Consideration
45 The seminal case on conditions for the grant of interlocutory relief, Beecham Group Limited v Bristol Laboratories Pty Limited (1968) 118 CLR 618 and 621, was itself a case in which an interlocutory injunction had been sought based on claims of infringement of patents. The claims for infringement were based on allegations of actual sales of an infringing drug. The proceedings were commenced one month before the primary judge, McTiernan J, was moved for the interlocutory injunction. The principles for interlocutory relief authoritatively established in that case were endorsed subsequently in Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 at 81-84 [65]-[72] per Gummow and Hayne JJ, whose approach to the organising principles to be applied by courts in such applications was approved by Gleeson CJ and Crennan J at 67-68 [18].
46 The first question is whether AstraZeneca has established a sufficient prima facie case and the second question is whether the balance of convenience justifies the grant of interim relief that is sought.
47 In order to establish a prima face case it is necessary that, if the evidence remains as it is, there is a probability that, at the trial of the action, the applicant will be found to be entitled to relief. 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.
48 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.
49 That brings me to the second question of whether the balance of convenience favours the grant of an injunction. In Samsung Electronics Co Limited v Apple Inc [2011] FCAFC 156 at [194] Dowsett, Foster and Yates JJ cited with apparent approval the following:
"In Miller R, Burkill G, Birss C, Campbell D, Terrell on the Law of Patents (17th edn, Sweet & Maxwell Ltd, 2010) at 18-51, the authors say, under the heading 'Clearing the way', that:
When a basic patent for a pharmaceutical agent expires …, the innovator company will often posses a number of further patents which may be infringed by a generic product otherwise due to be launched at expiry of the basic patent … . While there is no obligation on a potential defendant to start proceedings, if a party who wishes to launch a generic product in such circumstances chooses to wait until there is insufficient time between notifying the innovator company of its intentions and the launch date, that fact can be taken into account by a court deciding whether or not to grant an interim injunction. In other words:
"Where litigation is bound to ensue if the defendant introduces his product, he can avoid all the problems of an interlocutory injunction if he clears the way first. That is what the procedures for revocation and declaration of non-infringement are for."
Accordingly on evidence before the court that an interim injunction would cause uncompensatable loss to both sides; because on the claimant's side there would be formidable difficulties in the way of trying to get back to its present market position after a major collapse in prices caused by generic competition and because on the defendant's side one could not determine what the defendant would have sold if it entered the market at the moment it wishes to, the failure to clear the way has led to interim injunctions being granted in a number of patent cases in recent years." (emphasis added)
50 Each of the parties will suffer some damage to its present position, whether or not an injunction is granted. Nonetheless, it 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.
51 In my opinion, the principles enunciated by Brett JA in Plimpton v Spiller (1876) 4 Ch D 286 at 292-293, as approved by Kitto, Taylor, Menzies and Owen JJ in Beecham 118 CLR at 625-626, are directly apposite:
"… if you assume that the defendant is in the right, there is no doubt that an injunction is a great hardship upon him; but if you assume that the plaintiff is right, then the mere keeping of an account by the defendant seems to me to be a great hardship on the plaintiff, for he would be driven to commence actions against the purchasers from and customers of the defendant, which would obviously lead to a multiplication of suits. There will be a hardship on the one side or on the other, and the question is, on which side does the balance appear to lie? Now if the trade of a defendant be an old and an established trade, I should say that the hardship upon him would be too great if an injunction were granted. But where, as here, the trade of the defendant is a new trade, and he is the seller of goods to a vast number of people, it seems to me to be less inconvenient, and less likely to produce irreparable damage, to stop him from selling, than it would be to allow him to sell and merely keep an account, thus forcing the plaintiff to commence a multitude of actions against the purchasers. Therefore, as a rule of conduct, I think that in such a case as this it is better, where the trade of the defendant is a new one - and not an old established trade - and where there are likely to be many customers of the new trade, to say that you will act against the new trader by injunction, whereas if he were carrying on an old trade you would act in the other way." (emphasis added)
52 As their Honours went on to point out, about two weeks before it brought the proceedings, Beecham had warned Bristol Laboratories that if it began to market the competing product in Australia infringement proceedings would be taken. Their Honours then said (118 CLR at 626):
"It was in the face of this warning that the defendant commenced the acts now complained of, and the action was thereafter instituted without delay. Any goodwill the defendant may have built up for the hectacillin would of course be destroyed or damaged by granting an injunction, but that was a risk the defendant took with its eyes open. If it be not restrained, it will presumably take advantage of the time before the hearing to subject the goodwill of the plaintiff's established trade in ampicillin to the prejudice of competition from a product which the defendant maintains has some points of superiority. In no meaningful sense could matters be said to be kept in status quo if in these circumstances the defendant were left free to pursue its course, merely keeping account of the profits it makes." (emphasis added)
53 In my opinion that is the situation in the present case. The long term damage that AstraZeneca will suffer strongly outweighs the damage which Apotex might suffer. I am not persuaded that there has been any delay sufficient to warrant AstraZeneca being deprived of its right to protect its intellectual property pending the hearing fixed for 31 January 2012 or until further order.
54 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.
55 In my opinion, it would be entirely unreasonable to have expected AstraZeneca to have prepared a complex case involving allegations of infringement of its patents in a rush. These were important assets for it. It was entitled to protect those assets in as careful and appropriate a way as possible, having regard to the urgency of the proceedings. 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.
56 I am unable to see any unreasonable delay on the part of AstraZeneca. While there may be some force in the criticism that it ought to have moved before the docket judge on 6 December 2011, as 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. Because of the urgency of the matter I am sitting late in the evening and delivering these reasons ex tempore.
57 Obviously each case involving delay has to be assessed on its merits. Where parties have very valuable intellectual property rights, they are entitled to take some care in preparing a case that hopefully, once and for all, will be able to resolve issues as to whether, on an interim basis, a party is or is not entitled to protect those rights pending the final hearing of its claims for infringement. 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. Indeed, it engaged in somewhat disingenuous deflections of AstraZeneca's foreshadowed application for preliminary discovery by asserting that it had no basis and was doomed to fail.
58 In those circumstances, it is difficult to accept Apotex's complaint that, for some reason, AstraZeneca has been dilatory. Indeed, at no point in these proceedings has Apotex had any expert evidence to file, despite having made a claim for the invalidity of the 051 or dosage patent on 18 May this year. That dearth of evidence is to be seen in circumstances where, for the purposes of obtaining interlocutory relief, AstraZeneca has had to instruct, and obtain, the expert opinion evidence on which it has been able to rely. Indeed, Apotex says it still needs more time to be in a position to file its expert evidence; ie, was only able to put information and brief evidence on from Dr Marshall. In my opinion, that demonstrates the complexity of these matters and the need for parties to take, as both these parties have, proper and appropriate steps that they consider will protect their intellectual property and other rights adequately. In the circumstances there has not been any delay of significance by AstraZeneca.