FEDERAL COURT OF AUSTRALIA

Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (No 3) [2011] FCAFC 165

THE COURT ORDERS THAT:

1.    The declaration made by the primary judge on 8 November 2010 in proceeding number VID 195 of 2009 (the Sigma Proceeding) be set aside.

2.    Orders 5, 8, 9, 10 and 11 made by the primary judge on 8 November 2010 in the Sigma Proceeding be set aside.

3.    Order 6 made by the primary judge on 8 November 2010 in the Sigma Proceeding be set aside in so far as it releases the respondents from the undertakings as to damages given by them to the Court on 3 June 2009.

THE COURT DECLARES THAT:

4.    Each of claims 1 to 17 (inclusive) of the Australian Patent No 2003259586 (the Patent) is invalid.

5.    Claim 27 of the Patent is invalid to the extent that it is dependent upon any of claims 1 to 17 (inclusive) of the Patent.

THE COURT FURTHER ORDERS THAT:

6.    Claims 1 to 17 (inclusive) of the Patent be revoked.

7.    The cross-claim be dismissed.

8.    Any application that has or may be made by any person seeking an order for the payment of compensation pursuant to the undertaking as to damages given by the respondents to the Court on 3 June 2009 be remitted to the primary judge for determination.

9.    The respondents pay 80% of the appellant’s costs of the Sigma Proceeding and 80% of the appellant’s costs of the appeal.

AND THE COURT DIRECTS:

10.    The Commissioner of Patents to rectify the Register of Patents to record that each of claims 1 to 17 (inclusive) of the Patent has been revoked.

AND THE COURT FURTHER ORDERS:

11.    Upon the respondents undertaking to the Court as a condition of the making of this order:

(a)    to prosecute the application for special leave (and if granted, the appeal) expeditiously;

(b)    forthwith to serve on the Commissioner of Patents copies of these orders pursuant to s 140 of the Patents Act 1990 (Cth) (the Act) with a request that particulars of the order for revocation of claims 1-17 of the Patent and any order staying that order be registered in accordance with s 187 of the Act;

(c)    not to, during the period of the stay, threaten any person with or commence or prosecute proceedings for infringement of claims 1 to 17 and claim 27 (insofar as it is dependent on claims 1 to 17) of the Patent (for the avoidance of doubt, the Respondents do not undertake not to seek relief in respect of infringements occurring during the period of the stay should these claims ultimately be held to be valid);

(d)    not to, during the period of the stay, seek to amend claims 1 to 17 of the Patent otherwise than in the course of or in connection with these proceedings;

(e)    not to, during the period of the stay or in any event before 1 April 2012, make any application to delist Efexor-XR from the Pharmaceutical Benefits Scheme (the PBS); and

(f)    to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any party to Proceedings NSD 1533, 1603 and 1644 of 2010 adversely affected by the operation of the stay and to pay such compensation to that party:-

Order 6 and order 10 above be stayed:

(a)    initially for a period of 28 days from today;

(b)    if an application for leave to appeal is lodged within that period, until the determination of that application; and

(c)    if special leave is granted, until the determination of the appeal.

12.    Subject to the respondents providing the undertaking referred to in paragraph 11(e) above the respondents are released from the undertaking given by them to the primary judge on 8 November 2010 in the Sigma Proceeding not to make any application to delist Efexor-XR from the PBS.

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

THE COURT ORDERS THAT:

1.    The declaration made by the primary judge on 8 November 2010 in proceeding number NSD 596 of 2009 (the Alphapharm Proceeding) be set aside.

2.    Orders 5, 8, 9, 10 and 11 made by the primary judge on 8 November 2010 in the Alphapharm Proceeding be set aside.

3.    Order 6 made by the primary judge on 8 November 2010 in the Alphapharm Proceeding be set aside in so far as it releases the respondents from the undertakings as to damages given by them to the Court on 25 August 2009.

THE COURT DECLARES THAT:

4.    Each of claims 1 to 17 (inclusive) of the Australian Patent No 2003259586 (the Patent) is invalid.

5.    Claim 27 of the Patent is invalid to the extent that it is dependent upon any of claims 1 to 17 (inclusive) of the Patent.

THE COURT FURTHER ORDERS THAT:

6.    Claims 1 to 17 (inclusive) of the Patent be revoked.

7.    The cross-claim be dismissed.

8.    Any application that has or may be made by any person seeking an order for the payment of compensation pursuant to the undertaking as to damages given by the respondents to the Court on 25 August 2009 be remitted to the primary judge for determination.

9.    The respondents pay 80% of the appellant’s costs of the Alphapharm Proceeding and 80% of the appellant’s costs of the appeal.

AND THE COURT DIRECTS:

10.    The Commissioner of Patents to rectify the Register of Patents to record that each of claims 1 to 17 (inclusive) of the Patent has been revoked.

AND THE COURT FURTHER ORDERS:

11.    Upon the respondents undertaking to the Court as a condition of the making of this order:

(a)    to prosecute the application for special leave (and if granted, the appeal) expeditiously;

(b)    forthwith to serve on the Commissioner of Patents copies of these orders pursuant to s 140 of the Patents Act 1990 (Cth) (the Act) with a request that particulars of the order for revocation of claims 1-17 of the Patent and any order staying that order be registered in accordance with s 187 of the Act;

(c)    not to, during the period of the stay, threaten any person with or commence or prosecute proceedings for infringement of claims 1 to 17 and claim 27 (insofar as it is dependent on claims 1 to 17) of the Patent (for the avoidance of doubt, the Respondents do not undertake not to seek relief in respect of infringements occurring during the period of the stay should these claims ultimately be held to be valid);

(d)    not to, during the period of the stay, seek to amend claims 1 to 17 of the Patent otherwise than in the course of or in connection with these proceedings;

(e)    not to, during the period of the stay or in any event before 1 April 2012, make any application to delist Efexor-XR from the Pharmaceutical Benefits Scheme (the PBS); and

(f)    to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any party to Proceedings NSD 1533, 1603 and 1644 of 2010 adversely affected by the operation of the stay and to pay such compensation to that party:-

Order 6 and order 10 above be stayed:

(a)    initially for a period of 28 days from today;

(b)    if an application for leave to appeal is lodged within that period, until the determination of that application; and

(c)    if special leave is granted, until the determination of the appeal.

12.    Subject to the respondents providing the undertaking referred to in paragraph 11(e) above the respondents are released from the undertaking given by them to the primary judge on 8 November 2010 in the Alphapharm Proceeding not to make any application to delist Efexor-XR from the PBS.

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

THE COURT ORDERS THAT:

1.    The declaration made by the primary judge on 8 November 2010 in proceeding number NSD 1124 of 2009 (the Generic Health Proceeding) be set aside.

2.    Orders 5, 8, 9, 10 and 11 made by the primary judge on 8 November 2010 in the Generic Health Proceeding be set aside.

3.    Order 6 made by the primary judge on 8 November 2010 in the Generic Health Proceeding be set aside in so far as it releases the respondents from the undertakings as to damages given by them to the Court on 10 November 2009.

THE COURT DECLARES THAT:

4.    Each of claims 1 to 17 (inclusive) of the Australian Patent No 2003259586 (the Patent) is invalid.

5.    Claim 27 of the Patent is invalid to the extent that it is dependent upon any of claims 1 to 17 (inclusive) of the Patent.

THE COURT FURTHER ORDERS THAT:

6.    Claims 1 to 17 (inclusive) of the Patent be revoked.

7.    The cross-claim be dismissed.

8.    Any application that has or may be made by any person seeking an order for the payment of compensation pursuant to the undertaking as to damages given by the respondents to the Court on 10 November 2009 be remitted to the primary judge for determination.

9.    The respondents pay:

(a)    80% of the appellant’s costs of the Generic Health Proceeding; and

(b)    the appellant’s costs of the appeal.

AND THE COURT DIRECTS:

10.    The Commissioner of Patents to rectify the Register of Patents to record that each of claims 1 to 17 (inclusive) of the Patent has been revoked.

AND THE COURT FURTHER ORDERS:

11.    Upon the respondents undertaking to the Court as a condition of the making of this order:

(a)    to prosecute the application for special leave (and if granted, the appeal) expeditiously;

(b)    forthwith to serve on the Commissioner of Patents copies of these orders pursuant to s 140 of the Patents Act 1990 (Cth) (the Act) with a request that particulars of the order for revocation of claims 1-17 of the Patent and any order staying that order be registered in accordance with s 187 of the Act;

(c)    not to, during the period of the stay, threaten any person with or commence or prosecute proceedings for infringement of claims 1 to 17 and claim 27 (insofar as it is dependent on claims 1 to 17) of the Patent (for the avoidance of doubt, the Respondents do not undertake not to seek relief in respect of infringements occurring during the period of the stay should these claims ultimately be held to be valid);

(d)    not to, during the period of the stay, seek to amend claims 1 to 17 of the Patent otherwise than in the course of or in connection with these proceedings;

(e)    not to, during the period of the stay or in any event before 1 April 2012, make any application to delist Efexor-XR from the Pharmaceutical Benefits Scheme (the PBS); and

(f)    to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any party to Proceedings NSD 1533, 1603 and 1644 of 2010 adversely affected by the operation of the stay and to pay such compensation to that party:-

Order 6 and order 10 above be stayed:

(a)    initially for a period of 28 days from today;

(b)    if an application for leave to appeal is lodged within that period, until the determination of that application; and

(c)    if special leave is granted, until the determination of the appeal.

12.    Subject to the respondents providing the undertaking referred to in paragraph 11(e) above the respondents are released from the undertaking given by them to the primary judge on 8 November 2010 in the Generic Health Proceeding not to make any application to delist Efexor-XR from the PBS.

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

REASONS FOR JUDGMENT

THE COURT:

Background

1    In reasons for judgment published on 28 October 2011 we explained why each of the appeals from the judgment of the primary judge should be allowed: Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2011] FCAFC 132. On 11 November 2011 we made orders allowing the appeal and setting aside an injunction previously granted by the primary judge: Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (No 2) [2011] FCAFC 143. At the request of the parties the matter was then listed for further argument in relation to various outstanding issues concerning orders still to be made. We shall deal with each of these issues in turn. Where it is necessary for us to identify individual parties in these reasons we shall adopt the same abbreviations used in the earlier judgments.

SUBSTANTIVE ORDERS

2    It is common ground that there should be an order for revocation of claims 1 to 17, each of which we held was invalid. We also held that claim 27 was invalid to the extent that it was dependent upon any of claims 1 to 17. Since claim 27 is also dependent on other claims the validity of which were not in issue, it is not appropriate that we make an order revoking it. However, there should be a declaration to make clear that claim 27 is invalid to the extent it is dependent on any of claims 1 to 17.

3    The appellants also sought declarations that claims 1 to 17 were invalid. Since claims 1 to 17 are to be the subject of an order for revocation, a question arises as to whether declarations of invalidity with respect to those claims would serve any useful purpose. Nevertheless, once it is determined that it is appropriate to make a declaration in respect of claim 27 then it seems to us there is much to be said for making a declaration in respect of all claims found to be invalid. Not to do so may give rise to confusion in the minds of people not acquainted with the reasons for making a declaration in relation to one claim but not others. Accordingly, we are satisfied that in circumstances where it is necessary to make a declaration of invalidity in respect of claim 27, it is also desirable that such a declaration be made in respect of claims 1 to 17 as well.

4    The primary judge made a declaration that the appellants had threatened to infringe various claims of the patent. It is common ground that this declaration (see para 1 of the primary judge’s orders of 8 November 2010) should be set aside.

5    The primary judge also made an order for destruction on oath of infringing products (paras 8 and 9 of the primary judge’s orders) and an order under s 19 of the Patents Act 1990 (Cth) (the Act) (para 11) to the effect that the validity of various claims was questioned unsuccessfully. Again, it is common ground that these orders should be set aside.

6    A more contentious issue arises in relation to the primary judge’s order (para 6) setting aside the interlocutory injunction granted on 3 June 2009 by Sundberg J in favour of the respondents. The order made by the primary judge not only discharged the interlocutory injunction but also released the respondents from the undertakings as to damages given by them to the Court in support of their application for the interlocutory injunction. This undertaking required the respondents:

(a)    to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by any operation of the order below or any continuation (with or without variation) thereof, and

(b)    to pay the compensation referred to in (a) to the person there referred to;

The order made by Sundberg J was an order made in the proceeding brought by Sigma (VID 195 of 2009). It restrained Sigma, “[p]ending the determination of the proceeding or further order”, from (inter alia) marketing, supplying or offering to supply Evelexa-XR.

7    Similar orders were made by the primary judge prior to trial in the proceedings brought by Alphapharm and Generic Health. These orders were made on 25 August 2009 and 10 November 2009 respectively and on each occasion the respondents gave undertakings to the Court in the same terms as those given to Sundberg J on 3 June 2009.

8    After the primary judge delivered reasons for judgment her Honour made orders (inter alia) discharging the interlocutory injunctions and granting final injunctions. She also made orders releasing the respondents from the undertakings as to damages given on 3 June 2009, 25 August 2009 and 10 November 2009. The appellants then applied to the primary judge for orders staying the final injunctions. The appellants also applied for orders, in lieu of such orders, requiring the respondents to give an undertaking as to damages against the possibility that the appeals might be successful and that the injunctions might be discharged. The primary judge refused to grant a stay of the injunctions and her Honour also declined to impose a condition of the kind sought by the appellants.

9    Sigma later sought the same relief from Jacobson J who also refused to grant a stay or to require the respondents to give any undertaking as to damages in lieu of a stay: Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2010] FCA 1258.

10    The effect of the primary judge’s orders was to release the respondents from the undertakings as to damages even though the appellants made clear an appeal would be brought and there existed the possibility that the injunctive relief granted by the primary judge might be set aside on appeal. In such circumstances we think it would seldom, if ever, be appropriate to order that a party be released from an undertaking as to damages. The preferable course is for the undertaking to be left in place to operate in accordance with its terms.

11    The respondents opposed the making of any orders setting aside the orders made by the primary judge releasing them from the undertaking as to damages. The reason for their opposition became clear in the course of oral argument. Essentially, the respondents wish to argue that the primary judge’s findings as to the validity of the relevant claims of the patent and her Honour’s findings in relation to the issue of infringement, entitled the respondents to a release from the undertaking as to damages notwithstanding that those findings might be, and ultimately were, overturned by the Full Court.

12    During the course of argument before us the respondents did not seek to justify their position with respect to this particular issue beyond saying that by its nature an undertaking as to damages only operates until the determination of the proceeding and that if a trial judge holds in favour of the party who has sought a final injunction and who had obtained an interlocutory injunction before trial then, irrespective of whether the trial judge’s decision to grant the final injunction was right or wrong, the successful party could not be under any continuing obligation under the undertaking as to damages.

13    The respondents were unable to point to any authority in support of this submission. In our opinion it must be rejected. The respondents’ submission seeks to give the usual undertaking as to damages an operation that has the potential to cause substantial injustice in circumstances where an interlocutory injunction is obtained on the basis of a case which cannot be sustained on appeal. In the present case, the primary judge released the respondents from the undertakings as to damages on the basis that they had in each case established an entitlement to injunctive relief on a final basis. Once it was determined, as it was on appeal, that the respondents were not entitled to such relief then there can be no basis for not setting aside the primary judge’s order releasing the respondents from their undertaking as to damages.

14    Accordingly, to the extent that the relevant order of the primary judge released the respondents from their undertakings as to damages, it should be set aside so that the relevant undertakings as to damages may operate in accordance with their terms.

15    There should also be orders remitting to the primary judge any application that has or may be made by any person for an order for the payment of compensation pursuant to the undertakings as to damages given by the respondents to the Court on 3 June 2009, 25 August 2009 and 10 November 2009.

Costs

16    As was to be expected given her decision, the primary judge ordered the appellants to pay the respondents’ costs of the proceeding as taxed or agreed. No party suggested that her Honour’s costs orders should not be set aside but there is a dispute as to what costs orders should be made in place of those made by her Honour. There is also a dispute as to what costs orders should now be made in relation to the appeals.

17    The respondents argued that although the claims in suit were found to be invalid, they were successful on a number of issues which took up considerable time both at the hearing of the proceedings before the primary judge and at the hearing of the appeals. In particular, the respondents drew attention to the appellants’ lack of success on the issues of lack of inventive step, insufficiency, lack of entitlement and false suggestion, each of which was a ground of invalidity relied upon by the appellants before the primary judge and the Full Court. Similarly, the respondents pointed to their success before the primary judge on the question of infringement even though the only claims which were found to be infringed were held by us to be invalid. On this basis, the respondents submitted that there should be a substantial reduction in the costs to be awarded to the appellants in respect of the trials. In particular, the respondents submitted that they should not be required to pay more than 30% of the party/party costs incurred by the appellants. As to the costs of the appeals, the respondents agree that that they should pay Generic Health’s costs but say that the other appellants, Sigma and Alphapharm, should be awarded only 50% of their party/party costs of the appeals.

18    There is no doubt that there were some discrete issues upon which the appellants failed which had nothing to do with characterisation of the invention. This is certainly true of the challenge to validity based upon the alleged lack of entitlement and the alleged false suggestion. It is also true of some aspects of the defence to the infringement case as presented by Alphapharm to the primary judge and the Full Court.

19    Nevertheless, it seems to us that the most important and the most time consuming issue that was agitated both at trial and on appeal concerned the true characterisation of the invention and the implications this had for the challenges to validity which were ultimately successful.

20    In the circumstances, we are of the view that Sigma and Alphapharm should be awarded 80% of their party/party costs of the appeals. It seems to us that this figure allows a reasonable discount in respect of those issues upon which they were unsuccessful and which were not bound up with the characterisation of the invention.

21    In our opinion the same allocation should be made with respect to the costs of the trial. In the result, the respondents should pay 80% of Sigma and Alphapharm’s costs of the appeals and 80% of the costs of their proceedings below. The respondents should also pay 80% of Generic Health’s costs of the trial.

22    The respondents should also pay Generic Health’s costs of its appeal in accordance with an agreement between those parties.

23    Alphapharm also sought an order against Generic Health which would require Generic Health to pay Alphapharm 30% of any difference between the proportion of costs which Alphapharm claimed against Wyeth (100% of its party/party costs) and the proportion of costs actually awarded (80% of its party/party costs). Thus, Alphapharm sought an order which would have the effect of requiring Generic Health to pay Alphapharm 30% of that proportion of Alphapharm’s party/party costs that the respondents were not ordered to pay.

24    In support of its submission, Alphapharm referred us to the decision of Goldberg J in Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602. That was a case in which four proceedings were brought by the applicant against four separate groups of respondents. The four proceedings were heard together with evidence in one being evidence in the other. Some of the evidence tendered by the applicants in one proceeding was relied upon against the respondents in the other proceedings. The applicants were successful against some but not all respondents. His Honour said (at [95]):

If it be accepted that it is appropriate to have multiple proceedings heard together, where there are common issues of fact and law involved, for the purpose of reducing costs and having an efficient and economical use of court resources, it is also appropriate to consider whether in such circumstances there should be variations to the usual order as to costs. In particular it is appropriate to give consideration to the apportionment of the costs of an applicant incurred in relation to issues and matters common to those proceedings between those proceedings where the applicant is successful and those proceedings where the applicant is unsuccessful.

We accept, as did his Honour, that where various proceedings against different respondents that involve common questions are heard together, it may be appropriate to consider whether in such circumstances there should be variations to the usual order as to costs. Nevertheless, Alphapharm’s application for an order that Generic Health pay a proportion of its costs raises somewhat different considerations.

25    The argument put by Alphapharm in support of such an order was that Generic Health should be required to make a contribution to Alphapharm’s costs because it had obtained the benefit of a “free ride” or, as Alphapharm put it, “a seat at the table” at reduced cost to itself.

26    It is necessary to provide some additional background to Generic Health’s role in the proceedings heard by the primary judge. In April 2009 Sigma commenced its proceeding against Wyeth seeking (inter alia) orders for revocation of the relevant claims of the Patent and Alphapharm did the same in June 2009. It was not until October 2009 that Generic Health commenced it own proceeding seeking substantially the same relief as that sought by Sigma and Alphapharm. In support of its claim for orders for revocation Generic Health relied upon substantially the same grounds as those which were relied upon by Sigma and Alphapharm.

27    It appears that preparations for the proceedings between Sigma, Alphapharm and Wyeth were well advanced at least by the time the pleadings in Generic Health’s proceeding closed. In particular, the proceedings commenced by Sigma and Alphapharm had already been fixed for trial commencing in April 2010. On 18 December 2009 the primary judge made an order by consent that all three proceedings be heard together and that evidence on validity in the proceedings brought by Sigma and Alphapharm be evidence in the proceeding brought by Generic Health. A similar order was made in relation to evidence on infringement.

28    The primary judge also noted, as recorded in the relevant minute of order, that “Generic Health does not intend to file any evidence or make any submissions in respect of its claim for revocation of [the] Patent …”. Generic Health agreed, in effect, to submit to the same orders as might be made in the other proceedings in so far as they challenged validity.

29    In support of its application that Generic Health pay a portion of its costs Alphapharm relied upon a letter from its solicitors to Generic Health’s solicitors dated 1 December 2009 which was admitted into evidence before us subject to relevance. This letter, written some weeks before the consent order to which we have referred was made, included the following:

It seems to our client that, if your client does not adduce its own evidence on invalidity, and there is no order made that evidence in the Alphapharm or Sigma proceedings is also evidence in your client’s proceeding, there is a risk that, even if Alphapharm and/or Sigma is successful in revoking Wyeth’s patent, your client’s cross-claim will be dismissed (although the costs consequences for your client may be negligible). More significant, though, is the prospect that if your client chooses not to run an invalidity case, and Alphapharm and Sigma were to settle the proceedings with Wyeth at a late stage, your client may be left in the position of not being able to rely on an invalidity case (either as a revocation action or as a defence to infringement).

Accordingly, it seems likely that, if your client’s cross-claim is to be listed for hearing in April (as it is very likely to be), your client will require an order that validity evidence in the Alphapharm and/or Sigma proceedings be validity evidence in your client’s proceeding.

The letter then addressed the question of infringement evidence. It relevantly concluded:

Please let us know if your client is willing to make some form of financial contribution to the combined effort against Wyeth, in addition to cooperating more generally. While our client will of course respect your client’s decision in this regard (it would not, for example, consider a refusal to contribute financially to jeopardise the parties’ ability to cooperate fruitfully), we note for good order that, if your client does not wish to offer a contribution and our client obtains a successful outcome in the proceedings, our client reserves its rights to seek, at the conclusion of the proceedings, an order that your client contribute a reasonable proportion of its incurred costs.

30    There was no evidence before us of any response by Generic Health to the letter but it may be assumed that it declined to make any contribution to Alphapharm’s costs. Generic Health did not file any expert evidence of its own and instead left it to Sigma and Alphapharm to establish the invalidity of the relevant claims.

31    Alphapharm’s application for an order requiring Generic Health to make a contribution to its costs raises the question whether it was unreasonable for Generic Health to decline to make any such contribution. We are not satisfied that it was. The letter that Alphapharm has tendered falls short of what would be required to establish that Generic Health acted unreasonably in declining to accept Alphapharm’s proposal which was, after all, completely silent on the extent of costs incurred up to that time, what further costs it anticipated would be incurred thereafter and what role, if any, Generic Health might play in the preparation or presentation of the invalidity evidence.

32    In any event, it seems to us that this is not a case in which it would be appropriate to make the order sought by Alphapharm. Once Generic Health agreed to submit to orders on the terms set out in the consent orders of 18 December 2009, the extent of the challenge to invalidity and the manner in which it would be conducted was left to Sigma and Alphapharm to determine. We do not see why Generic Health should be required to contribute to costs incurred by Alphapharm in respect of challenges to validity which were unsuccessful where Generic Health had no say in what challenges were pressed by Alphapharm. The mere fact that Generic Health might have benefited if these challenges had succeeded is not to the point. There may have been other manufacturers which also stood to benefit if Alphapharm were successful. That Generic Health was a party raises the possibility of an order of the kind sought being made against it but is not of itself sufficient to justify the making of the order.

33    For the above reasons, we do not think this is an appropriate case for making an order of the kind sought by Alphapharm.

Stay

34    The respondents seek a stay of the orders for revocation of claims 1 to 17. In support of their application for a stay the respondents proffer the following undertakings:

(a)    to prosecute the application for special leave (and if granted, the appeal) expeditiously;

(b)    forthwith to serve on the Commissioner of Patents copies of these orders pursuant to s 140 of the Act with a request that particulars of the order for revocation of claims 1-17 of the Patent and any order staying that order be registered in accordance with s 187 of the Act;

(c)    not to, during the period of the stay, threaten any person with or commence or prosecute proceedings for infringement of claims 1 to 17 and claim 27 (insofar as it is dependent on claims 1 to 17) of the Patent (for the avoidance of doubt, the respondents do not undertake not to seek relief in respect of infringements occurring during the period of the stay should these claims ultimately be held to be valid);

(d)    not to, during the period of the stay, seek to amend claims 1 to 17 of the Patent otherwise than in the course of or in connection with these proceedings;

(e)    not to, during the period of the stay or in any event before 1 April 2012, make any application to delist Efexor-XR from the Pharmaceutical Benefits Scheme (the PBS); and

(f)    to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any party to Proceedings NSD 1533, 1603 and 1644 of 2010 adversely affected by the operation of the stay and to pay such compensation to that party.

35    It is important to keep in mind the effect of the stay that is sought by the appellants. It does not extend to the order setting aside the injunctive relief granted by the primary judge. It would operate only to ensure that the relevant claims of the patent are not revoked until the respondents have exhausted their rights of appeal. Importantly, there is no injunction, interlocutory or final, restraining the appellants from manufacturing, importing, marketing or supplying their products.

36    Sigma argued that any stay of the order for revocation should be conditional upon the respondents giving not merely an undertaking as to damages such as that proffered by the respondents but one which would require them, if so ordered, to pay Sigma and Alphapharm compensation in respect of any damage suffered by them since 8 November 2010, it being the date upon which the primary judge made the order releasing the respondents from the undertakings as to damages they gave to Sundberg J. We do not see any justification for imposing any such condition.

37    It is not usual to require a party seeking a stay of an order revoking a patent claim to give an undertaking as to damages: see Doric Products Pty Ltd v Lockwood Security Products Pty Ltd (2002) 54 IPR 495 at [4]-[8] in which Hely J refers to some relevant English authorities. In the present case it seems to us that the undertakings proffered by the respondents travel well beyond what would usually be expected of a party seeking a stay of an order for the revocation of a patent claim.

38    The form of the undertaking set out in para 34(f) above was also criticised by Sigma and Alphapharm because the undertaking is expressed to extend to the parties to the relevant proceedings only rather than to any person who might be adversely affected by the stay. In particular, Alphapharm submitted “that [it] does not believe there is any basis on which Wyeth should be permitted to provide an undertaking which is more restricted than the usual form of undertaking as to damages, which would require [Wyeth] to compensate third parties who suffer damages as a result of the stay”.

39    This submission is answered by our previous observations as to what is ordinarily required of a party seeking a stay of an order revoking a patent claim. The usual undertaking as to damages is not ordinarily required of a party seeking such a stay. As we have already said, the various undertakings proffered by Wyeth, including the undertaking as to damages set out in para 34(f) above, travel beyond what is required for that purpose.

40    Accordingly, we propose to grant the respondents a stay of the orders revoking claims 1 to 17 of the patent on the basis that they give to the Court the various undertakings which they proffered as recorded in para 34 above. The respondents also sought a stay of the various costs orders that are to be made against them. We are not persuaded that it is necessary or desirable to grant such a stay.

41    The respondents also sought a stay of any order remitting to the primary judge any application for an order for the payment of compensation pursuant to the undertakings as to damages given to the Court on 3 June 2009, 25 August 2009 and 10 November 2009. Again, we are not persuaded that it is necessary or desirable to grant such a stay. It will be a matter for the trial judge to determine what, if anything, needs to be done in relation to that matter pending the determination of the respondents’ application for special leave to appeal or, if leave is granted, any appeal.

42    The final matter that needs to be considered is the undertakings given by the respondents to the primary judge on 8 November 2010. These undertakings provided (para 14) that the respondents would not, until further order, make any application to delist Efexor-XR from the PBS. The respondents sought to be released from these undertakings on the basis that the undertakings now proffered in support of their application for a stay of the orders for revocation were more than sufficient to meet the particular concern to which these undertakings were directed. We accept this is so, and think the appropriate course is to make orders releasing the respondents with effect from today from the undertakings which they gave to the primary judge upon condition that they give the undertaking set out in para 34(e) above which they have proffered in support of their application for a stay of the revocation orders.

43    We shall make orders accordingly.

Associate:

Dated:    19 December 2011