FEDERAL COURT OF AUSTRALIA

Commonwealth of Australia v Sanofi (formerly Sanofi-Aventis) (No 2) [2017] FCA 711

ORDERS

THE COURT ORDERS THAT:

1.    By 4.00pm, 27 June 2017 the respondents are to serve on the applicant and also provide to the Associate to Nicholas J a revised version of MFI-1 that redacts only that material in respect of which a claim for legal professional privilege was pressed and upheld.

2.    The respondents pay the applicant’s costs of and incidental to the application for access to the documents marked MFI-1.

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

REASONS FOR JUDGMENT

NICHOLAS J:

Background

1    Before me is an application by the applicant (“the Commonwealth”) for access to documents (marked MFI-1) produced by the respondents (collectively “Sanofi”) pursuant to certain paragraphs of a notice to produce. At the time the documents were first produced there was a claim of legal professional privilege (“LPP”) made in respect of their entire contents. At the hearing of the application counsel for Sanofi indicated that the LPP claim was not pressed in relation to some of the material in MFI-1. The scope of the claim is now confined to certain parts of the documents that make up MFI-1 which were identified by counsel for Sanofi during the course of submissions by reference to another marked up version of the same documents in MFI-2. No party raised any objection to me inspecting the relevant documents.

2    The Commonwealth raises two points in answer to Sanofi’s LPP claim. First, it says that the evidence relied upon by Sanofi in support of its claim is insufficient to establish that the relevant documents constitute or record communications between lawyer and client for the dominant purpose of providing legal advice. Secondly, the Commonwealth says that if the documents were protected by LPP, then there has been implied waiver as a result of disclosures made by Sanofi at meetings attended by representatives of Sanofi-Aventis Australia Pty Ltd (“Sanofi Australia”) and the Commonwealth’s representatives that occurred on 21 April 2010.

The relevant principles

3    The relevant common law principles, which I will briefly summarise, are not in dispute.

4    First, LPP protects the confidentiality of certain communications made for the purpose of obtaining or providing legal advice from a qualified lawyer. The privilege can only arise if the relevant communication is confidential and made for the dominant purpose of obtaining or providing legal advice. It follows that a communication made for two purposes of equal or roughly the same weight will not have been made for the dominant purpose of providing legal advice. The question whether the dominant purpose requirement is satisfied in any particular case is a question of fact. The party asserting LPP has the onus of establishing the facts necessary to support a finding that the relevant communication was made for the dominant purpose of obtaining or providing legal advice.

5    Secondly, while the relevant communication must seek or provide “legal advice” if it is to qualify for protection, this expression is construed somewhat liberally. In AWB Ltd v Cole (2006) 152 FCR 382 at [100] Young J accepted that “legal advice is not confined to telling the client the law but includes professional legal advice as to what should prudently and sensibly be done in the relevant legal context.” Those words are drawn from the judgment of Taylor LJ in Balabel v Air-India [1988] Ch 317 at 330 whose judgment was also referred to by Allsop J (as the Chief Justice then was) in DSE (Holdings) Pty Ltd v InterTAN Inc (2003) 135 FCR 151. Allsop J said at [45]:

What legal advice is…goes beyond formal advice as to the law. This recognition does not see the privilege extend to pure commercial advice. In any given circumstance, however, it may be impossible to disentangle the lawyer’s views of the legal framework from other reasons that all go to make up the “advice as to what should prudently and sensibly be done in the relevant legal framework” …

6    Thirdly, an implied (or imputed) waiver of LPP may be found to have arisen where there has been a disclosure of information protected by LPP where the party in whose favour the privilege exists discloses such information in a manner that is inconsistent with the maintenance of that protection. It is the inconsistency in both disclosing confidential legal advice and maintaining a claim for LPP in such advice, informed by considerations of fairness, that may result in an implied waiver. As explained by Gleeson CJ, Gaudron, Gummow and Callinan JJ in Mann v Carnell (1999) 201 CLR 1 at [29]:

... What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.

7    Fourthly, the disclosure of the gist or substance of legal advice may give rise to an implied waiver of the whole of it. As Tamberlin J explained in Bennett v Chief Executive Officer of Australian Customs Service (2004) 140 FCR 101 at [13]:

Various expressions are used in the formulation of principles relating to waiver of legal professional privilege, such as references to “the substance”, “effect”, or “content” of the advice. The weight of the authorities, in my view, supports the conclusion that the disclosure of the conclusion reached in or course of action recommended by, an advice can amount to waiver of privilege in respect of the premises relating to the opinion which has been disclosed, notwithstanding that this reasoning is not disclosed. By way of illustration, if there is a disclosure that a client has been advised that interpretation “A” is preferable to interpretation “B” of a legislative provision, then even if there is no disclosure of the reasoning leading to that conclusion, the reasoning and content of the advice may be waived, including the factual premises and circumstances leading to that conclusion.

8    In Osland v Secretary,Department of Justice (2008) 234 CLR 275 Gleeson CJ, Gummow, Heydon and Kiefel JJ made clear at [44]-[49] that the question whether a limited disclosure of the existence and effect of legal advice in a given context is inconsistent with maintaining the privilege will depend upon the circumstances of the case and matters of fact and degree.

The evidence

9    The relevant evidence consists of two affidavits of Ms Rebecca Allsopp. She is a solicitor employed by Sanofi Australia and its chief legal officer. She has held a practicing certificate since 1992.

10    In her first affidavit Ms Allsopp says that it is her general practice to brief Sanofi Australia employees on legal issues orally, sometimes by reference to briefing materials such as PowerPoint presentations. In her second affidavit she refers to the documents in MFI-1. It is in the form of a bundle of documents divided into the following four sections:

    Tab 1: A PowerPoint presentation prepared by Mr Alan Brindell (then Director of Communications of Sanofi Australia) and Ms Allsopp to brief Mr Jez Moulding (then General Manager of Sanofi Australia) and Mr Paul Lindsay (then Director of Public Affairs of Sanofi Australia) on 29 March 2010. It is said to contain legal advice provided by Ms Allsopp to employees of Sanofi Australia including Mr Moulding and Mr Lindsay in relation to a meeting to be held 31 March 2010 with representatives of Medicines Australia, the representative body for originator pharmaceutical companies.

    Tab 2: A PowerPoint presentation prepared by employees of Sanofi Australia (including Ms Allsopp) for use at the meeting between representatives of Sanofi Australia and representatives of Medicines Australia to be held on 31 March 2010.

    Tabs 3 and 4: copies of email correspondence between Ms Allsopp and various other employees of Sanofi Australia in preparation for a meeting on 21 April 2010 with Mr Mark Butler MP, then Parliamentary Secretary for Health and Ageing.

11    According to Ms Allsopp’s first affidavit, the documents in MFI-1 “… are confidential documents that include material that was prepared by employees of Sanofi-Aventis Australia or lawyers for the dominant purpose of lawyers providing legal advice to Sanofi-Aventis Australia.”

12    A copy of a file note dated 21 April 2010 prepared by Ms Rowena Cowan (then Government Relations Manager of Sanofi Australia) is annexed to Ms Allsopp’s first affidavit. She says that it was prepared by Ms Cowan with contributions from Mr Lindsay and records what occurred:

    at a meeting held on 21 April 2010 between Mr Butler, a member of his staff, Dr Brendan Shaw (then Chief Executive of Medicines Australia), Mr Moulding, Mr Lindsay and Ms Cowan; and

    in a discussion between Mr Lindsay and Mr Rohan Hammett (then Head of the Therapeutic Goods Administration) later that day.

13    The heading to the file note refers to the meeting with Mr Butler and “Product Information Copyright”. It is apparent that the meeting was concerned with the potential use of copyright in Product Information documents (“PIs”) and Consumer Medicine Information documents (“CMIs”) by originator companies (including Sanofi Australia) to prevent or delay the supply of products by generic pharmaceutical suppliers in competition with the originator’s PBS listed product.

14    The file note makes a number of references to the Arava case. This would appear to refer to the case brought by Sanofi Australia against Apotex Pty Ltd (“Apotex”) in this Court in 2008 concerning the use of leflunomide in the treatment of psoriasis, which was ultimately the subject of the High Court’s decision in Apotex Pty Ltd v Sanofi Aventis Australia (2013) 253 CLR 284. It is apparent from other judgments in this Court that Apotex at one stage consented to an interlocutory injunction in that case restraining it from engaging in acts that were alleged to constitute an infringement of copyright in PIs or CMIs said to be owned by Sanofi Australia: see Sanofi Aventis Australia Pty Ltd v Apotex Pty Ltd [2010] FCA 601 at [1] and Sanofi Aventis Australia Pty Ltd v Apotex Pty Ltd (No. 3) (2011) 196 FCR 1 at [5].

15    The file note includes the following material relating to the meeting with Mr Butler:

Brendan Shaw

•    said he and MA knew nothing about the issue but had undertaken to go away and see what they could find out about any similar cases in other jurisdictions.

•    said he had checked with US, UK and international pharma associations, most of whom were completely unfamiliar with the issue. The only other case he could find was one ten years ago in the US, where a court found that PI copyright would not stop entry of a generic. He offered to keep looking for cases.

Mark Butler

•    said GMIA had brought it to his attention and raised copyright challenges to PI as a delay to generic entry. He said we would like more information about the US court case referred to by Brendan and the reasons behind that decision.

•    there are a range of hoops for generics to through to get to market and he does not want copyright of PIs to be an issue. He said he wants PIs to be identical and he will take action if copyright is a public policy issue.

Jez Moulding

•    outlined background to case giving history since 2008, emphasising that it is both patent and copyright and outlining issues involved.

•    made clear that Apotex agreed to the injunction, that they have since amended their PI (which now goes to the TGA) and that we estimate that such a process only takes two weeks and could have been done at any time. Also emphasised that case is not public.

•    outlined legal advice that copyright alone would be unlikely to delay generic entry and the unusual circumstances in this case which gave us grounds for asserting copyright.

•    also gave Clopidogrel example of more valuable product where we have not pursued copyright.

Mark Butler

•    said that he was not aware of method patent side of the case and acknowledged that the patent infringement circumstances altered the copyright issue.

•    said the issue that goes beyond the sanofi-aventis case is - to what extent should a generic company re-do PIs? He said the starting point or ultimate objective should be that they [sic] PIs and CMIs be identical and that he did not want slight differences. He went on to say that he would talk with Rohan Hammett and get legal advice about PI beings consistent vs. identical.

TAKEOUT: Concerns about extent of PI Copyright legal problem and likelihood of further challenges appear to be assuaged, but Mark Butler still has strong view that PIs should be identical, not just consistent.

16    The “Clopidogrel example” mentioned by Mr Moulding is most likely a reference to the proceeding brought by Sanofi against Apotex in which Sanofi gave the various undertakings as to damages pursuant to which the Commonwealth now makes its claims.

17    As to the discussion between Mr Lindsay and Mr Hammett, the file note states:

Paul Lindsay discussed copyright issue with Rohan Hammett (Head of TGA) that evening:

•    Told him this was primarily a patent case for which copyright was a lever to assist in awarding the injunction. He commented that he was not made aware of this and stated, “so copyright was a secondary issue”.

•    I told him it was not a public case and we believe it won’t be as Apotex has agreed to change the PI , so no precedence [sic] will be publicly available for other companies to use. I told him about $200M Clopidogrel and Sandoz having a different PI and thus no copyright case, so perhaps the $10M generic Arava was just badly managed by the generic company.

•    He said he was informed that a number of lawyers were now using copyright as a way to block generics and that’s why it has become political.

•    I explained that if this were only a copyright case our legal advice was that it would not have allowed an injunction and that Arava was a unique case as the proof of authorship bar was very high and we had PEB. I mentioned the Ice TV case which has now set the bar even higher than when the Arava case was heard so our legal advice was that copyright could not be used to block generics in the future.

•    He stated they were thinking of changing the TGA from ‘consistent’ to ‘same’. I said this would then contravene the Copyright Act and you’d have to also change that which would impact all industries in Australia.

•    He concluded, “this was very helpful, it seems to have been overblown and that it may be best that we don’t need to do anything”.

•    I was absolutely convinced that he didn’t want to go there after our discussion; in fact I sensed a much stronger belief that the Government shouldn’t do anything, than I got from Mark Butler (which was reasonably positive as well).

I draw attention to Mr Lindsay’s reference to legal advice. He apparently told Mr Hammett that Sanofi Australia’s legal advice was that “copyright could not be used to block generics in the future.”

Rulings

18    The first question to be considered is whether any parts of the documents in MFI-1 in relation to which the claim to LPP is still maintained were brought into existence for the dominant purpose of communicating legal advice given by Ms Allsopp to employees of Sanofi Australia.

19    The cover of the first PowerPoint document (MFI-1, tab 1) is entitled “Copyright in Product Information, Review of Arava Copyright Issue and Advice for Medicines Australia Respondent – Privileged and Confidential”. On the basis of my own examination of the document and the context in which it was brought into existence I am satisfied that those parts of the PowerPoint document in respect of which a claim of LPP continues to be made were most likely prepared by Ms Allsopp for the dominant purpose of providing legal advice.

20    However, I am also satisfied that LPP in some parts of that material was waived as a result of disclosures made to the Commonwealth in the meeting and subsequent discussion that took place on 21 April 2010. In particular, LPP has been waived in each of the yellow highlighted passages in the marked-up version of the copy of the document at tab 1 in MFI-2. LPP has been also waived in the material adjacent to and beneath the blue bullet point immediately above the highlighted material on page 2 of the document.

21    I am satisfied that the statement appearing next to the 3rd bullet point below the chapeau at page 4 has also been waived. I am satisfied that this statement is likely to have been disclosed in the course of the meeting with Mr Butler given that Mr Moulding is recorded in the file note as having “outlined legal advice that copyright alone would be unlikely to delay generic entry.” Even if there was no statement by Mr Moulding to that precise effect, the waiver resulting from any more generalised disclosure of his company’s legal advice would in my view extend to all of the legal advice appearing on page 4 of the PowerPoint document.

22    Turning to the second PowerPoint, (MFI-1, tab 2), I am satisfied that what appears at page 5 of that document is a record of legal advice. I am not satisfied that there has been any waiver of LPP in that legal advice.

23    With respect to page 6, I am not satisfied that any of it constitutes or records legal advice except for what appears beside and below the second blue bullet point. In relation to that material, LPP has in my view been waived by reason of Mr Moulding’s disclosure of his company’s legal advice that copyright alone would be unlikely to delay generic entry.

24    With respect to page 7, LPP in the legal advice recorded on this page also has been waived by reason of Mr Moulding’s disclosure.

25    As to page 8, I uphold the LPP claim in relation to what appears next to and below the second blue bullet point on that page. I am not satisfied that LPP in this material has been waived.

26    I reject the claim made in relation to what appears at page 9. This page includes a recommendation by Sanofi Australia to Medicines Australia “that MA strongly defend the industry’s position based on the following principles” followed by a series of points that Sanofi Australia was essentially asking Medicines Australia to convey to the Commonwealth in defence of its position in relation to copyright in PIs and CMIs. To the extent that this material included legal advice that may have been protected by LPP, that protection has been lost by an implied waiver arising out of Mr Moulding’s and Mr Lindsay’s disclosure of Sanofi Australia’s legal advice including, in particular, Mr Lindsay’s statements concerning the Ice TV case (IceTV Pty Limited v Nine Network Australia Pty Limited (2009) 239 CLR 458).

27    Turning to the documents in MFI-1, tab 3, I am not satisfied that any of this material was prepared for the dominant purpose of providing legal advice. In his email of 12 April 2010 (which is not said to be privileged) Mr Brindell asked Ms Allsopp to review what he said “… is intended to be a briefing doc for MA but would probably be used as a leave behind so will be in the public document.” The attached document, which includes some minor amendments made by Ms Allsopp, is said by Sanofi Australia to record confidential legal advice provided by Ms Allsopp in response to Mr Brindell’s request. I do not agree. Ms Allsopp has merely corrected some grammatical errors in Mr Brindell’s draft.

28    Turning to the documents in MFI-1, tab 4, these include a number of emails exchanged on 19 April 2010 between various employees of Sanofi Australia. One of the emails (highlighted in yellow in MFI-2) includes some comments that have been inserted (coloured green) by Ms Allsopp, but also includes contributions from Mr Brindell. I uphold the LPP claim in relation to Ms Allsopp’s inserted comments which in my view do record legal advice. However, I am not satisfied that the balance of the document was brought into existence for the dominant purpose of obtaining or providing legal advice.

29    On the question of waiver, it appears from the file note that the relevant disclosures were made in an effort to persuade the Commonwealth that copyright in PIs and CMIs would be unlikely to delay generic entry, that the Arava case was unusual, and that it should not take a generic manufacturer more than a few weeks to amend an originator’s PIs and CMIs in order to avoid copyright infringement.

30    One basis on which Sanofi is seeking to resist the Commonwealth’s claim on Sanofi’s undertakings as to damages in this proceeding is that Apotex, the generic supplier also involved in this case, would not have been able to obtain a PBS listing for its Clopidogrel products without infringing copyright in (inter alia) the Plavix PI. In their points of defence (para 84A) the respondents contend that:

the Apotex Clopidogrel Products would not have obtained listing on the PBS without the provision of the Apotex PI, which would have involved an infringement of the copyright in the Plavix PI and/or Plavix SPC within the meaning of the Copyright Act 1968 (Cth).

Plavix is the brand name for Sanofi’s Clopidogrel products. The Plavix PI and the Plavix SPC (a document described by Sanofi as a “Summary of Product Characteristics”) are both said by Sanofi to be original literary works.

31    I consider it would be unfair to permit the respondents to maintain the claims to LPP which I have rejected on grounds of implied waiver given the disclosures that were made to the Commonwealth, the purpose underlying those disclosures, and the reliance now placed by Sanofi upon copyright in PIs and CMIs in their defence to this proceeding.

32    I will order the respondents to serve on the Commonwealth and also provide to my Associate a revised version of MFI-1 that redacts only that material in respect of which a claim of LPP was pressed and upheld.

33    The Commonwealth has been largely successful in resisting Sanofi’s LPP claims. In those circumstances, I think Sanofi should pay the Commonwealth’s costs of and incidental to the application for access to the documents marked MFI-1.

34    Orders accordingly.

Associate:    

Dated:    23 June 2017