FEDERAL COURT OF AUSTRALIA

Pharmacia Italia S.p.A. v Interpharma Pty Ltd [2005] FCA 1675

PATENTS – interlocutory injunction – application for injunction in respect of threatened infringement of patent – claim that patent invalid – lack of novelty – obviousness – lack of manner of manufacture – lack of fair basis – false suggestion – whether serious issue to be tried – whether applicants for injunction would suffer irreparable harm for which damages would not be adequate compensation unless injunction granted – balance of convenience

PATENTS – interlocutory injunction – application for injunction in respect of threatened infringement of patent – whether applicant has standing as exclusive licensee of patent

Patents Act 1990 (Cth) ss 40, 120

Patents Act 1952 (Cth) s 6

Hexal Australia Pty Ltd v Roche Therapeutics Inc [2005] FCA 1218 cited

Ex parte British Nylon Spinners Ltd; Re Imperial Chemical Industries Ltd (1963) 109 CLR 336 distinguished

Grant v Australian Temporary Fencing Pty Ltd (2003) 59 IPR 170 discussed

Pharmacia Italia S.p.A. v Mayne Pharma Pty Ltd [2005] FCA 1078 discussed

Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 applied

Tidy Tea Ltd v Unilever Australia Ltd (1995) 32 IPR 405 followed

Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 619 applied

PHARMACIA ITALIA S.P.A. and PFIZER (PERTH) PTY LTD v INTERPHARMA PTY LTD

VID 1137 OF 2005

SUNDBERG J

MELBOURNE

23 NOVEMBER 2005

THE COURT ORDERS THAT, upon the applicants giving the usual undertaking as to damages:

1.                  The respondent whether by itself, its officers, employees, agents or otherwise, be restrained until the hearing and determination of the proceeding or further order from importing or offering to import the respondent’s Doxorubicin Hydrochloride Injections and Epirubicin Hydrochloride Injections (as defined in the applicants’ Particulars of Infringement dated 28 September 2005).

2.                  The respondent pay the applicants’ costs of and incidental to the motion notice of which was filed on 7 October 2005.

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

REASONS FOR JUDGMENT

BACKGROUND

1                     Pharmacia Italia S.p.A. (PI), an Italian company, is the registered proprietor of Australian Letters Patent No. 598197 entitled “Injectable ready-to-use solutions containing an anti-tumour anthracycline glycoside” (the patent).  Doxorubicin and epirubicin are two forms of anthracycline glycoside.

2                     Pfizer (Perth) Pty Ltd (PP), an Australian company, has what is described in the relevant statement of claim as an exclusive licence in Australia under the patent (the PP Licence).  Under that licence, it manufactures:

·                    ready-to-use solutions of doxorubicin hydrochloride, sold under the trade mark Adriamycin; and

·                    ready-to-use solutions of epirubicin hydrochloride, sold under the trade mark Pharmorubicin.

(Where it is not necessary for me to distinguish between PI and PP, I shall refer to them as the applicants.)

3                     Interpharma Pty Ltd (Interpharma) intends to import into Australia and thereafter sell and distribute ready-to-use solutions containing doxorubicin hydrochloride and epirubicin hydrochloride manufactured in Austria by Ebewe Pharma Ges.M.b.H. (Ebewe) (the imported solutions).  Interpharma has obtained approval from the Therapeutic Goods Administration (the TGA) to market the imported solutions.

4                     Interpharma has also procured the listing, effective from 1 August 2005, of the imported solutions on the Schedule of Pharmaceutical Benefits (the SPB listings).  As a result of the SPB listings, the imported solutions attract a subsidy under the Pharmaceutical Benefits Scheme (the PBS).  Though Interpharma provided the Pharmaceutical Benefits Advisory Committee with the requisite written assurance that a stock of the imported solutions would be available for supply on the date of the SPB listings, it had not, as at 9 November 2005, imported them.

5                     On 16 September 2005, the applicants commenced the proceeding described above as VID 1137 of 2005 (the infringement proceeding).  By that proceeding, the applicants seek, inter alia, a final injunction restraining Interpharma during the term of the patent from infringing the patent and in particular, from making, selling, supplying or otherwise disposing of, or offering to make, sell, supply or otherwise dispose of, or using or keeping for the purpose of doing any of those things, a ready-to-use anthracycline glycoside solution as claimed in the patent.

6                     On 29 September 2005, Interpharma commenced proceeding VID 1207 of 2005 (the revocation proceeding).  By that proceeding, Interpharma seeks revocation of the patent on the grounds that it:

·                    lacks novelty;

·                    lacks an inventive step;

·                    does not involve a manner of manufacture;

·                    does not comply with s 40 of the Patents Act 1990 (Cth) (the Act); and

·                    was obtained by false suggestion.

7                     On 12 October 2005, the District Registrar, pursuant to the consent of the parties, ordered that the infringement and revocation proceedings be heard together and that evidence in one be evidence in the other.

8                     By motion, notice of which was filed on 7 October 2005, the applicants seek interlocutory relief in the form of orders:

·                    restraining Interpharma whether by itself, its officers, employees, agents or otherwise from importing, making, selling, supplying or otherwise disposing of, or offering to import, make, sell, supply or otherwise dispose of, or using or keeping for the purpose of doing any of those things, the imported solutions; and

·                    that Interpharma procure the withdrawal of the SPB listings.

The motion came on for hearing before me on 9 November 2005.

PRINCIPLES

9                     There is no dispute as to the principles relevant to the Court’s exercise of its discretion to grant the relief sought by the motion.  Stone J recently set them out in Hexal Australia Pty Ltd v Roche Therapeutics Inc [2005] FCA 1218 at [17] to [22].

10                  The applicants must establish that:

·                    there is a serious question to be tried on the alleged infringement of the patent;

·                    unless the injunction sought is granted, they will suffer irreparable harm for which damages cannot adequately compensate; and

·                    the balance of convenience favours the granting of the injunction sought.

Interpharma must establish that there is a serious question to be tried on the alleged invalidity of the patent.

STANDING

11                  I must first deal with Interpharma’s contention that PP lacked standing to commence the infringement proceeding.

12                  Notwithstanding what appears in the applicants’ pleading (see [2]), the PP Licence is in fact a sub-licence from Pharmacia Cork Limited (PC), an Irish company.  PC obtained its licence from PI.  This licence was not in evidence, though it is pleaded in the statement of claim in the infringement proceeding.  At least for the purposes of the motion, that, by itself is of no consequence.

13                  Section 120 of the Act provides that “infringement proceedings … may be started … by the patentee or an exclusive licensee.”  Interpharma contends that PP is not an “exclusive licensee” as defined by the Act.  According to the Dictionary to the Act,

“exclusive licensee means a licensee under a licence granted by the patentee and conferring on the licensee, or on the licensee and persons authorised by the licensee, the right to exploit the patented invention throughout the patent area to the exclusion of the patentee and all other persons.

exploit, in relation to an invention, includes:

(a)               where the invention is a product – make, hire, sell or otherwise dispose of the product, offer to make, hire, sell or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things ….”

14                  In 1991, a predecessor of PI granted to David Bull Laboratories Pty Ltd (DBL), an Australian company, “a non-exclusive licence of [the patent] and the methods, processes and know-how comprising the intellectual property for the purposes of DBL manufacturing, using and selling the Doxorubicin RTU product” (the DBL Licence).  (The emphasis is mine.)  According to the DBL licence, the “Doxorubicin RTU product” is “a pharmaceutical product for human use containing doxorubicin as the active drug substance and which is a preservative-free ready-to-use sterile solution in finished dosage form”.

15                  By cl 2 of the PP Licence, PC granted to PP “(subject only to the rights, if any, subsisting from time to time, under the [DBL Licence]) an exclusive, royalty-free sub-licence under [the patent] to exploit the invention the subject of [the patent] throughout Australia to the exclusion of [PC] and all other persons.”  (The emphasis is mine.)

16                  Interpharma contends that neither PC nor PP was, at any relevant time, an “exclusive licensee” for the purposes of the Act because their rights as licensors were subject to the rights subsisting under the DBL Licence.  In support of that contention, Interpharma says that:

(a)                claim 1 of the patent (see [25]) does not distinguish between an anthracycline glycoside solution and the various forms thereof such as doxorubicin and epirubicin;

(b)               because of the DBL Licence, PP seems to assert that it has an exclusive licence to exploit the invention that is the subject of the patent only within a certain limited field: ie epirubicin and not doxorubicin; and

(c)                the assertion in (b) is inconsistent with the definition of “exclusive licensee” in the Act and the decision of the High Court in Ex parte British Nylon Spinners Ltd; Re Imperial Chemical Industries Ltd (1963) 109 CLR 336.

17                  Section 6 of the Patents Act 1952 (Cth) (the 1952 Act) provided that

“exclusive licensee means a licensee under a licence granted by the

patentee which confers on the licensee, or on the licensee and persons

authorized by him, the right to make, use, exercise and vend the patented

invention, throughout Australia, to the exclusion of all other persons,

including the patentee.”

18                  In British Nylon Spinners, a case determined under the 1952 Act, the invention the subject of the patent in suit was an improved process for melt-spinning nylon yarn.  The patentee assigned the patent to D.  D granted B an exclusive licence to make, use, exercise and vend the invention within a certain limited field – being yarn whose filaments did not exceed a certain dimension.  D later granted the patentee an exclusive licence to make, use, exercise and vend the invention subject to B’s licence.  Before the High Court, the patentee and B – in support of their application for an extension of the patent in suit – unsuccessfully argued that each of them was an exclusive licensee according to the definition at [17].

19                  By contrast, in Grant v Australian Temporary Fencing Pty Ltd (2003) 59 IPR 170, Holmes J said at [41]:

“It can be seen that the definition [of exclusive licensee] in the 1952 Act is exhaustive, and the rights cumulative: making, using, exercising and vending.  That is in contrast to the non-exhaustive definition of “exclusive licensee” under the present legislation, which merely refers to a ‘right to exploit’ and then separately defines ‘exploit’ in an inclusive and distributive way: ‘make, hire, sell or otherwise dispose … use or import …’ (emphasis added).  The latter definition is at least open to a construction similar to that given to s 101 of the English Patents Act of 1949, as discussed in Ex parte British Nylon Spinners Ltd and Imperial Chemical Industries Ltd: that because the definition of exclusive licence in that provision referred to a licence conferring ‘any right in respect of the patented invention’ the way was open for a ‘plurality of exclusive licences’.  But more importantly for present purposes, it makes no sense to say that the rights explicitly conferred by a licence must, in order to be exclusive, be an exhaustive list of what is comprised in the right to exploit in the legislation, when the legislation itself is not exhaustive in its definition of the term.  Consequently, I reject the argument that the failure to include a right to import (which neither party may have contemplated exercising, before or after the grant of licence) is fatal to exclusivity.”

(The emphasis on the two sentences appearing in the middle of the quotation is mine.)

20                  Relying on Grant, PP contends that the Act contemplates that a patentee might seek to exploit its rights by conferring more than one licence in circumstances where one of those licences is relevantly exclusive in relation to the (inclusively and distributively defined) right to exploit a patented invention.  PP also contends that British Nylon Spinners is distinguishable.

21                  The facts in this case are not on all fours with those in Grant.  In Grant, the argument was that the licence in question was not an exclusive licence under the Act because it conferred no right to import (ie one of the rights to exploit under the Act).  That argument was (rightly) rejected.  In this case, the argument is that the PP Licence is not an exclusive licence under the Act because, though it purports to confer on PP all of the rights to exploit under the Act, some of those rights (ie to make, sell and use doxorubicin) are subject to the rights conferred by the DBL Licence.

22                  On the other hand, British Nylon Spinners is distinguishable.  First, it turned on the wording of the relevant provision in the 1952 Act.  The High Court said at 340 that “the introduction of the definite article into the definition [at [17]] suggests that the right must be found in a single licensee for it is the right to make, use, exercise and vend the patented invention which the licence must be found to confer.”  Secondly, the High Court was concerned to avoid a particular mischief it anticipated might result if it accepted the contention that it ultimately rejected.  That mischief is peculiar to the 1952 Act.

23                  The conduct threatened by Interpharma that the applicants seek to enjoin on an interlocutory and final basis commences with and flows from the import of the imported solutions.  Without import, there can be no sale.  By contrast, the DBL Licence does not confer the right to import.  Those circumstances, in conjunction with what I have set out at [17] to [22], shows that PP has at least an arguable case that it has standing to commence the infringement proceedings.  In my view, that suffices for present purposes as I do not think it necessary or proper for me to finally determine that question in the context of an application for interlocutory relief.

SERIOUS QUESTION TO BE TRIED

Infringement

24                  The patent has previously been the subject of a proceeding concerning its alleged infringement.  That proceeding was commenced by the applicants against Mayne Pharma Pty Ltd, FH Faulding & Co Ltd and Faulding Healthcare Pty Ltd.  The respondents in that proceeding did not seek revocation of the patent.  On 5 August 2005, Crennan J held that the respondents had infringed the patent: Pharmacia Italia S.p.A. v Mayne Pharma Pty Ltd [2005] FCA 1078.

25                  The parties agree that, for present purposes, I can confine myself to claim 1 of the patent.  It may conveniently be set out as follows:

(a)                A sterile,

(b)               pyrogen-free,

(c)                anthracycline glycoside solution

(d)               which comprises

(i)                  a physiologically acceptable salt of an anthracycline glycoside

(ii)                dissolved

(A)              in a physiologically acceptable aqueous solvent therefor

(B)              at an anthracycline glycoside concentration of from 0.1 to 50 mg/ml,

(e)                which has not been reconstituted from a lyophilizate

(f)                 and the pH of which

(i)                  has been adjusted from 2.5 to 5.0

(ii)                solely with a physiologically acceptable acid.

Claim 1 is a claim for a product rather than a process or a method.

26                  For present purposes, I can confine myself to integer (e) of claim 1: “which has not been reconstituted from a lyophilizate”.  In Mayne Pharma, Crennan J said at [7] and [8]:

“Lyophilization is a process which is colloquially described as ‘freeze-drying’ whereby the temperature of the subject material is lowered to freeze it.  A vacuum is drawn then the temperature is raised such that the frozen solvent (usually water) sublimates directly from a solid to a gas.  Accordingly, a ‘lyophilizate’ is the dried or solid form of a product which was formerly in a liquid form and has undergone lyophilization.

Anthracycline glycosides [such as doxorubicin and epirubicin] cannot be administered to a patient in their lyophilized solid form yet they are unstable in aqueous solution and degrade, resulting in both a loss of pharmaceutical activity and the precipitation of solid particles, which prevents them from being administered intravenously.  Because of the problems related to instability, anthracycline glycosides were not manufactured in the form of ready-to-use solutions before the priority date [of the patent].  As mentioned above, they were only marketed in the form of a lyophilized solid in a vial, which was required to be reconstituted into a liquid form before the product could be injected into a patient.”

Integer (e) disclaims the prior art: ready-to-use anthracycline glycoside solutions including doxorubicin and epirubicin made by the reconstitution of lyophilized solids into liquid form prior to their intravenous administration to patients.  Therefore, the imported solutions will – assuming they possess all of the other integers – infringe claim 1 if they have not been reconstituted from a lyophilizate.

27                  In an affidavit sworn on 1 November 2005, David Gray, Interpharma’s managing director, says

“I am informed by Dr Schnait of [Ebewe] and believe that the processes that [Ebewe] can use and proposes to use to manufacture [the imported solutions] do not come within the claims specified in [the patent] because the processes involve reconstitution or dissolution of doxorubicin hydrochloride and epirubicin hydrochloride in the form of a lyophilisate in an aqueous solvent.”

28                  Clearly, the meaning of “reconstitution” is of importance here.  Crennan J dealt with it in Mayne Pharma at [59] and [60]:

“The word ‘reconstituted’ as it appears in the relevant expression in Claim 1 is not a term of art used to refer to the dissolution of a lyophilized product so as to produce a solution suitable for intravenous injection shortly thereafter.  It is clear however that both the word ‘reconstituted’ and the expression of which it forms a part in Claim 1 are used in a special sense in the specification.  Alternatively, because the word is capable of more than one meaning it lacks clarity.  It is permissible to have resort to the body of the specification both to see whether a word or expression has a special meaning or whether it requires clarification because the ordinary, or usual, meaning is not sufficiently precise.  To find a word or expression is used in a special sense it is only necessary that an intention to so use the word or expression is plainly indicated in the specification: Mineral Separation North American Corp v Noranda Mines (1952) 69 RPC 81 at 96.

The body of the specification shows the expression ‘which has not been reconstituted from a lyophilizate’ in Claim 1 disclaims preparations known in the prior art, the better to mark out the monopoly and to define the invention.  References in the body of the specification to lyophilized preparations known as at the priority date were references to lyophilized preparations in a vial.  Contextually, the exclusionary integer refers to a ready-to-use solution, produced from a lyophilizate in a vial which needed to be reconstituted before administration to a patient; that is what was known at the priority date and that is what is disclaimed by the exclusionary integer, so as to be excluded from the monopoly claimed for the invention.”

(The emphasis is mine.)  Her Honour did not draw a bright line in terms of the time before which the production of a solution from a lyophilizate could not amount to reconstitution.

29                  The applicants relied on the evidence of Dr Philip Marshall, a consulting pharmaceutical scientist, as they had in Mayne Pharma.  In an affidavit sworn on 4 November 2005, Dr Marshall says:

·                    he “used the technique of lyophilization … to prepare compounds for further analysis” in the course of research for the PhD thesis he completed in 1978; and

·                    as part of his role at Faulding Pharmaceuticals in Adelaide between 1982 and 1991 in which he “had ‘hands-on’ experience of a number of pharmaceutical manufacturing technologies”, he “learned a number of [those] technologies, including the process of lyophilization.”

In Dr Marshall’s opinion, contained in a further affidavit sworn on 7 November 2005, the imported solutions fall within the scope of claim 1 of the patent and, in particular, integer (e) thereof.  First, information provided to the TGA by Ebewe and the manufacturers of the imported solutions’ active pharmaceutical ingredients suggests that the imported solutions are manufactured from a crystalline powder rather than a lyophilizate.  This is contrary to Mr Gray’s evidence at [27] of what Dr Schnait had told him.  Secondly, the imported solutions are not in a “reconstituted dosage form made by adding a diluent to a vial of lyophilized material so as to produce a dosage form for administration.  Rather, the [active pharmaceutical ingredient], whether lyophilized or crystalline powder, is used as a raw material in a manufacturing process.”

30                  Interpharma impugned Dr Marshall’s qualifications as an expert.  At para 4.8 of his first affidavit, he says he does not have personal experience of anthracycline glycosides.  At para 5.3, in describing the skilled addressee of the patent, he says:

“The nature and complexity of pharmaceutical research and development for any new formulation may require a team of specialists.  The person or team will require knowledge of the relevant state of the art.  By that I mean that the person or team would have to have a general knowledge of how the currently available formulations most relevant to the problem have been made and the performance criteria of those formulations.  They would also have or acquire knowledge of problems analogous to the particular problem under consideration and the formulations that had been successful in addressing those problems.  Further, the person or the team would have general knowledge (and thus be comprised of persons with knowledge) of how currently available formulations are distributed, dispensed and administered.  Further, they would have general knowledge of how the current formulations and any proposed formulations worked or would work in the human body in delivering the therapeutic benefit involved, ie the physiological and pharmacological properties and effects of the drug involved.”

(The emphasis is in the original.)  At para 5.5, he says that “[i]n view of my qualifications and experience as at [the priority date of the patent] I consider that I would have been qualified in part to deal with the problem but not without other team members, and in particular not without team members to provide the expertise and knowledge referred to in paragraph 5.3 above.” (The emphasis is mine.)  Senior counsel for Interpharma described Dr Marshall as “the curate’s egg expert” and “on the periphery” of the team.

31                  In my view, Dr Marshall’s reservations at [30] are, for present purposes, of no consequence.  The parties do not dispute that the imported solutions are anthracycline glycosides.  Rather, the crux of their dispute is integer (e) of claim 1.  Dr Marshall’s experience as set out at [29] qualifies him to give an opinion as to whether the imported solutions fall within the scope of integer (e).  His opinion that they do is, in the first instance, based on a comparison between Mr Gray’s evidence and information provided to the TGA by Ebewe and the manufacturers of the imported solutions’ active pharmaceutical ingredients.  That comparison is not affected by anything he says at [30].  Nor is his opinion that the imported solutions are not reconstituted from a lyophilizate because the lyophilizate is used as a raw material in a bulk manufacturing process.

32                  In the circumstances, I give much more weight to Dr Marshall’s uncontroverted direct expert evidence than to Mr Gray’s controverted hearsay evidence.  There is a serious question to be tried as to the alleged infringement of the patent.

Invalidity

Novelty

33                  On invalidity generally, Interpharma relied on the evidence of Paul Whenman, a patent attorney.  According to Mr Whenman, none of the prior art documents he considered for the purposes of rendering his opinion on novelty “clearly disclose all of the integers in respect to any of” the claims of the patent.

34                  However, Interpharma also led evidence from Fabian Dwyer, who was employed as a pharmacist at Baxter Healthcare Pty Ltd (Baxter, then known as Travenol Laboratories Pty Ltd) from September 1983 to March 1986.  In his affidavit sworn on 27 October 2005, Mr Dwyer says that:

“5.       During 1984 to March 1986, whilst working … at Baxter, I was involved in the preparation of aseptically compounded cytotoxic drugs according to orders received from hospital pharmacies throughout Australia, including … doxorubicin ready-to-use solutions in syringes or infusion bags.  During 1984 to March 1986 whilst I was working at Baxter I recollect that I was preparing ready-to-use doxorubicin solutions placed in infusion bags or syringes on an almost daily basis ….

6.         I set out below the process that I used during 1984 to March 1986 to compound ready-to-use solutions of doxorubicin hydrochloride in syringes or infusion bags:

6.1       Baxter purchased from Farmitalia Carlo Erba S.r.L. [ie a predecessor of PI] doxorubicin hydrochloride in vials of 50mg lyophilised (freeze dried) powder.  Vials are sterile sealed containers made of glass.

6.2       The lyophilisate of doxorubicin hydrochloride was reconstituted or dissolved in an aqueous solvent being sterile water.

6.3       The resulting solution was then aseptically transferred either into sterile syringes or infusion bags according to the number of orders received from the hospital ….

7.         The ready-to-use doxorubicin hydrochloride solutions in syringes or infusion bags had a shelf life of approximately 30 days.  As the ready-to-use doxorubicin solutions were stable for use by hospitals as directed by Baxter, it was not necessary to adjust the pH by adding an acid or a buffer.

8.         The doxorubicin hydrochloride ready-to-use solutions in syringes or infusion bags that I compounded as described in paragraph 6 above, were sterile, pyrogen-free, anthracycline glycosides solutions which had been reconstituted from a lyophilisate powder of doxorubicin hydrochloride.”

Interpharma contends that the patent is invalid for lack of novelty, having been anticipated by Baxter’s activities before the priority date of 2 August 1985.

35                  Further, Mr Gray says that “I was informed by Thomas Tsai of Baxter and believe that [DBL] was also commercially compounding ready-to-use solutions of doxorubicin for hospitals when [Mr Tsai] commenced employment at Baxter as a pharmacist in about July 1985.”  DBL had filed a notice of opposition to the grant of the patent.  In that notice DBL described itself as “manufacturers and marketers of products similar to those covered in the … application [for the patent] and applicants for a patent in the same field.”  DBL withdrew the notice pursuant to cl 6.1 of the DBL Licence.

36                  I attach little weight to Mr Gray’s evidence as to DBL’s activities.  It is hearsay upon (apparent) hearsay about events that took place twenty years ago.

37                  I do not think that much turns on Mr Dwyer’s evidence as to Baxter’s activities (or the email from Mr Tsai to Mr Gray exhibited to Mr Gray’s affidavit and proffered as corroborative of Mr Dwyer’s evidence).  Clearly, Baxter was manufacturing ready-to-use doxorubicin solutions from lyophilizates in 50mg vials which solutions were transferred to syringes and infusion bags for distribution to hospital pharmacies where they could be administered to patients immediately following delivery.  In my view, that is precisely the prior art that Crennan J held in Mayne Pharma was excluded by integer (e) of claim 1 of the patent: see the second emphasised sentence in the quotation at [28].  The fact that those solutions had a shelf life of thirty days is only relevant if one (a) ignores what I noted in the last sentence at [28] and (b) assumes – in the absence of evidence – that other prior art solutions did not have such a long shelf life.

38                  Accordingly, Interpharma has not established that there is a serious question to be tried as to the alleged invalidity of the patent for lack of novelty.

Obviousness

39                  Interpharma contends that the patent is invalid for lack of an inventive step.  In Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262, Aickin J said at 270:

“… what has to be proved by evidence in any case in which obviousness is relied upon is the state of common general knowledge in Australia.

…

It is as well to bear in mind that the question of obviousness involves asking the question whether the invention would have been obvious to a non-inventive worker in the field, equipped with the common general knowledge in that particular field as at the priority date, without regard to documents in existence but not part of such common general knowledge.”

(The emphasis is mine.)

40                  Interpharma has not established that there is a serious question to be tried as to the alleged invalidity of the patent for lack of an inventive step.  Mr Whenman fails to consider whether the six documents he relies on as establishing obviousness formed part of the common general knowledge as at the priority date.  Dr Marshall says that four of them did not.  Two of them are “specialised papers [which] would not have been routinely read by the ordinary skilled worker in the field [and] although of a kind which might be found by a literature search, are not texts or routine references”.  The other two are

“… texts of limited circulation.  They were not, for example, to the best of my recollection, held by [my employer] in 1985.  Based on a recent search of library holdings I have conducted, I note that neither publication is held by major libraries like the University of Adelaide library or the Australian National University library.  These texts are not ones therefore, that I expect to be routinely used and referred to by all workers skilled in the field.”

As to the two documents that did form part of the common general knowledge as at the priority date, Dr Marshall says

“Had I considered the problem in light of the common general knowledge in 1985, including [those two documents], I would not have expected a stable ready-to-use solution (ie a solution with at least 12 months and preferably 2 years stability) could be produced solely by simple adjustment of pH.”

41                  Again, in my view, Dr Marshall’s reservations at [30] are, for present purposes, of no consequence.  That at para 4.8 of his affidavit is irrelevant.  Those at paras 5.3 and 5.5 do not affect what he says as to the state of the common general knowledge as at the priority date.  Indeed, he says in the last sentence of para 5.5 that “I would be the team member qualified to deal with the issues to which the remainder of this affidavit relates” – which includes his opinion as described at [40].

Manner of manufacture

42                  Interpharma has not established that there is a serious question to be tried as to the alleged invalidity of the patent because the invention involves a mere collocation of known integers performing known functions that cannot amount to a manner of manufacture.  Mr Whenman’s conclusion on this point relies on the four documents that Dr Marshall says did not form part of the common general knowledge as at the priority date.

Section 40

43                  Interpharma contends that the patent is invalid because:

·                    contrary to s 40(2) of the Act, the specification does not fully describe the best method of performing the invention; and

·                    contrary to s 40(3), the claims of the patent are not fairly based on the matters described in the specification.

Senior counsel for Interpharma said that this ground of alleged invalidity is more a matter for trial.  I agree.

False suggestion

44                   Interpharma contends that the patent is liable to be revoked under s 138(3)(d) or (e) of the Act because it was obtained by false suggestion.  According to Mr Whenman, PI

“represented to the US Patent Office that the invention was based on the discovery that the stability of an aqueous solution of doxorubicin in solution at a pH of 2.71 to 3.14, wherein the pH is adjusted by the addition of hydrochloric acid is stable as compared with a solution which is identical with the exception that phosphoric acid buffer solution had been used to adjust pH instead of hydrochloric acid.”

However, before the grant of the patent, integer (f) of claim 1 was amended from “which has a pH of from 2.5 to 6.5” to “which additionally incorporates a physiologically acceptable acid or buffer to provide a solution with a pH of from 2.5 to 5.0” and, after the grant of the patent,  it was amended into its present form which involves only a physiologically acceptable acid.

45                  Interpharma has not established that there is a serious question to be tried as to whether the patent is liable to be revoked because it was obtained by false suggestion.   The fact that, in the course of prosecuting a foreign patent, PI contended for a narrower claim than that found in claim 1 of the patent (both as at the date of grant and today) does not support, let alone make out, a case of false suggestion.  Nor does the fact that claim 1 was amended after the date of grant so as to narrow it.

Conclusion on invalidity

46                  Interpharma has failed to establish that there is a serious question to be tried as to the alleged invalidity of the patent.

IRREPARABLE HARM

47                  The applicants say they will suffer irreparable harm as a result of the conduct they seek to enjoin.  Much of that harm is in the form of inherently quantifiable monetary losses to PP.  The amounts involved are substantial. The evidence on quantum is contained in an affidavit sworn on 17 October 2005 by Brent Denning, National Key Account Manager of Pfizer Australia Pty Ltd (PA). It is confidential, and I will not give particulars thereof.

48                  Interpharma contends that those losses cannot be attributed to PP, but only to PA, which is not a party.  PA is, like PC, PI and PP, a member of the Pfizer group of companies and appears to be the company that actually sells and distributes Adriamycin and Pharmorubicin.  In an affidavit sworn on 17 October 2005, Bradley Winter, PP’s Commercial Manager, says that because PP “is the sole supplier of [ready-to-use] anthracycline glycosides to [PA], the loss of sales identified by Mr Denning will flow directly through to [PP] as corresponding loss of its sales.”  However, there is no evidence of the prices at which PP sells its products to PA.  Be that as it may, I think it clear that PP’s losses will be substantial.

49                  Additionally, the applicants say that the conduct they seek to enjoin will increase their costs in ways that cannot be quantified and imperil the viability of the facility where Adriamycin and Pharmorubicin are manufactured.  Interpharma contends that such additional harm “is vague in the extreme”.

50                  Interpharma’s capacity to pay damages in respect of the losses referred to at [48] is modest.  That capacity is, to a very large extent, dependent upon it importing the imported solutions, from which activity it projects a certain level of profit.  Though it has offered to undertake to keep proper accounts, it has not offered to undertake to quarantine that profit or any part of it.  That, combined with the fact that Interpharma is a young company in the process of establishing itself in its chosen market, suggests that Interpharma is likely to be unable to meet any significant award of damages.  Further, it can be doubted whether the indemnity in Interpharma’s favour given by a substantial foreign company is of any real comfort to the applicants as that company lacks a presence in Australia.

51                  What I have set out at [50] suggests that damages will not be adequate compensation for the harm that the applicants will suffer as a result of the conduct they seek to enjoin.  There was no dispute as to the applicants’ capacity to pay damages pursuant to the usual undertaking to do so.

BALANCE OF CONVENIENCE

52                  In my view, the balance of convenience is in favour of the applicants.  Interpharma entered its chosen market with “its eyes wide open” to the possible consequences: Tidy Tea Ltd v Unilever Australia Ltd (1995) 32 IPR 405 at 415.  It cannot avoid being enjoined simply because of those possible consequences.  Further, it is an invader yet to establish itself in its chosen market. It had not, as at 9 November 2005, imported the imported solutions.  Notwithstanding the various considerations of public interest raised by Interpharma as suggesting that it should be allowed it to continue the invasion, I have concluded that it should be kept “at bay until a decision has been reached as to whether the invasion is lawful or not”: Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 619 at 627.

CONCLUSION

53                  I will grant the applicants an order restraining Interpharma from importing or offering to import the imported solutions until the hearing and determination of the proceeding.  The reason for the limited form of that relief appears at [23].  I will not grant the relief sought in paragraph 2 of the notice of motion requiring Interpharma to procure the withdrawal of the SPB listings.  The operation of the PBS and the SPB are explained in the affidavit of Mr Denning referred to at [47] and his later affidavit of 8 November 2005.  I accept that if Interpharma is not restrained from importing the imported solutions, those products are likely, consistent with the Government guidelines, to be listed in the April 2006 edition of the SPB, which would trigger the foreshadowed 12.5% price reduction in respect of Adriamycin and Pharmorubicin that is of concern to the applicants.  I infer from this that if Interpharma is restrained, the relief sought in paragraph 2 of the notice of motion will not be necessary.

Associate:

Dated:              23 November 2005