Federal Court of Australia

Janssen-Cilag Pty Ltd v Arrotex Pharmaceuticals Pty Ltd (Interlocutory Costs) [2026] FCA 1611

ORDERS

THE COURT ORDERS THAT:

1.    Cipla Australia Pty Ltd and Seekwell Pty Ltd atf The Seekwell Unit Trust pay the applicants’ and the respondents’ costs of and incidental to their interlocutory application dated 21 October 2026 to be paid in an amount as agreed or, failing agreement, as determined on a lump sum basis, and to be paid immediately upon that agreement or determination.

2.    If agreement has not been reached as to an amount as contemplated by order 1 above by 27 November 2026, the matter be referred to a Registrar for determination of those costs on a lump sum basis, including for further directions.

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

REASONS FOR JUDGMENT

Delivered ex tempore

JACKMAN J:

1    These three proceedings concern allegations of patent infringement against three separate parties, namely Arrotex Pharmaceuticals Pty Ltd, Nova Pharmaceuticals Australasia Pty Ltd and MSN Laboratories Pty Ltd. The subject matter concerns products containing macitentan for the treatment of pulmonary arterial hypertension. The applicants seek interlocutory injunctions against the respondents and that interlocutory dispute is fixed for hearing on 19 November 2026.

2    Cipla Australia Pty Ltd (Cipla) proposes to launch a macitentan product in Australia, with Seekwell Pty Ltd (Seekwell) as its distributor. Neither Cipla nor Seekwell has been sued by the applicants. They have been granted leave to appear for the purpose of seeking certain suppression orders under s 37AF of the Federal Court of Australia Act 1976 (Cth) over evidence proposed to be adduced by the applicants, and they have set out their proposed orders in an interlocutory application dated 21 October 2026 in each of the three proceedings. The effect of those orders is that the three respondents (including their external legal representatives) would not have access at all to the allegedly confidential material, except to the extent that Cipla and Seekwell give their written consent.

3    At the heart of Cipla’s and Seekwell’s claim for confidentiality are some draft documents set out in confidential annexures RFG2–11 and RFG2–12 to the affidavit of Ms Rebekah Gay dated 14 October 2026, filed for the applicants (the Draft Undertakings). There is various associated material included in confidential annexure SD–5 to the affidavit of Mr Stuart D’Aloisio dated 21 October 2026. The material over which confidentiality is claimed is said by Mr D’Aloisio to have been prepared to ensure that Cipla’s and Seekwell’s launch of their macitentan product does not infringe a particular patent owned by the first applicant, which has been asserted against each of the three respondents. Cipla and Seekwell contend that they would be prejudiced if the Draft Undertakings were shared with their competitors in the generic pharmaceutical market.

4    The position initially taken by Cipla and Seekwell in their interlocutory application was plainly unreasonable. It would have had the effect that evidence which appears to be relevant to the balance of convenience, which the applicants intend to rely upon (and which the respondents do not propose objecting to on the ground of relevance), could not even have been seen by the respondents’ external legal representatives. The matter came before me on 22 October 2026. All that the applicants and respondents sought on that day was that the material be made available to the respondents’ external legal representatives, reserving liberty to apply subsequently for wider access. That was entirely reasonable on the part of the applicants and the respondents. However, it was opposed by Cipla and Seekwell until some of the difficulties with their position were exposed in oral argument. It was only when I put Cipla and Seekwell to an election between having their interlocutory application decided on the then state of the evidence (which struck me as inadequate to sustain the orders sought in the interlocutory application) or submitting to the respondents’ external legal representatives having access to the allegedly confidential material, that Cipla and Seekwell chose the latter course.

5    The matter has now been resolved, in effect by Cipla and Seekwell capitulating on the orders sought in their interlocutory application. Cipla and Seekwell seek to have the costs of their interlocutory application reserved until after determination of the interlocutory injunction application on 19 November 2026, but I can see no fairness, efficiency or utility in that course.

6    Ordinarily, a resolution by agreement, rather than by a determination on the merits, would entail each party bearing their own costs, assuming each had acted reasonably. However, I regard Cipla and Seekwell as having acted unreasonably in commencing and pursuing the interlocutory application in its extreme terms, and maintaining that position until well into the oral argument on 22 October 2026. I regard the applicants and the respondents as having conducted themselves entirely reasonably. In those circumstances, Cipla and Seekwell should be ordered to pay the applicants’ and the three respondents’ costs of the interlocutory application. It is practicable and reasonable for those costs to be paid by way of lump sum.

Associate:

Dated:    27 October 2026