Bristol-Myers Squibb Company v Apotex Pty Ltd

REASONS FOR JUDGMENT 1 After hearing the second applicant's (Otsuka's) application to amend Australian Patent No. 2002334413 (the patent) I delivered reasons on 4 August 2010 (Bristol-Myers Squibb Company v Apotex Pty Ltd [2010] FCA 814) in which I expressed reservations about whether the amendments represented by proposed claims 33 and 34 were allowable under s 102 of the Patents Act 1990 (Cth) (the Act). At the same time I indicated that the other amendments that were sought were allowable and that there were no circumstances which would lead me to conclude that those amendments should not be allowed. I said that in light of the fact that the Commissioner of Patents had expressed the view that the amendments were prima facie allowable and that no person had come forward to oppose the amendments, I would be prepared to hear Otsuka further in relation to proposed claims 33 and 34 should it wish to maintain its present application for amendment with those claims in their then proposed form. I also expressed the view that were proposed claims 33 and 34 to be limited to a process in which the mean particle size of Crystals B was 50 microns or less (reflecting an existing limitation in claims 66 and 70), then my reservations would be removed. 2 In the events which happened, Otsuka elected to further amend proposed claims 33 and 34 to limit them in the manner indicated. On 13 August 2010 I made orders directing amendment of the patent as proposed by Otsuka incorporating the further amendments to proposed claims 33 and 34. The further amendments were not such as to require further advertising or notification of the amendments by Otsuka. 3 The question of costs remains to be determined. 4 The respondent in the proceeding, Apotex, submits that it is entitled to its costs of the amendment application and that an order should be made against Otsuka accordingly. It submits that the amendments have been sought in the context of infringement proceedings to which it is a party respondent and in which an interlocutory injunction has been granted against it (albeit by consent). Apotex submits that it is not to the point that, ultimately, it did not oppose the amendments: it was necessary for it to consider the amendments and come to a view about whether those amendments were allowable and whether there was a basis for opposition (whether on legal grounds or on discretionary grounds) and whether, in the circumstances in which it found itself, it should oppose the amendments. Apotex also points to a line of authority which supports the proposition that, where a patentee seeks to amend its patent in the context of existing legal proceedings, it is frequently the case that the patentee pays a defendant's or an opponent's costs: see Apotex Pty Ltd v Les Laboratoires Servier (No 3) [2009] FCA 1069 at [5]; see also the statement of the practice in Young D, Watson A, Thorley S and Miller R, Terrell on the Law of Patents (14th ed, Sweet & Maxwell, 1994) at [7.52]. 5 Otsuka, on the other hand, opposes Apotex's application. It submits that costs are in the discretion of the Court and that the discretion should be exercised without adherence to any perceived enshrined practice referable to patent cases. It submits that, having elected not to oppose the amendments, Apotex's decision to then incur costs relating to the amendments was one of its own volition for which Otsuka should not be held responsible. It also submits that, if costs are to be awarded against it, they should be limited and Otsuka should not be liable for costs incurred after Apotex communicated its decision not to oppose the amendments. 6 In my view the question of costs should be approached by recognising and applying the broad discretion conferred by s 105(2) of the Act. This is not to say that regard should not be had to the considerations that customarily have informed the exercise of the discretion in past cases. The important point is that the recognition of a particular practice should not override the proper exercise of discretion taking into account the particular facts and circumstances of the case. 7 Here Otsuka had sought to amend its claims initially before the Commissioner of Patents. However, events overtook it. The first applicant, acting as Otsuka's claimed exclusive licensee, commenced the present proceeding against Apotex for infringement of the patent and initially joined Otsuka as a respondent. This meant that, by dint of s 112 of the Act, Otsuka had no choice but to proceed by s 105 should it wish to pursue the amendments at this time. As I have found, Otsuka saw the amendments as a desirable but neither pressing nor necessary objective. Although it may have preferred to pursue its amendment application in other circumstances, Otsuka nevertheless did choose to pursue the amendments in this Court at this time and filed its motion in the present proceeding. By taking that course it exposed Apotex to additional costs in the proceeding. As Otsuka was seeking what was effectively an indulgence, in the normal course it should stand responsible for the consequences of the exposure it created. 8 In this connection I accept that Apotex has had a real interest in the outcome of the amendment application. In my view it is not to the point that, ultimately, it did not oppose the amendments. It plainly had to take into account and consider the amendments that were proposed to the many claims by reference to which it had been sued. In this connection it is to be remembered that the amendments sought by Otsuka were to substitute one claim set for another. 9 Moreover, having reached the decision not to oppose the amendments, its interest in the amendment application did not cease. As the present case has demonstrated, it does not follow from a lack of opposition that, necessarily, the amendments will be allowed or allowed in the form proposed. The hearing of the application for amendment may take twists and turns which may affect the respondent who has been sued for infringement in the principal proceeding. The prospect of additional amendments being sought in the course of the amendment application, or other decisions or rulings being made that potentially affect the respondent, is real. In this connection, it was also reasonable, in my view, for Apotex to consider the evidentiary material which came to be placed before the Court in support of the amendment application, even though that material was filed after the making of its decision not to oppose the amendments. The reliance on such material may have the potential to cause a party in Apotex's position to review its position. 10 In my view Apotex's decision not to oppose the amendment application did not disentitle it to costs to which it was otherwise entitled or, upon its making, relieve Otsuka from liability for costs otherwise properly and reasonably incurred thereafter by Apotex in relation to the amendment application. 11 In all the circumstances I am persuaded that the appropriate course is to order Otsuka to pay Apotex's costs of the amendment application. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates.