Apotex Pty Ltd v AstraZeneca AB

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)).