Apotex Pty Ltd v Cipla Limited

Federal Court of Australia|2018-08-03|Before: Mr J, Beach J

By 4.00 pm on 19 October 2018, the Respondent/Cross-Claimants conduct an electronic search of the US Discovered Documents (as described in paragraph 18(b)(ii) of the affidavit of Shyama Jayaswal affirmed on 1 August 2018), using key words as agreed by the parties or otherwise ordered by the Court, for documents that: (a) record or describe the research, development, testing or experimental work undertaken in the course of developing the invention claimed in the Australian patent number 2003244799 titled "Combination of azelastine and steroids" during the period 14 June 2000 to 14 June 2002; and (b) were created during the period 14 June 2000 to 14 June 2003.
By 4.00 pm on 9 November 2018, the Respondent/Cross-Claimants: (a) give discovery to the Applicant/First Cross-Respondent (Apotex) of the documents identified pursuant to Order 1 above; and (b) produce for inspection, an electronic copy of each of the documents discovered pursuant to paragraph (a), subject to any claim for privilege.
Apotex's interlocutory application dated 5 March 2018 otherwise be dismissed.
The Respondent's/Cross-Claimants' costs of and incidental to Apotex's interlocutory application be their costs in the cause and there be no other orders as to costs in relation to the Interlocutory Application. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

CATEGORY 5 12 Category 5 of Apotex's discovery application was as follows: The following Documents produced in the US Proceeding: a. All depositions, transcripts of oral evidence, or affidavit evidence from: i. Mr Dennis Fuge; ii. Ms Patsy Jeffery; iii. Mr Jeffery Hostler; and iv. Dr Alexander D'Addio. b. Trial exhibits: i. DTX-300: Email and attachment from Dennis Fuge to Corey Fishman 08.04.2006. ii. PTX0145 - Pharmaceutical Development Report for Azelastine Hydrochloride and Fluticasone Propionate Nasal Spray. iii. PTX0149 - 2006.02.06 E-mail from Edick Paul to Fuge Dennis Re: Pfeiffer Bi Dose Nasal Spray System. iv. PTX0150 - 2006.02.06 E-mail from Richard Spivey to Alex D'Addio Re: Pfeiffer Bi Dose Nasal Spray System. v. PTX0151 - 2006.03.21 E-mail from Kale Kalidas to Alex D'Addio re: Astelin - Flonase Combination Product Feasibility Assessment Plan. 13 Let me set out some defined terms and background to the documents sought by Apotex's discovery application that are relevant to category 5: Documents has the meaning given in Schedule 1 to the Federal Court Rules 2011. … US Proceeding means Case Number 14-cv-01453-LPS, Meda Pharmaceuticals Inc., et al., v Apotex Inc., et al, United States District Court, District of Delaware. 14 The US Proceeding was between two related entities to the parties before me. It concerned the validity of two patents in the name of Cipla which shared the same inventors as the Patent and covered nasal spray formulations for the treatment of allergic rhinitis comprising azelastine and fluticasone. The US Proceeding has now settled. 15 In the US Proceeding, the Apotex parties alleged obviousness. In that proceeding there was evidence relating to work done by an earlier emanation of Meda Pharmaceuticals Inc. (Meda US), being known at the relevant time as MedPointe Inc (MedPointe), to combine azelastine in a nasal spray with a steroid. In July 2007, Meda acquired MedPointe and renamed it Meda US. The work undertaken by MedPointe ultimately led to the filing of US Patent Application US 2007/0020330 A1 (Dang Patent), some of the claims of which covered pharmaceutical compositions of azelastine hydrochloride and fluticasone propionate. 16 Now Cipla and MedPointe worked independently on preparing formulations containing azelastine and fluticasone in the early 2000s. This work led to the filing of Cipla's US patents and ultimately the Dang Patent. In or around May 2006, MedPointe became aware of Cipla's US Patents and approached Cipla regarding a licence. Such a licence was granted in November 2006. The material produced in the US Proceeding included internal documents from MedPointe relating to work done in the mid-2000s and evidence from MedPointe witnesses. 17 Before me, Apotex submitted that category 5 captured specific documents produced in the US Proceeding, including filed evidence and transcripts of oral evidence given by MedPointe witnesses as well as documents authored by those witnesses that were tendered at trial. The documents were identified by reference to the exhibit list from the US Proceeding and according to Apotex related to the MedPointe azelastine and fluticasone nasal spray development project. Ms Smith in her affidavit deposed at [20] to [22] and [35] to [36] the following: The US Proceedings concerned the validity of US Patent Nos. 8,168,620 and 9,259,428 (together, the US Patents) ... Both of these patents: (a) are owned by Cipla Limited (the Respondent in these proceedings); (b) cover nasal sprays for the treatment of allergic rhinitis through the use of fluticasone propionate and azelastine hydrochloride; (c) share the same inventors as the Patent; and (d) in relation to US8,168,620, claim priority from the same PCT application as the Patent. The Defendants to the US Proceeding, Apotex Corp. and Apotex Inc. (the Apotex Parties), claimed that the US Patents were invalid on the ground of obviousness. In the US Proceedings, documents were tendered at trial relating to the work done by a predecessor company of Meda Pharmaceuticals Inc. (Meda US) called MedPointe, to combine azelastine in a nasal spray with a steroid. Based on my review of the documents listed in paragraph 19 above, I understand that in the US Proceedings: (a) Meda US produced, by way of discovery, internal documents from MedPointe relating to work in or around the mid-2000s (see Defendants' Proposed Findings of Fact, DPFOF, Annexure KNS3-4, paragraphs 129, 132 to 135, Defendants' Opening Post-Trial Brief, DOB, Annexure KNS3-5, pages 41, 48 to 49). Copies of these documents were also tendered at trial (see, Exhibit List, Annexure KNS3-3 Exhibits PTX142, "MedPointe Laboratory Notebook"; PTX0145, "Pharmaceutical Development Report for Azelastine Hydrochloride and Fluticasone Propionate Nasal Spray"). (b) Witnesses were called from MedPointe who were involved in the azelastine/fluticasone nasal spray development project, including Dr Alexander D'Addio (Vice President of Scientific Affairs and Medical Communications at Meda US) and Mr Dennis Fuge (Vice President of Technical Operations) (see DPFOF paragraphs 10, 12, 21; Exhibit List, page 12). Mr Fuge testified that MedPointe had independently selected azelastine and fluticasone as the best two compounds to utilise in a combination nasal spray, before becoming aware of relevant Cipla patents (see DPFOF paragraph 21; DOB, page 12). (c) In July 2006, MedPointe filed a patent application in the US, US2007/0020330A1 entitled "Compositions comprising azelastine and methods of use thereof" (the Dang Patent). Dr D'Addio, Meda US's witness, testified that the work done by MedPointe in relation to the Dang Patent was completed before MedPointe became aware of Cipla's US Patents (see DPFOF paragraphs 130, 131). … Category 5 is limited to documents which have already been produced by Meda's related entity Meda US. These documents are identified by reference to the Exhibit List and the other documents listed in paragraph 19 above and relate to the MedPointe azelastine/fluticasone nasal spray development project. As set out in paragraph 22 above, Meda/MedPointe witnesses (including Mr Fuge, Dr D'Addio, Ms Jeffery and Mr Hostler) gave evidence in the US proceeding regarding the MedPointe azelastine/fluticasone nasal spray development project, the Dang Patent and the negotiations leading up to the licensing arrangement with Cipla. The documents listed in Category 5 capture, based on the Exhibit List, the filed evidence and transcripts of oral evidence given by these witnesses, as well as relevant documents authored by these witnesses that were tendered at trial. Thus for similar reasons noted in relation to categories 2 and 3 above, Apotex considers that documents falling within Category 5 will be directly relevant to Apotex's lack of inventive step case. Given the specific nature of the documents captured by Category 5, Apotex considers that it is unlikely that Meda will be required to undertake voluminous searches of its records in order to retrieve these documents. 18 Apotex said that for the reasons identified in relation to categories 2, 3 and 4 of the discovery sought, category 5 documents were likely to be relevant to Apotex's lack of inventive step case. Let me briefly turn to those submissions, insofar as they are relevant to category 5. First, by category 2 Apotex sought documents relevant to the work undertaken in the course of developing the formulation for DYMISTA. It said that documents falling within this category were likely to be relevant to Apotex's obviousness case, and that to the extent such documents evidenced the development of the combination azelastine and fluticasone product by a Meda entity, i.e. a formulator other than the patentee, this was likely to be powerful evidence of obviousness, particularly if done without knowledge of the Patent, even if undertaken after the priority date. Second, by category 3 Apotex sought documents relating to the work undertaken by the inventors of the Dang Patent in the course of developing its azelastine and fluticasone combination product. It said that evidence of work being undertaken concurrently with, and independently of, Cipla in relation to an identical combination formulation product was likely to be significant evidence of obviousness. Third, by category 4 Apotex sought correspondence between Cipla and Meda or Meda US/MedPointe in which the validity of the Patent or any foreign equivalent was addressed in the period prior to the grant of any licence by Cipla to Meda or any related entity or Meda US/MedPointe. It said that to the extent any such correspondence existed, it was likely to be directly relevant to its lack of inventive step case. As I have explained, at the hearing of the discovery application I rejected categories 2, 3 and 4. 19 In my view the documents sought in category 5 are not directly relevant to Apotex's lack of inventive step case. First, according to the evidence before me, Mr Hostler's, Mr Fuge's and Ms Jeffery's evidence did not concern the development by MedPointe of a combination azelastine/steroid pharmaceutical product or DYMISTA. Second, according to the evidence before me, Dr D'Addio's evidence was that MedPointe did not begin to investigate the development of a combination azelastine/steroid pharmaceutical product until October 2002 (i.e. after the priority date). Moreover, it would appear on the evidence that I was taken to that MedPointe's subsequent attempts to prepare a stable sample of a combination azelastine/steroid pharmaceutical product failed. Third, it does not appear to me that any of this material is of direct relevance to the issues before me such as to warrant a discovery order. Let me elaborate on some of the evidence before me. 20 Dr Alexander D'Addio worked for Medpointe and Meda US as Vice President of Product and Process development for approximately 10 years between 2001-2011. At the time of trial in the US, he was employed by Meda US as Vice President Scientific Affairs and Medical Communications. In the US Proceeding he: (a) made a declaration of approximately 9 pages; (b) gave 2 depositions in May and September 2016; and (c) gave oral evidence at trial (approximately 62 pages of transcript). 21 Dr D'Addio gave evidence in the US Proceeding that: (a) MedPointe did not begin to investigate the development of a combination azelastine/steroid pharmaceutical product until October 2002; (b) MedPointe's subsequent attempts to prepare a stable sample of a combination azelastine/steroid pharmaceutical product failed; and (c) the development work on DYMISTA did not commence until after MedPointe had licensed the relevant patents from Cipla in November 2006. 22 Mr Jeffrey Hostler was employed by Meda US as a financial analyst and was the director of finance, senior director of finance and VP of finance for Meda US before becoming the CFO in 2011. In the US Proceeding he: (a) did not make a declaration; (b) gave 1 deposition; and (c) gave oral evidence at trial (approximately 2 pages of transcript). 23 Mr Hostler gave evidence in the US Proceeding about, inter-alia, the commercial success of DYMISTA sales since 2012, and the commercialisation, promotion, marketing and sale of DYMISTA. 24 At the time of the US trial, Dennis Fuge was the VP of technical operations at Meda US. In the US Proceeding he: (a) did not make a declaration; (b) gave 1 deposition; and (c) gave oral evidence at trial (approximately 10 pages of transcript). 25 Mr Fuge gave evidence in the US Proceeding about, inter-alia, ownership of the DYMISTA US patents and with respect to Meda US's license of the DYMISTA US patents from Cipla. 26 Ms Patsy Jeffrey was employed in the department of Business Development and Alliance at Cipla from 2005. In the US Proceeding, she: (a) did not make a declaration; (b) gave 1 deposition; and (c) gave oral evidence at trial (approximately 6 pages of transcript). 27 Ms Jeffrey gave evidence in the US Proceeding about, inter-alia, the prosecution of the DYMISTA US patents and with respect to licences in relation to the DYMISTA US patents and products embodying those patents. 28 In summary, the evidence of Mr Hostler, Mr Fuge and Ms Jeffrey did not concern the development by MedPointe of a combination azelastine/steroid pharmaceutical product or DYMISTA. Their evidence is of little, if any, direct relevance to the issues that I need to consider. Further, Dr D'Addio's evidence concerned work after the priority date and could only be of secondary relevance. 29 Now both parties referred to my observations in BlueScope Steel Limited v Dongkuk Steel Mill Co., Ltd [2017] FCA 1537 regarding discovery applications of the present sort. In that case, I considered that where discovery is sought in relation to inventors' notebooks, reports etc., one must consider whether the document is properly of primary or secondary relevance to the ground of invalidity being advanced, with questions of proportionality also coming into play in determining whether the material should be required to be discovered. 30 In summary, I considered the category 5 material to be at best only of secondary significance and accordingly refused discovery in that category. 31 In any event, Apotex are free to approach the US parties and the US Court seeking a lifting of any confidentiality regime or analogous Harman type restriction. Finally, depending upon the trial evidence that is filed in the proceeding before me and the witnesses to be called, I may allow notices to produce or subpoenas to be issued if the significance or relevance of this US material needs to be re-assessed in light of the evidence filed.

CATEGORY 7 32 Category 7 of Apotex's discovery application was as follows: To the extent not captured by categories 1 to 6, any Documents, including, but not limited to, notebooks; memoranda; reports; and correspondence recording or describing the research, development, testing or experimental work undertaken in the studies reported in: a. Ratner, P et al, "Combination therapy with azelastine hydrochloride nasal spray and fluticasone propionate nasal spray in the treatment of patients with seasonal allergic rhinitis" Annals of Allergy, Asthma & Immunology, 2008; 100: 74-81; and b. Hampel, K et al, "Double-blind, placebo-controlled study of azelastine and fluticasone in a single nasal spray delivery device" Annals of Allergy, Asthma & Immunology, 2010; 105: 168-173. If summaries or reports of test results exist, they should be discovered, rather than the corresponding individual test results. 33 Apotex asserted that category 7 (and also category 6, which I do not need to refer to further) was directed at documents relating to clinical trial work as reported in what it described as the Ratner paper and the Hampel paper, both of which appear to have been sponsored by MedPointe. 34 Ms Smith at [38] to [44] of her affidavit deposed as follows: Category 7 captures documents recording the research work undertaken in two studies: (a) Ratner, P et al, "Combination therapy with azelastine hydrochloride nasal spray and fluticasone propionate nasal spray in the treatment of patients with seasonal allergic rhinitis" Annals of Allergy, Asthma & Immunology, 2008;100:74-81 (Ratner Paper); and (b) Hampel, K et al, "Double-blind, placebo-controlled study of azelastine and fluticasone in a single nasal spray delivery device" Annals of Allergy, Asthma & Immunology, 2010;105:168-173 (Hampel Paper). Copies of the Ratner Paper and the Hampel Paper are annexed to this affidavit and marked Annexure KNS3-8. I note that on the bottom of page 1 of the Ratner Paper, there is the statement "Sources of Funding: This study was supported by MedPointe Pharmaceuticals". I also note that on the bottom of page 1 of the Hampel Paper there is a statement "Funding for this study was provided by MedPointe Pharmaceuticals, Somerset, New Jersey". I note that both the Ratner Paper and the Hampel Paper were trial exhibits in the US Proceeding (see Exhibit List). Apotex considers that the documents captured by Categories 6 and 7 are directly relevant to the false suggestion ground of invalidity as particularised in paragraphs 11 to 13 of the Further Amended Particulars. As particularised in paragraph 11, before the grant of the Patent, Cipla represented to the Commissioner that the Patent covered a combined preparation containing azelastine hydrochloride and fluticasone propionate which provides a therapeutic effect for the treatment of seasonal or perennial allergic rhinitis that is greater than the sum of their separate effects. However, as particularised in paragraph 12 of the Further Amended Particulars, Apotex considers that the results of the Ratner and Hampel Papers indicate that a combined pharmaceutical preparation containing azelastine hydrochloride and fluticasone propionate does not provide a therapeutic effect for the treatment of seasonal or perennial allergic rhinitis greater than the sum of their separate effects. In order to test further the falsity of this representation, Apotex seeks access to documents which underlie the clinical trial reported in Example 13 of the Dang Patent which compares co-administration of the mono-therapy products Astelin® and Flonase® against either agent alone, the Ratner Paper and the Hampel Paper. These documents will also be relevant to the obviousness case. Apotex will contend that it is obvious to use two drugs to obtain the benefit of their individual effects. To combine those drugs into a single product has obvious advantages in terms of patient convenience. Documents demonstrating the expected benefit of the co-administration of azelastine and fluticasone are relevant to this case. To limit the extent of the searches required to be undertaken to produce documents falling within Categories 6 and 7, Apotex has also indicated that it will be prepared to accept copies of summaries or reports of the work sought to be captured by these categories should they exist. Apotex does not know the form in which the documents described in Category 1 to 7 are held by Cipla and/or Meda. Neither Cipla nor Meda has indicated that there is a specific difficulty with the form of the categories that makes one or more of them oppressive. Neither has attempted to re-frame any category to address any issue of alleged oppression. 35 Apotex submitted that documents falling within these categories were likely to be directly relevant to its false suggestion case in relation to the so-called "Synergy Representation". This is the alleged false or misleading representation made by Cipla to the Commissioner of Patents prior to the Patent's grant "that a combined pharmaceutical preparation containing azelastine hydrochloride and fluticasone propionate provides a therapeutic effect for the treatment of seasonal or perennial allergic rhinitis that is greater than the sum of their separate effects". Apotex said that it intends to submit at trial that the results described in the Ratner and Hampel papers indicate that a combined pharmaceutical preparation containing azelastine hydrochloride and fluticasone propionate does not provide a therapeutic effect greater than the sum of their separate effects. It said that it sought access to documents underlying the Ratner paper and the Hampel paper to further test the falsity of the Synergy Representation. 36 Further, Apotex submitted that in addition to false suggestion, documents falling within category 7 were also likely to be relevant to its lack of inventive step case. It said that it intends to submit at trial that it is obvious to use two mono-therapies together to obtain the combined benefit of their individual effects, including for reasons of patient convenience. It said that documents demonstrating the expected benefit of the co-administration of azelastine and fluticasone were relevant to the issues that I need to consider. 37 I rejected Apotex's application for the following reasons. 38 Let me make some preliminary comments about Ratner and Hampel, beginning with Ratner. 39 Ratner was published in January 2008, years after the priority date, although it was received for publication on 20 December 2006. The relevant study was conducted between 27 December 2005 and 17 February 2006. Further, as the paper indicates, one of the sources of funding was MedPointe. Now as the title of the paper indicates, what was analysed was a combination therapy involving the combination of an azelastine hydrochloride nasal spray (a mono-therapy) and a fluticasone propionate nasal spray (a mono-therapy) in the treatment of allergic rhinitis. This involved the co-administration of mono-therapies. But the claims of the Patent concern a formulation combining azelastine and fluticasone rather than a combined use of two nasal sprays. In my view, at most Ratner, although not strictly irrelevant to the question of inventive step and false suggestion, has indirect or secondary significance. It does not directly establish a lack of synergistic effect or benefits of the type said to be discussed in the Patent and said to constitute the Synergy Representation. It is years after the priority date. Further, the discovery sought goes well beyond the particulars. The particulars of invalidity only refer to "the test results reported in" Ratner and also Hampel. So the case as pleaded looks to the face of what is reported in Ratner and also Hampel. 40 Further, the Ratner study was carried out between 27 December 2005 and 17 February 2006, involving 5 investigational sites and 151 patients. There is a real question as to the volume of documents sought and the various locations where they would be held. Now I accept that for category 7, Apotex seeks to limit oppression by reference to only requiring "summaries or reports of test results" if they exist, rather than individual test results. But there would still be significant work in locating these and being satisfied that they were accurate summaries. 41 Let me now address Hampel. Hampel was published in August 2010, with funding for the study provided by MedPointe. It involved a double-blind, placebo-controlled study of azelastine and fluticasone in a single nasal spray delivery device. Similar points as I have made concerning Ratner can be made here save that here there was more than just the co-administration of mono-therapies. Further, I do not presently see how Hampel directly falsifies the suggestion of synergistic benefits. All it says is that it shows that the relevant combination demonstrated additive improvements. But this does not falsify synergistic (i.e. beyond additive) benefits in terms. Moreover, the question of synergistic benefits does not appear to have been analysed. 42 Further, there is the question of oppression. The relevant study involved 6 investigational sites and 610 patients. Now again I accept that for category 7, Apotex seeks to limit oppression by reference to only requiring "summaries or reports of test results" if they exist, rather than individual test results. But there would still be significant work in locating these and being satisfied that they were accurate summaries. 43 In summary, in my view there is little evidence to suggest that this clinical work is directly relevant to Apotex's false suggestion case. Second, in respect of the alleged falsity of the Synergy Representation, Apotex has only particularised the test results reported in the Ratner and Hampel papers in any event. Third, Apotex's submission that category 7 is also directly relevant to its obviousness case should be rejected. This clinical work was conducted by or sponsored by MedPointe (not Cipla) and was well after the priority date. Fourth, on any view, the category is not targeted and proportionate. 44 I will not order discovery of category 7 at this time. But after reviewing any expert evidence that may later be filed concerning the Ratner and Hampel papers, I may consider allowing targeted notices to produce or subpoenas if there is a serious question concerning the existence or results of the studies reported therein. I will wait and see what is really in dispute on such matters, particularly if hearsay type objections are taken by the respondent/cross-claimants. I would not expect the respondent/cross-claimants to act unreasonably concerning challenging the fact of the results of the tests reported in the Ratner and Hampel papers. 45 For all of the above reasons, I declined to order discovery of categories 5 and 7. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Beach.

SCHEDULE OF PARTIES VID 1229 of 2017 Cross-Claimants Second Cross-Claimant: MEDA A.B. Cross-Respondents Second Cross-Respondent MYLAN HEALTH PTY LTD (ACN 601 608 771)

Patents Act 1990(Cth)ss 18(1)(b)(ii)

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