FEDERAL COURT OF AUSTRALIA

Bristol-Myers Squibb Company v Apotex Pty Ltd (No 6) [2013] FCA 1235

THE COURT ORDERS THAT:

1.    Order 1 made by Bennett J on 20 October 2009 be vacated.

2.    The respondent, whether by itself, its directors, officers, servants, agents or otherwise, be restrained from, without the authority of the second applicant, engaging in the following acts within the patent area (as that term is defined in the Patents Act 1990 (Cth) (the Act)) for the term of Patent No. 2002334413 (the patent):

(a)    offering to sell or otherwise dispose of the products known as APO-ARIPIPRAZOLE, APOTEX-ARIPIPRAZOLE, CHEMMART ARIPIPRAZOLE and TERRY WHITE CHEMISTS ARIPIPRAZOLE or any other pharmaceutical composition the active ingredient of which is Anhydrous Aripiprazole Crystals B claimed in claims 12, 13, 14, 16, 30, 31, 35, 36, 44, 111, 112, 119 and 123 of the patent (collectively, the Apotex products);

(b)    importing the Apotex products;

(c)    keeping the Apotex products for the purpose of doing any of the acts described in subparagraphs (a) to (b) above;

(d)    authorising other people to engage in any of the acts described in subparagraphs (a) to (c) above.

3.    The respondent’s cross-claim be dismissed, except in respect of claim 45 of the patent.

4.    Claim 45 of the patent be revoked.

5.    Subject to order 6 below, the first applicant be released from its obligation to provide security in accordance with order 3 made by Bennett J on 20 October 2009 and as increased by later orders of the Court.

6.    Upon the undertaking referred to in paragraph 11 below, order 5 be stayed:

(a)    initially for a period of 21 days from the date on which these orders are pronounced; and

(b)    if an appeal is lodged within that period, until further order.

7.    As between the first applicant and the respondent:

(a)    the respondent pay the first applicant’s costs of the cross-claim;

(b)    otherwise, the first applicant and the respondent bear their own costs of the proceeding.

8.    As between the second applicant and the respondent, the respondent pay the second applicant’s costs of the proceeding, other than in respect of the notice of motion dated 18 March 2010.

9.    To the extent necessary, leave be granted to the respondent to appeal against orders 2, 3, 7 and 8 above.

THE COURT NOTES THAT:

10.    The second applicant undertakes to serve forthwith on the Commissioner of Patents a copy of these orders pursuant to s 140 of the Act.

11.    The respondent undertakes to prosecute any appeal expeditiously.

12.    In the judgment of this Court in Bristol-Myers Squibb Company v Apotex Pty Ltd (No 2) [2010] FCA 901, the second applicant was ordered to pay the respondent’s costs of and incidental to the notice of motion to amend the patent filed by the second applicant on 18 March 2010.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    On 30 October 2013, I published my reasons for finding that the challenges by the respondent (Apotex) to the validity of certain claims of Patent No. 2002334413 (the patent) failed and that the case of the second applicant (Otsuka) on infringement, with respect to certain claims, succeeded: Bristol-Myers Squibb Company v Apotex Pty Ltd (No 5) [2013] FCA 1114 (the earlier reasons). At that time, I made orders that provided for the parties to propose orders reflecting the earlier reasons and to make submissions in respect thereof.

2    The parties have reached agreement on a number of the orders that should now be made. There are, however, two areas of disagreement. The first relates to whether the first applicant (BMS), whose case on infringement did not succeed (see [413]-[440] of the earlier reasons), should be released from the undertaking as to damages it gave when obtaining interlocutory injunctive relief against Apotex. The second relates to costs.

3    As to the first matter, BMS contends that an order releasing it from its undertaking should be made but stayed – initially for a period of 21 days from the date when the order is pronounced and then, if an appeal is filed by Apotex within that period, until the final determination of that appeal or further order. Apotex opposes that relief.

4    BMS’s submissions in support of that relief assume, but its proposed orders do not reflect, that the undertaking would only be released if, in the event that an appeal is filed and prosecuted, the appeal fails. Regardless of this, in my view, consistently with the decision in Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (No 3) [2011] FCAFC 165 at [10], the undertaking should be left in place to operate according to its terms.

5    As to the question of costs, the applicants seek an order that Apotex pay their costs of the proceeding other than, in the case of Otsuka, the costs of the notice of motion dated 18 March 2010 seeking amendment of the patent: see Bristol-Myers Squibb Co and Another v Apotex Pty Ltd (2010) 87 IPR 516. This is so, regardless of the finding that BMS had no entitlement to sue Apotex for infringement of the patent.

6    Apotex submits that costs should be awarded according to the following regime:

    Apotex should pay Otsuka’s costs of the proceeding from 4 December 2009 (when Otsuka was joined as an applicant to the proceeding) and BMS’s costs of the cross-claim.

    BMS should pay Apotex’s costs of the proceeding up to 4 December 2009 and bear its own costs of its claim for infringement, including its costs associated with the provision of security for its undertaking as to damages given on 20 October 2009.

7    As can be seen, there is agreement, at least, that Apotex should pay BMS’s costs of the cross-claim. The disagreement between the parties on costs relates to BMS’s lack of standing to sue for infringement, a matter that Apotex says it raised in correspondence on 21 August 2009 and pleaded on 27 November 2009.

8    The applicants submit that “the usual costs order against the respondent” should be made, for the following reasons. The applicants say that, at the time of filing the application for interlocutory injunctive relief on 2 October 2009, BMS was recorded as the exclusive licensee of the patent. BMS filed and served its evidence in support of the application on 14 October 2009. That evidence included the Restated Development and Commercialization Collaboration Agreement (see [416]-[422] of the earlier reasons) (the Agreement). The applicants submit that Apotex through its solicitors had access to the Agreement. They were able to provide advice on whether BMS was the exclusive licensee for the purposes of the Patents Act 1990 (Cth). Further, Apotex did not oppose the interlocutory injunctive relief that was granted.

9    In my view, it would be incongruous to award BMS all its costs of the proceeding when, in my view, it had no entitlement to commence or to prosecute its claims for infringement. However, it does not seem to me to accord with the justice of the case to require BMS to pay Apotex’s costs up to the time when Otsuka was joined as an applicant.

10    Although, on its own case, Apotex put BMS’s standing in issue by correspondence from 21 August 2009, and although Apotex’s solicitors had access to the Agreement, it did not oppose the granting of interlocutory injunctive relief at BMS’s suit, when plainly it could have done so on the basis that BMS had no standing to seek that relief. Perhaps Apotex did not take this course because, even at that time, Otsuka, as patentee, was already joined as a party to the proceeding, albeit as a respondent. Had there been resistance to the granting of interlocutory injunctive relief on the basis of BMS’s lack of standing, it is reasonable to infer that that resistance would have been met swiftly by Otsuka’s removal as a respondent and its joinder as an applicant for that relief. The lack of opposition to the granting of interlocutory injunctive relief on the basis of BMS’s lack of standing reflects what must have been Apotex’s acceptance that, for practical reasons, resisting interlocutory injunctive relief on the basis of BMS’s lack of standing would ultimately be of little utility.

11    In light of these realities, the appropriate orders for costs should be as follows. As between Otsuka and Apotex, Apotex should pay Otsuka’s costs, excluding the costs of the notice of motion dated 18 March 2010. As between BMS and Apotex, Apotex should pay BMS’s costs of the cross-claim. This is a matter on which those parties are agreed. Otherwise, as between themselves, BMS and Apotex should bear their own costs.

12    Subject to one further matter, I am otherwise satisfied that the proposed orders are satisfactory and should be made substantially as proposed. The further matter relates to a stay of the order proposed by the parties that the first applicant be released from its obligation to provide security for costs in accordance with an order made on 20 October 2009. The parties have proposed that, in the event that an appeal is filed by the respondent, the order granting the release should be stayed “until the final determination of that appeal, or further order”. In my view, the order granting the release should be stayed simply “until further order”. The terms of the stay proposed by the parties may well have unintended consequences. Those terms appear to assume, once again, that any appeal will fail. The parties’ respective positions will be protected by the variation I propose to make.

Associate:

Dated:    22 November 2013