FEDERAL COURT OF AUSTRALIA

Novartis AG v Hospira Pty Limited (No 2) [2012] FCA 1113

THE COURT NOTES THE FOLLOWING UNDERTAKINGS GIVEN TO THE COURT BY THE APPLICANTS:

(a)    To submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by the injunctions in paragraphs 1, 2 and 3 below or any continuation (with or without variation) thereof.

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

(c)    Should they be informed or become aware of any other party seeking to exploit in Australia a pharmaceutical product other than ZOMETA or ACLASTA which includes the active ingredient zoledronic acid, they will forthwith take all reasonable steps to prevent such exploitation, including if necessary commencing proceedings in the Court to seek preliminary injunctive relief restraining such exploitation.

THE COURT ORDERS THAT pending the hearing and determination of thIS proceeding or further order:

1.    The respondent, whether by itself, its directors, officers, servants, agents or otherwise, be restrained from selling, supplying, offering to sell or supply, soliciting or taking orders for, advertising or promoting, in Australia, any pharmaceutical product which includes the active ingredient zoledronic acid, without the licence or authority of the applicants.

2.    The respondent, whether by itself, its directors, officers, servants, agents or otherwise, be restrained from taking any steps to obtain listing of any pharmaceutical product which includes the active ingredient zoledronic acid under the Pharmaceutical Benefits Scheme maintained by the Commonwealth Government under the National Health Act 1953 (Cth) (the PBS).

3.    The respondent immediately give notice withdrawing its application for inclusion on the Schedule of Pharmaceutical Benefits of any pharmaceutical product which includes the active ingredient zoledronic acid, and take any other necessary steps to withdraw the application and, by no later than 5.00 pm on 17 October 2012, serve on the applicants an affidavit made by a proper officer of the respondent verifying that such notice has been given and identifying any other necessary steps that have been taken to withdraw the application.

4.    The applicants give the respondent:

(a)    at least one month’s written notice before the applicants (or either of them) or any person authorised by the applicants (or either of them) exploits in Australia a pharmaceutical product (other than the ZOMETA or ACLASTA products currently listed under the PBS) which includes the active ingredient zoledronic acid;

(b)    at least one month’s written notice before the applicants (or either of them) or any person authorised by the applicants (or either of them) makes application to obtain listing under the PBS of a pharmaceutical product which includes the active ingredient zoledronic acid, including (for the avoidance of doubt) a ZOMETA 4mg/100ml product.

(c)    written notice of any person (other than the applicants or either of them or any person authorised by the applicants or either of them) known to the applicants (or either of them) who seeks to exploit in Australia a pharmaceutical product which includes the active ingredient zoledronic acid.

5.    In Order 4 the word “exploit” bears the meaning given to it in the Patents Act 1990 (Cth).

THE COURT FURTHER ORDERS THAT:

6.    The costs of and incidental to the applicants’ claim for interlocutory relief be the applicants’ costs in the proceeding.

7.    There be liberty to apply.

8.    The proceeding be listed for directions by arrangement between the parties and the Associate to Yates J.

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

THE COURT NOTES THE FOLLOWING UNDERTAKINGS GIVEN TO THE COURT BY THE APPLICANTS:

(a)    To submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by the injunctions in paragraphs 1, 2 and 3 below or any continuation (with or without variation) thereof.

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

(c)    Should they be informed or become aware of any other party seeking to exploit in Australia a pharmaceutical product other than ZOMETA or ACLASTA which includes the active ingredient zoledronic acid, they will forthwith take all reasonable steps to prevent such exploitation, including if necessary commencing proceedings in the Court to seek preliminary injunctive relief restraining such exploitation.

THE COURT ORDERS THAT pending the hearing and determination of thIS proceeding or further order:

1.    The respondent, whether by itself, its directors, officers, servants, agents or otherwise, be restrained from selling, supplying, offering to sell or supply, soliciting or taking orders for, advertising or promoting, in Australia, any pharmaceutical product which includes the active ingredient zoledronic acid, without the licence or authority of the applicants.

2.    The respondent, whether by itself, its directors, officers, servants, agents or otherwise, be restrained from taking any steps to obtain listing of any pharmaceutical product which includes the active ingredient zoledronic acid under the Pharmaceutical Benefits Scheme maintained by the Commonwealth Government under the National Health Act 1953 (Cth) (the PBS).

3.    The respondent immediately give notice withdrawing its application for inclusion on the Schedule of Pharmaceutical Benefits of any pharmaceutical product which includes the active ingredient zoledronic acid, and take any other necessary steps to withdraw the application and, by no later than 5.00 pm on 17 October 2012, serve on the applicants an affidavit made by a proper officer of the respondent verifying that such notice has been given and identifying any other necessary steps that have been taken to withdraw the application.

4.    The applicants give the respondent:

(a)    at least one month’s written notice before the applicants (or either of them) or any person authorised by the applicants (or either of them) exploits in Australia a pharmaceutical product (other than the ZOMETA or ACLASTA products currently listed under the PBS) which includes the active ingredient zoledronic acid;

(b)    at least one month’s written notice before the applicants (or either of them) or any person authorised by the applicants (or either of them) makes application to obtain listing under the PBS of a pharmaceutical product which includes the active ingredient zoledronic acid, including (for the avoidance of doubt) a ZOMETA 4mg/100ml product.

(c)    written notice of any person (other than the applicants or either of them or any person authorised by the applicants or either of them) known to the applicants (or either of them) who seeks to exploit in Australia a pharmaceutical product which includes the active ingredient zoledronic acid.

5.    In Order 4 the word “exploit” bears the meaning given to it in the Patents Act 1990 (Cth).

THE COURT FURTHER ORDERS THAT:

6.    The costs of and incidental to the applicants’ claim for interlocutory relief be the applicants’ costs in the proceeding.

7.    There be liberty to apply.

8.    The proceeding be listed for directions by arrangement between the parties and the Associate to Yates J.

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

REASONS FOR JUDGMENT

(REVISED FROM TRANSCRIPT)

1    On 28 September 2012 I published my reasons for concluding that the applicants are entitled to interlocutory injunctive relief: Novartis AG v Hospira Pty Limited [2012] FCA 1055.

2    In accordance with orders made on that day, the parties have provided drafts of the orders and undertakings which they seek and which they say would give effect to those reasons. I have also heard argument on that question.

3    I have now made what I consider to be the appropriate orders in each proceeding. My reasons for making orders in that form can be stated briefly.

4    First, the applicants’ applications for interlocutory injunctive relief were based on threatened infringement arising under s 117 of the Patents Act 1990 (Cth) (the Act). In my view the relief to be granted as interlocutory injunctive relief in relation to the threatened supply of the allegedly infringing products should reflect that basis. For that reason I have not made orders which extend the restraint upon the respondent to preparing, importing, or keeping any pharmaceutical product which includes zoledronic acid as an active ingredient or to authorising any person to engage in allegedly infringing acts. I should add that there is no evidence before me, beyond the respondent’s own threatened supply (which is now restrained), that would suggest that the respondent has or would seek to authorise any other person to infringe the applicants’ patent rights. For this reason I have preferred the form of the draft orders submitted by the respondent, save that I do not think that the orders should be limited temporally as the respondent has sought. The orders as now made have effect pending the hearing and determination of the proceedings, or further order. In my view, so conditioned, those orders strike the proper balance and provide adequate and appropriate relief in relation to the respondent’s threatened supply of zoledronic acid pharmaceutical products. If changed circumstances eventuate then it is always within the power of a party in the position of the respondent to approach the Court to seek a variation or a vacation of the orders that have been made.

5    Secondly, it is appropriate, in my view, that the respondent be restrained from taking steps to obtain listing under the Pharmaceutical Benefits Scheme (the PBS) of any pharmaceutical products containing zoledronic acid as an active ingredient. The respondent proposed an order that would permit it to file such an application but require it to withdraw it, if need be, in time to prevent listing of any such product. Strange as this might sound at first blush, the respondent’s purpose for seeking an order in that form was to enable it to have the benefit of a pending application for a zoledronic acid pharmaceutical product should it be found at the final hearing that the applicants are not entitled to the final injunctive relief they seek.

6    I am not persuaded that relief of that kind should be granted. The existence of such an application, based on an apparent intention to supply a product in infringement of the applicants’ prima facie rights, would expose the applicants to the risk of an irreversible statutory price reduction for the second applicant’s own PBS listed products, which is precisely what the applicants have sought to avoid by prosecuting their applications for interlocutory injunctive relief. If I were to accede to the order sought by the respondent, it would expose the applicants to a significant risk over which they have no control and place their protection in that regard in the hands of the respondent who, itself, does not have absolute or complete control over the administrative procedures it would have invoked by making such an application or such applications in the first place. In my view it would be inappropriate to allow a situation to arise where the applicants are exposed to any such risk, especially in circumstances where they have successfully vindicated their prima facie rights under the Act. In making this observation I should make clear that I do not in any way suggest that I hold concerns that the respondent would deliberately act contrary to that part of the order it seeks that would require it to withdraw any application for listing it might make. The point is that the respondent is not in complete control of the process it seeks to invoke in its own interests and any miscalculation or mistake by it or by others could have very significant and likely irreversible consequences for the applicants.

7    Thirdly, it is appropriate, in my view, that the respondent be ordered to give immediate notice withdrawing its present application for listing of its zoledronic acid product on the PBS Schedule and to take any other necessary steps to withdraw that application. I am persuaded that it is appropriate that the respondent should serve on the applicants an affidavit made by a proper officer of the respondent identifying the steps that it has taken in that regard.

8    Fourthly, I am persuaded that the applicants should be ordered to give appropriate prior notice of any intended exploitation of, or application for PBS listing of, any pharmaceutical product containing zoledronic acid as its active ingredient by them or either of them or by any person authorised by them or either of them. Although the applicants’ case on the balance of convenience was advanced on a number of bases, one significant basis was the fact that the second applicant had no present intention to seek or to pursue any further application for PBS listing of a new pharmaceutical product containing zoledronic acid as an active ingredient. If that situation were to change, or if either of the applicants were to otherwise authorise another person to exploit in Australia a pharmaceutical product that contains zoledronic acid as an active ingredient, then this would likely represent changed circumstances that may entitle the respondent to seek a variation or, indeed, a vacation of one or more of the orders I have made. I say “may entitle” because much would depend on the circumstances that would then exist. The Court would be required to assess the balance of convenience and justice in light of those new circumstances, nevertheless taking into account the strength of the applicants’ prima facie case for final injunctive relief.

9    Fifthly, for the same reason, I am persuaded that the applicants should give notice to the respondent of any person who, to their individual or collective knowledge, seeks to exploit in Australia a pharmaceutical product that includes zoledronic acid as an active ingredient.

10    Finally, it is appropriate, in my view, that an order for costs be made now, and not reserved as the respondent has contended. The applicants have been successful in obtaining substantial interlocutory injunctive relief over significant opposition. They are entitled to an order for costs which recognises that fact. In my view the appropriate order, however, is that the costs of and incidental to the applications for interlocutory relief be the applicants’ costs in each proceeding.

Associate:

Dated:    12 October 2012