FEDERAL COURT OF AUSTRALIA

Apotex Pty Ltd v AstraZeneca AB (No 3) [2012] FCA 265

THE COURT ORDERS THAT:

1.    The interlocutory applications dated 20 January 2012 and 24 February 2012 be dismissed.

2.    Costs be reserved.

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

REASONS FOR JUDGMENT

THE APPLICATIONS

1        These reasons for judgment relate to two interlocutory applications by which Apotex Pty Ltd (Apotex) seeks to vary interlocutory orders made by Rares J on 14 December 2011 in favour of AstraZeneca AB and AstraZeneca Pty Ltd (Astra).

BACKGROUND

2        On 14 December 2011 Rares J published his reasons for decision in Apotex Pty Ltd v AstraZeneca AB [2011] FCA 1520. Rares J recorded the following:

(1)    AstraZeneca AB has relevantly three patents in Australia for what it claims are innovations in relation to rosuvastatin, a compound that is an active ingredient in a drug for treating high blood cholesterol levels and related conditions (at [1]).

(2)    The three patents in issue are:

    the 051 patent, or dosage patent, the subject of the invalidity proceeding;

    a patent known as the 842 patent, or composition patent, that concerned the composition of the pill in which the active ingredient is delivered; and

    a patent known as the 165 patent, or generic patent, that concerns the use of the active ingredient in the treatment of heterozygous familial hypercholesterolemia (at [3]).

(3)    Claim 1 in the 051 patent is as follows (at [4]):

“A method of treating a patient suffering from hypercholesterolemia which comprises administration as a starting dose of a single, once daily, oral dose of 5 to 10 mg of [rosuvastatin] or a pharmaceutically acceptable salt thereof, in the form of a pharmaceutical composition.”

(4)    Claim 1 in the 842 patent is as follows (at [6]):

“A pharmaceutical composition comprising [rosuvastatin] or a pharmaceutically acceptable salt thereof as the active ingredient and an inorganic salt in which the cation is multivalent, provided that:

(i)    the inorganic salt is not synthetic hydrotalcite; and

(ii)    the counter anion to the inorganic salt is not a phosphate”.

(5)    Claim 1 in the 165 patent is as follows (at [7]):

“A method for treating heterozygous familial hypercholesterolemia in a patient suffering heterozygous familial hypercholesterolemia, comprising administering to the patient [rosuvastatin] or a pharmaceutically acceptable salt thereof.”

(6)    Following the commencement of the proceedings, the matter was first returned before the docket judge on 16 June 2011. On that occasion, counsel for AstraZeneca raised the question as to whether or not the proceedings were being used to “clear the way” for Apotex to market a generic rosuvastatin product. However, these matters remained in limbo and during the course of the next few months, AstraZeneca’s solicitors sought to elicit from Apotex whether or not it was making some attempt to bring a generic product to the market. The attempts to elicit the information were deflected (at [8]).

(7)    By 17 November 2011, Apotex was ready to launch its generic into the market. On that day, Freehills wrote advising Blake Dawson that this is what had already happened (at [11]).

(8)    Apotex launched an intense marketing campaign on 17 November 2011…[t]he marketing campaign involved Apotex offering a substantial number of pharmacy groups and individual pharmacists discounts in the order of 75% off the current price charged by AstraZeneca for its product (at [13]).

(9)    Apotex had previously challenged claims for the 051 and 165 patents in the Patents Office. Its claims for those patents to be further examined were rejected by the Office in 2010 (at [18]).

(10)    Curiously, Mr Millichamp confirmed that Apotex had sought, and obtained, from the Therapeutic Goods Administration the express exclusion of heterozygous familial hypercholesterolemia in the indications for treatment for its generic rosuvastatin that I set out earlier in these reasons (see [16]). That is, in contradistinction to the approved indications for CRESTOR and the claim in the 165 patent that it is indicative for treating the very condition that Apotex excluded from its indications. No explanation was given by Mr Millichamp or Apotex for seeking and obtaining that exclusion (at [32]).

(11)    I am of opinion that a prima facie case has been made out here. First, there is the unexplained omission from the indications in Apotex’s description of its product that it excludes the heterozygous familial hypercholesterolemia condition. Apotex deliberately chose to avoid an explanation of that omission. It argued that a common feature of indications set out in a product’s description was that some indications were omitted. In argument, senior counsel for Apotex speculated that one explanation might be that it was avoiding an unnecessary fight. That contention hardly strengthens its argument that this patent was so obvious that it would be held to be invalid (at [47]).

(12)    The evidence of Dr Nestel and Dr Williams satisfies me that there is a sufficient prima facie case that, if things remain the same at the trial, AstraZeneca will be able to establish a claim for infringement. Indeed, it is somewhat curious that if each of the patents were so obviously defective, Apotex, with its carefully planned marketing campaign and its having commenced this proceeding solely to challenge the validity of the 051 or dosage patent, has not been in a position to put any evidence of any expert on at all, albeit that it has relied on information and belief as to what Dr Marshall says (at [48]).

(13)    [I]t seems to me that the balance of convenience, at the moment, is strongly in favour of maintaining the status quo ante. This is a proceeding in which AstraZeneca, as an innovator, would be irreparably damaged in its ability to exploit its invention for another eight years if it is forced to drop its prices to meet demand over the next seven weeks pending the hearing of the application for further interlocutory relief by the docket judge. It seems to me that while Apotex might lose the first mover advantage, it is an advantage that it has quite carefully sought to exploit through its somewhat misleading assertions that there was no basis for AstraZeneca’s claims for preliminary discovery (at [50]).

(14)    Apotex engaged in a carefully orchestrated marketing exercise designed to catch AstraZeneca by surprise. Indeed, as appeared in the assertions in Freehills’ correspondence on Apotex’s behalf in the period before 17 November 2011, Apotex was asserting that AstraZeneca had no reasonable basis to seek preliminary discovery to find out whether Apotex was about to launch a generic into the market. The last such assertion was made by Freehills on 26 October 2011, days after its client had obtained approval from the Therapeutic Goods Administration for its generic rosuvastatin (at [54]).

(15)    At every point beforehand, Apotex was fully on notice that its claims would be contested. What Apotex sought to do was, as it has candidly admitted, to build up as big a market presence and share as it could, having had the advantage of surprise. While Apotex had no obligation to foreshadow what it was going to do, it does not lie well in its mouth to criticise AstraZeneca for the time it took to, first of all, understand the effect and characteristics of the generic product and, secondly, obtain expert advice and evidence to demonstrate its claims for infringement and then bring proceedings in the Court to make those claims good (at [55]).

(16)    [A]s matters have transpired, both parties have produced considerably more evidence in the meantime and the proceedings before me have taken a very considerable time today (at [56]).

(17)    It is invidious that I must decide this contested application now. But that is because of the way in which Apotex has chosen to conduct the litigation that proceeded before the docket judge for some six months without any suggestion by Apotex that it proposed to launch a product in the way it did (at [57]).

(18)    At the outset of the hearing today, counsel for AstraZeneca indicated, as they had before the docket judge on 6 December 2011, that it wished to proceed ex parte for injunctive relief up to 31 January 2012, but, that, if Apotex had substantive evidence and opposed the ex parte grant of relief, AstraZeneca wished to have the relief granted inter partes until further order. I made it clear then to Apotex’s counsel that the usual practice of the courts has been that, ordinarily, a respondent who appears to oppose the grant of interlocutory injunctive relief and leads evidence, rather than allowing the applicant to proceed ex parte, will lose the opportunity for the relief to be granted only up to a particular time shortly afterwards, while it better marshalls its case against interlocutory relief. I adhere to that view (at [61]).

(19)    Here, Apotex substantively opposed AstraZeneca’s application. That opposition was based on a deal of evidence and submissions. Apotex was aware that it ran the risk that by doing so I would make an order until further order. The time of the Court is public time. It would be contrary to the ordinary practice I have referred to and to the overarching purpose in Pt VB of the Federal Court of Australia Act [1976 (Cth)] to permit Apotex to have the benefit of requiring AstraZeneca to prove its case for interlocutory relief once more on 31 January 2012. I am satisfied that I should grant interlocutory relief as sought until further order (at [63]).

3        Amongst other orders, Rares J ordered that:

The applicant/cross-claimant be restrained until further order from, in Australia and without the licence of the respondents/cross-claimants, selling, supplying, offering to sell or supply (including without limitation offering to sell or supply after 1 April 2012), soliciting or taking orders for, or advertising or promoting any generic rosuvastatin product.

4        On 31 January 2012, the date on which the interlocutory injunction application had originally been listed for hearing, and again on 6 February 2012, the proceedings came before Emmett J (Apotex Pty Ltd v AstraZeneca AB (No 2) [2012] FCA 142). Emmett J recorded the following:

(1)    By amended interlocutory application dated 20 January 2012, Apotex applied for orders that the terms of the injunction be varied so as to limit their restraint to rosuvastatin products in 5mg and 10mg dosages. Astra opposed the application on two bases. The first was that the application was in essence an abuse of process because Apotex had contested a full interlocutory hearing in consequence of which the injunction was granted, and there has been no appeal from the order granting the injunction. The second basis was that, assuming that Apotex was permitted to pursue its application, it had made out no case for varying the interlocutory order made on 14 December 2011 (at [2]).

(2)    Rares J concluded that Astra had established a sufficient prima facie case of infringement of its patents by Apotex and that the balance of convenience justified the grant of the interim relief claimed by Astra against Apotex. I have said that those conclusions were reached after a contested interlocutory hearing. However, there is some doubt as to the precise nature of the proceeding in question (at [4]).

(3)    Rares J made clear that, while the hearing might be regarded as ex parte, there was no reason why Apotex could not be heard on issues such as the adequacy of the evidence adduced by Astra and the appropriateness of the orders sought. His Honour said, however, that, if Apotex chose to fight Astra on the evidence, it would not get a ‘second bite’ because it would have fought the interlocutory injunction as a matter of substance. His Honour observed that ‘if you dip your toes in the water too far, you will find that there is no reason that the Court should let you have several bites of the cherry’. His Honour observed that, if an interlocutory injunction were granted in circumstances where it was actively opposed and there was a contest in relation to it, Stone J would be relieved of dealing with the matter on 31 January 2012. On the other hand, if Astra proceeded ex parte, it would be necessary for it to justify a continuation of any injunction on 31 January 2012 (at [10]).

(4)    After detailed argument as to whether Apotex should be permitted to prosecute its application, I adjourned the hearing to 6 February 2012 to enable me to consider more carefully the procedural history of the proceeding and to study the transcript of the hearings before Stone J on 6 December 2011 and Rares J on 14 December 2011…When the matter came before me again on 6 February 2012, I indicated that I would entertain the application by Apotex but would require Apotex to satisfy me why, by reason of the additional evidence now available, I should reach a conclusion different from that reached by Rares J (at [13]).

(5)    The injunction granted by Rares J was not specific in relation to the patents that supported it. It was common ground before me that, if I were satisfied that there is a prima facie case of infringement of the Cation Salt Patent, there would be no need to consider whether there is also a prima facie case of infringement of the Low Dose Patent and the HeFH Patent. Nevertheless, it would be necessary to consider any additional evidence as to the balance of convenience, assuming that a prima facie case had been established (at [14]).

(6)    I am not persuaded that the additional evidence, which was not before Rares J, is sufficient to lead to the conclusion that there is not a prima facie case of infringement, assuming that the Cation Salt Patent is valid (at [28]).

(7)    Astra begins with its position as the grantee of a patent. The Cation Salt Patent is effective until such time as it is revoked (at [35]).

(8)    Apotex has proffered an undertaking not to market its 5mg and 10mg rosuvastatin products pending trial. It seeks to market only 20mg and 40mg products (at [43]).

(9)    I was not persuaded that any additional evidence adduced by Apotex is of such a character as to lead to the conclusion that the findings of Rares J should be varied…However, Astra has commenced proceedings against other generic suppliers of rosuvastatin. Those proceedings are listed for directions for the purpose of considering applications for interlocutory relief on 1 March 2012. Issues similar to those raised in this application will be raised in those proceedings. Accordingly, I considered that the appropriate course was to adjourn the hearing of this application by Apotex to 1 March 2012. If it were not for the fact that those other proceedings were listed for the purpose of considering interlocutory relief, I would have dismissed the present motion with costs. The present motion will be listed for hearing on 1 March 2012 on the basis that it will be treated as a fresh application to vary the orders made by Rares J on 14 December 2011 by reason of any change in circumstances that might arise as a consequence of orders made in the other proceedings (at [46]).

5        On 1 March 2012 I dealt with the other proceedings mentioned at [46] of Emmett J’s reasons (see Watson Pharma Pty Ltd v AstraZeneca AB [2012] FCA 200 (Watson Pharma)). Nothing which occurred in relation to the other proceedings constitutes a change in circumstances insofar as they might apply to Apotex. To the contrary I reached conclusions to the same general effect as Rares and Emmet JJ and thereafter made orders restraining the generic pharmaceutical companies involved in those proceedings from exploiting their rosuvastatin products until further order. Accordingly, the basis upon which Emmett J adjourned Apotex’s first interlocutory application did not arise.

6        In the meantime, however, and having been rejected in its arguments as to the proper construction of the 842 or cation salt patent (at least for interlocutory purposes) by both Rares and Emmett JJ, Apotex decided to change the formulation of its generic rosuvastatin product. As a result, on 24 February 2012, by another interlocutory application, Apotex sought variation of the interlocutory orders of Rares J on the basis of its changed formulation and having regard to its additional evidence and proposed undertakings, including undertakings: – (i) only to supply its generic rosuvastatin product in accordance with the new formulation and to continue to exclude from supply 5mg and 10mg dosage forms (the Apotex dosage forms thus being limited to 20mg and 40mg only), (ii) to prohibit pill splitting in its product and consumer information and to notify doctors and pharmacists of this prohibition on a regular basis (in effect, and having regard to the 051 or low dose patent, to try to prevent patients from buying Apotex’s 20mg and 40mg doses and splitting them into lower doses such as 5mg and 10mg doses), (iii) to continue to exclude heterozygous familial hypercholesterolemia (HeFH) from the indications in its product information for its generic rosuvastatin product and to notify doctors and pharmacists of this exclusion on a regular basis (in effect, and having regard to the 165 or HeFH patent, to prevent the use of Apotex’s product to treat HeFH), and (iv) to keep proper records and accounts.

7        According to Apotex the fact that it has changed the formulation of its generic rosuvastatin product so as to remove the basis for the allegation of infringement by AstraZeneca AB (Astra) of the 842 or cation salt patent is a change of circumstances which, together with the additional evidence and undertakings, warrants variation of Rares J’s orders. Apotex submitted it was inconceivable that in circumstances where (at least for the purposes of these interlocutory applications) Astra no longer asserts infringement by Apotex’s new formulation of the 842 or cation salt patent the interlocutory injunction based on that patent could be continued. Moreover, according to Apotex, the fact that Astra did not now assert infringement of the 842 or cation salt patent for the purposes of this interlocutory application fundamentally changed the strength of its prima facie case (which was limited now to the 051 or low dose patent and the 165 or HeFH patent) and the balance of convenience. In any event, Apotex submitted, Apotex’s new proposed undertakings ensure that either there will be no primary infringements of those patents or, at the least, that Apotex has no reason to believe that its product will be put to an infringing use (s 117(2)(b) of the Patents Act 1990 (Cth) (the Patents Act)).

DISCUSSION

8        The first notice of Apotex’s changed formulation was given on 22 February 2012 by letter from Apotex’s solicitor to Astra’s solicitor. The letter said that, notwithstanding Apotex’s strong view that its current formulation did not infringe the 842 or cation salt patent, “our client’s supplier has reformulated its tablet coating to exclude” any compound which could be considered a salt. The letter also said Apotex expected to be advised on or before 25 February “whether the reformulation has been successful”. The letter does not disclose: – (i) when Apotex first considered the possibility of reformulating its product, or (ii) when Apotex first instructed the supplier to begin the process of reformulation. But for the hearing before Emmett J on 31 January and 6 February 2012 this information might not particularly matter. As Apotex put it, if a party is subjected to an interlocutory injunction by reason of alleged patent infringement by a product, the party would be entitled thereafter to apply to vary or set aside the injunction if it managed to change its product so as to avoid the alleged infringement.

9        The critical difference in this case is that, irrespective of its strong views to the contrary, Apotex knew the basis upon which it had been restrained on 14 December 2011 included the arguable presence of a salt in its coating. Apotex chose to apply to have those orders set aside before Emmett J on 31 January and 6 February 2012 and argued again that its product did not infringe the 842 or cation salt patent by reason of its coating. In making this further application after it failed before Emmett J, it would be expected that Apotex would provide a proper evidentiary foundation for the exercise of discretion it now seeks in its favour. Given the circumstances in which the present application is made, in my view a proper evidentiary foundation would explain when Apotex first considered the possibility of reformulating its product and when it first instructed the supplier to begin the process of reformulation. In short, if Apotex was contemplating a change of formulation at any time before 6 February 2012 then it was incumbent upon it to make this fact known to Emmett J. If Apotex did not contemplate changing its formulation until after 6 February 2012, then it was incumbent upon it to provide evidence in support of that fact in the present application.

10        The concern I have about the state of Apotex’s evidence in this regard is reinforced when other material is considered. It is apparent from the letter of 22 February 2012 that, by that date, Apotex’s supplier “has reformulated its tablet coating”, presumably on Mr Millichamp’s instructions. This is supported by the affidavit of Mr Marshall of 22 February 2012. By that date Mr Marshall had not only been provided with a table identifying Apotex’s proposed formulation but also had completed his analysis of that formulation. The difficulty with Mr Marshall’s affidavit is that it is silent about relevant dates. It says that Freehills provided him with a document containing the current and proposed formulations but does not say when Freehills did so. It says that Freehills asked him to review the proposed formulation but does not say when this occurred. Mr Millichamp, who has given two affidavits on which Apotex relied, does not appear to have given any evidence as to when the document given to Mr Marshall was created or how that relates to when Apotex first considered the possibility of reformulating its product and when it first instructed the supplier to begin the process of reformulation.

11        Against the background of the applications before Rares and Emmett JJ, and given that Apotex is seeking the exercise of a discretion in its favour, I would have expected Apotex to explain why it is making this application now rather than as part of the hearing before Emmett J. If the explanation is as simple as that Apotex did not think about the possibility of a changed formula to avoid the argument about the 842 or cation salt patent until after the hearing before Emmett J then Apotex could readily have given evidence to that effect. But the evidence is not to this effect. Moreover, Apotex’s evidence avoids any mention of the dates on which Apotex first considered the possibility of reformulating its product and when it first instructed the supplier to begin the process of reformulation. Not only does the evidence not identify those dates, it avoids any mention of any date from which any inference might be drawn about those facts which seem to be of obvious and central relevance to an application seeking a favourable exercise of discretion. I have already mentioned the fact that Mr Marshall’s affidavit does not mention when he was given the document identifying Apotex’s current and proposed formulations. The document itself also bears no date.

12        In the circumstances and without the benefit of evidence explaining the facts in relation to timing which Apotex alone could have adduced, it seems to me that the inference which should be drawn is that the matters which Apotex now chooses to place before the court as a reason for varying the interlocutory injunction could have been taken or, at the least, offered or foreshadowed in the hearing before Emmett J on 31 January or 6 February 2012.

13        Apotex had 6 weeks after the hearing before Rares J in order to determine its course of action before Emmett J. When it came before Emmett J Apotex did not indicate that it would or could avoid wasted time and cost by changing its formulation obviating the need for reconsideration of the construction of the 842 or cation salt patent. Apotex also did not indicate that it was willing to proffer more undertakings so as to strengthen its position on the prima facie case for infringement with respect to the other patents and the balance of convenience. Apotex chose to argue the full interlocutory case, including challenging Rares J’s construction of the 842 or cation salt patent.

14        None of these facts would be a cause for concern if in the present application Apotex had given a full and frank explanation of the timing of the various steps it had taken to reach its current position, including disclosing when Apotex first considered the possibility of reformulating its product and when it first instructed the supplier to begin the process of reformulation. Considered in the context of the well-known principle that a party should not be permitted to relitigate “at will” the terms of an interlocutory injunction (Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 at 46), Apotex’s conduct does not readily support an exercise of discretion in its favour.

15        Nevertheless, the fact remains that Apotex has changed its formulation and, for the purposes of this application at least, Astra no longer asserts a prima facie case of infringement of the 842 or cation salt patent. If the injunction is too broad in consequence then it would be unjust to maintain it and it should be varied irrespective of the concerns about Apotex’s conduct which remain given the state of the evidence. I have considered the application on this basis and have concluded that the existing injunction should be maintained having regard to the other patents on which it was founded – the 051 or low dose patent and the 165 or HeFH patent.

16        First, nothing in Apotex’s material or submissions persuades me that Astra’s prima facie case of infringement of the 051 or low dose patent and the 165 or HeFH patent has any less strength than I found to exist, on similar material, in Watson Pharma. The only truly new submission Apotex made was one which also could have been but was not put to Rares and Emmett JJ, namely, that Apotex’s generic rosuvastatin product is a “staple commercial product” and thus not subject to the “reason to believe” source of infringement by supply in s 117(2)(b) of the Patents Act. As Astra submitted, this is an argument Apotex might choose to make at the hearing but there are certainly grounds open to Astra to argue strongly to the contrary. At this interlocutory stage Astra should not be deprived of relief to which it is otherwise entitled merely by reason of Apotex’s submission being arguable.

17        Otherwise, the evidence presently before me establishes that not only is splitting of both 20mg and 40mg tablets feasible but also that (unless Astra substantially lowers its prices to compete with Apotex’s generic product) patients will have a strong price incentive to do so. Indeed, the evidence before me about tablet splitting is more powerful than that which I considered in Watson Pharma and leads to the inference that, without substantial price reductions by Astra, tablet splitting of Apotex’s 20mg and 40mg tablets to achieve doses of 5mg or 10mgis by no means an unlikely or fanciful prospect.

18        Nor do I think that Apotex’s instructions to the contrary in product and consumer information and letters to doctors and pharmacists will be of much practical assistance. Apotex points to not one therapeutic efficacy or safety issue to back up its proposed direction that “tablets must not be broken or crushed and must be swallowed whole with a glass of water”. Indeed, it points to no evidence – other than the fact of the instructions themselves – to support the notion that it will not have reason to believe that its tablets will not be split into 5mg and 10mg doses in the face of evidence that: – (i) rosuvastatin tablets, amongst others, can be and are split into smaller doses on the instructions of doctors and otherwise by patients so as not to waste their tablets if their dose is changed, (ii) there is no apparent therapeutic efficacy or safety issue which would preclude splitting tablets, (iii) devices to split tablets are commonly available for low cost in many pharmacies, and (iv) if Astra does not substantially lower its prices to meet those of Apotex an inference should be drawn that the patient will have a large incentive to engage in tablet splitting so as to take advantage of Apotex’s 20mg and 40mg dosage forms.

19        In Watson Pharma the evidence left me in some doubt about the reality of the prospect of patients splitting a 40mg tablet into quarters to obtain a 10mg dose when they could simply buy the 20mg product instead. The evidence in the present matter suggests that such splitting is feasible and a not unlikely prospect, probably dependent on price incentives. On this evidence I am satisfied that Astra has established a prima facie case of infringement of the 051 or low dose patent.

20        In terms of the 165 or HeFH patent the additional instructions and undertakings proposed by Apotex also do not persuade me to reach a conclusion different from that Rares J reached and, indeed, I reached in Watson Pharma. Again, Apotex has not pointed to any evidence suggesting any therapeutic efficacy or safety issue with the prescription of Apotex’s generic rosuvastatin product to treat HeFH. It is obvious that Apotex’s generic rosuvastatin product will be equally capable of treating HeFH as Astra’s product, Crestor. Apotex’s entire scheme of proposed instructions to doctors, pharmacists and patients is founded on the apparent but in evidentiary terms unsupported belief that doctors, pharmacists and patients will be willing to overlook the scientific reality (that Apotex’s generic rosuvastatin product will be equally capable of treating HeFH as Astra’s product, Crestor) and insofar as their own price incentives might be concerned wholly disregard those incentives for the purpose only of ensuring that Apotex has no reason to believe that its product might be used to infringe one of Astra’s patents. I do not accept that the scheme is practical or likely to be efficacious. In any event, insofar as reasonably practicable, doctors and pharmacists should not be burdened by court-mandated instructions from a pharmaceutical company that have no therapeutic efficacy or safety purpose and which are intended to do nothing other than to aid the pharmaceutical company to avoid an alleged patent infringement pending the final resolution of disputed issues between the parties. This is a strong reason not to accept the scheme of undertakings Apotex proposes. Either way I am satisfied that Astra has established a prima facie case of infringement of the 165 or HeFH patent.

21        In terms of invalidity, as Astra noted, Apotex made no submissions in respect of the 051 or low dose patent on the basis (which I have rejected) that there is no threatened infringement of that patent. As to the 165 or HeFH patent Apotex relied on the SCRIP article and the open label trial. I dealt with the open label trial but not the SCRIP article in Watson Pharma. I adopt the conclusions I reached about the open label trial in Watson Pharma. As to the SCRIP article, it contains one second-hand reference to rosuvastatin. The authorities on which Apotex (and, for that matter, Astra) relied – Bristol-Myers Squibb Co v FH Faulding & Co Ltd (2000) 97 FCR 524; [2000] FCA 316 and Merck & Co Inc v Arrow Pharmaceuticals Ltd (2006) 154 FCR 31; [2006] FCAFC 91 – do not seem to me to undermine Astra’s case against invalidity having regard to the particular circumstances of the open label study and the particular terms of the SCRIP article. Moreover, nothing in the present case causes me to conclude that Apotex’s case on invalidity of the 165 or HeFH patent is of sufficient weight either to undermine the overall strength of Astra’s prima facie case on infringement or to otherwise materially affect the balance of convenience.

22        It is also relevant to recall that Apotex unsuccessfully sought re-examination of both the 051 or low does patent and the 165 or HeFH patent before the Patent Office.

23        It is true that protection of the rights under the two patents has the effect of excluding Apotex from any supply of its generic rosuvastatin product pending the outcome of the proceedings. But this is a consequence of the rights the patents create and the fact that Apotex chose to proceed to market with its product irrespective of those rights.

24        It is also true that the strength of Astra’s case on infringement of the two patents (rather than three as considered by Rares and Emmett JJ) interacts with the balance of convenience. And in terms of the balance of convenience itself what is being weighed is Apotex’s desire to supply only its 20mg and 40mg dosage forms rather than all dosage forms from 5mg to 40mg against Astra’s case that the total restraint on the supply of all Apotex’s generic rosuvastatin products continue. In this regard, Apotex submitted that the conduct of pill splitting and supply to treat HeFH (1 in 500 or 350 people) was a very small part of the overall rosuvastatin market. The difficulty with this submission is the evidence which indicates the size of the market overall and the importance of the 20mg and 40mg dosage forms to the market, as well as the relationship between the prices of the dosage forms. In summary: – (i) if Apotex enters the market with its 20mg and 40mg dosage forms Astra will be subject to potentially irreparable damage from the need to compete on price (over and above mandatory price reductions caused by another statin entering the market), and (ii) because of both price disclosure requirements enabling comparison of prices across doses and the very real prospect of pill splitting the pressure on price will be very likely to directly affect Astra’s entire range.

25        Once these considerations are weighed with the factors that Rares and Emmett JJ considered and which continue to have weight, it is apparent that the balance of convenience remains in the protection of the status quo pending the hearing. In short: – (i) Apotex has no established position in the market, (ii) Astra has a substantial existing market in Crestor, (iii) Apotex has sought to enter the market knowing of Astra’s patents and the rights it asserts, (iv) the patents on which Astra relies – in this case the 051 or low dose patent and the 165 or HeFH patent – are long-standing and were the subject of unsuccessful re-examination proceedings by Apotex, and (v) Apotex’s entry into the market with its proposed 20mg and 40mg dosage forms will cause significant and most likely irreparable upheaval in the existing market, including by way of price pressure on Astra across its entire range and substantial erosion of Astra’s market share. By contrast, maintaining the injunction made by Rares J will leave Apotex in the same position as it currently is in – and, moreover and not unimportantly, the same position as the other generic companies that wish to enter to rosuvastatin market. In these circumstances, Apotex will not be exposed to irreparable harm and will be adequately protected by Astra’s continued undertaking as to damages.

26        For these reasons Apotex’s interlocutory applications should be dismissed. Costs may be argued subsequently and will be reserved for this purpose.

Associate:

Dated:    23 March 2012