.
3.The Applicants pay the Respondent’s costs of the interlocutory application, excluding the costs of the abandoned inventive step case, to be assessed or agreed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
BURLEY J:
1 INTRODUCTION
[1]
1.1 The parties and the broad issues
[1]
1.2 Summary of conclusion
[5]
1.3 The witnesses
[6]
1.4 Diabetes
[9]
1.5 Sanofi Australia’s insulin products
[12]
1.6 The Alphapharm product
[20]
1.7 The issues
[23]
2 THE RELEVANT LAW
[28]
3 ARGUABLE CASE
[35]
3.1 Introduction
[35]
3.2 The Patent
[42]
3.3 The claims
[57]
3.4 Consideration of the construction issues
[58]
3.5 The prior art
[82]
3.5.1 Schofield
[82]
3.5.2 Weston
[94]
3.5.3 Burren
[107]
3.6 The non-infringement argument
[113]
3.7 Conclusions in relation to strength of prima facie case
[118]
4 BALANCE OF CONVENIENCE
[120]
4.1 Overview of the Pharmaceutical Benefit Scheme
[120]
4.1.1 Mandatory price reductions
[128]
4.1.2 Price disclosure associated price reductions
[131]
4.2 Effect of listing of the Semglee product on the PBS Schedule
[134]
4.3 Summary of the balance of convenience arguments
[136]
4.4 Consideration of the balance of convenience
[140]
5 CONCLUSION AND DISPOSITION
[188]
1. INTRODUCTION
1.1 The parties and the broad issues
The first applicant, Sanofi-Aventis Deutschland GmbH (Sanofi Deutschland), and the second applicant, Sanofi-Aventis Australia Ltd (Sanofi Australia), bring proceedings seeking final relief pursuant to the Patents Act 1990 (Cth) (Act) and the Competition and Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)) (ACL), broadly, to restrain the respondent, Alphapharm Pty Ltd from launching its SEMGLEE insulin glargine (rDNA) solution for injection injector pen, which I refer to below as the Semglee product. Sanofi Australia is a member of the same group of companies as Sanofi Deutschland. Unless otherwise stated, the applicants are referred to below as Sanofi.
Sanofi seeks urgent interlocutory orders to restrain Alphapharm from marketing and offering the Semglee product for sale. Alphapharm has obtained a listing for the Semglee product on the Australian Register of Therapeutic Goods (ARTG) and is seeking for it to be listed on the Schedule of Pharmaceutical Benefits (PBS Schedule) pursuant to the Pharmaceutical Benefits Scheme (PBS) from 1 April 2019. Until a few days before the hearing of this matter, Alphapharm had indicated that it sought PBS listing from 1 December 2018, but for reasons unexplained, on 29 October 2018, that date was deferred until 1 April 2019.
When considering an application for an interlocutory injunction, the Court must address two main inquiries, namely whether the applicant for relief has established a prima facie case in the sense explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; 118 CLR 618 at 622-623, and whether the balance of convenience and justice favours the grant of an injunction or the refusal of that relief. Sanofi asserts that unless restrained, Alphapharm will launch the Semglee product and thereby infringe claims 1 - 4 of Australian Patent No. 2009304105 entitled “Drug delivery device and method of manufacturing a drug delivery device” (Patent) which has a priority date of 13 October 2008. In its Statement of Claim, Sanofi alleges that by the same conduct Alphapharm will engage in misleading or deceptive conduct in breach of ss 18 and 29(1)(h) of the ACL.
Alphapharm contests the application primarily on the basis that the Patent is invalid for want of novelty over three prior art documents. It also advances an argument that the Semglee product does not infringe the Patent. Initially Alphapharm also relied on lack of inventive step as a basis upon which to contest the interlocutory application, but prior to the hearing it abandoned that approach.
1.2 Summary of conclusion
For the reasons set out below, I have concluded that the balance of convenience and justice does not lie in favour of the grant of the interim relief sought by Sanofi. I dismiss the interlocutory application.
1.3 The witnesses
Sanofi relies on evidence from 6 witnesses:
·Kym Bramich is General Manager, for Australia and New Zealand, of the Diabetes and Cardiovascular unit of Sanofi Australia. She commenced her employment in 2017. Broadly, she gives evidence about the Sanofi corporate group, diabetes generally, various Sanofi insulin products for the treatment of diabetes, the basal insulin market, the Semglee product and what she considers will be the impact of the launch of the Semglee product in Australia on Sanofi Australia. Sanofi relies on three affidavits affirmed by Ms Bramich.
·Alan John Brindell is the General Manager, External and Corporate Affairs, Australia and New Zealand, of Sanofi Australia. He commenced his employment with a predecessor in business to Sanofi Australia in August 2003. He gives evidence about the regulation and sale of therapeutic goods in Australia, the Semglee product and the effects of a listing of that product on the government pricing scheme insofar as it concerns Sanofi’s insulin products. Sanofi relies on two affidavits affirmed by Mr Brindell.
·Thomas Huth is the Head of Tax at Sanofi Deutschland and has been employed with that company since 1988. He gives confidential evidence about the manufacture of Sanofi insulin products. Sanofi relies on one affidavit sworn by Mr Huth.
·Hugh Lithgow Stark is a Consulting Mechanical Engineer, who was awarded a PhD in biomedical engineering from Strathclyde University in 1971. Dr Stark has extensive experience as a lecturer in mechanical engineering and as a consultant across many industries. He was provided with the Patent and the Semglee product and expresses his opinion that the Semglee product has all of the features of claims 1 – 4 of the Patent. Sanofi relies on one affidavit affirmed by Dr Stark.
·Zoran Milijasevic is a Biomedical Engineer who was awarded a Bachelor of Engineering (Mechanical) from the University of Sydney in 1982. Since 1983, he has worked as a biomedical engineer in various industries. In 2004, he founded EIM Medical, a medical device consultancy. He gives evidence about the construction of the Patent and the prior art documents in response to the evidence of Alphapharm’s expert witness, Mr Bilney. Sanofi relies on one affidavit affirmed by Mr Milijasevic.
·Lisa Anne Taliadoros is a Partner of Jones Day, the solicitors representing Sanofi. She gives evidence annexing correspondence between the parties, about searches for and seizures of allegedly infringing products in France and the origin of the Semglee product inspected by Dr Stark, and about the prosecution and amendment of an equivalent European patent, European Patent No. 2 346 552 (EU Patent). Sanofi relies on three affidavits affirmed by Ms Taliadoros.
Alphapharm relies on the evidence of 4 witnesses:
·Adam Lucas Bilney is a Mechanical Engineer and Medical Device Designer who completed a Bachelor of Engineering degree majoring in Mechanical Engineering at Monash University in 2002. Since 2002, he has been employed in the design and development of various medical devices. He gives evidence concerning the construction of the Patent and the prior art documents relied upon by Alphapharm. Alphapharm relies on three affidavits affirmed by Mr Bilney.
·Robert Kelvin Cooper is a Partner of MinterEllison, the solicitors representing Alphapharm. He gives evidence about amendments made to an equivalent US patent, US Patent No. 9,132,237. Alphapharm relies on one affidavit sworn by Mr Cooper.
·Jonathan Leigh Kelp is also a Partner of MinterEllison. He puts into evidence certain correspondence between the parties and gives evidence about Alphapharm’s involvement in Federal Court proceedings relating to a claim by Alphapharm and others pursuant to an undertaking as to damages. Alphapharm relies on one affidavit sworn by Mr Kelp.
·Maria Mollica is the Business Unit Head – Prescription at Alphapharm. She has been employed at Alphapharm since 1999. She gives evidence about the Semglee product, Sanofi’s insulin products, the insulin glargine market in Australia, the effect of the entry of the Semglee product on the market and the likely damage suffered by Alphapharm if the injunction sought is granted. Alphapharm relies on two affidavits sworn by Ms Mollica.
Much of the evidence was not the subject of substantial disagreement. Although, as I note below, differences of opinion regarding patent construction were expressed by the experts and there are some different views expressed as to the likely effects of the launch of the Semglee product. No witness was cross-examined and it is not the role of the Court in an application such as this to make findings of fact. I do not purport to do so here.
1.4 Diabetes
Diabetes is classified as type 1, type 2 or gestational diabetes. Type 1 diabetes is an auto-immune condition in which the immune system destroys the cells in the pancreas which produce insulin. Type 2 diabetes is a condition whereby the ability of the patient to produce and use insulin effectively diminishes over time. Gestational diabetes is developed by some women during pregnancy and usually resolves after the baby is born. All patients with type 1 diabetes require insulin treatment for management of their diabetes. As to patients with type 2 diabetes, the treatment of any individual patient will depend on the extent of progression of the disease to which the treatment must respond. For some patients, their diabetes can initially be appropriately managed by changing lifestyle factors, such as diet and exercise. For other patients, management of their diabetes will require prescription medications (which include oral medications and injectable medications) either as monotherapy or in combination. All patients with type 2 diabetes will eventually require insulin treatment for management of their diabetes.
Patients requiring insulin to manage their diabetes will generally require a basal insulin; that is, a long-acting insulin that is administered once or twice a day. Basal insulin manages the patient's fasting blood glucose levels. The evidence indicates that some patients will initially, and all patients will eventually, also require other forms of insulin to manage spikes in blood glucose levels after a meal. These include rapid-, short- and intermediate-acting insulins. There are also combination insulin treatments which include a rapid- or short-acting insulin, and an intermediate- or long-acting insulin, in the one injection.
Insulin glargine is a basal insulin indicated for the treatment of diabetes. It is a biologic drug, being a large complex molecule derived from a biological source, as compared to a synthetic small molecule medicine, which is simpler to produce and replicate, and has a less complicated chemical structure.
1.5 Sanofi Australia’s insulin products
Sanofi Australia is the sponsor of several products on the ARTG that contain insulin glargine as an active ingredient. The Sanofi Products identified below and insulin detemir, sold by another unrelated pharmaceutical company Novo Nordisk under the name Levemir, are the only basal insulin products presently on the Australian market. However, Levemir is only indicated for type 1 diabetes, whereas the Sanofi Products are not so limited. Sanofi Australia is also the sponsor of another set of products (sold under the brand name Apidra) that contain insulin glulisine as an active ingredient, which is a rapid-acting insulin.
The Sanofi Australia insulin glargine products currently offered in Australia can be summarised as follows:
Product name
Presentation
Indication
Administration Device
Device covered by the Patent?
Substitutable w Semglee?
Lantus
(Lantus Vial)
Insulin glargine (rbe) 100 units/ml in 10 ml injection vial
Once-daily subcutaneous administration in the treatment of type 1 diabetes mellitus in adults and children and type 2 diabetes mellitus in adults who require insulin for control of hyperglycaemia
Syringe (only used in a hospital setting)
No
No
Lantus (Lantus Cartridge)
Insulin glargine (rbe) 100 units/ml in 3 ml injection cartridge
AllStar Pro pen. Reusable injector pens containing replaceable Lantus Cartridges
Yes
No
Lantus SoloStar
(Lantus SoloStar)
Insulin glargine (rbe) 100 units/ml in 3 ml solution for injection injector pen
SoloStar pen. Disposable injector pens containing a single cartridge that are not replaceable
No
Yes
Toujeo SoloStar
(Toujeo)
Insulin glargine 300 units/ml solution for injection injector pen
Treatment of diabetes mellitus in adults
SoloStar pen. Disposable injector pens containing a single cartridge that are not replaceable
No
No
I refer to the above-mentioned products collectively as the Sanofi Products. Where appropriate, I refer to the Lantus Vial, Lantus Cartridge and the Lantus SoloStar products collectively as the Lantus Products.
The Toujeo, Lantus SoloStar and Lantus Cartridge products are all administered via injector pens. The Lantus Cartridge is administered using the AllStar Pro pen, which is re-usable and distributed (without charge) by Sanofi Australia’s sales team. The Lantus SoloStar and Toujeo products are disposable single use injector pens (referred to as the SoloStar pen). It is not in dispute that the AllStar Pro pen falls within the scope of the claims of the Patent and the SoloStar pen does not.
Toujeo was recently listed on the PBS Schedule, on 1 April 2018, and has been supplied in Australia by Sanofi since that date. Toujeo is a second generation insulin product with a long-acting, higher concentration formulation of insulin glargine (300 units/mL or U300 products) that reduces the insulin release rate and provides more gradual dissolution and prolonged insulin activity compared to lower concentration formulations of insulin glargine (100 units/mL or U100 products), which include the Lantus Products and the Semglee product. Ms Bramich gives evidence that the flatter, more prolonged and stable profile achieved by Toujeo provides clinical benefits when compared to insulin glargine U100 products, such as convenience, adaptability of dosing interval and lower variability of insulin exposure, and results in sustained blood glucose control beyond 24 hours with a reduced risk of hypoglycaemic events in patients with type 2 diabetes. A lesser volume is also injected to achieve the same number of units of injected insulin glargine and the same target ranges for plasma glucose levels. Injecting less volume is said to reduce injection pain for the patient. Furthermore, the Toujeo SoloStar injector pen has 50% more units of insulin glargine than a Lantus SoloStar and a Lantus Cartridge, meaning that the interval between prescriptions is greater and the patient has less frequent co-payments. Sanofi’s evidence is that Toujeo provides not only real clinical advantages but also measurable financial and quality of life outcomes over insulin glargine U100 products, and that it is reasonable that clinicians would choose to prescribe Toujeo in preference to U100 products for patients for whom clinicians consider Toujeo will provide improved health outcomes when compared to U100 products. This evidence is given in the context of a suggestion in the evidence of Alphapharm that Sanofi Australia has, since the launch of Toujeo, actively engaged in “switching” patients from its Lantus Products to Toujeo, a subject to which I shall return.
The Lantus Vial product is not listed on the PBS Schedule and the evidence is that sales of this product are, in relative terms to the other Sanofi Products, slight. The Lantus Cartridge, Lantus SoloStar and Toujeo products are all listed on the PBS Schedule. This means that the cost to patients of a prescription for these products is $39.50 (or $6.40 for concessional patients), and the balance is subsidised by the Commonwealth Government. Medicines administered to in-patients in public and private hospitals are not reimbursed under the PBS, rather they are paid for by the hospitals, the patients themselves or the patient’s private health insurer.
The Sanofi Products may be prescribed by general practitioners (GPs), specialists or nurse practitioners. Treatment for most type 1 diabetes patients will be initiated in the hospital setting and treatment continuation is often shared between the GP and an endocrinologist. For type 2 diabetes patients, initiation may occur with a GP or in a specialist clinic and the majority of ongoing care is with the GP, with reference to a specialist endocrinologist if complications arise.
The evidence indicates that there is a benefit to securing use in the hospital setting because once the patient is established on a particular brand of medication, its use is highly likely to be continued outside of the hospital setting. The evidence also indicates that where patients are established on a medication by a specialist, the patient is likely to be continued on that medication by the GP who takes over management of the patient.
1.6 The Alphapharm product
Alphapharm obtained ARTG registration for the Semglee product on 28 March 2018. It is a biosimilar to Sanofi Australia’s Lantus Products, meaning it is a biologic drug that has been granted regulatory approval by comparison with Lantus. Whilst it has the same active ingredient as Toujeo, it is not bioequivalent and is therefore not directly interchangeable with Toujeo. It is a pre-filled disposable injector pen that comes in 5 or single pen packs.
The Pharmaceutical Benefits Advisory Committee (PBAC) recommends that the Semglee product be marked as equivalent in the PBS Schedule for the purposes of substitution at the pharmacy level, or ‘a’ flagged, against the Lantus SoloStar product only. This means that, if brought to market, the Semglee product could be dispensed by a pharmacist in place of the Lantus SoloStar (but not the Lantus Cartridge, Lantus Vial or Toujeo product) if a patient presents with a prescription which:
(1)specifies the active ingredient, namely insulin glargine, but not the brand name; or
(2)notwithstanding that it states the brand name of the product to be prescribed (i.e. Lantus SoloStar), the prescriber has not given a direction by ticking the applicable box on the prescription that brand substitution is not permitted.
A prescriber could also specifically prescribe the Semglee product by brand name.
1.7 The issues
The dispute concentrates on the broad questions of the strength of the patent infringement case that Sanofi advances and whether the balance of convenience and justice warrants the grant of the interlocutory relief sought.
In the context of the strength of the prima case, the following issues arise. First, whether Sanofi has established that it has a sufficiently strong prima facie case of infringement of claims 1 - 4 of the Patent to warrant the grant of relief. Whilst Sanofi asserted infringement of claims 3 and 4 for the purposes of this application, it was accepted at the hearing that the application could be approached on the basis of claim 1, which is set out in section 3.1 below.
Secondly, whether, whatever the strength of the infringement case, the foreshadowed cross-claim for revocation of claims 1- 4 is such that Sanofi’s claim is not likely to succeed. For the purpose of the interlocutory application, Alphapharm confines its cross-claim to the contention that claims 1 – 4 are invalid for want of novelty within s 7(1) of the Act by reason of the prior publication of:
(1)United Kingdom Patent No. GB 743,839 “Improvements in or relating to Devices for Dispensing or Delivering Predetermined Quantities of Liquids from Cartridges or the like Containers” (Schofield);
(2)United States Patent Application No. 2004/0254526 entitled “Needle-less injector” (Weston); and
(3)United States Patent No 2007/0021718 entitled “Plastic Spring” (Burren).
The parties agree that the strength of the novelty case is to be considered in the context of two construction issues, which are identified below.
Sanofi’s ACL claim is that by supplying and offering to supply the Semglee product after PBS listing, Alphapharm will impliedly and falsely represent to medical practitioners, distributors, pharmacists, patients and others that it is able to supply it without infringing the Patent. Accordingly, for a successful outcome of the ACL claim, Sanofi must at least establish a prima facie case of patent infringement. No doubt for this reason scant reference was made to this claim by the parties and it is unnecessary for me to address it further.
2. THE RELEVANT LAW
The requirement of a “prima facie case” does not mean that the applicant for relief must show that it is more probable than not that it will succeed at trial. It is sufficient if the applicant shows a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending trial. How strong that probability needs to be depends upon the nature of the rights that are being asserted and the practical consequences likely to flow from the order that is sought; Australian Broadcasting Corporation v O’Neill[2006] HCA 46; 227 CLR 57 (Gummow and Hayne JJ) at [65]. In O’Neill at [19], Gleeson CJ and Crennan J explained that in all applications for an interlocutory injunction, a court will ask whether the plaintiff has shown that; there is a serious question to be tried as to the plaintiff's entitlement to relief; the plaintiff is likely to suffer injury for which damages will not be an adequate remedy; and the balance of convenience favours the granting of an injunction. These they described as the organising principles to be applied, having regard to the nature and circumstances of the cause under which issues of justice and convenience are to be addressed.
As noted above, an applicant for interlocutory relief need not necessarily show that its case is, on balance, likely to succeed. However, the exercise described in O’Neill may lead to the conclusion that in order sufficiently to recognise the serious consequences for the respondent of the grant of interlocutory relief, the applicant should reasonably be expected to demonstrate such likelihood; Samsung Electronics Co Ltd v Apple Inc [2011] FCAFC 146; 217 FCR 238 (Dowsett, Foster, Yates JJ) at [51].
In Samsung the Full Court said of the question of the assessment of harm to the plaintiff:
[62]The assessment of harm to the plaintiff, if there is no injunction, and the assessment of prejudice or harm to the defendant, if an injunction is granted, is at the heart of the basket of discretionary considerations which must be addressed and weighed as part of the Court’s consideration of the balance of convenience and justice. The question of whether damages will be an adequate remedy for the alleged infringement of the plaintiff’s rights will always need to be considered when the Court has an application for interlocutory injunctive relief before it. It may or may not be determinative in any given case. That question involves an assessment by the Court as to whether the plaintiff would, in all material respects, be in as good a position if he were confined to his damages remedy, as he would be in if an injunction were granted (see the discussion of this aspect in Spry, The Principles of Equitable Remedies (8th edn, 2010) at pp 383–389; at pp 397–399; and at pp 457–462).
[63] The interaction between the Court’s assessment of the likely harm to the plaintiff, if no injunction is granted, and its assessment of the adequacy of damages as a remedy, will always be an important factor in the Court’s determination of where the balance of convenience and justice lies. To elevate these matters into a separate and antecedent inquiry as part of a requirement in every case that the plaintiff establish “irreparable injury” is, in our judgment, to adopt too rigid an approach. These matters are best left to be considered as part of the Court’s assessment of the balance of convenience and justice even though they will inevitably fall to be considered in most cases and will almost always be important considerations to be taken into account.
[64] Gleeson CJ also observed in Lenah Game Meats (at [18] (p 219)), that, where there is little or no room for argument about the legal basis of the applicant’s claimed private right, the court will be more easily persuaded at an interlocutory stage that a prima facie case has been established. The court will then move on to consider discretionary considerations, including the balance of convenience and justice. But, as his Honour also observed at [18] (p 219):
The extent to which it is necessary, or appropriate, to examine the legal merits of a plaintiff’s claim for final relief, in determining whether to grant an interlocutory injunction, will depend upon the circumstances of the case. There is no inflexible rule.
[65] The resolution of the question of where the balance of convenience and justice lies requires the Court to exercise a discretion.
[66] In exercising that discretion, the Court is required to assess and compare the prejudice and hardship likely to be suffered by the defendant, third persons and the public generally if an injunction is granted, with that which is likely to be suffered by the plaintiff if no injunction is granted. In determining this question, the Court must make an assessment of the likelihood that the final relief (if granted) will adequately compensate the plaintiff for the continuing breaches which will have occurred between the date of the interlocutory hearing and the date when final relief might be expected to be granted.
[67] As Sundberg J observed in Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (2009) 81 IPR 339 at [15] (p 342), when considering whether to grant an interlocutory injunction, the issue of whether the plaintiff has made out a prima facie case and whether the balance of convenience and justice favours the grant of an injunction are related inquiries. The question of whether there is a serious question or a prima facie case should not be considered in isolation from the balance of convenience. The apparent strength of the parties’ substantive cases will often be an important consideration to be weighed in the balance: Tidy Tea Ltd v Unilever Australia Ltd (1995) 32 IPR 405 at [416] per Burchett J; Aktiebolaget Hassle v Biochemie Australia Pty Ltd (2003) 57 IPR 1 at [31] (p 10) per Sackville J; Hexal Australia Pty Ltd v Roche Therapeutics Inc (2005) 66 IPR 325 at [18] (p 329) per Stone J; and Castlemaine Tooheys at 154 per Mason ACJ.
The point set out in [67] of Samsung is of relevance in the present application. Alphapharm, whilst contesting infringement, also contends that it has a sufficiently strong case of invalidity so as to weigh materially in its favour on the question of balance of convenience.
In this context it is apposite to note that a countervailing argument for invalidity must be considered with some care. It is not sufficient to balance the scales by establishing a triable revocation case on the cross-claim. If that is as far as it goes, then assuming that the applicant for relief has shown a triable issue on infringement, the conclusion would remain that the applicant has a triable question. As Jessup J said in Interpharma Pty Ltd v Commissioner of Patents [2008] FCA 1498; 79 IPR 261:
[17] As a matter of analysis, unless the case for invalidity is sufficiently strong (at the provisional level) to qualify the conclusion that, overall, the applicant has a serious question, or a probability of success, the court should move to consider the adequacy of damages, the balance of convenience and other discretionary matters. It is the applicant’s title to interlocutory relief which is under consideration, and the bottom-line question, as it were, is whether the applicant has a serious question, or a probability of success, not whether the respondent does in relation to some point of defence raised or foreshadowed.
This passage has been adopted as correct by a number of single judges of this Court; Janssen Sciences Ireland UC v Alphapharm Pty Ltd [2017] FCA 1399 (Yates J) at [96]; Merck Sharp & Dohme Corp v Apotex Pty Ltd [2012] FCA 928; 97 IPR 414 (Jagot J) at [5]; Organic Marketing Australia Pty Ltd v Woolworths Ltd [2011] FCA 279 at [60] (Katzmann J) and myself in F. Hoffman-La Roche AG v Sandoz Pty Ltd [2018] FCA 874; (2018) 134 IPR 172 at [28].
In Samsung, the Full Court considered the correct approach to be taken to the examination of the strength of the prima facie case. In relation to one of the patents in suit (the “Touch Screen Patent”) it determined that the alleged infringer, Samsung, had not established a prima facie case of invalidity; Samsung at [140] and [150]. However, the Full Court nevertheless concluded that an interlocutory injunction was not appropriate because the construction case concerning infringement was insufficiently strong. Of note, are comments in relation to infringement of claim 6 of the Touch Screen Patent, where their Honours concluded:
[120]It is not for this Full Court to determine, as on a final hearing, the scope of claim 6 or whether the Galaxy Tab 10.1 infringes that claim. It is necessary, however, for us to make some evaluation of the strength of Apple’s case for infringement of that claim, recognising that we do not have the benefit of all the evidence that the parties might see fit to call at the final hearing on the question of the construction of the touch screen of the Galaxy Tab 10.1 and on the question of the common general knowledge as it assists to inform the question of the construction of claim 6.
[121]It is sufficient for us to express the view that, on the present state of the evidence, there is a real and substantial prospect that the importation into and supply in Australia of the Galaxy Tab 10.1 will not infringe claim 6 of the Touch Screen Patent. We have referred to a number of difficulties that confront Apple in making good its case on infringement. It may well be that, on a final hearing, Apple will meet these difficulties. But difficulties they are. Whilst we would not be prepared to say that Apple’s case on infringement is not open to be argued, the difficulties to which we have referred do affect the assessment at the present time of the probability that, if on a final hearing the evidence remains the same, Apple will be found to be entitled to final injunctive relief for infringement of that claim. If Apple has established a prima facie case at all (which we doubt), it is founded upon a construction argument which, if the evidence remains as it is, is unlikely to succeed at trial.
3. ARGUABLE CASE
3.1 Introduction
The parties agree that the novelty and infringement cases may be considered for the purpose of the present application by reference to claim 1 of the Patent, which is as follows (integer numbers added):
(1) A drug delivery device comprising: (2) a housing with a proximal end and a distal end, (3) a cartridge adapted to accommodate a drug, (4) a cartridge retaining member adapted to retain the cartridge, (5) the cartridge retaining member being secured to the housing, (6) wherein a spring washer arranged within the housing so as to exert a force on the cartridge and to secure the cartridge against movement with respect to the cartridge retaining member, (7) the spring washer being arranged so as to abut the cartridge on a side of the cartridge that faces the proximal end of the housing.
The primary dispute between the parties was characterised as a question of claim construction. The parties agree that there are two substantive arguments raised, the first concerns the words “the cartridge retaining member being secured to the housing” (integer (5)) and the second concerns the words “cartridge retaining member adapted to retain the cartridge” (integer (4)). Mr Milijasevic and Mr Bilney give evidence on construction on behalf of Sanofi and Alphapharm respectively. Dr Stark did not engage on these construction issues, which gives rise to a third issue, which is Alphapharm’s contention that if the Sanofi construction of the claims is accepted, then no evidence establishes that, on that construction, infringement has been made out.
The principles concerning claim construction are clear and do not require extensive repetition. It is sufficient to refer to the summary of those principles as set out in Jupiters Ltd v Neurizon Pty Ltd [2005] FCAFC 90; (2005) 65 IPR 86 at [67]; Décor Corporation Pty Ltd v Dart Industries Inc [1988] FCA 682; (1988) 13 IPR 385 at 400; and Flexible Steel Lacing Company v Beltreco Ltd [2000] FCA 890; (2000) 49 IPR 331 at [70] – [81]. The claims are to be construed in the context of the specification as a whole but it is not legitimate to narrow or expand the boundaries of monopoly as fixed by the words of a claim by adding to those words glosses drawn from other parts of the specification. Terms in a claim which are unclear may be defined by reference to the body of the specification, but the body of a specification cannot be used to change a clear claim for one subject matter into a claim for another and different subject matter.
Crennan J’s statement of the relevant principles in Pharmacia Italia SPA v Mayne Pharma Pty Ltd [2005] FCA 1078; (2005) 222 ALR 552 is particularly apt. The question in that case was what did “reconstituted from a lyophilizate” mean. After referring to the judgment of Sheppard J in Décor, her Honour said:
[56]Particularly relevant are the principles that the specification as a whole must be read and the context of a specification may qualify the prima facie meaning of a word or expression in a claim. If a word used in a claim is not a term of art, by reference to the technical knowledge possessed by persons skilled in the art, and is used in a plain, clear and unambiguous way in a claim, there should be no resort to the body of the specification to aid in the construction of the claim: Welch Perrin and Co Pty Ltd v Worrel (1961) 106 CLR 588 at 610; Electric & Musical Industries Ltd v Lissen Ltd (1936) 54 RPC 23 at 41. That principle is subject to the proviso that any lack of clarity or ambiguity in a claim can be resolved by resort to the body of the specification: Interlego AG v Toltoys Pty Ltd (1973) 130 CLR 461 at 457–8 (per Barwick CJ and Mason J); Décor at 391; Marconi v Mullard (1923) 40 RPC 159 at 175.
[57]There is no inconsistency in the principles governing construction of patent specifications as explained by Hely J in Flexible Steel Lacing Co v Beltreco Ltd (2000) 49 IPR 331; [2000] FCA 890 at [73]–[76] and especially [78]. It is as true of patent specifications, as of statutes (or any documents), as noted by Viscount Simonds in Attorney-General v Prince Ernest Augustus of Hanover [1957] AC 436; [1957] 1 All ER 49:
... words, and particularly general words, cannot be read in isolation: their colour and context are derived from context [at AC 461; All ER 53] ... the elementary rule must be observed that no one should profess to understand any part of a statute or of any other document before he has read the whole of it. Until he has done so he is not entitled to say that it or any part of it is clear and unambiguous [at AC 463; All ER 55].
[58] Similarly, the meaning of a word in a particular context may involve some limitation on its application in a patent claim, but such a meaning can only be derived from the context in which the word is used: see some examples, Henriksen v Tallon [1965] RPC 434 at 445 (per Reid LJ); Minnesota Mining at CLR 261ff; ALR 32; IPR 233–4, esp CLR 272; ALR 41–2; IPR 241–2 (per Aickin J) and Décor at 410–11 (per Sheppard J).
In Lynx Engineering Consultants Pty Ltd v The Pilbara Infrastructure Pty Ltd [2016] FCAFC 19; (2016) 243 FCR 263 (Besanko, Jagot, Edelman JJ) said:
[24]The essential question, therefore, is whether the primary judge was correct in his conclusion that the word “formed” in claim 1 of the Patent bore its technical meaning. In Kimberly-Clark Australia Pty Limited v Multigate Medical Products Pty Limited [2011] FCAFC 86; (2011) 92 IPR 21, 30 [39], Greenwood and Nicholas JJ said that ordinary words which are used in a patent claim should be given their ordinary meaning unless the skilled addressee would give them a different meaning. There are words used in patent claims that have no ordinary meaning apart from their technical or scientific meaning. There are also words used in patent claims that have a technical or scientific meaning as well as an ordinary meaning. In the latter situation the words may have been intended to be used in accordance with their technical or scientific meaning or in accordance with their ordinary meaning. Expert evidence may be received to assist in determining which of these meanings was intended.
The disclosures upon which Alphapharm relies for the purposes of its novelty challenge to the validity of the asserted claims are paper anticipations in the form of three patents. If they are to deprive these claims of novelty, each must clearly disclose each and every essential integer of the impugned claim. That is, the information as to the alleged invention given by the prior publication must, for the purposes of practical utility, be equal to that given by the subsequent patent; Hill v Evans (1862) 4 De GF & J 288; 1A IPR 1 at 7. The stringency with which prior disclosure is to be assessed in order to be novelty-destroying has been discussed in a number of decisions; see H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70; (2009) 177 FCR 151 at [161] – [192] (Bennett and Middleton JJ).
It is to be noted that evidence can be given by experts on the meaning which those skilled in the art would give to technical or scientific terms or phrases and on unusual or special meanings given by such persons to words which might otherwise bear their ordinary meaning. However, the construction of the specification is for the Court, not for the expert witnesses; Flexible Steel Lacing at [81]; Jupiters at [78]. For the most part, the expert evidence in the present case reveals that the words used in the specification, understood in context, bear their ordinary meaning.
3.2 The Patent
The Patent begins by describing that the invention relates to a drug delivery device and a method of manufacturing a drug delivery device. It states that drug delivery devices are used for the administration of a drug, for example insulin, heparin or growth hormones. Some devices are configured to deliver a plurality of doses. Additionally, some devices are configured to allow the setting of different dose sizes which are to be delivered and in that context the Patent states that it is important that the size of the dose can be precisely set and the set dose can be reliably delivered.
After referring to two prior art syringes which are identified as including spring arrangements the Patent provides (p 1 line 23 and following) :
It is an aim of the present invention to provide for an improved drug delivery device. In particular, a drug delivery device should be provided, which allows for improved operability with respect to dosage control and/or improved reproducibility of the dosage in connection with different cartridges.
For this aim, a drug delivery device comprises a housing with a proximal end and a distal end, a cartridge adapted to accommodate a drug, a cartridge retaining member adapted to retain the cartridge, the cartridge retaining member being secured to the housing, and a spring washer being arranged within the housing so as to exert a force on the cartridge and secure the cartridge against movement with respect to the cartridge retaining member and, preferably, against movement with respect to the housing.
There is no dispute between the experts that the “distal end” is the end that holds the needle and the “proximal end” is the opposite end.
The “cartridge retaining member” accordingly is described as having a function, being to retain the cartridge. The spring washer exerts a force on the cartridge and so will “secure the cartridge” against movement with respect to the retaining member and, preferably (that is, optionally) against movement in relation to the housing. The Patent continues (p 2 line 4 and following) (emphasis added):
In a drug delivery device of this kind movement of the cartridge with respect to the housing and/or the cartridge retaining member is reduced or even avoided on account of the spring washer, which exerts the force on the cartridge. The spring washer can reduce play between cartridge and housing and/or between cartridge and cartridge retaining member. This is, for example, particularly advantageous when cartridges with different lengths are to be used in the drug delivery device. Thus, the drug delivery device may be a reusable device. Manufacturing tolerances in cartridge lengths can thus be compensated by means of the spring washer. Consequently, during operation of the drug delivery device, axial movement of the cartridge in the cartridge retaining member can be reduced or even prevented and dose accuracy can be increased. The spring washer allows securing the cartridge within the cartridge retaining member without requiring much space. Consequently a very compact drug delivery device can be formed.
There is no dispute between the experts that the reference to “axial” in the context of “movement” or “direction” is a reference to the movement or direction following the long axis of the device. It may be distinguished from three dimensional and sideways movement.
The above paragraph describes the invention generally, but in the context of alternative embodiments. The emphasised passage notes that movement of the cartridge in relation to the housing or cartridge retaining member is “reduced or avoided” by the spring washer exerting force on the cartridge and notes as alternatives the reduction of “play” between the cartridge and the housing “and/or” the cartridge retaining member. The disclosure also contemplates that this can be particularly advantageous when using cartridges of different lengths within the housing and notes that the device may thus be reusable, with axial movement “of the cartridge in the cartridge retaining member” being reduced or prevented and dose accuracy being increased.
The Patent then refers to other embodiments (p 2 line 18 and following) (emphasis added):
In a further embodiment, the spring washer is arranged so as to abut the cartridge, preferably on a side of the cartridge that faces the proximal end of the housing.
The spring washer may keep the cartridge fixed in the cartridge retaining member by abutting the cartridge, preferably on a side of the cartridge that faces the proximal end of the housing. Accordingly, axial movement of the cartridge with respect to the cartridge retaining member is reduced or even prevented.
…
In one embodiment, the spring washer is fixed to a sleeve member of the housing, preferably a threaded sleeve member of the housing. According to this embodiment, the spring washer may be implemented in a conventional housing of a drug delivery device, without performing significant design changes on the housing. The (threaded) sleeve member may simultaneously be used to secure the cartridge retaining member to the housing, e.g. by means of an inner thread.
…
In one embodiment, the further washer is arranged to limit the loading distance of the spring washer.
During insertion of the cartridge, a force in the proximal direction may be exerted on the spring washer, e.g. when (releasably) securing the cartridge retaining member with the cartridge being retained therein to the housing. In order to prevent the spring washer from being permanently plastically deformed, the further washer can be arranged on the proximal side of the spring washer. The further washer may limit the distance by which the spring washer may be deformed.
The following passage commences at page 5 line 5, and is directed to the aspect of the invention concerning the method of manufacturing the device (emphasis added):
For the above mentioned aim, a method of manufacturing a drug delivery device comprises the steps of: providing a housing with a proximal end and a distal end, providing a cartridge adapted to accommodate a drug, providing a cartridge retaining member adapted to retain the cartridge, arranging a spring washer within the housing and securing the cartridge retaining member to the housing, thereby loading the spring washer so as to exert a force on the cartridge and to secure the cartridge against displacement, in particular against axial displacement, with respect to the cartridge retaining member.
For the above mentioned aim, a spring washer is used to secure a cartridge which contains a drug in a cartridge retaining member of a drug delivery device against displacement, preferably against axial displacement, with respect to the cartridge retaining member.
In argument, the emphasised passages including “in particular” and “preferably” adopted significance in relation to the role of the cartridge retaining member.
Figure 1 is a schematic drawing of a simplified cross-sectional side view of one embodiment, which is as follows:
The Patent then relevantly provides (p 6 line 10 and following) (emphasis added):
In Figure 1 an embodiment of a drug delivery device 5 is shown, which is an injector for a liquid medication. The drug delivery device may be configured to deliver a plurality of, preferably user-settable, doses of a drug. The drug delivery device may be a pen-type device. The drug delivery device 5 comprises a housing 10, wherein a cartridge 15 containing a medical product (drug) is located. A needle unit 20 is located at the distal end 25 of the drug delivery device 5. Needle unit 20 may be secured against movement with respect to the housing. Through needle unit 20 the medical product can be injected into a patient.
…
The drug delivery device as shown in Figure 1 further comprises a cartridge retaining member 45 which is (releasably) secured to the housing 10. The cartridge retaining member 45 is adapted to retain the cartridge 15 within the drug delivery device 5. The cartridge retaining member 45 can be configured such that the cartridge 15 can be replaced by a user after it has been emptied.
Delivery of the medical product can be performed by means of a piston rod 30 or the like, which can be moved into the distal direction with respect to the cartridge 15. A piston (not explicitly shown) which is retained in the cartridge and seals the cartridge on the proximal end side may be moved in the distal direction with respect to the cartridge by the piston rod.
…
When the cartridge 15 has been inserted into the cartridge retaining member 45 and the cartridge retaining member 45 has been secured to the housing, movement of the cartridge 15 in the distal direction is prevented by the cartridge retaining member 45. The cartridge 15 may abut the cartridge retaining member distally.
The Patent turns to describe the spring washer 50. Alphapharm in submissions emphasised the following passage (p 8 line 11 and following):
Spring washer 50 may be fixed to sleeve member 60 by a snap-fit, for example. Sleeve member 60 and/or spring washer 50 is expediently secured against rotational and/or axial movement with respect to the housing. Of course, axial movement of the spring washer 50 for loading the spring washer or during relaxing of the spring is allowed.
After providing a description of further aspects of the embodiment, the Patent says (p 9 line 18 and following):
Exerting a force on the cartridge 15 in the distal direction can be performed by loading the spring washer 50 in the proximal direction when the cartridge retaining member 45 with the cartridge is mounted to the housing 10… Thus, when the cartridge moves into abutment with the spring washer 50 and spring washer 50 is moved further in the proximal direction together with the cartridge, the spring washer is loaded and exerts a force on the cartridge in the distal direction.
The drug delivery device 5 of the embodiment depicted in Figure 1 eliminates axial movement of cartridge 15 with respect to the housing 10 and with respect to the cartridge retaining member 45. This is for example advantageous when cartridges 15 with different lengths are used in the drug delivery device 5. It is, for example, possible to compensate for length differences, which may result from manufacturing tolerances between different cartridges or which may be the properties of different cartridge types, e.g. between 0.2 and 2mm, by applying a spring washer. Consequently, during operation of the drug delivery device 5 axial movement of the cartridge 15 in the cartridge retaining member 45 is prevented and precision of drug delivery is improved.
In relation to the method of manufacture aspect of the invention the Patent also says (p 12 line 11 and following):
A method of manufacturing the drug delivery device 5 includes the steps of providing a housing with a proximal end and a distal end, providing a cartridge adapted to accommodate a drug, providing a cartridge retaining member adapted to retain the cartridge, arranging a spring washer within the housing and securing the cartridge retaining member to the housing, thereby loading the spring washer so as to exert a force on the cartridge and to secure the cartridge against displacement, in particular against axial displacement, with respect to the cartridge retaining member.
Before concluding with the standard “comprising” statement, the Patent states (p 12 line 20 and following):
Other implementations are within the scope of the following claims. Elements of different implementations may be combined to form implementations not specifically described herein.
3.3 The claims
Relevant claims dependent on claim 1 (which is set out in [35] above) are as follows:
2.The drug delivery device according to claim 1, wherein the spring washer is biased so as to exert the force on the cartridge in the distal direction.
3.The drug delivery device according to claim 1 or 2, wherein the spring washer is secured against axial movement with respect to the housing.
4.The drug delivery device according to any one of claims 1 to 3, wherein the drug delivery device comprises a piston rod for dispensing a dose of the drug from the device when the piston rod is driven in the distal direction and wherein the spring washer comprises an opening, the opening being arranged so as to allow the piston rod to run through the opening.
3.4 Consideration of the construction issues
It is not for this Court, as on a final hearing, to determine the scope of claim 1 or whether or not it is anticipated by one or other of the prior art documents. It is necessary, however, to make an evaluation of the strength of Sanofi’s case, recognising that the Court does not have the benefit of all of the evidence that the parties might consider fit to call at the final hearing, including, for instance, going to the question of common general knowledge as it assists to inform the question of the claim and the prior art. The views that I express below are on the present state of the evidence.
The first construction argument concerns integer (5) in claim 1; “the cartridge retaining member being secured to the housing”, and whether the cartridge retaining member must be a separate component to the housing or whether it can be made from the same mould as the housing such that they are, in effect, permanently “secured”. Sanofi contends that the claim refers to the “cartridge retaining member” and “housing” as two distinct components. It asserts that the claim describes the physical relationship they have to each other, namely that the cartridge retaining member be “secured to” the housing, which indicates that they are separate components held in place with respect to each other, not that they are the same component. Mr Milijasevic understands that “secured” in this context means a component being held in place with respect to another component.
Alphapharm contends (adopting a metaphor that attributes emotions to the Patent) that the claim is ambivalent as to whether they are separate components or one component, so long as they are “secured” to each other and perform their respective functions. Alphapharm refers to the evidence of Mr Bilney where he gives the opinion that the words “secured to the housing” are broad enough to include an arrangement where the components can be permanently secured or releasably secured. Thus, in mechanical engineering terms he understands that two separate components that are, for instance, snap locked together or created in one piece using injection moulding would both be “secured” to one another.
The parties both call in aid passages in the specification to support their construction. Alphapharm says that the specification describes the interrelationship of the various features by reference to their physical relationship with one another rather than by reference to the means by which they are made (i.e. as a single piece in the same mould or as two separate pieces). In this respect Alphapharm points to a “merely illustrative” embodiment described in the specification which refers to the cartridge retaining member being “(releasably) secured to the housing” as opposed to other embodiments where the cartridge retaining member is just “secured” to the housing. Alphapharm submits that this dichotomy supports its construction.
Sanofi asserts that the specification does not disclose any embodiment in which a form of cartridge retaining means is part of the housing. Rather, it discloses the cartridge retaining member as a distinct component. Further, Sanofi points to other parts of the specification which it contends support its approach. For instance, in one embodiment a threaded sleeve member may be used “to secure the cartridge retaining member to the housing”, the use of “secure” indicating that they are separate components.
The language of the claim itself identifies four main features; a housing; a cartridge; a cartridge retaining member; and a spring washer. Although the specification identifies in embodiments each of these parts and claims a method of manufacturing such devices, nowhere does it specifically prescribe how a device with these features is to be made. That is perhaps an indication that, so long as the features are present and bear the relationship to each other defined in the claim, it does not matter. The only guide is that in integer (5) the cartridge retaining member is “secured to the housing”. As a matter of ordinary language, “secure” in context may well bear the meaning given to it in the Macquarie Dictionary (4th ed, 2005, which was the available version as at the priority date); “to make firm or fast”. Being secured in that sense refers to the result rather than the means by which it is achieved (for instance by joining separate or discrete components as opposed to moulding them in one part). It is in that sense that Mr Bilney understands the term, which is the construction for which Alphapharm contends and the one that, on the basis of the presently available evidence, I consider most likely to be correct.
In any event, for reasons that are explained further below, the first construction issue does not arise with respect to Schofield; Weston in so far as it relates to the screwed retaining cap or nozzle; and Burren in so far as it relates to the stop where it is joined to the housing. In those instances, the only issue that arises is the second construction issue and so the first construction issue can largely be put to one side.
The second construction issue concerns the meaning of “a cartridge retaining member adapted to retain the cartridge”, namely integer (4) in claim 1. Sanofi contends first, that the cartridge retaining member must hold the cartridge in position. Secondly, that it must be held in a three dimensional position. That is, sideways movement, as well as axial movement of the cartridge out of the device, must be prevented. Thirdly, Sanofi contends that this argument is supported by the language in the specification which identifies that the cartridge must be placed “in” or “into” the cartridge retaining member. Sanofi submits that its construction corresponds with the purpose of the invention, being the principal aim of allowing for improved operability with respect to dosage control and/or improved reproducibility of the dosage in connection with different cartridges. Alphapharm disputes that the second and third propositions advanced by Sanofi are limitations imposed within claim 1. It contends that the only requirement is that the member be adapted to retain the cartridge in the sense that it prevents the cartridge from falling out of the device.
Both parties rely on the evidence of their experts in support of their construction, although it is to be doubted that after receiving the evidence of the experts going to the spacial relationships and functioning of the invention as described in the Patent, the evidence of the experts can take matters much further. As I have noted, the construction of the specification insofar as it uses words of ordinary English language is for the Court.
My provisional view, on the present state of the evidence and having regard to the arguments made by both parties, is that there are considerable difficulties with the construction purported by Sanofi because it appears to seek to introduce impermissible glosses to the language of the claim.
Where the words in a claim are of ordinary English language, they should be given their ordinary meaning unless the skilled addressee would give them a different meaning; Lynx at [24]. In the present case no party submitted that the words in the claim have a technical or scientific meaning that would be different to the ordinary English meaning to be ascribed in context.
The claim is for a combination of features that together provide for the drug delivery device. The words in integers (4) – (7) of the claim “a cartridge retaining member adapted to retain the cartridge, the cartridge retaining member being secured to the housing, wherein a spring washer arranged within the housing so as to exert a force on the cartridge and to secure the cartridge against movement with respect to the cartridge retaining member, the spring washer being arranged so as to abut the cartridge on a side of the cartridge that faces the proximal end of the housing” draw attention to the fact that it is the action of the spring member that exerts a force on the cartridge to secure the cartridge against movement with respect to the cartridge retaining member. It is in that context that the word “retain” takes its meaning. I accept that the word “retain” is likely to be understood (as Sanofi submits) to mean “hold in place or position”; (Macquarie Dictionary, 4th ed, 2005). But that does not of itself mean to retain against three dimensional movement. In fact, the claim leaves open how the “retaining” is to be done and makes no mention of it having to hold the cartridge in a particular position, including “axial alignment” or a “three dimensional position”. No aspect of the claim defines or limits that concept, either in terms of the shape of the cartridge retaining member or the means of its operation, so long as it is something in respect of which the cartridge can be retained.
Sanofi submits that applying the dictionary definition of “retain” to claim 1, yields the conclusion that the cartridge retaining member must hold the cartridge against all forms of movement and that in a sense it is to be understood as something that can accommodate the cartridge within it, something like a container. But a distinction may be drawn between something that retains and something that contains. The latter is a narrower term. The use of “retain” does not indicate that the restraint must be of movement in all directions (for instance, a retaining wall would not do so). I would not read down the scope of the claim in this manner absent an indication from the language of the claim, read in the context of the specification, that this is a requirement. On the state of the present evidence, I can see no such requirement.
Turning to the body of the specification, it contains no definition of the term “cartridge retaining member” or the meaning of “retain”. No party or expert suggests otherwise. The specification includes a number of preferred embodiments, none of which are said to be definitive of the invention as claimed. The broad description on page 2 lines 4 and following (quoted in [45] above) provides that in the device of the kind the subject of the invention, movement of the cartridge with respect to the housing and/or the cartridge retaining member is “reduced or even avoided on account of the spring washer”. The spring washer can “reduce play” between the cartridge and the housing and/or cartridge and the cartridge retaining member. This does not present the invention as requiring the cartridge retaining member to retain against three dimensional movement. The action of the spring washer in reducing play is said to be “particularly advantageous” when cartridges are of different lengths. The paragraph explains that during operation “axial movement of the cartridge in the cartridge retaining member can be reduced or even prevented and dose accuracy can be increased”. It goes on to say, as an example, that in operation the cartridge retaining member is to retain the cartridge against axial movement. No express or implied mention is made of retaining against three dimensional movement. The specification later describes some preferred embodiments that involve the spring washer exerting force in an axial or a distal direction (eg patent p 2 line 24 and p 2 line 26).
Dependent claim 2 adds an integer to specify the direction of the bias of the spring washer so as to exert force on the cartridge in the distal direction. This provides a further indication that claim 1 provides no limitation as to the particular manner in which the cartridge retaining member is to retain the cartridge.
In its written submissions Sanofi contends that the description in the specification supports its construction by disclosing that the cartridge is to be placed “into” or “in” the cartridge retaining member. This, it submits, confirms that the member holds the cartridge in position against not only axial but also three dimensional movement. The embodiment depicted in Figure 1 is an example of this. In oral submissions Sanofi went further and contended that it is a requirement of the claim that the cartridge must be held within or in (meaning, wholly or almost entirely within) the cartridge retaining member. However, the claims do not expressly refer to the cartridge being “in” or placed “into” the cartridge retaining member and it is not apparent to me how the body of the specification would support such an inference. In this regard I am conscious that it may be an error to import such a limitation described in respect of the preferred embodiments into the language of the claim.
Finally, I have some disquiet about the approach of Mr Milijasevic, whose evidence is relied upon by Sanofi in support of its construction, even leaving to one side the limited role that an expert may take on matters of claim construction.
After reciting passages from the specification, Mr Milijasevic says (emphasis added):
22.In my opinion the accuracy of dosing is a principal objective of the invention described. I understand that this is achieved by the use of a “cartridge retaining member” which, together with a “spring washer”, enables the “cartridge” to be located in a specific position relative to the “housing”. This is achieved by placing the “cartridge” within the “cartridge retaining member” and securing the “cartridge retaining member” to the “housing”. Movement (“displacement”) of the “cartridge in the “cartridge retaining member” is restricted by the “spring washer” exerting a force on the “cartridge”. Movement of the “cartridge retaining member” is in turn restricted by it being secured to the “housing”. I understand that this will result in the position of the “cartridge” within the device being defined.
23.I understand the term “secure(d)”, as used in the 105 Patent, to refer to a component being held in place with respect to another component. More specifically, I understand the term “secure(d)”, when used in the context of the “cartridge retaining member” to mean that the “cartridge retaining member” is held in place with respect to the “housing (that is, movement of the “cartridge retaining member” with respect to the “housing” is prevented) and, when used in the context of the “cartridge”, to mean that the “cartridge” is held in place with respect to the “cartridge retaining member” (that is, movement of the “cartridge” with respect to the “cartridge retaining member” is prevented).
Later, Mr Milijasevic gives his understanding of integers (4) and (5) at [26(d)(i)] (emphasis added):
26(d)(i)I note the use of the term “member’, the phrase “adapted to retain’ and the term “secured”, which together suggest to me a discrete component which is distinct from other components. The phrase “adapted to retain the cartridge” indicates to me that the “member’ has features which enable it to hold the “cartridge” in a manner which prevents its displacement. The term “secured’ additionally indicates to me that the “cartridge retaining member” is a separate component because, as I discuss in paragraph 23 above, the term indicates to me a “component being held in place with respect to another component”.
Mr Milijasevic goes on to say that the function of the cartridge retaining member is to prevent movement of the cartridge in the axial direction as well as to “maintain its axial alignment with other components in the housing”. That is, as Sanofi characterises it, the cartridge is held in a specific three dimensional position relative to the housing.
The passage in bold in [26(d)(i)] is where Mr Milijasevic explains, as a matter of language, how he considers that the three dimensional limitation of movement arises from the claim. It is apparent that it comes from his construction of the specification and in particular from his characterisation in [22] and [23] of the objective of the invention. His paragraph [23] also indicates how he considers that “within” and “in” are to be included with the requirement of the claim. Mr Bilney disputes that characterisation. In my view, the approach of Mr Milijasevic tends to subsume the language used in the claim to the “objective” described and to examples taken from the preferred embodiments. This does not accord with the correct approach to claim construction.
For the reasons stated, based on the current state of the evidence and my reading of the Patent, it appears to me that the specification does not confine the invention to arrangements where the cartridge must be placed within the cartridge retaining member or arrangements that prevent three dimensional movement of the cartridge. The specification focuses attention on the prevention of axial movement caused by the arrangement of the spring washer with respect to the cartridge and the cartridge retaining member. Indeed in relation to Figure 1, where cartridge 15 does fit within cartridge retaining member 15, the specification says:
When the cartridge 15 has been inserted into the cartridge retaining member 45 and the cartridge retaining member 45 has been secured to the housing, movement of the cartridge 15 in the distal direction is prevented by the cartridge retaining member 45. The cartridge 15 may abut the cartridge retaining member distally.
It makes no express or implied mention of axial alignment and, in any event, the description of Figure 1 is “merely illustrative” (p 6 lines 19-20).
The relevance of the disputes as to construction arises in the context of the prior art documents, to which I now turn.
3.5 The prior art
3.5.1Schofield
Schofield is a UK patent specification bearing the publication date 25 January 1956. It is entitled “Improvements in or relating to Devices for Dispensing or Delivering Predetermined Quantities of Liquids from Cartridges or the like Containers”. The only dispute between the parties insofar as the Schofield novelty case is concerned is the construction of integer (4), specifically whether or not Schofield contains a “cartridge retaining member adapted to retain the cartridge” as required by claim 1 of the Patent. If it does, then Sanofi accepts that it is a novelty-defeating document.
It is necessary first to identify the broad disclosure of Schofield, which commences by explaining that the invention relates to devices for dispensing or delivering predetermined quantities of liquids from cartridges or like containers. It explains that the device of the invention:
…comprises a pair of interconnected end portions one of which carries a ramrod adapted for displacing a piston or end wall of a cartridge in dispensing its contents, and the other of which includes two pivotal halves which in their open position present a free passage for one end of a cartridge in feeding it to the device without a needle or other exit orifice at said end coming into contact with any part of the device thereby rendering sterilization of the latter wholly unnecessary, and in their closed position are adapted to close the passage and firmly support said cartridge to permit its contents to be dispensed under the control of the ramrod.
One end of the device (referred to as an “applicator”) has a “beak” form of pivotal support for one end of the cartridge which enables the axial insertion of the cartridge into position when the beak is fully open, yet provides an “even and resilient support for a sheath around the needle where it projects from the cartridge”, when the "beak is closed”.
This is defined, by way of example, by reference to the Figures, two of which are reproduced below:
Figure 2
Figure 3
Figure 2 is a view partly in section, showing the cartridge 13 almost fully inserted and the jaws of the beak, or pivotal elements 21, about to reach their operative retained position. In the construction illustrated, the device is said to be made of metal and comprises front and rear frame members 10 and 11, interconnected by rods 12 to form an integral structure for housing a cartridge 13. The rods 12 may be replaced by a tubular structure having windows for permitting the cartridge to be viewed, or be replaced by a single axial element or semi-circular form, the main purpose being to ensure that the end members 10, 11 are held at a fixed distance apart. The rear member 11 incorporates a resilient cushion 14 to accommodate varying lengths of cartridges, which may be rubber or be a spring loaded metallic washer or its equivalent. It is seated within the rear member 11 and abuts against the inner end wall of it. The rear member carries a ramrod 15, the inner end of which has a ram 16 which abuts the piston 18 for the purpose of inwardly displacing the piston to eject the contents of the cartridge through the needle 19. Figure 3 is a view of the device in use, with the outer end of the sheath for the needle 25 removed and the ram at about the middle of its operative stroke.
The “beak” or pivotal elements 21 are described in operation as follows (emphasis added):
Hinged to the member 10 and forming part of the fore portion of the applicator is a gripping device somewhat comparable to a chuck. It comprises a pair of elements 21 made up of a body part and tapering neck or mouth piece. Each is pivoted to the frame member 10 and constitutes a jaw having a semi-circular recess 22 in its body part terminating in an internal shoulder 23 from which extends a semi-circular bore 24 from the neck or mouth piece end of the element. When the pivotal elements 21 are in their open position as shown in Figure 1 a cartridge 13, with its needle or the like hermetically sealed and housed by a sheath 25, is adapted to be inserted into the applicator through the front frame 10. When the end of the cartridge 13, at which the piston 18 is provided, touches the rubber or the like cushion 14 the upper end of the cartridge lies slightly proud of the frame 10 and its pivotal members 21 as shown in Figure 2, and in this position the members 21 require a slight pressure in a direction towards the needle in order to bring said elements 21 to their closed position. In such a final inward displacement of the pivotal members 21 the base 26 of each exerts slight pressure on the end of the cartridge 13 to press the cartridge firmly downwardly against its rubber seating 14 and thus ensure that during displacement of the ramrod 15 and the piston 18 the cartridge is firmly held in position.
Alphapharm refers to the evidence of Mr Bilney, who identifies that the elements 21 represent a cartridge retaining member within claim 1 of the Patent. They operate as two jaws which when closed prevent the cartridge from moving outside the device. He understands from the passage set out above in bold that the spring washer (i.e. the resilient cushion 14, which as noted above can be rubber or a spring loaded metallic washer or its equivalent) ensures that the cartridge is secured, in that the cartridge cannot move with respect to the cartridge retaining member due to the force exerted on the cartridge by the spring washer.
Sanofi contends that the elements 21 function only as a “stop” by presenting a horizontal surface at the distal end of the device when closed, so as to prevent the cartridge falling out of the distal end of the device. Mr Milijasevic contends that when the cartridge 13 is inserted and the elements 21 are closed, the cartridge is prevented from movement in the axial direction, however, because he considers that the cartridge retaining member of claim 1 of the Patent requires a “specific shape and dimensions to accommodate the ‘cartridge’ and hold the ‘cartridge’ in position” (in accordance with his opinion in relation to the second construction issue), he expresses the view that the equivalent is not to be found in Schofield.
On the present state of the evidence and the parties’ submissions, I consider that there is a real and substantial prospect that Schofield discloses all of the features of claim 1 of the Patent. I have referred to the difficulties that confront Sanofi’s proposed construction of the second construction issue. It requires the inference of two aspects into claim 1 that, for the reasons explained above, appear to be extraneous to its language. The first is that the cartridge retaining member must restrain three dimensional or sideways movement. The second is that the cartridge must be “within” or “in” the cartridge retaining member. Sanofi does not dispute that if the second construction argument advanced by Alphapharm is accepted, then integer [4] is disclosed by Schofield.
Further, even applying Sanofi’s proposed three dimensional positioning construction, Alphapharm contends that the gripping effect of the jaws in Schofield is such that the cartridge is secured in the requisite three dimensional way in any event. In my view there is some force (I emphasise, on a provisional level) in this contention in light of the disclosures in Schofield. The above passages quoted refer to the elements 21 being part of a “gripping device”. In the closed position the elements 21, along with the base 26, are said to exert “slight pressure on the end of the cartridge to press the cartridge firmly downwardly against its rubber seating and thus ensure that during displacement of the ramrod 15 and the piston 18 the cartridge is firmly held in position”. Further, the elements are said to provide even and resilient support for a sheath around the needle where it projects from the cartridge, when the beak is closed.
It is also debatable whether Schofield satisfies the second aspect of Sanofi’s claim construction in any event, namely that the cartridge must be “in” or “within” the cartridge retaining member. Mr Bilney’s evidence is that the cartridge 13 includes a large rectangular component as well as a tip at the distal end that contains the needle, in which case the cartridge and the needle would sit within the proposed cartridge retaining member, namely the elements at item 21. In his view, there is no suggestion in Schofield that the tip and needle do not form part of the cartridge identified in Schofield.
It is not necessary for me to determine the above issues at this preliminary stage. It is sufficient to express the view that, on the present state of the evidence and the parties’ submissions, there is a sufficiently strong (at the provisional level) prospect that Schofield anticipates claim 1 of the Patent, to undermine the strength of Sanofi’s infringement claim (a matter to which I return below).
3.5.2Weston
For reasons related to my discussion in paragraphs [150] – [151] above regarding Warner-Lambert, I also set to one side the contention advanced by Alphapharm that it would be an unfair result to restrain Alphapharm’s entry into the market for insulin glargine by reason of the existence of the Patent, which is not for the active ingredient, but for an injector pen. Alphapharm submits that by the interlocutory application Sanofi is attempting to secure monopoly protection for the entire insulin glargine market and that all of the harm to which Sanofi points arises from competition in that market in circumstances where the use of the injector pen is incidental and would not per se cause any loss to Sanofi. Accordingly, Alphapharm submits, it would be a disproportionate remedy. However, the assessment of relative harm in the present case includes consideration of the effects of the allegedly infringing conduct. The Semglee product is an insulin pen which, for the purpose of considering loss, prima facie infringes the Patent. Alphapharm is free to cast about and find and supply injector pens containing insulin glargine that do not infringe in competition with the Sanofi Products.
As to the quantification of the loss suffered, Sanofi contends that the loss, should Alphapharm be permitted to launch, would be difficult to calculate because the market for basal insulin, of which insulin glargine is an example, is a dynamic and evolving market. Sanofi has multiple insulin glargine products on the market. It submits that whilst some of the Sanofi Products are not ‘a’ flagged and therefore are not directly substitutable with the Semglee product, they are nevertheless competitive products because the Semglee product may itself be prescribed by name (instead of Toujeo or Lantus SoloStar). As a consequence, Sanofi submits that there could be considerable complexity in determining whether a sale of the Semglee product represents a lost sale of Lantus SoloStar, Lantus Cartridges, or even Toujeo, requiring consideration of additional counterfactual scenarios.
Sanofi also contends that further complications would arise in circumstances where one or more additional biosimilar insulin glargine product(s) entered the market, particularly in circumstances where it cannot be assumed that any such biosimilar would use a device which infringes the Patent. Sanofi submits that, in that circumstance, there would be substantial complexity in calculating the quantum of any claim to damages including; (a) the relative market shares that Sanofi Australia and the legitimate third party entrant(s) would have achieved in the absence of Alphapharm’s infringing conduct; (b) the price of the Lantus Cartridge, Lantus SoloStar and Toujeo products in the relevant period (for example, whether any of the applied price disclosure associated price reductions should not have been applied or a lesser reduction would have applied if the Semglee Product was not in the market); (c) the profit which Sanofi Australia would have derived from sales of the Lantus Cartridge, Lantus SoloStar and Toujeo products; and (d) whether any discounting by Sanofi Australia would not have been implemented if Alphapharm was not in the market, and similarly, in relation to any discounting by the legitimate third party entrant(s).
Moreover, Sanofi considers that the Court would be required to consider the ongoing loss into the future, including assessing hypothetical matters such as the extent to which the PBS price would in any event have fluctuated in the counterfactual world.
Despite these matters, in my view the effects of the launch of the Semglee product are generally capable of being remedied by an award of damages. If Alphapharm enters the market and is subsequently found to infringe the Patent, then Sanofi will be able to pursue damages (or an account of profits). The market share of Sanofi Australia prior to the launch will be a known fact. The market consequences caused by the introduction of the Semglee product will be apparent from the figures. It is true that there may be complications, such as those identified by Sanofi, but the starting point of the market and the various actions of those involved will be known. By contrast, in the event that Alphapharm is restrained the question of what would have happened in the market will be highly speculative.
I have addressed above the question of market share. Accompanying this are hypothetical questions about the likely impact of the launch of the Semglee product on the market based on a significant number of hypothetical scenarios. In Hoffman at [186] – [190] and [223] I referred to the type of considerations that have been taken into account in considering the difficulties in proving the hypothetical loss that the restrained parties in recent proceedings have encountered. They have included; (a) the hypothetical consideration of whether the product would have been launched in the face of a potential damages claim based on the mandatory price drops flowing from a PBS listing; (b) when in fact the product would have been listed; (c) the total size of the market for the products in each month of the claim period; (d) the prices at which the products would have been sold by each market participant each month during the claim period; (e) the portion of the market that would have been captured by the generic; and (f) whether the originator would have launched its own generic or authorised a third-party to do so or taken other measures to protect its market.
In particular, the estimation of the precise level of discounting that would have occurred during the period of the injunction would be dependent on factors such as; (a) the number of biosimilar competitors in the market; (b) the timing of entry of those biosimilar competitors; (c) how Sanofi Australia might respond to any biosimilar competitors who enter the market including whether it would have launched its own second brand (or authorised another pharmaceutical company to do so), and its approach to price discounting (both in relation to any such second brand, and its existing products); (d) the effect on third parties who are involved in the supply chain; (e) the loss Alphapharm will suffer on the basis of the interruption of its preparations to educate prescribers about the benefits of the Semglee product; (f) any improvements in the manufacturing processes for any biosimilar drug (including in reducing cost of goods sold); and (g) the bargaining power of each customer negotiating competitive pricing with the pharmaceutical companies.
Many of these considerations may be seen to have played out in Sigma. In the judgment of Jagot J, her Honour said:
[1336]It is difficult to imagine that when Sundberg J and then I granted the interlocutory injunctions in 2009 we anticipated that if those injunctions turned out to be wrongly granted, the resulting exercise would bear any resemblance to this one. Hindsight makes one thing certain. Knowing what has occurred, it could never have been concluded, for example, that insofar as relevant to the balance of convenience it would be easier for the generics to prove their loss if the interlocutory injunctions were wrongly granted than for Wyeth to prove its loss if the interlocutory injunctions were withheld and the method patent was valid.
I accept, as Sanofi submits, that complications may arise within the insulin glargine market if other non-infringing products are launched. However, in my view if such an event occurs before the question of final relief is determined, then the effects of that on market share can be assessed against a background of comparative figures, starting with the status quo as at the time of the launch. In any event, the launch of other non-infringing products would be just as much if not more of a complicating factor in the assessment of Alphapharm’s claim pursuant to an undertaking as to damages as it would be in the assessment of any loss suffered by Sanofi.
In this regard there is no dispute that sales of goods listed on the PBS Schedule are highly regulated. The mandatory price disclosure process ensures that sales of all such insulin glargine products are well recorded. Alphapharm has stated that if allowed to enter the market it will keep detailed records of its Semglee sales including records of its agreements with its customers; invoices and order forms; and records of its sales revenue, volume sold and the kind and value of incentives given. Furthermore, there is no suggestion that Alphapharm will not be able to meet any successful claim for damages. If it transpires that the effects of the mandatory price reductions and any price erosion are not reversed by the Minister upon the grant of a final injunction, then Alphapharm adopts the risk of liability for damages flowing from any conduct found to be infringing.
I turn now to consider the consequences to Alphapharm and third parties in the event that an interlocutory injunction is granted.
In addition to the complications caused by the necessarily hypothetical nature of calculating financial loss to Alphapharm that I discuss above, several factors indicate that the harm suffered by it in the event that an injunction is granted may be significant and not readily compensable.
First, a significant complicating factor for the calculation of harm to Alphapharm in the present case arises in the context of Sanofi’s launch in April 2018 of Toujeo. This is a product that, on the evidence adduced by Sanofi, which I accept for present purposes, is in a number of respects superior to insulin glargine U100 products, including the Lantus Products and the Semglee product. In this regard the evidence of Ms Bramich is that Toujeo is a second generation insulin product with a long-acting, higher concentration formulation which reduces the insulin release rate and provides more gradual dissolution and prolonged insulin activity compared to insulin glargine U100 products. This provides clinical advantages over those products, to which I have referred in paragraphs [16] and [144] above.
The evidence permits the conclusion that Toujeo is being promoted by Sanofi as a superior replacement for Lantus SoloStar which has for several years been the dominant insulin glargine product in the market. Confidential information provided from an organisation called “IQVIA”, a distributor of market information relating to the pharmaceutical and health industry, indicates that Sanofi actively promotes these advantages of Toujeo over Lantus Products.
The confidential sales and market figures indicate that at present Lantus SoloStar occupies a dominant position for insulin glargine. Sanofi points to the market figures which demonstrate that Lantus, which currently has 200,000 patients prescribed, is still the substantial market leader in comparison to the 11,000 patients prescribed Toujeo. That said, Alphapharm points out that Toujeo has only been on the market for approximately 7 months and any injunction would provide Sanofi with more time in which to increase the market share for Toujeo, in place of Lantus. Ms Mollica observes in evidence to which Sanofi did not respond, that there is a low prospect that a doctor who commences a patient on Toujeo would be switched to Lantus. The evidence permits the conclusion that it is likely that the market for Lantus will progressively be taken over by Toujeo and that patients who move from Lantus to Toujeo are unlikely to turn either to Lantus or to the Semglee product.
Depending on the speed of the success of Toujeo, the market for the Semglee product could diminish or even disappear before any interlocutory injunction is lifted after a final hearing, especially if (as is not unusual in these cases) an appeal is involved. A significant aspect of the subject matter of the proceedings – being Alphapharm’s ability to sell the Semglee product including in competition with the Lantus SoloStar – will be removed before the litigation is resolved. It is not possible to say, on the basis of the present evidence, how likely this could be other than to observe that it is a real possibility.
Secondly, Alphapharm contends that it will be deprived of the benefit of the “first mover advantage” if it is restrained from launching the Semglee product. Ms Mollica gives evidence that the launch of a first biosimilar drug to compete with an established reference biologic is likely to affect both volume and price in the market for that product and that the first biosimilar product is likely to enjoy a significant, lasting and unique commercial advantage. This advantage is, Ms Mollica contends, reflected in a period of exclusivity as a biosimilar and, in this respect, timing is critical, the first few months being of prime importance. Ms Mollica gives the opinion that a first biosimilar will generally secure a substantial market share and profit advantage over later biosimilar entrants because; (a) when the first biosimilar becomes available, most pharmacists will order stock of that product because it is their first opportunity to provide patients with an alternative that is more profitable for the pharmacist; (b) many pharmacists will likely chose to carry only one biosimilar product; (c) unlike generic small molecules, the first mover in the biosimilar market is more likely to retain substantial market share once patients have switched because the second biosimilar supplier will need to convince and educate prescribers and pharmacists about the benefits of its product over the first biosimilar and the reference biologic and convince them to switch again. Sanofi disputes that there is a first mover advantage and responds to examples given by Ms Mollica of cases where Alphapharm obtained market share advantages as a result of being the first mover with different examples suggesting that Ms Mollica’s examples are unreliable.
The evidence available to me does not permit firm conclusions in relation to first mover advantage in terms of likely market share or the duration of any such advantage. As I noted in Hoffman at [204], logic suggests that typically there will be some advantage but the variables make it difficult to assess. As discussed above, there is evidence that Eli Lilly has obtained ARTG listing for its own insulin glargine U100 product. That listing has been in place since November 2014 and it received a positive PBAC recommendation in March 2015. Although Eli Lilly has launched this product elsewhere in the world, it has not done so in Australia. It is not known whether the Eli Lilly devices fall within the scope of the claims of the Patent. The evidence does not permit any more than the conclusion that there is a possibility that that product may be launched in Australia, but Alphapharm has itself increased the risk that it will lose a first mover advantage by delaying its launch until 1 April 2019.
Nevertheless, on the basis of the evidence now available, I consider that it is more likely than not that, if not restrained, the launch of the Semglee product in April 2019 will be the first biosimilar in the market for insulin glargine. Alphapharm is likely to accrue advantages by doing so, although the extent and duration of those advantages are not possible to predict in advance. As I noted in Hoffman at [204], this plays to the benefit of Alphapharm in the calculation of where the balance of convenience lies. The difficulty in knowing precisely what advantage Alphapharm would have as a first mover and the contest between the parties in this respect further emphasises the difficulty of assessing any claim pursuant to an undertaking as to damages.
Thirdly, in addition to the lost benefit of sales that Alphapharm may suffer, which Alphapharm contends would be difficult to quantify, it submits that as a relatively new player in the biosimilar market in Australia, it will also suffer reputational damage if its first mover advantage is lost or diluted which it asserts will significantly adversely affect its ability to launch other biosimilars should it choose to do so in the future. It notes that statements have already been made to the market in relation to Alphapharm’s ARTG approval. This includes a press release in April 2018 in which Rajiv Malik (current president of Alphapharm's parent company, Mylan) announced the development of the Semglee product in the Australian market. However, Alphapharm operates in a sophisticated market where the cut and thrust of patent rights are frequently observed. On the basis of the evidence, I do not attribute any significant weight to this factor. It is most likely that customers will be disappointed if Alphapharm is delayed in delivering the Semglee product. Reputational harm, however, seems unlikely.
A further factor to consider is the question of third parties affected by the grant of any interlocutory injunction. In this regard I note that the Commonwealth has commenced a claim on the undertaking as to damages in relation to several drugs including venlafaxine (which was the subject of the decision in Sigma), clopidogrel and rosuvastatin (the latter two are yet to be determined); Hoffman at [185]. In Sigma the Commonwealth settled its claim after the hearing; Sigma at [3]. Nevertheless, harm to the Commonwealth as a party that is responsible for making payments pursuant to the PBS is to be considered. Given the observations made by Jagot J in Sigma (which I consider would also have applied in relation to the claim by the Commonwealth had it proceeded), in my view the challenges likely to be associated in calculating the loss to the Commonwealth, in the event that that an injunction is allowed but subsequently found to be wrongly made, is a further factor to take into account, although it is on the low end of the spectrum.
Finally, Alphapharm submits that the unresolved application to amend the Patent brought by Sanofi Deutschland to amend the claims of the Patent provides a further basis upon which the Court should decline to grant any interlocutory injunction.
At the same time that infringement proceedings were commenced against Alphapharm in August 2018, Sanofi Deutschland filed an interlocutory application in the present proceeding seeking orders pursuant to s 105 of the Act that claims 1, 5, 7, 15 and 16 of the Patent be amended. The amendment application has not been progressed since that date.
For present purposes it is only necessary to refer to the proposed amendments to claim 1, which are:
1. A drug delivery device comprising:
a housing with a proximal end and a distal end,
a cartridge adapted to accommodate a drug,
a cartridge retaining member adapted to retain the cartridge, the cartridge
retaining member being secured to the housing, wherein
a spring washer is arranged within the housing so as to exert a force on the cartridge and to secure the cartridge against movement with respect to the cartridge retaining member, the spring washer being arranged so as to abut the cartridge on a side of the cartridge that faces the proximal end of the housing,
wherein a sleeve member is fixed to the housing characterized in that the spring washer is fixed to the sleeve member on an outer surface of the sleeve member, wherein the spring washer is fixed to the sleeve member by fixing elements of the spring washer and wherein the fixing elements extend in an axial direction.
The material amendment is the addition of an integer in the form of a sleeve member. This will necessarily have the effect of narrowing the scope of the monopoly claimed. The evidence of Ms Taliadoros indicates that these amendments are the same in form as those proposed to an equivalent claim in the EU Patent. The claims of the EU patent were amended following opposition proceedings commenced in May 2013 in which the EPO determined (in November 2015) that the relevant original claims were invalid for want of novelty in light of Schofield and a German equivalent to Burren. A subsequent auxiliary request to amend the European equivalent claims to their current form was allowed by the EPO in January 2016. The EPO considered that those amendments met the patentability requirements of the European Patent Convention, and in particular that the amended claims were novel and inventive over the prior art. In March 2016, Sanofi Deutschland appealed the EPO’s decision, contending inter alia that the original claims of the European equivalent should be maintained. The hearing of that appeal is yet to be set. In early to mid 2018, Sanofi Deutschland also commenced proceedings against various companies in France and Germany based on the amended claims of the EU Patent.
Alphapharm contends that Sanofi’s amendment application gives rise to a substantial risk that the foundation of the claim for interlocutory relief, namely the prima facie case of infringement by reference to the claims currently in force, will not be the subject of the ultimate trial in this proceeding, which it alleges is inconsistent with the requirement to establish a prima facie case in the sense described in Beecham at 622-623. This is because the asserted claims will no longer exist and therefore will not provide the basis for any final relief. In this regard, Alphapharm relies on the United Kingdom decision of Molnlycke AB v Procter & Gamble Limited (No 2) [1990] RPC 487. It submits that the amendment application demonstrates that it is the intention of Sanofi Deutschland not to proceed with the claims in their unamended form with the result that it creates ambiguity as to the final form of the Patent. It also contends that it creates intricacies and uncertainty in relation to the ability of Alphapharm to claim on the undertaking as to damages, because if the claims are amended before final hearing, the validity of the unamended claims may never be tested, and Alphapharm would not be able to establish its claim.
Sanofi does not accept these concerns. It emphasises that a plaintiff seeking an interlocutory injunction must show at least a probability that it will succeed in establishing its right to final relief; Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199 at [11]. As the injunction sought is referable to the Semglee product, rather than infringement of particular claims, Sanofi submits that the injunction can be sustained at final hearing and, therefore, whether Sanofi succeeds at final hearing on the amended or unamended claims is irrelevant provided that there is a basis for sustaining final relief at the end of the day. Further, Sanofi submits that the proposed amendments provide additional comfort because the amendments are, on their face, narrowing the scope of the claims which could only improve the validity position at final hearing, and because, in their independent expert’s view, the Semglee product will still infringe the narrower claims. That of course, provides no “comfort” in a legal sense, because, as Sanofi accepts, the application for interlocutory relief is to be determined having regard to the scope of Sanofi’s present monopoly rights as conferred by the Patent, rather than potential rights in the event that it prosecutes its amendment application to conclusion and is permitted to amend; see Interpharma at [33].
In the alternative, Sanofi posits possible solutions, namely:
(1)Alphapharm could make a claim on the undertaking as to damages in due course if it wishes to contend that the fact that the unamended claims were invalid meant the interlocutory injunction was wrongly granted, which could be considered by the Court at that stage if the Court considered it a legitimate argument.
(2)The grant of the interlocutory relief could be made conditional on the amendment application being dealt with at the final hearing, which would enable the unamended claims to remain in place and their validity to be determined.
(3)The grant of the interlocutory relief could be made conditional on the unamended version of claim 1 being retained, with the addition of a further dependent claim having the additional feature sought by the amendment application, so as to enable Alphapharm to test the validity of the unamended claim at final hearing.
(4)That the interlocutory injunction orders be revisited upon the granting of the amendment application.
It is not necessary for me to resolve these matters in light of the conclusion that I have reached that the interlocutory injunction be refused. However, in my view, the present case is distinguishable from Molnlycke where there was an unequivocal abandonment on the part of the applicant for interlocutory relief of the claims in their unamended form; Molnlycke at 491. Sanofi does not abandon its present claims. Furthermore, one or other of options (2) – (4) could provide solutions to the question of the entitlement of Alphapharm to relief on the basis of its undertaking as to damages.
5. CONCLUSION AND DISPOSITION
As often is the case in such matters, the balance of convenience is quite evenly balanced. The factors raised by Sanofi indicate that there will be considerable complexity in the calculation of its loss, in the event that an interim injunction is refused. However, the factors that I have identified in relation to the claim on the undertaking as to damages in the event that an interlocutory injunction is granted lead me to the conclusion that there are aspects of harm that Alphapharm is likely to suffer that will not be recompensed. In relative terms the harm suffered by Alphapharm should an injunction be granted will be significant and less readily compensated by an award of damages than for Sanofi, if an injunction is not granted. Furthermore, having regard to the relative complexities between the two, I consider that the calculation of loss likely to be suffered by Alphapharm having regard to a hypothetical launch is likely to be more difficult as a vehicle for recompense than the calculation of loss for Sanofi, even taking into account the consequential effects of price drops that arise because Semglee is listed on the PBS Schedule and the uncertainties associated with future market conditions.
To these considerations I add my conclusions going to the weakness of Sanofi’s prima facie case, to which I have referred in Section 3. Taken together, they lead me to the firm conclusion that there is insufficient likelihood of success, in all of the circumstances including the matters to which I have had in relation to the balance of convenience, to justify the grant of the relief that Sanofi seeks. Accordingly, the interlocutory application must be dismissed.
I certify that the preceding one hundred and eighty-nine (189) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Burley. Associate:
Dated: 19 December 2018
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