Commonwealth of Australia v Sanofi

PATENT DISPUTES 4 A patentee understandably seeks to exploit its statutory monopoly for as long as is possible. One may expect that, as a patent approaches its expiry date, the patentee and its potential competitors will be considering the opportunities and risks which may arise upon such expiry. The patentee may seek effectively to extend its monopoly by developing a new product which is sufficiently different from the patented product to justify a new patent. Once the patent has expired, competitors may seek to compete with the patentee in supplying the previously patented product. Prior to such expiry, a competitor may seek to compete by supplying a new product which it considers to be sufficiently different from the patented product to allow supply without infringement. The patentee will, of course, try to resist such inroads into its monopoly.

INTERLOCUTORY INJUNCTIVE RELIEF 5 Patentees frequently seek injunctive relief, restraining patent infringement. As patent cases involve substantial preparation, there is usually some delay between the commencement of proceedings and their resolution. Where a competitor enters the market before expiry of a patent, it may attract market share for quite some time, causing loss to the patentee. To remedy this problem, the courts, as in other cases, use the remedy of an interlocutory injunction and other forms of relief to try to maintain the status quo until the case has been resolved. The competitor may be restrained from supplying its product. Alternatively, it may be required to keep records of sales, which records will assist the patentee to calculate its damages in the event that it succeeds in the infringement proceedings. However there is always the possibility that the patentee will fail. In that case the interlocutory relief may have caused unjustifiable loss to the competitor. To deal with that possibility, the court will, as the price of granting interlocutory injunctive relief at the suit of the patentee, extract from it an undertaking as to damages. Kenny and Nicholas JJ have explained that concept. In some jurisdictions such an undertaking may be limited to the payment of compensation to other parties to the proceedings. In other jurisdictions, the undertaking may extend to the payment of compensation to non-parties. In this case, the Commonwealth claims pursuant to undertakings in the latter form.

SECTIONs 26B, 26C and 26D 6 The certification process prescribed by s 26B(1) encourages an applicant for registration or listing to make an early assessment of the possibility that marketing of its goods will infringe a patent. It also affords patentees early notice of possible infringement. Section 26C seeks to deter patentees from commencing misconceived or speculative infringement proceedings. It also provides in s 26C(8) for the award to the Commonwealth, States and Territories, of compensation for damages sustained or costs incurred, "as a result of the grant of [an] interlocutory injunction" restraining infringement. Compensation pursuant to s 26C(8) will only be payable if: the patentee has given a certificate under s 26B(1); and either the certificate is false or misleading in a material particular; or the patentee has breached an undertaking given in the certificate. Such compensation is for damages or costs incurred as a result of the grant of the injunction, not as a result of the false or misleading certificate or breach of undertaking. Compensation is payable "pursuant to" s 26C, and not pursuant to any undertaking as to damages. However given the virtually universal practice of requiring an undertaking as the price of obtaining an interlocutory injunction, it is likely that such an undertaking will have been given. However, as I have observed, it may not extend to third parties such as the Commonwealth, States and Territories, or if it does so extend, its terms may be otherwise insufficient to authorize the award of adequate compensation to those entities. As I see it, the primary purpose of s 26C(8) is to ensure that such entities will have some recourse in the event that they sustain damage, or incur costs as the result of the grant of interlocutory relief, regardless of whether there is an undertaking pursuant to which they might do so. 7 Section 26D will be engaged if an applicant for registration or listing has given notice to a patentee pursuant to s 26B(1)(b)(iii), and the patentee proposes to apply for an interlocutory injunction restraining infringement. The patentee must give notice to the various Attorneys-General of its intention to seek interlocutory relief. The Commonwealth Attorney-General will be a party to the interlocutory proceedings. As such, he or she will have the opportunity to be heard in connection with the terms of any undertaking as to damages. No doubt he or she will seek to ensure that any undertaking is in terms wide enough to authorize the award of compensation to the Commonwealth, States and Territories. 8 Section 26D(5) provides for the award of compensation, "pursuant to the usual undertaking as to damages given by the patentee … to obtain the interlocutory injunction". Thus the availability of compensation under this section depends upon the existence of an undertaking, the terms of which are sufficiently wide to allow such an award. However an award under s 26D may only be made if the requirements of s 26D(4) are satisfied. That subsection will be engaged if the substantive proceedings have been disposed of in a way which is unfavourable to the patentee, and the court declares that either: the patentee had no reasonable grounds for believing that it would obtain final relief against the infringing applicant for registration or listing, or for believing that each claim in the patent would be found to be valid; or the application for an interlocutory injunction was vexatious or otherwise not reasonably made. Orders pursuant to s 26D(5) may be made in addition to other available relief. Prima facie such other relief would include an award of compensation pursuant to an undertaking as to damages, not involving reliance upon s 26D(4). In this respect, I differ from the view expressed by Kenny and Nicholas JJ. In my view the term "any other relief" must at least include any other relief in respect of damages sustained or costs incurred as a result of the grant of the interlocutory relief. 9 It might be argued that the compensation system prescribed by s 26D is unlikely to be more beneficial to an applicant for registration or listing, who has been subjected to an interlocutory injunction, than would be enforcement of the usual undertaking as to damages, without any reliance on s 26D. However the benefit to such an applicant lies in s 26D(5)(a). That section effectively empowers the court to award compensation on the basis of an account of gross profits, without proof or quantification of loss, or on any other appropriate basis. The advantages of proceeding by way of account of profits are obvious. However such an award may effectively operate as a penalty. This possibility may have led to the perceived need for legislative authority. 10 Pursuant to s 26D(5)(b) and s 26D(5)(c), the Commonwealth, States and Territories must demonstrate and quantify any compensation claim on the basis of causation. Again, it might be argued that the remedy prescribed by s 26D would not offer those entities any advantage not available pursuant to the usual undertaking. However that proposition assumes that any such undertaking will be wide enough to justify assessment of compensation on a basis which is as least as generous as that prescribed by s 26D(5)(b) and s 26D(5)(c). Although individual courts may generally adopt standardized forms of undertaking, the various courts may adopt different standard forms. Further, as far as I know, individual Judges are not generally obliged to use the standard forms adopted by their respective courts. Personal preferences or the circumstances of a particular case may lead a Judge to adopt his or her own version of the undertaking. The formula generally used in such an undertaking leaves quantification of compensation very much in the discretion of the court. Thus, having regard to the form used in this Court, the party obtaining the interlocutory injunction undertakes to submit to such order: as the Court considers just; for the payment of compensation to be assessed by the Court, or as it may direct; and to any person, whether or not a party, adversely affected by the operation of the interlocutory order or undertaking. 11 One can imagine circumstances in which there could be significant argument about the meaning of the expressions "adversely affected", and, "by the operation of the interlocutory order or undertaking". The formula, "compensation for any damages sustained, or costs incurred by it as a result of the grant of the interlocutory injunction" seems much simpler. Further, although the quantification process will always be discretionary, the amount to be awarded under s 26D(5)(b) or s 26D(5)(c) may be more closely tied to actual loss than may be the case under the usual undertaking. In the latter case, it may be that the court could take into account disentitling conduct by the relevant entity.

SUBMISSIONS BY THE SANOFI AND WYETH PARTIES 12 The Sanofi and Wyeth parties submit that ss 26B, 26C and 26D, "establish a statutory regime" for recovery of compensation by the Commonwealth, and that those provisions, "must be understood as being the source of the Commonwealth's right to seek compensation … and a complete statement of the Commonwealth's rights to seek compensation of this kind". In support of this proposition the Sanofi and Wyeth parties rely upon certain statements made in connection with the introduction of the relevant amending legislation into the Senate. The amendments were initiated by the Opposition. In introducing that legislation, Senator Conroy said: We have to be absolutely certain the [Free Trade Agreement] will not in any way undermine or delay community access to cheap medicines. Labor will not allow cheap drugs to be delayed by dodgy patent claims. Companies trying to pull that stunt face severe financial penalties if a court determines that their claims were initiated without a reasonable basis for believing that their claims would be successful. Labor has moved these amendments on that basis to protect the [Pharmaceutical Benefits Scheme]. … The current law requires that a court cannot grant an interlocutory injunction unless the applicant provides an undertaking as to damages. [The amendment introducing s 26D] enhances the entitlement to damages for the generic company and for the Commonwealth, states and territories. (Commonwealth, Parliamentary Debates (Hansard), Senate, 12 August 2004, p 26297.) 13 The Opposition tabled legal advice which it had received concerning the proposed amendments, including one opinion from senior counsel concerning s 26D as follows: 19. The effect of this proposal is to clarify and enhance the entitlement to damages of a Defendant to unsuccessful proceedings for patent infringement alleged in relation to marketing of therapeutic goods, where an interlocutory injunction has been granted, but the patentee ultimately fails in the substantive proceedings. 20. Although it is well settled (see National Australia Bank Ltd v Bond Brewing Holdings Ltd … ) that a Court may not grant an interlocutory injunction unless the Applicant for that injunction provides an undertaking to the Court to pay any damages that the Court may regard as appropriate which are suffered by any other person in consequence upon the grant of the injunction, the state of the law as to the ability of an aggrieved person in practical terms to enforce the undertaking is not entirely satisfactory. There is a very high threshold in order to establish a causal nexus between any damage suffered and the grant of the injunction, confronting an aggrieved person. 21. Where a Court has determined that it is appropriate for it to make a declaration of the kind described in the proposed draft s 26D(4), the proposed clause 26D(5) is likely significantly to improve the position of an aggrieved person and the Commonwealth, the States and Territories. (D Shavin QC, "Memorandum of advice concerning the proposed amendments to the US Free Trade Implementation Bill 2004", 9 August 2004, Senate Tabled Paper 14309/2002-04.) 14 Senator Conroy's statements and counsel's opinion both suggest an intention to "enhance" or to "clarify and enhance" the availability of damages, and to lower the "threshold" for the establishment of the causal nexus between damage suffered and the grant of the injunction. There is no suggestion that the proposed amendments would exclude the availability to the Commonwealth of any claim for compensation other than pursuant to the proposed ss 26C and 26D. Whatever use may properly be made of this material, it offers no real assistance to the Sanofi and Wyeth parties. 15 I should say that I doubt the correctness of Senator Conroy's statement that the Court cannot grant an interlocutory injunction unless the applicant for such relief gives an undertaking as to damages. I also doubt the correctness of counsel's suggestion that the High Court in National Australia Bank Ltd v Bond Brewing Holdings Ltd (1990) 169 CLR 271 held that an interlocutory injunction could not be granted unless a relevant undertaking was extracted from the applicant for such relief. The position is rather that in exercising the discretion to grant interlocutory relief a court must consider the need for such an undertaking and that generally, such an undertaking will be required. 16 The Sanofi and Wyeth parties also rely upon the proposition, "that it was improbable that a statutory scheme was supplementary to general law rights in circumstances where it [is] hard to see 'why any person would adopt the [statutory] procedure … which would seem to be greatly more restrictive than that applicable at common law'". This proposition is said to flow from decisions of this Court in Chippendale Printing Co Pty Ltd v Commissioner of Taxation (1996) 62 FCR 347 and Comptroller-General of Customs v Kawasaki Motors Pty Ltd (No 2) (1991) 32 FCR 243. The Sanofi and Wyeth parties also rely upon the decision of the House of Lords in Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 70 as establishing the proposition that, "a detailed statutory regime may appropriately create, exclude, limit and control the exercise of rights to repayment and to preclude any general law rights to repayment freed of such restraints" (Tamberlin J in Kawasaki at 356 citing Woolwich). 17 The Sanofi and Wyeth parties submit that, "these decisions are an expression of a broader principle of construction that where the legislature imposes conditions and constraints upon a general power, there is an implied intention that the exercise of the more general power must, within the particular field, yield to the more specific and conditional statutory regime". Authority for this proposition is said to be the decision of Dixon J as his Honour then was in R v Wallis; ex parte Employer's Association of Wool Selling Brokers (1949) 78 CLR 529. That proposition was concerned with general and more specific provisions in the same statute. However the Sanofi and Wyeth parties submit that "the governing principle is that the creation of a statutory right that qualifies a general law remedy reflects the necessary intention to exclude the general law remedy which might otherwise have arisen on the same facts".

A LIMIT ON THE COURT'S POWER AND DISCRETION 18 In my view these cases and propositions have little to do with the present case. We are not here concerned with any general law right, but with the practice of the Court. The ultimate source of the Court's power to grant an injunction is s 23 of the Federal Court of Australia Act 1976 (Cth) and s 122 of the Patents Act 1990 (Cth). It may be that s 122 relates only to final relief and not to interlocutory relief. Nonetheless, it is clear that interlocutory relief is available pursuant to s 23. The Sanofi and Wyeth parties' submission must be either that ss 26B, 26C and 26D limit the power to grant interlocutory relief, subject to the giving of an undertaking, at least to the extent that it concerns loss suffered by the Commonwealth, or that the Commonwealth is precluded by those sections from seeking to enforce such an undertaking for its own benefit. I find it impossible to infer that Parliament intended to limit the power of the Court to extract an undertaking as to damages, given the absence of any express statement to that effect. It in no way detracts from the remedies prescribed by those sections that the Court should retain its long-established power to extract an undertaking in appropriate terms as the price of granting interlocutory relief. Indeed, s 26D relies upon the Court having extracted such an undertaking. Whilst the existence of an undertaking is not essential to the operation of s 26C, it does not follow that the Court cannot extract an undertaking in a form which would benefit the Commonwealth. If it be the case, as I consider it is, that the Court may extract such an undertaking, nothing in s 26C purports to limit the Commonwealth's right to exploit the benefit conferred by it. 19 The Court may conclude, in a particular case, that ss 26B, 26C and 26D provide a suitable framework for the necessary undertaking. In that case, it might tailor the undertaking to reflect the legislation. However, in other cases, the Court may consider that the statutory scheme is not adequate for the purpose. Nothing in the legislation suggests that the Court cannot tailor its own form of undertaking so as to meet the needs of the case.

DEPARTURE FROM THE UNDERTAKINGS 20 In the present case, no notice was given pursuant to s 26B(1)(b)(iii). Hence the Commonwealth may claim relief pursuant to s 26C(8). In order to establish such a claim to compensation, the Commonwealth would have had to obtain the declaration contemplated in s 26C(8)(d). Rather, it seeks orders pursuant to the undertakings given to the Court as the price of the grant of the interlocutory injunctions. As the Commonwealth was not a party to the proceedings in which the undertakings were given, they were presumably not extracted at its request. I infer that the Court extracted the undertakings. It is not suggested that it lacked the power to do so in order to protect the interests of identified or unidentified third parties. In submitting that the Commonwealth may not recover other than pursuant to s 26C, the Sanofi and Wyeth parties effectively seek to resile from their undertakings. It may be simply too late for them to do so. Any limitations upon the undertakings ought to have been sought at the time at which they were given. The Court would then have had to consider whether such limited undertakings were sufficient to justify the grant of the interlocutory injunctions. The Commonwealth has not put its case in that way. However, in any event, I see no basis for limiting the Commonwealth's right to seek to enforce the undertakings to the extent that it benefits under them. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

Associate: Dated: 7 December 2015 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1639 of 2007

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 195 of 2009

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 596 of 2009

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1124 of 2009

JUDGES: DOWSETT, KENNY AND NICHOLAS JJ DATE: 7 December 2015 PLACE: SYDNEY

INTRODUCTION 21 A Judge of the Court made orders on 11 May 2015 pursuant to s 25(6) of the Federal Court of Australia Act 1976 (Cth) that there be a case stated in a number of proceedings in the Court that raise a common question. The question that arises in each of the proceedings is as follows: Is the Commonwealth of Australia precluded, as a matter of law, from recovering compensation pursuant to any of the Undertakings as to Damages by reason of Chapter 3, Part 3-2, Division 2 of the Therapeutic Goods Act 1989 (Cth)? 22 The Undertakings as to Damages referred to in the question were in the form of the "usual undertaking as to damages" as that expression is used in the context of applications for interlocutory injunctive relief in this Court. In this Court, the usual undertaking as to damages requires that the applicant for interlocutory relief undertake to the Court: (a) to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by the operation of the interlocutory order or undertaking or any continuation (with or without variation) thereof; and (b) to pay the compensation referred to in (a) to the person there referred to. 23 Each of the Undertakings as to Damages referred to in the questions reserved for consideration by this Court was, or included, an undertaking in the same terms as the usual undertaking which we have set out above.

The Sanofi Proceedings 24 The patentee ("Sanofi") in the first of the relevant proceedings ("the Sanofi Proceedings") obtained interlocutory relief against Apotex Pty Ltd ("Apotex"), then called GenRx Pty Ltd, in September 2007. Sanofi and other related parties who were also applicants for interlocutory relief ("the Sanofi Parties") were required to give the usual undertaking as to damages. They were also required to provide substantial security in support of their undertaking. 25 The interlocutory injunction prevented Apotex, until the determination of the proceeding or further order, from (inter alia) supplying pharmaceutical compositions which had clopidogrel bisulphate, a compound claimed in various claims of Sanofi's patent, as the active component. 26 In August 2008, the trial judge upheld the validity of a number of Sanofi's patent claims and granted a final injunction based upon one of them. Apotex filed an appeal against the trial judge's judgment. In September 2009, a Full Court allowed Apotex's appeal and subsequently ordered that Sanofi's patent be revoked. In March 2010, an application by the Sanofi Parties for special leave to appeal was refused by the High Court. 27 In the period between the trial judge giving judgment and the High Court refusing special leave, Apotex gave a number of additional undertakings aimed at preserving the status quo. In return, the Sanofi Parties provided further undertakings as to damages in the usual form, once in September 2008, and again in October 2009. 28 After the High Court refused special leave, Apotex and the Commonwealth made claims against the Sanofi Parties on the usual undertakings as to damages provided by the Sanofi Parties in the Sanofi Proceedings and the related appellate proceedings. These claims were commenced by interlocutory applications filed by Apotex and the Commonwealth in the Sanofi Proceedings. In November 2014 Apotex discontinued its claim leaving the Commonwealth as the sole claimant. 29 It is common ground that Apotex was not permitted to supply its clopidogrel products unless they were first registered in the Australian Register of Therapeutic Goods ("ARTG") maintained under s 9A of the Therapeutic Goods Act 1989 (Cth) ("the TG Act"). It is also common ground that Apotex was required by s 26B(1A) of the TG Act to give a certificate under s 26B(1), that Apotex had, in August 2007, provided a certificate under s 26B(1)(a), and that Apotex did not provide any certificate under s 26B(1)(b), which would have required it to give notice to Sanofi as patentee under s 26B(1)(b)(iii). The Sanofi Parties contend that, in those circumstances, the Commonwealth's claim must fail because it is precluded by the provisions of Chapter 3, Pt 3-2, Div 2 (ss 23-30E) of the TG Act ("Div 2"). 30 In short, the Sanofi Parties contend that Div 2 of Pt 3-2 manifests a legislative intention that, in the circumstances in which Div 2 is engaged, the Division impliedly denies the Commonwealth any entitlement that it might otherwise have had under the general law to recover under the usual undertaking as to damages. The specific provisions of the TG Act which are said by the Sanofi Parties to preclude recovery by the Commonwealth pursuant to the usual undertaking are ss 26B, 26C and 26D, which are said by the Sanofi Parties to provide a "complete statement of the Commonwealth's rights to seek compensation of this kind". We have reproduced these provisions as they stood at 1 January 2009 in these reasons. Section 26C(8) and s 26D are reproduced at [56] and [58] below. Sections 26B and 26C are reproduced in full in the schedule to these reasons. There does not appear to have been any material change to the relevant provisions since they were enacted in 2004.

The Wyeth Proceedings 31 Between June and November 2009, the patentee ("Wyeth") and its exclusive licensee (together "the Wyeth Parties") obtained interlocutory injunctions in three separate proceedings (together the "Wyeth Proceedings") against Sigma Pharmaceuticals (Australia) Pty Ltd, Alphapharm Pty Ltd and Generic Health Pty Ltd (together "the Generic Parties"). In each case the Wyeth Parties were required to give the usual undertaking as to damages. 32 The interlocutory injunctions obtained by the Wyeth Parties prevented each of the Generic Parties, until the determination of the proceeding or further order, from supplying pharmaceutical products which included venlafaxine hydrochloride, a compound claimed in various claims of Wyeth's patent. It is common ground that the Generic Parties were not permitted to supply these products unless they were first registered on the ARTG. It is also common ground that each of the Generic parties was required by s 26B(1A) of the TG Act to give a certificate under s 26B(1), that each provided a certificate under s 26B(1)(a), and that none gave a notice to the patentee of the kind referred to in s 26B(1)(b)(iii). 33 The Wyeth Proceedings were heard together. In November 2010 the trial judge upheld the validity of a number of the claims of Wyeth's patent, and granted final injunctive relief against the Generic Parties in relation to those claims. The trial judge also made orders (inter alia) releasing Wyeth from the undertakings as to damages. 34 Each of the Generic Parties filed an appeal. In October 2011 a Full Court allowed the Generic Parties' appeals, and in December 2011 made orders revoking the relevant claims of Wyeth's patent. The Full Court also ordered that the orders releasing Wyeth from the undertakings as to damages be set aside, and that any application made by any person seeking an order for the payment of compensation pursuant to those undertakings be remitted to the trial judge for determination. In May 2012 applications by Wyeth for special leave to appeal the decision of the Full Court were refused. 35 Each of the Generic Parties made a claim against the Wyeth Parties under the usual undertaking. A number of other persons (who were not parties to the Wyeth Proceedings) also made claims. In August 2013 the Commonwealth also filed an application in each of the Wyeth proceedings making its own claim against the Wyeth Parties on the undertakings as to damages given in each of the three proceedings. 36 The Wyeth Parties also contend that the Commonwealth's claims must fail on the basis that they are precluded by the provisions of Div 2 of Pt 3-2 of Chapter 3 of the TG Act.

The Pharmaceutical Benefits Scheme 37 At all material times the Sanofi Parties' products and the Wyeth Parties' products have been supplied under the Pharmaceutical Benefits Scheme ("PBS"). The PBS is the scheme for the supply of pharmaceutical benefits established under Pt VII of the National Health Act 1953 (Cth) ("the NHA"). Broadly speaking, pharmaceutical benefits are drugs or medicinal preparations that are the subject of a relevant declaration or determination under Pt VII of the NHA and listed on the Schedule of Pharmaceutical Benefits ("PBS Schedule"). An eligible person who is receiving treatment by a medical practitioner is entitled to receive pharmaceutical benefits under Pt VII of the NHA. The eligible person is generally required to make a co-payment to the approved pharmacist dispensing the pharmaceutical benefit. The actual cost of the pharmaceutical benefit is often significantly more than the amount of the co-payment. Any difference is paid for by the Commonwealth. 38 The losses the Commonwealth alleges it has suffered and that it seeks to recover pursuant to the usual undertakings as to damages from the Sanofi Parties and the Wyeth Parties include the difference between what it says it had to pay for the relevant pharmaceutical benefits under the PBS while the interlocutory injunctions were in force, and what it would have had to pay for them under the PBS if Apotex's products, or the Generic Parties' products, had also been supplied under the PBS, something which the Commonwealth alleges would have occurred were it not for the interlocutory injunctions. The amounts claimed by the Commonwealth, which are said to reflect these differences, are substantial. For example, in the case of the claim made against the Sanofi Parties, the claim includes an amount of $54.8 million in respect of an initial 12.5% statutory price reduction that the Commonwealth alleges would have been triggered with effect from 1 April 2008 if Apotex's products had been listed on the PBS Schedule from that date.

THE legislative HISTORY AND CONTEXT 39 Sections 21 and 22 of the TG Act create various offences relating to the supply in Australia of therapeutic goods for use in humans where such goods are not registered or listed in the ARTG maintained under s 9A of the TG Act. 40 Section 23 of the TG Act is concerned with applications for registration or listing of therapeutic goods. An application under s 23 must be made in the approved form by the Secretary and is not effective unless (inter alia) the prescribed application fee has been paid, and the applicant has delivered such information, in approved form, as will allow the determination of the application. Section 24(2) provides that an application will lapse in certain circumstances including if information is given that is inaccurate or misleading in any material particular, or if the applicant fails to comply with a requirement under s 31 to give individual patient data in relation to the goods. 41 Broadly speaking, "individual patient data" in the case of therapeutic goods means information derived from clinical trials. The provision of such information is part of the process whereby therapeutic goods the subject of an application under s 23 are evaluated for registration in accordance with s 25 having regard to (inter alia) their quality, safety and efficacy. Section 24(1) makes provision for the payment by the applicant of a fee in respect of the evaluation of the goods. 42 Section 25A of the TG Act relevantly provides: 25A When the Secretary must not use protected information (1) When evaluating therapeutic goods for registration, the Secretary must not use information about other therapeutic goods that is protected information. (2) Information is protected information if: (a) the information was given to the Secretary in relation to an application to register therapeutic goods (the new goods): (i) not being therapeutic devices; and (ii) consisting of, or containing, an active component; and (b) the information is about the active component and is not available to the public; and (c) when the application to register the new goods was lodged: (i) no other therapeutic goods consisting of, or containing, that active component were included in the Register; and (ii) no such therapeutic goods had been included in the Register at any time before then; and (d) the new goods became registered on or after the commencement of this subsection; and (e) 5 years have not passed since the day the new goods became registered; and (f) the person in relation to whom the new goods are registered has not given the Secretary permission in writing for the Secretary to use the information. (3) For the purposes of subsection (2), an active component, in relation to therapeutic goods, is a substance that is, or one of the substances that together are, primarily responsible for the biological or other effect identifying the goods as therapeutic goods. 43 The period of five years referred to in s 25A(2)(e) is often referred to as the "data exclusivity period" or the "exclusivity period". 44 Section 25A was inserted into the TG Act with effect from 17 April 1998 by the Therapeutic Goods Legislation Amendment Act 1998 (Cth), as part of the Government's response to the Industry Commission's Report on the Pharmaceutical Industry (Report No 51, 3 May 1996) and to Australia's international obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS") adopted at Marrakesh on 15 April 1994. Section 7, Art 39(3) of TRIPS provides: Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use. 45 The Australia-United States Free Trade Agreement ("FTA") entered into on 18 May 2004 (some six years after s 25A was introduced) includes provisions to a similar effect. Article 17.10 cl 1(a) of the FTA provides: If a Party requires, as a condition of approving the marketing of a new pharmaceutical product, the submission of undisclosed test or other data concerning safety or efficacy of the product, the Party shall not permit third persons, without the consent of the person who provided the information, to market the same or a similar product on the basis of that information, or the marketing approval granted to the person who submitted such information, for at least five years from the date of marketing approval by the Party. 46 Article 17.10 cl 4 is also relevant to a proper understanding of the legislative history and purpose of ss 26B, 26C and 26D. It provides: Where a Party permits, as a condition of approving the marketing of a pharmaceutical product, persons, other than the person originally submitting the safety or efficacy information, to rely on evidence or information concerning the safety or efficacy of a product that was previously approved, such as evidence of prior marketing approval by the Party or in another territory: (a) that Party shall provide measures in its marketing approval process to prevent those other persons from: (i) marketing a product, where that product is claimed in a patent; or (ii) marketing a product for an approved use, where that approved use is claimed in a patent, during the term of that patent, unless by consent or acquiescence of the patent owner; and (b) if the Party permits a third person to request marketing approval to enter the market with: (i) a product during the term of a patent identified as claiming the product; or (ii) a product for an approved use, during the term of a patent identified as claiming that approved use, the Party shall provide for the patent owner to be notified of such request and the identity of any such other person. 47 There are two points to make about Art 17.10 cl 4. First, subpara (a) requires Australia to "provide measures" in its marketing approval process to prevent a person relying on another person's safety or efficacy evidence or information when seeking approval to market a product that is claimed in a patent or to market a product for an approved use that is claimed in the patent. Secondly, if Australia permits a person to request marketing approval for such a product or use, it must provide for the patentee to be given notice of the request. 48 Sections 26B, 26C and 26D were introduced into the TG Act by the US Free Trade Agreement Implementation Act 2004 (Cth) with effect from 1 January 2005. They were not, as enacted, in the same form as first passed by the House of Representatives. In particular, the US Free Trade Agreement Implementation Bill 2004 (Cth), as first passed by the House of Representatives, did not include s 26C or s 26D which were only introduced as a result of amendments made by the Senate. We will say a little more about the legislative history of these provisions later in these reasons.

The Relevant Legislative Provisions 49 Section 26B(1A) specifies the circumstances in which a certificate under s 26B(1) must be given by an applicant for registration under s 23. Broadly speaking, the requirement that an applicant for registration provide a certificate under s 26B(1) will only arise if the applicant for registration is required to submit evidence or information to establish the safety or efficacy of the relevant goods and the applicant wishes to rely upon evidence or information previously submitted by another person in support of their own application for registration. This may include information that was once, but is no longer, protected information due to the expiration of the data exclusivity period. 50 Importantly, there are two types of certificate that may be provided under s 26B(1) by an applicant for registration under s 23. They are: a certificate under s 26B(1)(a) to the effect that the applicant, acting in good faith, believes on reasonable grounds that it is not marketing, and does not propose to market, the therapeutic goods in a manner, or in circumstances, that would infringe a valid claim of a patent that has been granted in relation to the therapeutic goods; or a certificate under s 26B(1)(b) to the effect that: - a patent has been granted in relation to the therapeutic goods; and - the applicant proposes to market the therapeutic goods before the end of the term of the patent; and - the applicant has given the patentee notice of the application for registration or listing of the therapeutic goods under s 23 ("s 26B(1)(b)(iii) notice"). 51 It is apparent that the applicant for registration under s 23 who is required to give a certificate under s 26B(1) has a choice to make. It may give a certificate under s 26B(1)(b) but first it would need to give the patentee notice of the kind referred to in subpara (b)(iii). However, the applicant could only give a certificate under s 26B(1)(a) (without committing an offence under s 26B(2)) if it was first satisfied, in good faith and on reasonable grounds, that it did not propose to market the goods in question in a manner, or in circumstances, that would infringe a valid claim of a patent. The applicant which gives a certificate under s 26B(1)(a) is not required to give notice of its application to a patentee. This enables the applicant to obtain the registration applied for without first communicating its intentions to a patentee. This most likely explains why Apotex and the Generic Parties gave certificates under s 26B(1)(a) rather than s 26B(1)(b). 52 Section 26C(1) provides that s 26C applies if a certificate is given under s 26B(1) in relation to therapeutic goods, and another person (referred to in s 26C as "the second person") intends to commence proceedings for infringement of a patent that has been granted in relation to such goods against the person who provided the certificate under s 26B(1). Section 26C(2) provides that the person intending to commence such proceedings must provide a certificate under s 26C(3), in approved form, that certifies that the proceedings are to be commenced in good faith, have reasonable prospects of success, and will be conducted without unreasonable delay. Section 26C(4) explains what the expression "reasonable prospects of success" means for the purposes of s 26C(3). 53 Section 26C(5) provides that the second person may be ordered to pay to the Commonwealth a pecuniary penalty if the person gives a certificate under s 26C(3) that is misleading in a material particular or if it breaches an undertaking given in such a certificate. Presumably, the "second person" will be (or at least claim to be) the patentee or its exclusive licensee since they are the persons who may commence infringement proceedings under the Patents Act 1990 (Cth). Importantly, s 26C(5) may be engaged even though no such proceedings are commenced, and may therefore operate to deter a patentee or its exclusive licensee from threatening a person who has given a certificate under s 26B(1) with proceedings for patent infringement if the contemplated proceedings would not be commenced in good faith or if they would not have reasonable prospects of success. 54 An application for an order under s 26C(5) must be made to a prescribed court by the Attorney-General or, with the leave of the prescribed court, a person who has given a certificate in accordance with s 26B(1). A "prescribed court" for the purposes of both s 26C and s 26D means the Federal Court and the Supreme Courts of the States and Territories: see s 26C(9), s 26D(6) and the definition of "prescribed court" in Sch 1 to the Patents Act 1990. 55 Section 26C(6) requires the court that is determining the extent of the pecuniary penalty to take into account any profit obtained by the second person, and any loss suffered by any other person "… by reason of the second person exploiting the patent during the proceedings." Section 26C(7) makes clear that they are not the only matters that a court may take into account when determining a pecuniary penalty. 56 Section 26C(8) is concerned with a situation in which the second person has commenced proceedings and sought and obtained an interlocutory injunction against a person who gave a certificate under s 26B(1). Section 26C(8) provides: If: (a) the second person has sought and obtained in the proceedings an interlocutory injunction restraining the person referred to in paragraph (1)(a) [ie. the person who gives the certificate under s 26B(1)] from infringing a patent; and (b) section 26D does not apply; and (c) a prescribed court declares that the second person has given a certificate required under subsection (3) [ie. certifying that the proceedings will be commenced in good faith, etc]; and (d) a prescribed court declares that: (i) the certificate is false or misleading in a material particular; or (ii) the second person has breached an undertaking given in the certificate; the prescribed court may, pursuant to this section, order that the second person pay to the Commonwealth, a State or a Territory compensation for any damages sustained or costs incurred by the Commonwealth, a State or a Territory as a result of the grant of the interlocutory injunction. 57 Section 26C(8) does not purport to confer on the prescribed court any power to award compensation to any person other than the Commonwealth, a State or a Territory. Further, s 26C(8) cannot apply in circumstances where s 26D applies. 58 Section 26D is also concerned with a situation in which a patentee or its exclusive licensee commences proceedings in which it proposes to seek interlocutory relief for patent infringement, although it is only applicable where notice has been given to a patentee under s 26B(1)(b)(iii). Section 26D provides: 26D Requirements for interlocutory injunction (1) This section applies where: (a) an applicant gives notice to a patentee in accordance with subparagraph 26B(1)(b)(iii); and (b) the patentee and/or its exclusive licensee (in this section the party or parties is or are referred to as the patentee) applies to a prescribed court for an interlocutory injunction to restrain the applicant from marketing the therapeutic goods the subject of the application on the ground that such conduct will constitute an infringement of its patent. (2) An application for interlocutory relief in accordance with subsection (1) may not be instituted unless the patentee has first notified the Attorney-General of the Commonwealth, or of a State or of a Territory, in writing of the application. (3) The Attorney-General of the Commonwealth shall be deemed to be a party to any proceedings commenced in accordance with subsection (1) unless the Attorney-General gives written notice to the prescribed court that he or she does not desire to be a party. (4) If an interlocutory injunction is granted pursuant to an application made as described in subsection (1) and: (a) the patentee subsequently discontinues the principal proceedings without the consent of the other parties thereto; or (b) the principal proceedings are dismissed; and (c) in either case, the prescribed court declares that: (i) the patentee did not have reasonable grounds, in all the circumstances known to the patentee or which ought reasonably have been known to the patentee: (A) to believe that it would be granted final relief by the prescribed court against the applicant referred to in paragraph (1)(a) for infringement by that person of the patent; or (B) (in addition to the fact of grant of the patent), for believing that each of the claims, in respect of which infringement is alleged in the proceedings, would have a reasonable prospect of being held to be valid if challenged by the applicant referred to in paragraph (1)(a); or (ii) the application for the interlocutory injunction was otherwise vexatious or not reasonably made or pursued; the prescribed court may, in addition to any other relief which it believes should be granted to any person, make any of the orders described in subsection (5). (5) If the prescribed court makes a declaration pursuant to paragraph (4)(c), the prescribed court may, pursuant to the usual undertaking as to damages given by the patentee to the prescribed court to obtain the interlocutory injunction: (a) assess and award compensation to the applicant referred to in paragraph (1)(a) against whom the interlocutory injunction was made: (i) on the basis of an account of the gross profits of the patentee arising from the sale by it in Australia of the therapeutic goods the subject of the interlocutory injunction, during the period of the interlocutory injunction, without requiring the said applicant to establish or quantify its actual loss; or (ii) on such other basis as the court determines to be appropriate; and (b) award to the Commonwealth compensation for any damages sustained, or costs incurred, by it as a result of the grant of the interlocutory injunction; and (c) award to a State or a Territory compensation for any damages sustained, or costs incurred, by it as a result of the grant of the interlocutory injunction. (6) In this section: prescribed court has the same meaning as in the Patents Act 1990.

The PARTIES' submissions 59 Mr Walker SC, who appeared on behalf of the Sanofi Parties, submitted that Div 2 of Pt 3-2 of Chapter 3 of the TG Act establishes a legislative scheme that restricts recovery by the Commonwealth under the usual undertaking in circumstances where a certificate is given to the Secretary by an applicant for registration in accordance with s 26B and an interlocutory injunction was later obtained by the patentee. He submitted that the scheme is exhaustive, and that there can be no recovery by the Commonwealth (or the States or Territories) pursuant to the usual undertaking as to damages in circumstances where such a certificate has been given unless the requirements of s 26D(4) are satisfied. He relied upon Chippendale Printing Co Pty Ltd v Commissioner of Taxation (1996) 62 FCR 347 as an example of a case in which revenue legislation was found to have operated in an analogous way. 60 Mr Walker's written submissions focused upon the implications ss 26B, 26C and 26D had for the Commonwealth's claims. He submitted that these provisions constitute a statutory scheme which both confers upon the Commonwealth the right to seek compensation under s 26C(8) or s 26D(5), and which operates as a complete statement of the Commonwealth's right to recover compensation in circumstances where a respondent against which a patentee obtained an interlocutory injunction gave a certificate under s 26B. 61 In oral submissions Mr Walker also argued (as we understood him) that, in circumstances where a certificate under s 26B has been given and an interlocutory injunction was then obtained against the applicant for registration, a prescribed court could not make an award under the usual undertaking in the applicant's favour unless the requirements of s 26D(4) were satisfied. In particular, he submitted that such an award could only be made against the patentee if it was shown to have engaged in misconduct of the type described in s 26D(4)(c). However, in written submissions filed by the Sanofi Parties after the hearing it was said that no such positive submission was made, and that the entitlement of a generic supplier to recover on the undertaking as to damages in circumstances where the requirements of s 26D(4) were not satisfied was hypothetical and not a matter that needed to be decided in this case. It was on this basis that the Sanofi Parties more or less invited the Court to put aside the broader implications of their arguments in relation to the operation of ss 26B-26D for the claim of a generic supplier which may have given a certificate under s 26B(1)(a). 62 A central premise of the Sanofi Parties' submissions was that the remedies which may be awarded pursuant to s 26D(5) were "not materially different" to what might be awarded under the usual undertaking in the absence of s 26D. In particular, it was submitted that s 26D(5) did not permit the prescribed court to award more than was necessary to compensate the claimant for its actual loss. 63 Mr Lloyd SC, who appeared for the Wyeth Parties, adopted Mr Walker's submissions in relation to the Commonwealth's claim against the Wyeth Parties, but made clear that the Wyeth Parties did not contend that s 26D could also defeat the claim of an applicant for registration which had given a certificate under s 26B(1)(a). However, Mr Lloyd submitted that the argument raised by Mr Walker was "respectable" and that, if it was upheld, the Wyeth Parties would most likely wish to rely upon it as an answer to the Generic Parties' claims. In this regard, Mr Lloyd also appears to have understood Mr Walker to have argued for a construction of the relevant provisions that would, if accepted, provide an answer to the claims made by the Generic Parties against the Wyeth Parties. We will say more about the Wyeth Parties' position on this issue later in these reasons when dealing with the question of costs. 64 Mr Lloyd submitted that, at the time ss 26B-26D were introduced, the position under the general law was that the Commonwealth (and each of the States and Territories) could not recover on a patentee's undertaking as to damages or that, at the very least, there was uncertainty surrounding the Commonwealth's right of recovery. He submitted that by the introduction of ss 26B-26D, the Commonwealth was given a clearly defined, but confined, right of recovery under the usual undertaking by force of s 26D which the Commonwealth had not previously enjoyed. 65 Mr Lloyd also submitted that if Parliament creates a statutory remedy that is "inconsistent" with a general law remedy (in the sense that the statutory remedy contains restrictions or limitations reflecting a legislative choice that is a feature of the relevant provisions), the general law remedy is "displaced" and the statutory remedy is the only one available. He relied upon the English Court of Appeal's decision in Monro v Revenue and Customs Commissioners [2009] Ch 69 to illustrate his point. 66 Mr Lloyd relied upon various statements made in the public law context and, in particular, the principle laid down in Attorney-General v De Keyser's Royal Hotel [1920] AC 508 that "when a prerogative power of the Executive Government is directly regulated by statute, the Executive can no longer rely on the prerogative power but must act in accordance with the statutory regime laid down by the Parliament": Jarratt v Commissioner of Police (NSW) (2005) 224 CLR 44, McHugh, Gummow and Hayne JJ at [85]. He also relied upon Anthony Hordern and Sons Limited v The Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 (Anthony Hordern) at 7 per Gavan Duffy CJ and Dixon J, as explained in Minster for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566 at [52]-[55], and the principle of construction that "affirmative words appointing or limiting an order or form of things may also have a negative force and forbid the doing of the thing otherwise …" per Dixon CJ, McTiernan, Fullagar and Kitto JJ in R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 (Boilermakers') at 270. 67 Mr Gleeson SC, the Solicitor-General, submitted on behalf of the Commonwealth that s 26D operated to enlarge the Court's power in situations where it was satisfied that the patentee had engaged in "abusive conduct" of the type described in s 26D(4)(c). He submitted that s 26D was not intended to restrict the ability of an applicant for registration who provides a certificate under s 26B(1)(a) or (b), the Commonwealth, the States and Territories, or any other person for that matter, from claiming on the undertaking as to damages. He submitted that the remedies provided for in s 26D(5) were more generous than would otherwise be available for the simple reason that they are intended to deter patentees from engaging in abusive conduct. He supported these submissions by reference to the text, purpose and legislative history of the relevant provisions.

The usual undertaking as to damages 68 The expression "usual undertaking as to damages" is not defined in the TG Act. However, it is clear that it is used in s 26D(5) to refer to an undertaking of the kind that is invariably required to be given by a patentee who obtains an interlocutory injunction restraining an alleged infringement, or threatened infringement, of its patent. 69 The power of the Court to grant an interlocutory injunction is conferred by s 23 of the Federal Court of Australia Act 1976 which expressly allows for the making of such interlocutory orders as the Court thinks appropriate. The Court may, and often does, make such orders on terms. In proceedings for patent infringement, interlocutory injunctions are invariably granted on condition that the applicant for such relief provide the usual undertaking as to damages. 70 The practice of requiring an applicant for an interlocutory injunction to provide an undertaking as to damages "is founded upon, and arises from, the discretion which the court has in such cases, to grant or not to grant, the injunction applied for": Mansfield v Director of Public Prosecutions (WA) (2006) 226 CLR 486 at [32]-[33] citing Russell v Farley (1881) 105 US 433 at 438 where Bradley J, referring to the first edition of Kerr on Injunctions published in 1867, "explained the requirement of the undertaking as a response to the anxiety entertained by the court that otherwise its interlocutory order might lead to damage for which there could be no redress except by an order for costs" per French CJ, Gummow, Hayne, Heydon and Kiefel JJ in European Bank Ltd v Evans (2010) 240 CLR 432 (European Bank) at [15]. 71 In Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249 (Air Express), in an appeal by a defendant against the decision of Aickin J refusing to award it damages pursuant to the plaintiff's undertaking as to damages, the High Court explained the object of the usual undertaking and the circumstances in which a plaintiff may be ordered to make payment under it. Gibbs J said at 311: The object of requiring a plaintiff who seeks an interlocutory injunction to enter into an undertaking of this kind is to attempt to ensure that a defendant will receive compensation for any loss which he suffers by reason of the grant of the injunction if it appears in the event that the plaintiff was not entitled to obtain it. The insistence upon the giving of an undertaking is a very important, if not an essential, means of preventing injustice from being done by the court when it makes an order at an interlocutory stage, before the rights of the parties have been finally determined. Stephen J said at 318: What occurs when such an undertaking is extracted from a plaintiff is that the court, as a condition of its grant of interim or interlocutory injunctive relief, has ensured that, should it turn out that that relief should never have been granted, it will have the power, so far as monetary compensation allows, to make good the harm which the grant has done to the defendant. The court acquires powers to do justice between the parties which it would not otherwise possess. 72 Stephen J distinguished the position of a plaintiff who fails to obtain final relief at trial after having obtained an interlocutory injunction from that of a wrongdoer who is held liable to the plaintiff in damages in contract or tort. His Honour said at 319-320: But a plaintiff who sues for an injunction and obtains interlocutory relief, giving an undertaking to the court as the price of that relief, commits no wrongful act, no breach of contract or of duty when, at the trial, he fails to obtain any perpetual injunction. If, as a result of the grant of interlocutory relief, the defendant has been harmed there will, however, have been injustice and, an undertaking having been given, the court will thereby have been armed with jurisdiction, otherwise lacking, to right that injustice and compensate the defendant for the harm done to him. Mason J said at 324-325: The object of the undertaking is to protect a party, normally the defendant, in respect of such damage as he may sustain by reason of the grant of the interim injunction in the event that it emerges that the plaintiff is not entitled to relief. 73 On the matters of causation and remoteness, Aickin J was of the opinion that the usual undertaking as to damages was regarded as permitting, in most cases, recovery of those damages which were foreseeable and which flowed directly from the interlocutory injunction. His Honour said at 266-267: In a proceeding of an equitable nature it is generally proper to adopt a view which is just and equitable, or fair and reasonable, in all the circumstances rather than to apply a rigid rule. However the view that the damages should be those which flow directly from the injunction and which could have been foreseen when the injunction was granted, is one which will be just and equitable in the circumstances of most cases and certainly in the present case. These observations of Aickin J were affirmed by French CJ, Gummow, Hayne, Heydon and Kiefel JJ in European Bank at [18]. Their Honours' reasons indicate at [29] that the relevant inquiry will usually involve three questions: What is the loss that is alleged to have been suffered? Did the loss flow directly from the interlocutory injunction? Could the loss of the kind actually sustained have been foreseen at the time the interlocutory injunction was granted? 74 Although the High Court made clear in European Bank that the process of assessment of compensation was not constrained by any rigid rule, there is no reason to think the approach taken by their Honours in that case would not also be applied in the case of a respondent restrained by interlocutory injunction from infringing a patent that was subsequently held to be invalid. In the case of other persons affected by the interlocutory injunction, the usual requirement that their loss be loss of a kind that "could have been foreseen" at the time the interlocutory injunction was granted, constitutes an important check on the liability of the person providing the usual undertaking as to damages in such cases.

Section 26C 75 Section 26C is concerned with certificates that must be given to the Secretary pursuant to s 26C(2) by a person intending to commence a proceeding for patent infringement. Section 26C(8) provides the Commonwealth with a right to recover compensation where the person giving the certificate has obtained an interlocutory injunction and the Court later declares that the certificate was false or misleading in a material particular or that an undertaking in the certificate was breached. However, s 26C has nothing to say about the Commonwealth's right to recover compensation under the usual undertaking as to damages except indirectly by providing that s 26C(8) cannot apply if s 26D applies. 76 Section 26C will have an important role to play if the patentee obtained the interlocutory injunction after providing a false or misleading certificate and later obtained final relief with the consent of the respondent (for example, a consent order for the dismissal of a cross-claim seeking revocation of the patent). The possibility that patent proceedings might be settled by a patentee on that basis in return for the patentee granting a licence in favour of the respondent is by no means novel. Where a generic supplier did not give the s 26B(1)(b)(iii) notice, s 26C(8) will provide the Commonwealth with a right to recover compensation from a patentee which has obtained an interlocutory injunction against the generic supplier, and then settled with it, in circumstances where the patentee did not have reasonable grounds to believe the patent was valid. In this way, s 26C operates to provide the Commonwealth with a monetary remedy that would not be available to it under the usual undertaking as to damages.

Section 26D 77 Section 26D(5) provides a source of power to award compensation to the applicant for registration who has given a notice to a patentee of the kind referred to in s 26B(1)(b)(iii), and which is then restrained by an interlocutory injunction obtained by the patentee in circumstances where the proceedings are later dismissed or discontinued without consent, and the prescribed court declares, broadly speaking, that the patentee did not have reasonable grounds to believe that its claim for final relief would succeed. Section 26D(5) also provides a source of power to award compensation to the Commonwealth or a State or Territory for damages suffered as a result of the grant of the interlocutory injunction. In the language of s 26D(5), these awards of compensation may be made "pursuant to the usual undertaking as to damages given by the patentee to the prescribed court to obtain the interlocutory injunction." 78 We consider it significant that s 26D is expressed to apply not where a certificate has been given pursuant to s 26B(1)(b), but where a notice has been given in accordance with subpara (iii) of that provision. This raises the possibility that an applicant might provide a certificate under s 26B(1)(a), and also give notice to the patentee of the kind referred to in s 26B(1)(b)(iii). Although it is not necessary for us to decide the question, there does not appear to us to be any reason why the relevant provisions would not allow an applicant for registration to take that course. 79 There are a number of other matters to note in relation to s 26D. 80 First, if s 26D(1) applies, the patentee's application for interlocutory relief cannot be made unless the patentee has first given written notice to the Attorney-General of the Commonwealth or of a State or Territory of the interlocutory application pursuant to s 26D(2). By virtue of s 26D(3), once the application is made the Attorney-General of the Commonwealth is deemed to be a party subject to him or her electing not to be a party by the giving of a written notice. It is reasonable to assume that the purpose of s 26D(3) is to ensure that the Commonwealth will have a right to appear and be heard in the proceeding generally, including in relation to the interlocutory application, and to give or withhold its consent to any proposed discontinuance by the patentee. Section 26D(3) may also have the effect of ensuring that the Commonwealth can claim on the usual undertaking as to damages in those State or Territory jurisdictions where the usual undertaking is still given in respect of damage suffered by a party as opposed to "any person, whether or not a party" adversely affected by the operation of the interlocutory injunction. 81 Secondly, s 26D(4) specifies the circumstances in which the prescribed court may make any orders of the kind described in subs (5). Not only must the infringement proceedings be determined by discontinuance (without consent) or dismissal, the court must declare that the patentee did not have reasonable grounds to believe that its claim for final relief for patent infringement would succeed or that the application for "the interlocutory injunction was otherwise vexatious or not reasonably made or pursued." In substance, a declaration of this kind can only be appropriate if the patentee has engaged in conduct that is tantamount to an abuse of process. 82 Thirdly, the prescribed court's power to make orders under subs (5) is expressed to be "in addition to any other relief which it believes should be granted to any person": subs (4). 83 Mr Walker submitted that the words "in addition to any other relief it believes should be granted to any person" in subs (4) refer to relief that the prescribed court believes should be granted in respect of conduct referred to in subparas (a)-(c) of subs (4) of s 26D. However, Mr Gleeson submitted that these words have a broader operation and that they make clear that the court may make an award in favour of any person pursuant to the undertaking as to damages even if the patentee is not shown to have engaged in any relevant misconduct. 84 In our opinion Mr Walker's construction of subs (4) is to be preferred. It seems to us that the concluding words of subs (4) are there to make clear that the relief which the prescribed court may grant, or the persons which may be granted such relief, in the particular circumstances described in subs (4), are not limited by the terms of subs (5). In an appropriate case this might include, for example, damages (including exemplary damages) for the tort of abuse of process: see Williams v Spautz (1992) 174 CLR 509 at 522-526. 85 We turn now to the question whether s 26D(5) enlarges the remedies available to the applicant for registration who has given a notice of the kind referred to in s 26B(1)(b)(iii) and who is the subject of proceedings, later dismissed or discontinued (without consent), in which an interlocutory injunction was obtained, and where the patentee is shown to have engaged in misconduct of a type referred to in s 26D(4)(c). 86 Section 26D(5)(a) expressly provides that the prescribed court may assess and award compensation on the basis of an account of gross profits made by the patentee during the period of the interlocutory injunction without requiring the applicant to establish or quantify its actual loss, or on such other basis as the court considers appropriate. 87 Mr Walker submitted that s 26D(5) does not authorise the prescribed court to award an account of gross profits or to award an amount of money equivalent to the gross profits made by the patentee during the period the interlocutory injunction operated because to proceed in that manner would involve doing more than awarding "compensation". But it seems to us that, at the very least, s 26D(5) provides the prescribed court with far more flexibility in assessing compensation than would be the case if the application for compensation were to be determined in accordance with the general law as explained in Air Express and European Bank. In particular, subpara (a)(i) provides that compensation may be assessed and awarded on the basis of an account of the gross profits "without requiring the … applicant to establish or quantify its actual loss". Precisely how the court would go about assessing compensation on that basis is by no means clear, particularly if there are multiple claimants which have each suffered loss because of the interlocutory injunction. However, whatever the true scope of a prescribed court's power under s 26D(5)(a), and whatever the discretionary factors that may govern its exercise, we do not doubt that the power to award compensation has been considerably enhanced in circumstances where s 26D(5)(a) applies. 88 For an award of compensation to the Commonwealth, or a State or Territory, the language used in s 26D(5)(b) and (c) does not import any requirement that "damages sustained, or costs incurred" by the Commonwealth, or a State or Territory, as a result of the grant of the interlocutory injunction be "foreseeable". On this basis alone it is apparent that s 26D(5)(b) and (c) provide a broader scope for recovery of loss, which a court might otherwise consider itself bound to disallow on the basis that it was of a kind that was not reasonably foreseeable at the time the patentee obtained the interlocutory injunction. 89 This view of s 26D(5)(b) and (c) is consistent with recent authority which denies the applicability of reasonable foreseeability as a means of limiting liability in respect of intentional torts (eg deceit): Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388 at [63]-[65] per Gummow J (Gleeson CJ agreeing at [13]). In the course of his reasons Gummow J referred with approval to the following statements in the judgment of Lord Denning MR in Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 158 at 167: In contract, the damages are limited to what may reasonably be supposed to have been in the contemplation of the parties. In fraud, they are not so limited. The defendant is bound to make reparation for all the actual damages directly flowing from the fraudulent inducement ... [I]t does not lie in the mouth of the fraudulent person to say that [the damage] could not reasonably have been foreseen. As Gummow J also pointed out, Lord Denning MR's statement of principle has been referred to with apparent approval by the High Court in South Australia v Johnson (1982) 42 ALR 161 at 170; see also McHugh J in Henville v Walker (2001) 206 CLR 459 at [133] referring to (inter alia) Lord Denning MR's judgment in Doyle at 167 and Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 at 12. Of course, a claim on the undertaking as to damages that is based upon s 26D(5) is not a claim for damages for an intentional tort (such as deceit). But there are obvious parallels between tortious conduct of that kind and conduct of the kind specified in s 26D(4)(c). 90 We accept Mr Gleeson's submission that s 26D enhances the power of the court to grant relief ordinarily available pursuant to the usual undertaking as to damages where a notice has been given to the patentee as contemplated by s 26B(1)(b)(iii), and if the patentee is found to have engaged in misconduct of the kind specified in s 26D(4)(c).

Does Div 2 prevent the Commonwealth from recovering under the usual undertaking as to damages where the requirements of the section are not satisfied? 91 It is not in dispute that Div 2 of Pt 3-2 of Chapter 3 of the TG Act does not include any express restriction which prevents the Commonwealth, or any other person, from recovering under the usual undertaking as to damages in the ordinary way in circumstances where the patentee fails to obtain a final injunction but is not shown to have engaged in any relevant misconduct, or where no notice has been given to the patentee under s 26B(1)(b)(iii). The Sanofi Parties contend that in the case of the Commonwealth such a restriction arises by implication. 92 Div 2 cannot be construed without giving some consideration to the effect of the relevant provisions upon the claims of other persons besides the Commonwealth. It is not a satisfactory answer to say that the question whether other persons' claims are also excluded does not arise because the question posed for consideration by the Full Court is directed only to the Commonwealth's claims. The proper construction of the relevant provisions cannot be ascertained on that narrow basis. 93 If the Commonwealth's claim is precluded by operation of an "exhaustive code" found in Div 2 then, as a matter of statutory construction, it is difficult to see why the claim of the applicant for registration which gave the relevant s 26B(1)(b)(iii) notice is not also precluded. In our view, the notion that Div 2 might operate as an exhaustive code in respect of the Commonwealth's claim but not the claim of the applicant for registration, does not reflect a rational legislative choice. 94 The Sanofi Parties submitted that the Parliament may have sought to curtail a patentee's liability under the usual undertaking as to damages where a supplier (the "generic supplier") has elected to rely on evidence or information to establish the safety or efficacy of its goods that another person (the "originator") previously submitted to the Secretary. As we understood this submission, the Parliament may have sought to limit the patentee's liability to a generic supplier (which had given the s 26B certificate) under the usual undertaking as to damages as a quid pro quo for allowing the generic supplier to rely on an originator's evidence and information (so-called "springboarding"). We reject this submission, as explained below. 95 Sections 26B, 26C and 26D were enacted in response to Australia's entry into the FTA. As we have pointed out, it requires Australia to provide for a patentee to be given notice of a request for marketing approval in certain circumstances. There is nothing in the FTA that gives us any reason to think that Parliament might have considered it necessary or desirable to deprive a person giving a certificate under s 26B of the right to recover under the usual undertaking for loss occasioned by the grant of an interlocutory injunction founded upon an invalid patent. In the circumstances, we do not think that Div 2 can be interpreted to operate as an exhaustive code that curtails the rights of such a person to recover compensation under the usual undertaking as to damages in an appropriate case. 96 The contrary view of Div 2 is likely to produce results that are inconvenient and unjust. The prescribed courts invariably award interlocutory injunctions on the premise that the usual undertaking will permit the court to compensate the respondent for any injury caused by the interlocutory injunction if the plaintiff loses the case: see Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 623. From the generic supplier's perspective, it would mean that it could be kept out of the relevant market for a very lengthy period until such time as the infringement proceedings were finally determined and without any redress if the patent was eventually held invalid. From the patentee's perspective, it could be particularly difficult for a patentee to persuade a judge that there should be a grant of an interlocutory injunction in circumstances where there was a serious question to be tried as to whether or not the respondent was threatening to infringe a valid claim of the patent: cf. Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 at [19] per Gleeson CJ and Crennan J, [65]-[72] per Gummow and Hayne JJ. 97 Mr Walker submitted that Div 2 dealt with the generic supplier and the Commonwealth rather differently, from which it might be inferred that the Parliament intended to create an exhaustive code for the Commonwealth, but not for the generic supplier that had not given the s 26B(1)(b)(iii) notice. In this regard, he sought to distinguish the Commonwealth from the generic supplier by reference to s 26C(8) which provides the Commonwealth (but not the generic supplier) with a limited right to recover compensation for damages sustained by it as a result of the grant of an interlocutory injunction. 98 It is true that the Commonwealth is given a right to claim compensation in the circumstances referred to in s 26C(8) whereas the applicant for registration is not. However, the Commonwealth's right under s 26C(8) is not linked to the undertaking as to damages, but is instead a purely statutory right that is enlivened where the patentee provides a certificate under s 26C(2) that is false or misleading in a material particular or where the certificate contains an undertaking by the patentee that is breached. Section 26C has nothing to say about the entitlement of the Commonwealth to recover under the usual undertaking as to damages. In particular, ss 26C(5)-(8) are essentially concerned with ensuring that certificates given under s 26C(2) are given in good faith, and on reasonable grounds, and permitting the Commonwealth and the States and Territories to recover damages where a false or misleading certificate is given by the patentee prior to commencing proceedings in which an interlocutory injunction is obtained. 99 We do not think the distinction relied upon by Mr Walker justifies the conclusion that Div 2 may have been intended by Parliament to act as an "exhaustive code" in relation to the Commonwealth but not the generic supplier which gave the s 26B(1) notice in the first place. 100 In Chippendale Printing Co Pty Ltd v Commissioner of Taxation (1996) 62 FCR 347 (Sheppard, Tamberlin and Lehane JJ) the Full Court upheld the primary judge's (Lindgren J's) decision that the relevant provisions of the Sales Tax Assessment Act (No 1) 1930 (Cth) and the Sales Tax Assessment Act 1992 (Cth) were intended to be an exhaustive code of taxpayer's rights to recover an overpayment of tax. Sheppard J said at 348-349: Much of the argument before us was taken up with an interesting consideration of the circumstances in which a common law right to recover moneys for an overpayment of tax could coexist with a statutory right for that recovery. There was a good deal of consideration given to the question whether the legislation in point contained what might be described as a code thus reflecting an intention on the part of the legislature to oust other forms of recovery. Plainly the matter is one of statutory interpretation. It would seem to me to be an odd state of affairs if the legislature, in the circumstances which exist here, intended to restrict the right to recover under the statute as it has and yet to allow an unrestricted right deriving from the common law to remain available at the same time. I think that the legislation reflects a sufficiently clear intention to warrant the conclusion that it did not intend there to be available for an overpayment such as was made in this case any remedy other than the statutory one for which the legislation provides. Tamberlin J said at 359: It must be borne in mind that the obligation to pay sales tax and the procedures by reference to which such tax is to be assessed, paid, collected and adjusted, arises from statute and not from agreement or from the general law. The subject matter of the tax is a statutory debt. The whole regulatory framework is legislative and not consensual in character. Against this background it is not inappropriate that the statutory regime should be interpreted to cover the field and not allow actions under the general law where the result would be to bypass carefully formulated legislative controls. … The existence of these entitlements, conditions and procedures also lends support to the conclusion that the legislative regime under the 1930 Act as amended was intended to be exhaustive as to the way in which, and the basis on which, claims for refunds of overpaid sales tax could be obtained. It is unlikely, to say the least, that these procedures and entitlements would be cast in such a comprehensive and detailed form if it was envisaged that alternative rights under the general law could also be availed of with the consequence that the procedural machinery was bypassed. Lehane J was also of the opinion that the relevant provisions established an exhaustive code with respect to the recovery of overpayments of sales tax. His Honour was particularly influenced by the fact that one of the relevant provisions explicitly required the Commissioner not to make a refund of any overpayment unless one of a number of specified conditions was satisfied. 101 Chippendale was distinguished by the New South Wales Court of Appeal in Bromley v Forestry Commission of New South Wales (2001) 51 NSWLR 378 on the basis that the legislation in issue in Chippendale occupied the same field as the common law right and that it did so in a manner that was incompatible with an untrammelled common law right: see Mason P (at [49]) (with whom Heydon JA and Ipp AJA agreed). 102 In our view Chippendale is distinguishable from the facts of this case. In the present case there is no inconsistency or incompatibility that arises by holding that a prescribed court can make an award of compensation under the usual undertaking as to damages in accordance with the general principles discussed in Air Express and European Bank in circumstances where a s 26B(1)(b)(iii) notice has been given. 103 Monro v Revenue and Customs Commissioners [2009] Ch 69 raised a very similar question to that dealt with in Chippendale. In Monro the question was whether the taxpayer could maintain a common law action to recover a mistaken overpayment of capital gains tax or whether it was precluded by s 33 of the Taxes Management Act 1970 (UK). Section 33(1) provided that a taxpayer could make a claim for the repayment of such an overpayment, and s 33(2) conferred on the Board the power to grant relief in respect of such a claim. However, s 33(2A) excluded the relief available in two specific situations. The taxpayer's claim was within s 33(1) but his right to relief was excluded by s 33(2A). The Court of Appeal upheld the trial judge's decision that the taxpayer's common law claim was precluded. 104 Arden LJ held (at [6]) that the obvious purpose of s 33(2A) was to protect the public finances. She described (at [7]) s 33 as "its own code for repayments to which s 33(1) applies" and "a parallel universe to the common law remedy." Arden LJ also said at [22]-[23]: [22] In my judgment, the authorities give clear guidance that if Parliament creates a right which is inconsistent with a right given by the common law, the latter is displaced. By "inconsistent" I mean that the statutory remedy has some restriction in it which reflects some policy rule of the statute which is a cardinal feature of the statute. In those circumstances the likely implication of the statute, in the absence of contrary provision, is that the statutory remedy is an exclusive one. [23] Undoubtedly, Mr Monro paid money under mistake of law, and a remedy at common law in general exists in that situation. Such a right can, however, be excluded by express words or necessary implication. In this case the implication arises because Parliament has created a specific remedy with a limitation to exclude payments made under generally accepted practice. That limitation would be defeated if the court permitted an action to be brought at common law. That principle applies even though the statute is a taxing statute which must be interpreted so as not to impose burdens on the taxpayer unfairly. I have already discussed the obvious purpose of subsection (2A). It would make a nonsense of that purpose if it were possible to bring an action at common law for the recovery of money in circumstances where s 33(1) applies. Longmore LJ concluded at [40] that Parliament intended s 33 to cover all mistakes coming within the section and that it was to that extent intended to supersede and displace the common law. Mummery LJ (at [43]) agreed with both judgments. 105 Monro is distinguishable from the facts of this case for the same reason that Chippendale is distinguishable: there is nothing inconsistent or incompatible with permitting recovery by the Commonwealth (or any other person) pursuant to s 26D(5) while not excluding recovery under the undertaking as to damages in the ordinary way. Nor is there any other reason to suggest that ss 26B-26D were intended to supersede or displace a person's right to recover on the undertaking in the ordinary way. 106 The other authorities relied upon by the Wyeth Parties, including the Anthony Hordern case and the Boilermakers' case, do not assist. The principle of statutory construction referred to in those cases does not in terms apply here because we are not concerned with a situation in which the statutory instrument contains both specific and general provisions such that a choice must be made as to which of them is to apply in a given case. In any event, as Gummow and Hayne JJ explained in Nystrom at [54]: Underlying Anthony Hordern and later cases is the notion "that affirmative words appointing or limiting an order or form of things may have also a negative force and forbid the doing of the thing otherwise". This statement was made by Dixon CJ, McTiernan, Fullagar and Kitto JJ in R v Kirby; Ex parte Boilermakers' Society of Australia [(1956) 94 CLR 254 at 270 … ] and applied to Ch III of the Constitution as a "very evident example". Counsel for the Minister, in oral argument, invoked the maxim expressum facit cessare tacitum (when there is express mention of certain things, then anything not mentioned is excluded), and its affinity with the above statement will be apparent. But, whilst "rules" or principles of construction may offer reassurance, they are no substitute for consideration of the whole of the particular text, the construction of which is disputed, and of its subject, scope and purpose. 107 As previously mentioned, Mr Lloyd submitted that the Commonwealth had no right to recover on the undertaking as to damages in respect of loss suffered by it as a result of a generic supplier being kept out of the market by an interlocutory injunction founded upon an invalid patent and that, at the very least, the Commonwealth's right of recovery was the subject of considerable uncertainty that Parliament sought to eliminate by the enactment of ss 26B-26D. 108 It seems to us that at least some of the uncertainties in relation to the Commonwealth's entitlement to recover under the undertaking as to damages are more imaginary than real. For example, the Wyeth Parties suggested that the Commonwealth might not be able to recover on the undertaking as to damages given by them because the Commonwealth granted the patent that was in suit in the Wyeth Proceedings. While it is not necessary for us to express a view as to the correctness of this particular argument, we seriously doubt that this is a matter that is likely to have been troubling the Commonwealth at the time ss 26B, 26C and 26D were enacted. In any event, it is not an uncertainty that could explain the reference to the States and Territories in s 26D(5)(c) since none of them is involved in granting patents. 109 It was also faintly suggested by the Wyeth Parties that the Commonwealth might not be a "person" within the meaning of the undertakings that they provided to the Court. We do not think that can be correct. The ordinary and natural meaning of the word "person" includes the Crown: McGraw-Hinds (Aust.) Pty Ltd v Smith (1979) 144 CLR 633 at 649 per Stephen J citing Lord Tucker in Madras Electricity Supply Corporation Ltd v Boarland [1955] AC 667 at 692. Given that the usual undertaking as to damages is required to be given in a wide range of situations (including where the Commonwealth is a respondent), there can be no possible justification for adopting an interpretation of the words "any person" that includes some legal entities (eg. a corporation) but not others (eg. a body politic). 110 The Wyeth Parties also suggested that the Commonwealth may have been concerned that it may not be able to recover any loss suffered by it as a result of having to pay higher prices under the PBS than would be the case if a generic supplier could have achieved a PBS listing for its products but for a patentee obtaining an interlocutory injunction based upon a patent ultimately held invalid. The argument, as we understood it, was that the Commonwealth causes its own loss in such circumstances because the price reductions triggered by the listing of a generic supplier's products on the PBS Schedule are mandated by Commonwealth legislation (the NHA). 111 We do not propose to enter into any discussion of the merits of this argument which will be for a Judge hearing the Commonwealth's claims to consider. Nevertheless, even if this argument were correct, this is again not a matter that would explain the reference to the States and Territories in s 26D(5)(c). In any event, there is nothing that the Wyeth Parties can point to that suggests that ss 26B, 26C and 26D were enacted as a response to any uncertainty surrounding the Commonwealth's entitlement to recover under the usual undertaking as to damages. Further, although s 26D(5)(b) would certainly enhance the Commonwealth's prospects of recovery in circumstances where it was engaged, it does not follow that it was also Parliament's purpose to preclude the Commonwealth from recovering under the undertaking in the ordinary way in circumstances where s 26D(5) was not engaged. 112 As already explained, ss 26B, 26C and 26D were introduced into the TG Act by the US Free Trade Agreement Implementation Act 2004. As the long title to that Act suggests, its principal purpose was to make amendments to Commonwealth legislation (including the TG Act) consequent upon Australia and the United States entering into the FTA. 113 There is nothing in the FTA or any other aspect of the relevant legislative history to suggest that ss 26B, 26C and 26D were intended to curtail the right of any person, including generic suppliers of pharmaceutical products who had given a certificate under s 26B(1), the Commonwealth, or the States or Territories, to recover on a usual undertaking as to damages given by a patentee as a condition of obtaining an interlocutory injunction. In particular, the proposition that it was Parliament's intention to reduce the scope for a patentee to be held liable in a case where a generic supplier engaged in "springboarding" (by making use of an originator's evidence or information) finds no support in the language or legislative history of the relevant provisions. 114 If Parliament intended by the enactment of ss 26B, 26C and 26D to curtail the prescribed court's power to make an award under the usual undertaking as to damages then we would expect it to have done so by express words or necessary intendment. It has not done so by express words, and we are satisfied that there is no necessary intendment manifest in Div 2. 115 The Sanofi Parties referred to Parliamentary Debate in the Senate in relation to the US Free Trade Agreement Implementation Bill 2004 and a legal opinion tabled in the Senate by Senator Conroy on 9 August 2004 which he said supported the Opposition's proposed amendments to the Bill (Senate Official Hansard, 9 August 2004, p 25,933). Nothing said in the Senate, or in the tabled legal opinion, provides any support for the Sanofi Parties' or the Wyeth Parties' arguments. 116 To the extent that it might be considered permissible to have regard to these extrinsic materials (see ss 15AB(1), (2)(h) and (3) of the Acts Interpretation Act 1901 (Cth)), they do no more than confirm the conclusion we have reached. Speaking in support of the proposed amendments to the Bill, which were later enacted in the precise form in which they now appear in ss 26B, 26C and 26D, Senator Conroy said: The current law requires that a court cannot grant an interlocutory injunction unless the applicant provides an undertaking as to damages. Amendment (3) [ie. proposed s 26D] enhances the entitlement to damages for the generic company and for the Commonwealth, states and territories. If the patent-holding company wants to take injunction proceedings after being notified by the generic company that it is bringing a generic drug onto the market, it will be liable for damages: if the case is discontinued by the patent-holding company, if the case is dismissed and the court determines the patent-holding company did not have reasonable grounds to believe it would succeed in the overall action or to believe that each of its claims was valid, or if the basis of the injunction was vexatious, not reasonably made or unreasonably pursued. The court can award damages to the generic company, including on the basis of the patent-holding company's gross profits on its drug during the period of the injunction. Let us be clear: if a court finds that a drug company has got a bodgie patent and has been deliberately keeping generic drugs off the market, the court can order that all profits made by that company on that drug be taken from them. This is a seriously punitive penalty. That is what is necessary to make sure that this practice, prevalent in the US, does not come to Australia. It is not something that the Labor Party wants and it is not something the Australian community wants. This amendment puts in place a serious disincentive for companies to engage in this bodgie practice. (Senate Official Hansard, 12 August 2004, pp 26,297-26,298, emphasis added.) 117 Whether or not s 26D(5) permits a "punitive" award against a patentee which has engaged in misconduct of the type referred to in s 26D(4)(c), as Senator Conroy suggested, is something that we do not need to decide. What is significant for present purposes is that Senator Conroy's remarks indicate that s 26D was seen by him as "enhancing" the rights of the generic suppliers, the Commonwealth, and the States and Territories.

DISPOSITION 118 In each case stated the question asked should be answered in the negative. 119 As to costs, we think the preferable approach is to order that the Commonwealth's costs of and incidental to the case stated in each of the four matters be dealt with on a global basis, with the Sanofi Parties to pay 50% and the Wyeth Parties to pay 50% of such costs. 120 After the Court reserved its decision, the Generic Parties (which did not appear at the hearing) sought and were granted leave to file written submissions on the question whether their claims under the usual undertakings as to damages in the Wyeth Proceedings might also be precluded by Div 2. As we have mentioned, the first time this was raised as a possibility was during Mr Walker's oral submissions. We have already referred to what Mr Lloyd said on the point. 121 The Generic Parties' application for leave to file written submissions appear to have been prompted by the Wyeth Parties' indication, in answer to questions from the Court, that they wished to reserve to themselves the right to apply to amend their defence to rely upon Div 2 as a bar to the Generic Parties' claims. In those circumstances, we think it is appropriate that the Wyeth Parties pay the Generic Parties' costs of and incidental to the preparation and filing of those written submissions. 122 There will be orders accordingly. I certify that the preceding one-hundred and two (102) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Kenny and Nicholas.

Associate: Dated: 7 December 2015 Schedule 26B Certificates required in relation to patents (1A) A certificate is required under subsection (1) in relation to an application for registration or listing of therapeutic goods only if: (a) the applicant is required to submit evidence or information to establish the safety or efficacy of the goods as part of the process of applying for registration or listing; and (b) in order to satisfy that requirement, the applicant relies (in whole or in part) on evidence or information that another person submitted to the Secretary: (i) to establish the safety or efficacy of other therapeutic goods that have already been registered or listed; and (ii) as part of the process of applying for the registration or listing of those other goods. (1) The certificate required under this subsection is either: (a) a certificate to the effect that the applicant, acting in good faith, believes on reasonable grounds that it is not marketing, and does not propose to market, the therapeutic goods in a manner, or in circumstances, that would infringe a valid claim of a patent that has been granted in relation to the therapeutic goods; or (b) a certificate to the effect that: (i) a patent has been granted in relation to the therapeutic goods; and (ii) the applicant proposes to market the therapeutic goods before the end of the term of the patent; and (iii) the applicant has given the patentee notice of the application for registration or listing of the therapeutic goods under section 23. The certificate must be signed by, or on behalf of, the applicant and must be in a form approved by the Secretary. (2) A person is guilty of an offence if: (a) the person gives a certificate required under subsection (1); and (b) the certificate is false or misleading in a material particular. Maximum penalty: 1,000 penalty units. (3) For the purposes of this section, a patent is taken to have been granted in relation to therapeutic goods if marketing the goods without the authority of the patentee would constitute an infringement of the patent. (4) In this section: patent has the same meaning as in the Patents Act 1990. 26C Certificates required in relation to patent infringement proceedings (1) This section applies if: (a) a person gives a certificate required under subsection 26B(1) in relation to therapeutic goods; and (b) another person (the second person) intends to commence proceedings under the Patents Act 1990 against the person referred to in paragraph (1)(a) for infringement of a patent that has been granted in relation to the therapeutic goods (the proceedings). (2) The second person, before the date upon which the proceedings are commenced, must give to the Secretary and to the person referred to in paragraph (1)(a) the certificate required by subsection (3). (3) The certificate required by this subsection is a certificate to the effect that the proceedings: (a) are to be commenced in good faith; and (b) have reasonable prospects of success; and (c) will be conducted without unreasonable delay. The certificate must be signed by, or on behalf of, the second person and must be in a form approved by the Secretary. (4) For the purpose of paragraph (3)(b), proceedings have reasonable prospects of success if: (a) the second person had reasonable grounds in all the circumstances known to the second person, or which ought reasonably to have been known to the second person (in addition to the fact of grant of the patent), for believing that he or she would be entitled to be granted final relief by the court against the person referred to in paragraph (1)(a) for infringement by that person of the patent; and (b) the second person had reasonable grounds in all the circumstances known to the second person, or which ought reasonably to have been known to the second person (in addition to the fact of grant of the patent), for believing that each of the claims, in respect of which infringement is alleged, is valid; and (c) the proceedings are not otherwise vexatious or unreasonably pursued. (5) The person referred to in paragraph (1)(a), with leave of the court, or the Attorney-General, may apply to a prescribed court for an order that the second person pay to the Commonwealth a pecuniary penalty if the second person gives a certificate required under subsection (3) and: (a) the certificate is false or misleading in a material particular; or (b) the second person breaches an undertaking given in the certificate. Maximum penalty: $10,000,000. (6) When determining the extent of a pecuniary penalty to be ordered pursuant to subsection (5), the court must take into account: (a) any profit obtained by the second person; and (b) any loss or damage suffered by any person; by reason of the second person exploiting the patent during the proceedings. (7) For the avoidance of doubt, subsection (6) does not limit the matters the court may take into account when determining a pecuniary penalty ordered pursuant to subsection (5). (8) If: (a) the second person has sought and obtained in the proceedings an interlocutory injunction restraining the person referred to in paragraph (1)(a) [ie. the person who gives the certificate under s 26B(1)] from infringing a patent; and (b) section 26D does not apply; and (c) a prescribed court declares that the second person has given a certificate required under subsection (3) [ie. certifying that the proceedings will be commenced in good faith, etc]; and (d) a prescribed court declares that: (i) the certificate is false or misleading in a material particular; or (ii) the second person has breached an undertaking given in the certificate; the prescribed court may, pursuant to this section, order that the second person pay to the Commonwealth, a State or a Territory compensation for any damages sustained or costs incurred by the Commonwealth, a State or a Territory as a result of the grant of the interlocutory injunction. (9) In this section: prescribed court has the same meaning as in the Patents Act 1990. 26D [Section 26D is reproduced at [58] of the reasons]