FEDERAL COURT OF AUSTRALIA

Les Laboratoires Servier v Apotex Pty Ltd [2009] FCA 1097

PRACTICE AND PROCEDURE – discovered documents redacted to keep third party identity confidential – discovered documents provided voluntarily by overseas third party on basis of identity confidentiality – access to unredacted documents to obtain identity of third party

Gray v Associated Publishers (Aust) Pty Limited [2002] FCA 1045followed

Mackay Sugar Co-operative Association Limited v CSR Limited (1996) 63 FCR 408 cited

Sabre Corporation Pty Ltd v Russ Kalvin's Hair Care Company (1993) 46 FCR 428 cited

Science Research Council v Nasse [1980] AC 1028 at 1065 cited

LES LABORATOIRES SERVIER and SERVIER LABORATORIES (AUST) PTY LTD (ACN 004 838 500) v APOTEX PTY LTD (ACN 096 916 148), SYMBION PHARMACY SERVICES PTY LTD (ACN 000 875 034), CHEM MART PTY LIMITED (ACN 001 235 374), PHARMACOR LIMITED (ACN 121 020 835), GENEPHARM (AUSTRALIA) LIMITED (ARBN 003 854 626) (FORMERLY GENEPHARM LIMITED) and SIGMA PHARMACEUTICALS (AUSTRALIA) PTY LTD (ACN 004 118 594)

VID 139 of 2007

BENNETT J

29 SEPTEMBER 2009

SYDNEY

THE COURT ORDERS THAT:

1.         The first respondent provide to the applicants all identifying details relating to the third party supplier or its employees, agents and/or representatives redacted for “confidentiality” in the documents set out in the Schedule within 7 days of the date of this Order.

2.         The identifying details of the third party supplier or its employees, agents and/or representatives referred to in paragraph 1 above be marked as confidential and dealt with in accordance with the confidentiality orders in these proceedings dated 2 November 2007 (‘the Confidentiality Orders’).

3.         For the purposes of paragraph 4(a)(vii) of the Confidentiality Orders, Ms Sylvie Jaguelin, Patent Director at the First Applicant, is a person to whom, upon her signing the undertakings titled “Annexure A” annexed to Servier’s email dated 25 August 2009, the information referred to in paragraphs 1 and 2 may be disclosed.

4.         Costs reserved.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

Schedule

List of Documents dated 3 October 2008

List of Documents dated 16 January 2009

REASONS FOR JUDGMENT

1                          In these proceedings for infringement of its patent for the process for the synthesis of, relevantly, its perindopril product (‘the patent’), the applicants (‘Servier’) seek access to information that has been redacted from documents produced on discovery by the first respondent, Apotex.

2                          The process that is the subject of the patent includes a step in which a diastereoisomer is obtained after purification by crystallisation from a polar organic solvent, chosen from acetonitrile, ethyl acetate or lower aliphatic alcohol.  Servier alleges that Apotex infringed the patent by, inter alia, importing, selling or supplying its perindopril product made by using the process there claimed.  Apotex denies infringement. 

3                          Apotex’s parent company, Apotex Pharmachem Inc (‘API’), uses a compound known as Intermediate B (‘Intermediate B’) in the manufacture of its perindopril erbumine product.  Intermediate B is supplied to API by a third party supplier (‘the supplier’).  In issue in the proceedings is whether the synthesis of Intermediate B infringed the patent.  For the purpose of the proceedings, Apotex has provided the route of synthesis for Intermediate B, which relevantly specifies that the solvent used is one which I will call ‘Solvent 1’.  As Solvent 1 is not one of the solvents specified in the claims of the patent, its use in the synthesis of Intermediate B is a key plank in Apotex’s denial of infringement. 

Discovery

4                          Apotex agreed to discover documents constituting or recording the process description for the synthesis of Intermediate B and the operating procedure for that process. While API is not subject to the obligation of discovery, Servier had raised with Apotex the possibility of a Sabre order (Sabre Corporation Pty Ltd v Russ Kalvin's Hair Care Company (1993) 46 FCR 428).  API then voluntarily provided the documents to Apotex, redacted to remove information that would identify the supplier.  This provision was on the basis that the supplier’s identity would be protected.  Apotex produced documents provided to it by API with the name, address and contact details of the supplier redacted (‘API documents’).  From the correspondence between the parties, it does not seem to be in dispute that Freehills (Apotex’s solicitors) have in their possession documents disclosing the identity of the supplier.  Freehills has stated in correspondence that it caused the documents to be redacted in accordance with instructions that the supplier does not wish to be identified.  In no document provided to Servier has the identity of the supplier been revealed.

5                          API had requested documents, relevant to the discovery categories, from the supplier.  For some time no documents were received from the supplier and Servier asked Apotex for the name, address and contact details of the supplier in order to pursue an application under the Hague Convention.  Apotex indicated in correspondence that it could not provide the identity of the supplier as that was the confidential information of API and API did not consent to its disclosure.  Eventually, the supplier provided two documents to API, which were produced by Apotex on discovery to Servier (‘supplier documents’).  Both of those documents were provided on a confidential basis and on the assurance by API that the supplier’s identity would be kept confidential.  Any redactions on the supplier documents were made by the supplier before they were provided to API.

6                          Subsequently, in response to Servier’s requests, API made further approaches to the supplier for documents.  At one stage, the supplier expressed a willingness to cooperate in providing further documents but subsequently informed API that no further documents will be provided.  When the matter first came before the Court, I requested Apotex to make one further request of the supplier for ten batch records for Intermediate B which the supplier had previously indicated it would review and provide.  Apotex was also given the opportunity to make contact with the supplier to advise it of Servier’s application to obtain its identity and to determine whether any further documentation or information would be provided in the absence of an order of the Court.  To date, no further documentation or information has been produced by the supplier.

Servier’s reasons for seeking the identity of the supplier

7                          Servier seeks information as to the identity of the supplier because it believes that the supplier may be in possession of information or documents important for its infringement claim, particularly concerning the solvent used by the supplier in the synthesis of Intermediate B.  Servier refers to two sets of documents produced on discovery which, it says, suggest that Solvent 1 was not used in the synthesis of Intermediate B, as claimed by Apotex:

1.         An email dated 4 May 2004 from API to a party whose name has been redacted, presumably the supplier, asked for a list of solvents used in the synthesis of Intermediate B.  The reply email, dated 21 May 2004, stated that the solvents being used for Intermediate B were what I will call Solvent 2 and Solvent 3 (which are different to Solvent 1).  The reply does not mention Solvent 1.  Solvent 2 and Solvent 3appear to fall within the solvents specified in the claimed process of Servier’s patent.

            Servier says that it is not satisfied with the documents that have been produced by the supplier through API and Apotex, in the light of the emails.  There is no explanation for the statement in the emails that Solvent 2 and Solvent 3 (rather than Solvent 1) are used as the solvents for the preparation of Intermediate B.  While, as Apotex points out, the emails were sent in 2004, there is no evidence to explain whether there has been a change in solvent since 2004, or the length of time that Solvent 2 and 3 (within the claims of the patent) may have been used.   

2.         One of the sets of documents within the supplier documents provides for “deviations/remarks” concerning the process adopted by the supplier in the synthesis of Intermediate B.  The document produced is a standard form and there is no entry under this heading. 

Servier submits that the supplier has not provided sufficient documentation to explain whether or not the deviations provided for in its standard form allow for a departure from the standard process to permit the substitution of Solvent 1 by another solvent.

8                          The supplier has declined to produce any further documentation, despite repeated requests by Apotex through API.  Servier maintains its entitlement to obtain unredacted copies of documents, that is, copies of documents in which the identity of the supplier is disclosed.  This, Servier says, is to enable it to consider what further action it will take to conduct enquiries of that supplier concerning the solvent actually used in the process.

9                          Apotex says that Servier is seeking an order that Apotex act in a manner contrary to its obligation of confidence to API and to the supplier.  It points out that Servier’s solicitors are aware that the basis upon which API and the supplier provided the documents to Apotex was that the details of the identity of the supplier be redacted.  Servier’s response is that it accepted the redaction and the confidentiality only on the footing that it was provided with complete documentation which, it says, it was not.

10                        Servier now accepts that it cannot obtain an order to remove redactions from the documents that had been provided to API already redacted by the supplier.  However, it does press for copies of API’s unredacted documents, where the redaction has been carried out by Freehills.  Servier says that all they want is ‘name, address and contact details’ of the supplier.  

11                        Servier says that the course it will adopt after obtaining this information will depend upon the identity and location of the supplier.  It may include a direct approach, a subpoena, discovery by the supplier if the supplier has a relevant presence in the jurisdiction, investigation of whether the supplier has published its process, or an application under the Hague Convention for taking evidence abroad.  Servier also says, without elaborating, that it does not seek to ask questions of the supplier that are not relevant to these proceedings.

Apotex’s grounds for keeping the supplier’s identity confidential

12                        Apotex says that it is unable to disclose voluntarily the identity of the supplier for the following reasons:

1.         Apotex does not have any relationship with the supplier and never has.  All information relating to the supplier has been received by Apotex through API.  API takes the view that the identity of its suppliers is the confidential information of API.  API has maintained the confidentiality of that information and has not consented to its disclosure to Servier.

2.         The supplier has given instructions that it does not wish to be identified in these proceedings.

3.         The supplier expressed a willingness to co-operate in giving documents sought on the basis that its identity would be kept confidential. 

4.                     The supplier’s documents were provided on the basis that they were only for use in the proceedings and that its identity would not be disclosed in the proceedings.  Where the supplier provided the documents to the API, the supplier had redacted those documents before supplying them to API.

13                        Apotex’s position is that it is unable to provide Servier with the identity of the supplier as it is the confidential information of API and API does not consent to its disclosure.  The supplier has provided some documentation but has declined to respond to a further broad request for documents as sought by Servier and requested by Apotex/API.  From the evidence, neither Apotex nor API has the ability to direct the supplier to provide further information or documentation.

14                        Apotex points out that, while Servier says that having the name of the supplier will permit it to consider whether there is an alternative course of action to obtain information for the purposes of giving evidence about the process, Servier has not provided any information as to:

1.         The nature of the evidence it will seek from the supplier if it pursues an application for taking evidence under the Hague Convention.

2.         Why such evidence is relevant to the proceedings.

3.         The likely timing implications to the present proceedings of any action that Servier might take.

4.         Why the proceedings should be further delayed to enable Servier to conduct these further enquiries.

As discussed above, Servier has, to some extent, now clarified points 1 and 2.

Consideration

15                        In Gray v Associated Publishers (Aust) Pty Limited [2002] FCA 1045, Branson J considered a similar claim for confidentiality where the respondents produced on discovery documents with the identity and personal details of external editors masked.  Her Honour accepted that the respondents wished to protect the privacy of the external editors in the belief that they would object to the disclosure of their personal details to the applicant without their prior knowledge and consent.  However, her Honour noted at [13] that, as recognised by Lord Wilberforce in Science Research Council v Nasse [1980] AC 1028 at 1065 cited by Spender J in Mackay Sugar Co-operative Association Limited v CSR Limited (1996) 63 FCR 408:

There is no principle in English law by which documents are protected from discovery by reason of confidentiality alone.

16                        Her Honour also noted (at [14]) that there is an established practice whereby inspection is provided of discovered documents with parts of the documents masked.  That practice is based on a positive right to withhold from inspection that part of the document in respect of which there is, for example, a valid claim for privilege.  Justice Branson said that there is no such positive right in respect of portions of documents sought to be withheld from inspection on the grounds of confidentiality or irrelevance.  Observing at [21] that the Court is in a position to prevent the inappropriate issue of, for example, subpoenas, her Honour concluded that the applicant was entitled to see complete, unmasked copies of discovered documents.

17                        Here, confidentiality of the identity of the supplier is asserted.  There is no evidence filed by the supplier or by API as to the reasons why the supplier is concerned to maintain the confidentiality of its identity or why API regards the supplier’s identity as confidential.  The only evidence is that Apotex and API undertook to keep the identity confidential based upon instructions given to those parties by the supplier and that, on that basis, the supplier provided documents to API and, through API, to Apotex.

18                        Servier’s position is that at no time did it accept that it would abide by the asserted confidentiality regime if it took the view that the documentation provided concerning the process of the patent was incomplete.  It was only after provision of the documents that Servier noted what it characterised as inconsistencies concerning the solvent used in the process.  The documents produced on discovery suggest that, at least at one stage, the solvents used in the preparation of Intermediate B came within the claimed process and that the solvent claimed to be presently used in that process was not used at the time.  It is such an inconsistency, between these documents and the documents specifying the use of Solvent 1, that Servier says it wishes to pursue.  This presents for Servier a line of inquiry as to whether Solvent 1 is presently used and if there has been a change in solvent since 2004.  Apotex launched its product in December 2006. 

19                        Apotex submits that the inconsistencies alleged by Servier are ‘a thin reed’ on which to embark upon a protracted attempt to obtain further evidence on infringement.  That may be so, but it is not apparent at this time whether any delay would result from providing the identity of the supplier.

20                        Apotex also submits that the application is premature in the absence of any evidence of infringement by Servier.   It submits that there is no reason why Servier should not first file its evidence on infringement with the opportunity, if appropriate, to file supplementary evidence arising from any further investigations.  I understand that Servier served evidence on infringement on 9 September 2009.

21                        Servier has the right to inspect API’s documents with the redactions of the information concerning the identity of the supplier removed.  I cannot order Apotex to remove redactions from documents that came into Apotex’s or API’s possession already redacted.  It remains to be seen what, if any, application Servier makes and whether the weight of any evidence that Servier wishes to pursue is outweighed by the delay and inconvenience caused in the proceedings and to other parties. 

22                        Servier has agreed that it is sufficient for Apotex to provide the information identifying the supplier that it seeks from the redacted documents, rather than unredacted versions of the documents.  Apotex may, in the alternative to removing the redactions, provide the information that Servier seeks from the unredacted documents: the name, address and contact details of the supplier. 

23                        In order to minimise concerns as to the use that may be made of the identity of the supplier, Ms Sylvie Jaguelin of Servier has agreed to provide an undertaking of confidentiality as agreed between the parties in addition to the confidentiality regime in place as agreed by the parties. 

24                        The orders are those proposed by Servier on 12 August 2009, with the undertaking annexed to Servier’s email of 25 August 2009. 

Associate:

Dated:         29 September 2009