FEDERAL COURT OF AUSTRALIA

Novartis AG v F H Faulding and Co Ltd [2004] FCAFC 254

PATENTS – application for leave to appeal

Federal Court Rules, O 29 r 2(a)

Novartis AG V F.H. Faulding & Co Limited [2004] FCA 1002 considered

Adam P. Brown v Phillip Morris (1981) 148 CLR 170applied

Re Will of Gilbert (1946) 46 SR (NSW) 318 cited

House v The King (1936) 55 CLR 499 referred to

NOVARTIS AG v F H FAULDING AND CO LTD & ANOR

V 981 OF 2004

HEEREY, EMMETT & ALLSOP JJ

25 AUGUST 2004

MELBOURNE

THE COURT ORDERS THAT:

1. The application for leave to appeal is dismissed.
2. The second respondent pay the applicant’s costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

HEEREY J

1                     The second respondent Hexal Australia Pty Limited (Hexal) seeks leave to appeal against a decision of Sundberg J given on 3 August 2004.  His Honour rejected Hexal’s application for an order under O 29 r 2(a) of the Federal Court Rules for the determination separately before trial of a series of questions: Novartis AG v F.H. Faulding & Co Limited [2004] FCA 1002.

2                     The case concerns an application for infringement of a pharmaceutical patent and there will likely be a cross-claim for invalidity.

3                     The circumstances are very comprehensively set out in his Honour's judgment which I incorporate by reference.  I do not see any error of principle in his Honour's exercise of his discretion.  Arguments were put by Mr Catterns QC on behalf of Hexal directed towards the substantive merits of his client’s case.  In particular Mr Catterns said that Hexal’s construction of the expression "pharmaceutical preparation" was highly tenable and that his Honour erred in saying at [18] of his judgment that he did not have any confidence that the applicant would succeed.

4                     Mr Catterns took us to the specification and made a number of points from the text which he argued supported his client's construction.  Those arguments in themselves seem valid and worthy of respect, although we did not call on Mr Clarke SC for Novartis and thus have not heard any answer.  The Court would not want to discourage use of this rule in an appropriate case where costs and time may be saved, but it is always necessary to keep in mind that at this level, where leave to appeal from an interlocutory decision is sought, our task is to see whether the primary judge erred in the exercise of his discretion.  It was clear from the transcript that substantially the same arguments were advanced to his Honour and although his Honour does not analyse them in his reasons, there is no reason to believe that he ignored them.

5                     The fact of the matter is that Hexal has an arguable case, but that in itself is not enough for it to succeed on the present application.  Hexal does not suggest that any substantive rights have been affected by his Honour's decision.  In Adam P. Brown Male Fashions Pty Ltd v Phillip Morris Inc (1981) 148 CLR 170 at 177the High Court has made it clear, following the well-known decision in Re Will of Gilbert (1946) 46 SR (NSW) 318 at 323, that a court should exercise particular caution in granting leave to appeal in matters of practice and procedure.  While in an appropriate case there is much to be said in the light of principles of modern efficient case management in isolating preliminary questions, by the same token those very principles will be eroded if appellate review of practice decisions becomes a matter of routine.

6                     Moreover, as Mr Catterns fairly conceded, there was no evidence of particular hardship in a practical sense.  Therefore I am not persuaded his Honour's discretion miscarried and I would refuse leave.

Associate:

Dated:              9 September 2004

REASONS FOR JUDGMENT

EMMETT J

7                     I agree that his Honour's discretion did not miscarry.  However, I would like also to add my support for the notion that an imaginative approach to case management in complex technical cases such as patent cases should be encouraged wherever possible.  That may not necessarily require an order under Order 29.  For example, it may be possible for the trial judge to deal with separate issues successively on the basis that all of the material will ultimately be dealt with.  It sometimes assists to have argument on some issues at a different time from when the argument in relation to other issues is raised.  I agree that the application should be dismissed.

Associate:

Dated:              9 September 2004

REASONS FOR JUDGMENT

ALLSOP J

8                     I agree that the application should be dismissed and I respectfully agree with the reasons of Heerey J and Emmett J.  I would only add that while I have not had the benefit of Mr Clarke's submissions because the Court is of the view that there is no error of principle for the purposes of the application of House v The King (1936) 55 CLR 499, I for myself may well have had a different view as to the likely utility in this case of Order 29.  Modern patent litigation costs hundreds of thousands of dollars and sometimes much more.  Where a crisp and clear demurrer point arises, Order 29 should be viewed as a tool in the speedy disposition of what may otherwise be a complex matter.  His Honour was not persuaded of the crispness and clarity of the point.  That view was not a view which could be said not to be open, though others may have had a different view.  In these circumstances the application should be dismissed.

Associate:

Dated:              9 September 2004