Sanofi-Aventis & Ors v Apotex Pty Ltd

[2015] HCATrans 300

[2015] HCATrans 300

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S326 of 2014

B e t w e e n -

SANOFI‑AVENTIS

First Applicant

SANOFI‑AVENTIS US LLC

Second Applicant

BRISTOL‑MYERS SQUIBB INVESTCO LLC

Third Applicant

and

APOTEX PTY LTD ACN 096 916 148

Respondent

Application for special leave to appeal

KIEFEL J
GAGELER J

TRANSCRIPT OF PROCEEDINGS

FROM SYDNEY BY VIDEO LINK TO CANBERRA

ON FRIDAY, 13 NOVEMBER 2015, AT 10.27 AM

Copyright in the High Court of Australia

MR B.W. WALKER, SC:   May it please the Court, I appear in Canberra with my learned friends, MR S.M. NIXON and MR S. FITZPATRICK, for the applicants.  (instructed by Jones Day)

MR D.C. CATTERNS, QC:   May it please the Court, I appear with MS J.M. BEAUMONT for the respondent.  (instructed by Ashurst Australia)

MR J.T. GLEESON, SC, Solicitor‑General of the Commonwealth:   May it please the Court, I appear with MS F.T. ROUGHLEY, seeking leave to intervene on behalf of the Commonwealth of Australia.  (instructed by Corrs Chambers Westgarth Lawyers)

KIEFEL J:   As I understand it, there is no objection to the Commonwealth having leave to intervene in this matter.  Is that correct, Mr Walker?

MR WALKER:   That is correct, your Honour.

KIEFEL J:   Mr Catterns?

MR CATTERNS:   No, your Honour.

KIEFEL J:   Yes, there will be leave to intervene.

MR WALKER:   May it please the Court.

KIEFEL J:   Yes, Mr Walker.

MR WALKER:   Thank you, your Honour.  Your Honours, this is, on any view of it, we accept – we hope you see the recognition in our written submissions - a remarkable case.  It is remarkable for obviously the circumstance that this is an application by us alternatively to reopen or to be heard a second time to obtain special leave to appeal. 

It is also remarkable, in our submission, for the criticism that an enlarged Full Court in the Federal Court in the AstraZeneca decision, which has since been to this Court and back, expressed in relation to the Full Court decision from which we seek special leave to appeal.  I will come briefly to elaborate that in a moment.

But, finally, it is particularly remarkable because, notwithstanding the very considerable lapse of time - indeed, as your Honours have seen, the patent has expired – notwithstanding that very considerable effluxion of time, these are proceedings which in every real sense are continuing and pending, and that which is impending is itself a remarkable application.  When I say remarkable, I mean it quite literally.  It is a tremendously large claim, at least so far as it is mooted on behalf of the Commonwealth, approaching apparently half a billion dollars by reason of the application of the usual undertaking as to damages.

Now, of course it is true it is in the nature of the usual undertaking given in the humblest equity suit that persons not parties to the litigation may later come in order to be vindicated so as to allocate the risk of the loss that they have borne by reason of an injunction on the unsuccessful plaintiff, and there is no question about the fact that that potential was obviously well and truly understood when the decisions were made to seek injunctions.

But, in our submission, at the bottom of the most remarkable aspect of this case, this application as we present it, is this fact - in any other litigation concerning want of inventive step in relation to the 1952 Act, mediated as it is through the 1990 Act, there will be full scope in any other proceeding for full play in argument in consideration by a Bench, whether it be first instance or on appeal, of the implications of the very serious statements in a most, in our submission, impressive piece of reasoning by which the AstraZeneca Full Bench has cast real doubt on a fundamental issue in the Sanofi Full Bench.

KIEFEL J:   You have elided a number of factors there, I think.  If one looks to the first factor you identified for the basis for this being an exceptional case to warrant leave to effectively reopen the former refusal of special leave, the fact that the Commonwealth is now suing on the undertaking would not alter the prospects of success on the appeal, would it?  Would not the factors that you have to identify to bring this into - this being in the nature of an exceptional case because of what has occurred since, would not those factors have to show that there would be a different outcome than was available when special leave was first argued?

MR WALKER:   Yes, is the short answer.  First of all, the fact that the Commonwealth brings a claim on the undertaking is of course of no moment in relation to prospects, that is, an appropriate showing at a special leave level of the possibility of error.  I accept that; that is true.  It is of course the combination of all the factors that I have referred to that combines, in our submission, to justify a decision of ‑ ‑ ‑

KIEFEL J:   Well, speaking for myself, I do not see how the Commonwealth’s actions bear upon this matter at all.

MR WALKER:   Your Honour, it is for this reason.  It means the proceeding is still current, it is still pending.  This is not an application to open up completely finished business, business that could be regarded, as would happen in practically every case, as complete upon special leave being refused.

KIEFEL J:   What you are really saying is that it now has a very strong and even more important practical result for you.

MR WALKER:   I am certainly saying that, your Honour.  I cannot shrink from that.  Would we be here but for the undertaking application?  It is obviously to be doubted.  It needs to be something that justifies an exceptional application and, yes, the enormity of the Commonwealth’s claim is obviously something that focuses our attention on the possibility of seeking this highly exceptional relief.

GAGELER J:   So, Mr Walker, what is it that justifies the grant of special leave in these extraordinary circumstances?  Exactly what is it?

MR WALKER:   I suppose the neatest way of putting it is what is reported in 226 FCR, particularly in the Full Court’s conclusion with all its surrounding reasoning, in paragraph 213.  Now, it is true that once or twice, thus, for example, in paragraph 217, as also in paragraph 192, that their Honours in AstraZeneca point out that this can be said as to the difference between the cases that they are, as it were, under different statutes.  But the link between the statutes cannot be gainsaid.  I will come back to that in just a moment. 

But in answer to Justice Gageler’s question, quite precisely it is that since the unsuccessful application for special leave, there has been in paragraph 213 a very clear statement – I submit, respectfully, well supported by reasoning – showing a conceptual error with profound importance in this area of the law, in the Full Court in Sanofi.

GAGELER J:   What about paragraph 217, Mr Walker?

MR WALKER:   That is one of the ones I drew to attention where their Honours might be thought, if I can put it this way with some courtesy, to go no further than is necessary for the decision of the case before their Honours.  They were not sitting obviously on a mythical appeal from their colleagues on the Full Bench in Sanofi.  However, I do draw to attention – I hope not too heavy handed – to the language of 217:

It is not strictly necessary to express a view . . . Whatever may be the correct position under the 1952 Act, the position under the Act is, in our view, as previously described.

Now, that takes us back to 213, where it can be seen that this notion of the “essentially objective comparison” is that which attracts the strictures which are really unrestrained and fully explained by the latter and enlarged Full Bench against the Full Bench in this case.

KIEFEL J:   But what the Full Court has done effectively by those references in 213 and 217 is to identify an issue which might fall to be resolved at some further point, but it has not created, has it, a clash between it and the Full Court in the Sanofi‑Aventis matter – in this matter?

MR WALKER:   Can I take that in two parts, please, your Honour?  Yes, it is of course true all counsel interested in special leave, as it were, file away such propositions in appellate judgments, be they in this Court or intermediate courts.  Yes, that is grist to the mill for a future point to be taken in proceedings not yet commenced by parties not yet in dispute.

That does not mean it does not presently also present, indeed, for very similar reasons, a problem in the jurisprudence.  Let me explain.  This is the second part of my answer.  Paragraphs 192 and 217 are certainly not sufficient to enable, as it were, counsel in the position of a contradictor answering an argument in some future proceeding by saying, “No, the Sanofi decision remains good law with no reason to doubt it because see how their Honours in AstraZeneca spoke in 192 and 217.  They weren’t overruling”, et cetera, et cetera, to which ‑ ‑ ‑

KIEFEL J:   Was the starting point issue raised on the application for special leave which was refused?

MR WALKER:   In essence, yes, your Honour.  Now, that, I concede, might be against me today, that is, we are coming back for a second go, not mind you, that better second thoughts on our part would ever justify a fresh special leave application.  What justifies the extraordinary second special leave application is the fact that one could not avoid in a responsible deployment of the jurisprudence in some other case, not this case, one could not avoid considering the implications of the reasoning that culminates in paragraph 213 in AstraZeneca, for the continued cogency of the reasoning of which decided this point in Sanofi.

Now, when I say it decided this point, that is because on any view of it, on any view of it, the contention - this is recorded in the Sanofi Full Court reasons at paragraph 148 which is on application book pages 138 and 139 – on any view of it, there was an acceptance that the dispute, I will call it the doctrinal dispute about starting point, was critical.

You will see the passage in particular where their Honours record that Apotex accepts that if common general knowledge is the starting point, the claims are not obvious and your Honours appreciate by the references that you will find in the passages at 176 to 178, application book 146 to 147, particularly in…..the position taken in the Sanofi Full Court was, of course, contrary to the proposition that the common general knowledge was the starting point because without dispute, incontestably, the glycaemic mixture or the single enantiomer point were both not within common general knowledge and they were, and differently as between them, they were the starting point chosen by the Full Court.

Now, in our submission, once one accepts as must be so from a number utterances by Sir Keith Aickin, but particularly in the MMM Case, to which we have drawn attention, once one accepts that there is nothing in the verbal changes between the 1952 Act and the 1990 Act, both are talking relevantly about common general knowledge, then, in our submission, it is unavoidable that the jurisprudence which includes the enlarged Full Bench and the later Bench in AstraZeneca, casts great doubt, a considerable cloud on the continuing authority of Sanofi. 

Now, it is true that at first instance, stare decisis will no doubt have its effect but at a Full Court level, in other proceedings, there could and should be the orthodox investigation of where the matter stands and that means of course that the restraint exhibited in 192 and 217 in AstraZeneca will no longer be of any moment, jurisprudentially it is of no moment, with respect, because there is no distinction that is pointed up apart from the reference to the two different statutes, for the reasons we have just put.

The reference to the two different statutes says nothing about the applicability of the reasoning because the two different statutes are in pari materia by force of binding dicta in this Court in relation to the understanding of the common general knowledge as the appropriate starting point.

It is for those reasons, in our submission, that this is far more than simply wishing to revisit and get special leave from this Court to entertain argument on a point raised but not given special leave previously.  This is now in proceedings which are continuing as something which raises the presence of the spectacle I am about to describe.

As I say, in any other case where this jurisprudential problem arose there would be full liberty for a party interested to contest the authority of the Sanofi Full Bench to do so and by reference to the AstraZeneca Full Bench.  That was in order to get the right answer according to law which according to the latter Full Bench is to be found in their reasons and not, emphatically not, and for reasons of principle, not to be found in the Sanofi Full Bench. 

However, we, because this is continuing proceedings in the same piece of litigation, we are bound.  There has been an attempt, correctly repelled, in the undertaking proceedings, in the undertaking argument, for us, as it were, to invoke these latterly discovered doubts about the correctness of Sanofi in answer to the undertaking, repelled, as I say, because one cannot have within the same litigation proposition “X” and also proposition “Not X” as a matter of law.  We are bound as the most obvious and solid form of res judicata. 

If that…..this Court is contemplating if special leave not be granted here is that without any possibility ever of an appeal by us on this point because we will never be able to raise the point in this Court if we are not able to raise it at single instance in the undertaking proceedings that the enforcement of the undertaking will go off on a basis which is probably wrong in law. 

GAGELER J:   Probably wrong, Mr Walker?

MR WALKER:   We would say wrong, but we are bound at the moment by a decision in the case in the undertaking application we cannot say is wrong.  We can only say ‑ ‑ ‑

KIEFEL J:   But will not the issue that you identify actually be agitated in the undertaking proceedings and then be capable of consideration on appeal?

MR WALKER:   No.  Your Honour, I have answered no, perhaps not hastily, but I should have an alternative and the alternative is yes, we hope so but that is wishful thinking, we suspect.  I have just referred to an attempt being made to raise that contention in the undertaking application and having been rejected as well - or the pleading point on what I will call, loosely, res judicata bases.

KIEFEL J:   But the judge who was hearing the undertaking matter on the basis of what you have shown us in the paragraphs you have taken us to will not be bound by this later Full Court.  Will not the issue be at large?  If it is not at large, is it not then open to say as you have argued that there is an issue and, therefore, likelihood of your appeal is greater?

MR WALKER:   No, I think is the answer to all of that, your Honour.  We are not at liberty, it has been ruled, at first instance, in case management in the undertaking application, we are not at liberty to canvas the correctness of the Full Court’s decision.  It is the Full Court’s decision, of course, that produces the enforcement of the undertaking.  That means, of course, that we are not at liberty to say look at the later AstraZeneca decision.  It casts doubt on or shows that there is error in and it is the latter that matters for us, the Sanofi Full Court.  We are not allowed to do that. 

If we were allowed to do that, if we were allowed to say in the undertaking proceedings, “But, your Honour, there should be no enforcement of the undertaking because its premise is the overturning of an interlocutory injunction pursuant to an erroneous decision of the Full Court”, if we could do that then we would not be troubling your Honours.  That would be part and parcel of an application in due course if we were unsuccessful overall and only if we were unsuccessful overall in the undertaking proceeding.  If that was an end of it, then that would be an excellent reason for us not having made this application and your Honours refusing it. 

GAGELER J:   Mr Walker, the issue estoppel is nothing new.

MR WALKER:   No.

GAGELER J:   The issue estoppel is not something that has arisen since the previous determination that ‑ ‑ ‑

MR WALKER:   No, no, of course you are right.  It comes with the territory, it is de rigueur ‑ ‑ ‑

GAGELER J:   So, getting back to my original question, all that is new is the dicta of the Full Court of the Federal Court in the subsequent decision of AstraZeneca v Apotex.

MR WALKER:   That is all that is new jurisprudentially.  The other thing that is new and that is the pervasive circumstance that brings us here is that these proceedings are, unusually – I do not say wrongly, far from it – but unusually, they are still continuing.  So the rulings of the Full Court continue to govern.  As Justice Gageler points out, that is in the nature of things, that is not special to this case.  We accept that.  But if that be so, and we fear it is, then this is our only possibility of resisting the undertaking being enforced on the basis of an erroneous decision.  It could never come back to this Court. 

Now, it may be that following what Justice Kiefel has raised that we will give further consideration to possibilities that, at the moment, have been ruled unavailable to us.  That may lie in the future.  But, in our submission, by far the better view is – and for reasons that Justice Gageler has touched on – by far the better view is that it is absolutely routine, and not at all special or new in this case, let alone by reason of the AstraZeneca decision, that we are bound in the undertaking proceedings by the determination of all the material contentions and counter‑contentions involved in the litigation that had the interlocutory injunction in question. 

Now, your Honours, the enforcement of an undertaking as to damages is a critical attribute of the administration of justice.  There ought to be, in our submission, considerable delicacy about a procedure which presents such a clear prospect of the justice in question being more formal than substantive.  Of course, it answers entirely the requirements of formal justice that we have all the arguments that we have had up to and including the last special leave application.  There cannot be any complaint about that.

KIEFEL J:   Mr Walker, I see that your time is up.

MR WALKER:   If it please your Honour.

KIEFEL J:   Thank you.  We do not need to trouble the other parties and the intervener.

We do not consider that a sufficient basis has been shown for taking the exceptional step of granting special leave in the face of an earlier refusal.  Special leave is refused with costs.

MR GLEESON:   Would your Honours be able to make clear whether that costs order extends to our application in paragraph 35 of our written submissions, namely that it extends to the Commonwealth?  We would seek such an order in the particular circumstances of the case where it has been admitted by Mr Walker this morning the Commonwealth is the true target of the application and it was necessary for us to put evidentiary and argumentative material before the Court.

KIEFEL J:   Mr Walker, what do you say to the application of the Commonwealth?

MR WALKER:   As I apprehend it, your Honour, it is that the order for costs ‑ ‑ ‑

KIEFEL J:   Extend to the Commonwealth.

MR WALKER:   As intervener.

KIEFEL J:   Yes.

MR WALKER:   Yes.  I accept that this is not an intervention of what I will call a constitutional kind.  It is an intervention of a kind which is fairly, if cruelly, summarised by my friend, yes.

KIEFEL J:   Yes.  In that event, the order for costs will extend to the Commonwealth.

MR GLEESON:   May it please the Court.

KIEFEL J:   The Court will now adjourn to reconstitute. 

AT 10.52 AM THE MATTER WAS CONCLUDED