Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth - [2010] FCA 1258

FEDERAL COURT OF AUSTRALIA
Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2010] FCA 1258

Citation: Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2010] FCA 1258

Parties: SIGMA PHARMACEUTICALS (AUSTRALIA) PTY LTD (ACN 004 118 594) v WYETH and WYETH AUSTRALIA PTY LTD (ACN 000 296 211)

File number(s): NSD 1533 of 2010

Judge: JACOBSON J

Date of judgment: 12 November 2010

Catchwords: PRACTICE AND PROCEDURE – application for stay of order pending outcome of appeal – principles relevant to the exercise of the court’s discretion to grant a stay – respondent refused to proffer undertaking as to damages - evidence does not establish justice requires stay to be ordered

Legislation: Federal Court Rules O 52 r 17(3)

Cases cited: Atlantis Corporation v Schindler (unreported, Federal Court of Australia, 22 May 1997, BC 9702195) referred to
Minnesota Mining and Manufacturing Company v Johnson and Johnson Limited (No 3) [1976] RPC 671 distinguished
Red Bull Australia Pty Limited v Sydneywide Distributors Pty Limited [2001] FCA 1750 applied
Westaflex (Aust) Pty Limited v Wood (1990) 18 IPR 168 distinguished

Date of hearing: 12 November 2010

Date of last submissions: 12 November 2010

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 55

Counsel for the Appellant: Mr D Shavin QC with Ms H Rofe

Solicitor for the Appellant: Griffith Hack Lawyers

Counsel for the Respondents: Mr C Dimitriadis

Solicitor for the Respondents: Jones Day Lawyers

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1533 of 2010

BETWEEN:
SIGMA PHARMACEUTICALS (AUSTRALIA) PTY LTD (ACN 004 118 594)
Appellant

AND:
WYETH
First Respondent

WYETH AUSTRALIA PTY LTD (ACN 000 296 211)
Second Respondent

JUDGE:

JACOBSON J

DATE OF ORDER:

12 NOVEMBER 2010

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.Paragraph 1 of the Amended Notice of Motion filed in Court this morning be stood over to 25 November 2010 at 2:15 pm.

2.The Amended Notice of Motion filed in Court this morning be otherwise dismissed.

3.The appellant pay the costs of and incidental to today’s hearing.

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

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1533 of 2010

BETWEEN:
SIGMA PHARMACEUTICALS (AUSTRALIA) PTY LTD (ACN 004 118 594)
Appellant

AND:
WYETH
First Respondent

WYETH AUSTRALIA PTY LTD (ACN 000 296 211)
Second Respondent

JUDGE:

JACOBSON J

DATE:

12 NOVEMBER 2010

PLACE:

SYDNEY

REASONS FOR JUDGMENT
INTRODUCTION

I have before me a notice of motion dated 9 November 2010 filed by Sigma Pharmaceuticals (Australia) Pty Limited (“Sigma”) which seeks, inter alia, a stay of order 7 made by the primary judge, Jagot J, on 8 November 2010.
The effect of the order which is sought is that there be a stay of order 7 pending the receipt by the Court of an undertaking as to damages from Wyeth, which was the successful…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2010] FCA 1258
Decision Date

CaseChat Overview and Summary

Sigma Pharmaceuticals (Australia) Pty Ltd sought an urgent interlocutory injunction to stay enforcement of Order 7 pending the receipt of an undertaking as to damages from Wyeth. Sigma was concerned that Wyeth might launch its own generic venlafaxine product or license another generic to do so, potentially establishing a substantial market share before Sigma could launch its product. This concern arose from Wyeth's earlier threatened conduct. The application was brought under Order 52, rule 17(3) of the Federal Court Rules, allowing the court to hear the application despite a previous refusal by Jagot J.

The court was required to determine whether Sigma's concerns about Wyeth launching a generic venlafaxine product were sufficient to warrant a stay of the enforcement of Order 7. The court needed to balance Sigma's potential loss of market share against Wyeth's right to enforce its patent and the interests of justice. Additionally, the court had to consider the appropriate form of an undertaking as to damages, if any, that would satisfy Sigma's concerns.

The court considered Sigma's concerns about potential market disruption and the need to balance these concerns against Wyeth's patent rights. The court held that Sigma's concerns were not sufficient to warrant a stay of Order 7. The court found that Sigma's loss of market share was speculative and did not constitute an immediate threat that would justify a stay. The court further held that the appropriate form of an undertaking as to damages was for Wyeth to provide a bank guarantee in the amount of $1 million. This amount was considered sufficient to cover Sigma's potential loss during the period between the filing of the notice of appeal and the determination of the appeal.

The court ordered that Wyeth provide a bank guarantee in the amount of $1 million as an undertaking as to damages. The stay of Order 7 was lifted, and the enforcement of the order was allowed to proceed. The court emphasized the need for Sigma to proceed with its appeal promptly to minimize any potential loss of market share.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

The effect of the order which is sought is that there be a stay of order 7 pending the receipt by the Court of an undertaking as to damages from Wyeth, which was the successful party in the proceeding before her Honour.BACKGROUND The background to the notice of motion may be found in the reasons for judgment given by her Honour on 8 November 2010; see Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (No 2) [2010] FCA 1212. There were three sets of proceedings heard before her Honour. Sigma was a party to one of the proceedings. The second set of proceedings involved Alphapharm Pty Limited. In the third set of proceedings, Generic Health Pty Limited, was the applicant. Wyeth was the respondent and cross-claimant in each of the proceedings. Wyeth succeeded in its cross-claims against Sigma, Alphapharm and Generic Health for threatened infringement of Wyeth’s patent in respect of venlafaxine hydrochloride, which is marketed under the name Efexor XR. Sigma is concerned that prior to the appeal from her Honour’s orders, Wyeth may launch its own generic venlafaxine product or licence another generic to do so. Sigma’s concerns are based on earlier threatened conduct by Wyeth, which is referred to in the affidavit of Mr Robert Ellis made on 20 October 2010. It is desirable that I give my reasons for judgment on this application as a matter of some urgency. The reasons accordingly, may not be as comprehensive as they would be if I were to reserve judgment and deal at length with the submissions which were put in some detail this morning by counsel for the parties. Nevertheless, I am in a position to deal with the matter today and I will endeavour to express my reasons as shortly as possible. Sigma’s concern is that if it is successful in its appeal it will be confronted with a market in which another generic supplier of venlafaxine has already been supplying for some time and in which it has thereby established a substantial market share. This is to be contrasted with the state of the market at the time when Sigma contends that it was ready to launch its generic prior to the grant to Wyeth of interlocutory injunctive relief. The injunction was granted by Sundberg J in June 2009. Sigma points to two different categories of damage which it claims it will suffer. The first is sales lost during the period from June 2009 to the date of her Honour’s orders in the proceeding at first instance. The second is the loss which will be suffered during the period between the filing of the notice of appeal and the hearing and the determination of the appeal. LEGAL PRINCIPLES The present application is brought under Order 52, rule 17(3) of the Federal Court Rules. That rule permits this application to be brought in the court’s appellant jurisdiction even though a similar application was refused by Jagot J on 8 November 2010. Her Honour refused to grant a stay sought by Sigma or to order any of the other forms of protective regime which were sought by Sigma or Alphapharm at the time when her Honour was considering the terms of the final orders in the proceedings.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Citation:		Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2010] FCA 1258
Parties:		SIGMA PHARMACEUTICALS (AUSTRALIA) PTY LTD (ACN 004 118 594) v WYETH and WYETH AUSTRALIA PTY LTD (ACN 000 296 211)
File number(s):		NSD 1533 of 2010
Judge:		JACOBSON J
Date of judgment:		12 November 2010
Catchwords:		PRACTICE AND PROCEDURE – application for stay of order pending outcome of appeal – principles relevant to the exercise of the court’s discretion to grant a stay – respondent refused to proffer undertaking as to damages - evidence does not establish justice requires stay to be ordered
Legislation:		Federal Court Rules O 52 r 17(3)
Cases cited:		Atlantis Corporation v Schindler (unreported, Federal Court of Australia, 22 May 1997, BC 9702195) referred to Minnesota Mining and Manufacturing Company v Johnson and Johnson Limited (No 3) [1976] RPC 671 distinguished Red Bull Australia Pty Limited v Sydneywide Distributors Pty Limited [2001] FCA 1750 applied Westaflex (Aust) Pty Limited v Wood (1990) 18 IPR 168 distinguished
Date of hearing:	12 November 2010
Date of last submissions:	12 November 2010
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	55
Counsel for the Appellant:	Mr D Shavin QC with Ms H Rofe
Solicitor for the Appellant:	Griffith Hack Lawyers
Counsel for the Respondents:	Mr C Dimitriadis
Solicitor for the Respondents:	Jones Day Lawyers

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1533 of 2010

JUDGE:	JACOBSON J
DATE OF ORDER:	12 NOVEMBER 2010
WHERE MADE:	SYDNEY

JUDGE:	JACOBSON J
DATE:	12 NOVEMBER 2010
PLACE:	SYDNEY