Commonwealth of Australia v Sanofi

THE COURT ORDERS THAT:

1. The Commonwealth is given leave to file the following affidavits: (a) affidavit of Felicity McNeill sworn 20 June 2017; (b) affidavit of Ian Crettenden sworn 20 June 2017; (c) affidavit of Roger Millichamp sworn 20 June 2017; (d) affidavit of Gordon Fahner sworn 6 July 2017; and (e) affidavit of Rajesh Goel sworn 18 July 2017.
2. The affidavits referred to in order 1 be filed and served by 4.00pm today.
3. The costs of the interlocutory application filed 14 July 2017 be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

NICHOLAS J: 1 Before me is an application by the applicant ("the Commonwealth") for leave to file additional affidavits of five witnesses whom the Commonwealth intends to call in its case in chief at the final hearing of this proceeding which is fixed to commence on 28 August 2017. The five witnesses are Felicity McNeil; Ian Crettenden; Gordon Fahner; Roger Millichamp; and Rajesh Goel. 2 In these reasons I will refer to Mr Fahner, Mr Millichamp and Mr Goel collectively as "the Apotex witnesses" because each of them is employed by an Apotex company, and has previously made one or more affidavits for Apotex Pty Ltd and other Apotex companies in the now discontinued proceeding in which those companies claimed compensation from the respondents ("the Sanofi parties") pursuant to various undertakings as to damages. 3 In support of the present application the Commonwealth relies on affidavits of its solicitor, Mr Christopher Pagent, made 14 July 2017 and 28 July 2017. 4 The Commonwealth's application is opposed by the Sanofi parties except in so far as it relates to Mr Crettenden. The Sanofi parties rely on an affidavit of 24 July 2017 made by their solicitor, Mr John Emmerig. 5 Mr Pagent's affidavits annex copies of the relevant affidavits, recounts some of the relevant procedural history, explains the relevance of some of the further evidence, and provides some explanations for the delay in filing it. 6 Mr Emmerig's affidavit sets out relevant procedural history including details of orders previously made, first on 21 May 2014 and, most recently, on 3 May 2017, for the filing of the Commonwealth's evidence. The order of 3 May 2017 required the further statements and affidavits to be filed and served by 15 June 2017. Mr Emmerig's affidavit also includes some evidence as to the difficulties that the late service of the affidavits will cause the Sanofi parties. 7 Additional background to the proceeding between the Commonwealth and the Sanofi parties is contained in previous judgments including one concerned with the enforceability of various provisions of a settlement deed made between various Apotex companies and the Sanofi parties: see Commonwealth of Australia v Sanofi (formerly Sanofi-Aventis) [2017] FCA 382 ("the April Judgment"). 8 Each of the additional affidavits is made by a witness who has already made a statement or affidavit and who the Commonwealth has previously indicated that it proposes to call as part of its case in chief. It is not disputed by the Sanofi parties that the additional evidence is directly relevant to the issues in the proceeding including various counterfactual scenarios that are pleaded by the Sanofi parties in answer to the Commonwealth's case. 9 As to Ms McNeil's affidavit, her additional evidence relates to the likely response of the Minister and senior officials within the relevant department in the event that the Sanofi parties had lobbied the Minister and the Department to refuse to list Apotex's generic clopidogrel products until such time as the litigation between Apotex Pty Ltd and the Sanofi parties (including any appeal) was determined. Her affidavit was required to be served pursuant to the 3 May 2017 orders by 15 June 2017 but was not served until 20 June 2017. 10 As to Mr Goel's affidavit, it (in unsworn form) was not served until 14 July 2017, which is almost one month late. Mr Pagent's affidavit does not include any explanation for this delay and all that was said by way of explanation by counsel for the Commonwealth in his submissions was that the delay was due to an oversight. That explanation is so vague as to be next to meaningless. Nevertheless, it was not suggested by the Sanofi parties that the late service of this affidavit will cause them any prejudice or that they would not be able to answer Mr Goel's evidence should they wish to do so. 11 Both Ms McNeil's and Mr Goel's additional affidavits contain evidence that is relevant to the issues to be determined at the final hearing. I am satisfied that it is in the interests of justice that the Commonwealth be granted leave to file this additional evidence notwithstanding the delays that have occurred in serving it. 12 With regard to Mr Millichamp's latest affidavit, much of it elaborates on evidence already appearing in his previous affidavits and is aimed at refuting the Sanofi parties' contention that Apotex Pty Ltd ("Apotex") did not intend to launch its clopidogrel products in Australia prior to the final determination of the proceeding heard by Gyles J. I do not consider the late service of this material will cause the Sanofi parties any relevant prejudice. 13 Mr Millichamp latest affidavit also includes material relating to three further issues that I will now briefly address. 14 The first issue concerns what Apotex would have done when Gyles J granted the permanent injunction following the trial of the proceeding if no interlocutory injunction had been granted and Apotex's generic clopidogrel products were already on the market. Mr Millichamp's evidence suggests that Apotex would have sought a stay of the permanent injunction and related orders ("the hypothetical stay") pending an appeal by Apotex to the Full Court. This evidence is directed to the counterfactual scenario pleaded by the Sanofi parties in para 65 of their defence. The relevant allegation in that paragraph was included in the defence by amendment made pursuant to leave granted on 19 April 2017. 15 Again, I do not think the late service of this material will cause the Sanofi parties any relevant prejudice. I accept it may require some further evidence to be elicited from the Sanofi parties' own witnesses as to what the Sanofi parties would have done had Apotex sought a stay, but the evidence relevant to that topic is not likely to be very different to what was before Gyles J at the time he granted the interlocutory injunction. Even if it were quite different, it is evidence that the Sanofi parties' existing witnesses should be readily able to give at the trial. 16 The second issue concerns the Sanofi parties' (or other related entities') copyright in relevant Product Information documents ("PIs") and Consumer Medicine Information documents ("CMIs"). Mr Millichamp describes the steps he would have taken if Sanofi had sought to rely upon copyright in the PIs and CMIs in its efforts to block Apotex's attempts to launch its generic clopidogrel products. In particular, he explains the steps that were taken by Apotex to rewrite the PI for Apotex's generic leflunomide products after Apotex was sued for infringement of the copyright by Sanofi Aventis Australia Pty Ltd. I do not consider the late service of this material will cause the Sanofi parties any prejudice. If there is a need for the Sanofi parties to obtain access to documents relating to this additional evidence from Apotex then a subpoena can be issued for that purpose. 17 The third issue relates to efforts made by Apotex and other generic suppliers to lobby for legislative changes to prevent originators from relying on copyright in PIs and CMIs to block the entry of new generic products. There may be an issue as to the relevance of some of Mr Millichamp's evidence with respect to this issue. However, I do not consider the late service of this material will create any prejudice for the Sanofi parties. The Commonwealth will provide further discovery in relation to this issue if required. 18 Mr Fahner's latest affidavit mostly relates to the structure and size of the Apotex group's business operations including its various supply chains and manufacturing capabilities. Much of this evidence clarifies or amplifies like material already appearing in his first affidavit. His latest affidavit also includes evidence that is specifically directed to the ability of the Apotex companies to provide a bank guarantee for a considerable sum had they been required to provide security in support of the hypothetical stay. 19 Mr Emmerig states that the Sanofi parties would wish to obtain access to documents relating to the ability of the Apotex group to provide a bank guarantee if Mr Fahner is permitted to give this evidence. He also states that no discovery was provided by any of the Apotex companies (when their claim against the Sanofi parties was still on foot) relating to the financial capacity of Apotex Pharmaceutical Holdings Inc (the parent of Apotex Inc) to provide a bank guarantee. 20 Mr Fahner is the Senior Vice President of Global Finance of Apotex Inc, which is a party to the settlement deed. As mentioned at [19] of the April Judgment, cl 8 of the settlement deed requires the Apotex companies that are party to the deed to provide reasonable assistance to the Sanofi parties in defence of the Commonwealth's claim and to provide access to relevant personnel (which would presumably include Mr Fahner) who made affidavits filed and served in support of the Apotex companies' compensation claim. Thus, the Sanofi parties have a right under cl 8 of the settlement deed to obtain any information (assuming it is not privileged) they may reasonably require from Mr Fahner relevant to the matter of the hypothetical bank guarantee. 21 In its opposition to the Commonwealth's application, the Sanofi parties suggested that the settlement deed could have had no impact upon the Commonwealth's ability to interview any of the Apotex witnesses after early November 2016. In a practical sense that may well be right, but I do not think it was unreasonable for the Commonwealth to test the enforceability of cl 6 of the settlement deed before commencing to interview the Apotex witnesses. As I explained in the April Judgment, the primary purpose of cl 6 of the settlement deed was to prevent the Commonwealth communicating with the Apotex witnesses in relation to matters relevant to the Commonwealth's claim against the Sanofi parties. I do not think it reasonable, despite what was said by the Sanofi parties in correspondence, to expect the Commonwealth to have interviewed the Apotex witnesses in the shadow of cl 6, and before enforceability of that provision was determined. 22 The Sanofi parties also drew attention to various parts of Mr Millichamp's affidavit in which he asserts claims for legal professional privilege with respect to various documents which Mr Millichamp says Apotex would voluntarily waive were it not for cl 6 of the settlement deed, thereby allowing both the Commonwealth and the Sanofi parties to obtain access to such documents. The suggestion from the Sanofi parties was that these documents, which neither the Commonwealth nor the Sanofi parties have yet seen, may be quite voluminous (it was said there may be around 500 such documents) and that, if they have to be reviewed, this will give rise to considerable work that will need to be undertaken in the three weeks or thereabouts before the start of the trial. 23 I do not think this point has any merit. I would infer that these documents could have been produced to the parties several weeks ago were it not for the fact that the Sanofi parties have continued to rely upon their rights under cl 6 of the settlement deed which prevents the Apotex companies from waiving privilege without the Sanofi parties' consent. It has been open to the Sanofi parties to provide the necessary consent to obtain access to these documents since 7 July 2017 when Mr Millichamp's affidavit was served. In my view the difficulty that was referred to by the Sanofi parties is quite contrived. 24 The Sanofi parties also contended that there was some difficulty because it was not clear which of the Apotex companies were entitled to claim privilege in the documents referred to by Mr Millichamp. All that needs to be said on this point is that the notion that Mr Millichamp would make statements in his affidavit indicating a willingness on the part of Apotex to waive privilege in any of the relevant documents (subject to obtaining the Sanofi parties' consent) without having the necessary authority of the relevant Apotex companies to make such statements seems to me to be most unlikely. In any event, all that the Sanofi parties need do is to provide their consent to the Apotex companies with whom they entered into the settlement deed waiving any claims for legal professional privilege that any one or more of those companies may be entitled to make. 25 In all the circumstances I propose to grant the Commonwealth the leave it seeks. The costs of the interlocutory application will be reserved. 26 Orders accordingly. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholas.