Generic Health Pty Ltd v Otsuka Pharmaceutical Co., Ltd

Federal Court of Australia (Full Court)|2013-03-06|Before: Emmett J, Bennett J, Greenwood J, Greenwood JJ

ADDENDUM TO REASONS FOR JUDGMENT OF JUSTICE GREENWOOD 1 In my reasons for judgment published on 6 March 2013, together with the reasons for judgment of Emmett J and the reasons for judgment of Bennett J, I expressed the view at [254] that I respectfully disagreed with the "absolute way" in which Emmett J had expressed a particular principle at [26] in his Honour's discussion of the principles governing the grant of an interlocutory injunction. I have, since publication, seen the final form of the way in which his Honour has expressed the principle which is now contained within [27] of his Honour's reasons. Having regard to the formulation of the matter as expressed at [27], I see no point of departure between the views I have expressed at [249] to [259] and the principle identified by his Honour at [27]. I certify that the preceding one (1) numbered paragraph is a true copy of the Addendum to the Reasons for Judgment herein of the Honourable Justice Greenwood.

Associate: Dated: 8 March 2013 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 490 of 2012

Leave to appeal be refused.
The applicant pay the respondent's costs of the application for leave. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 490 of 2012

JUDGES: EMMETT, BENNETT AND GREENWOOD JJ DATE: 6 march 2013 PLACE: SYDNEY

INTRODUCTION 1 Generic Health Pty Limited (Generic Health) seeks leave to appeal from interlocutory orders made by a judge of the Court on 22 March 2012. Interlocutory injunctions were ordered on the basis that the supply of certain products (the GH Products) by Generic Health would involve an infringement of Australian patent number 2005201772 (the Patent) by reason of the operation of s 117(2)(b) of the Patents Act 1990 (Cth) (the Act). The injunctions restrain Generic Health from offering to sell or otherwise dispose of the GH Products, and from importing the GH Products. 2 The relevant effect of s 117(2)(b) of the Act is that, if a person (the supplier), who supplies a product to another person, has reason to believe that that other person would put the product to a particular use and that that use of the product would infringe a patent, that supply of that product by the supplier is an infringement of the patent by the supplier. Section 117(2)(b) has that effect only on the assumption that the relevant product is not a staple commercial product. For the purpose of the present application, Generic Health accepts that the GH Products are not staple commercial products.

THE PATENT 3 The first respondent, Otsuka Pharmaceutical Co., Limited (Otsuka), is the holder of the Patent. The title of the Patent is: Substituted carbostyril derivatives as 5-HT1A receptor subtype agonists. The complete specification of the Patent (the Specification) describes the invention of the Patent as relating to a method of treating a patient suffering from a disorder of the central nervous system associated with the 5-HT1A receptor subtype, the active ingredient comprising a carbostyril derivative or a salt thereof, known as aripiprazole. The active ingredient of the GH Products is aripiprazole. The second respondent, Bristol-Myers Squibb Company, is licensed to sell products containing aripiprazole in Australia. They are sold under the name Abilify. Abilify products are registered on the Australian Register of Therapeutic Goods (the Register). 4 The Patent has thirteen claims. For present purposes, the only relevant claim is Claim 7. Claim 7 is a method for treating a patient suffering from certain disorders specified in Claim 7 (the Claim 7 Disorders). The method consists of administering to such patients a therapeutically effective amount of aripiprazole. The Claim 7 Disorders are disorders that: consist of cognitive impairment caused by treatment-resistant schizophrenia, inveterate schizophrenia, or chronic schizophrenia; and fail to respond to two or more of the anti-psychotic drugs specified in Claim 7 (the Claim 7 Drugs). 5 The Specification states that typical anti-psychotic drugs are effective in treatments for the positive symptoms of schizophrenia. In contrast to typical anti-psychotic drugs, atypical anti-psychotic drugs are more effective against the negative symptoms and against cognitive impairment symptoms associated with schizophrenia. However, the Specification says that, even though atypical anti-psychotic drugs provide a suitable pharmacotherapy for schizophrenia, certain patients are resistant to the anti-psychotic therapies of such drugs. Such patients may either not respond or may feel more anxious, depressed or experience cognitive dysfunction in response to anti-psychotic therapy. Such treatment-resistant patients pose a problem for a physician in providing an appropriate therapy. The Specification asserts that aripiprazole may prove to be a potent and safer drug therapy for cognitive impairment symptoms caused by treatment-resistant schizophrenia, inveterate schizophrenia and chronic schizophrenia, being symptoms that fail to respond adequately to certain currently available anti-psychotic drugs that are described in the Specification, being the Claim 7 Drugs.

SYMPTOMS AND TREATMENT OF SCHIZOPHRENIA 6 Schizophrenia is a serious mental disorder that affects 1 per cent of the population worldwide. It generally comes on in early adulthood. Its main features are disturbances in the ability to experience reality, lack of capacity to engage with others in the outside world and disturbances in thinking, behaviour and emotional responses. The symptoms of schizophrenia can be classified into a number of separate categories. Generally, the four main categories are positive symptoms, negative symptoms, cognitive impairment symptoms and mood symptoms. While cognitive impairment symptoms are sometimes said to fall within the category of negative symptoms, cognitive impairment symptoms are also sometimes said to constitute a totally separate category. In any event, cognitive impairment symptoms are recognised as an important category of schizophrenic symptoms. 7 Cognitive impairment refers to a range of impaired higher cognitive functions. The main manifestations of cognitive impairment are disturbances in attention, memory and executive function. The current view, as reflected in the accepted literature, is that the majority of all patients with schizophrenia suffer from some degree of cognitive impairment. 8 A distinction is drawn between acute schizophrenia and chronic schizophrenia. Acute schizophrenia is schizophrenia that lasts for at least 6 months, after which the patient recovers. However, acute schizophrenia may relapse from time to time. Chronic schizophrenia lasts significantly longer than 6 months and usually many years. Generally speaking, the symptoms of chronic schizophrenia are negative symptoms and cognitive impairment symptoms. While a patient suffering from chronic schizophrenia may have positive symptoms under control, the negative symptoms often persist. Chronic schizophrenia includes a particularly severe form of schizophrenia known as treatment-resistant schizophrenia. Treatment-resistant schizophrenia is where the patient's positive symptoms, in addition to negative and cognitive symptoms, are unresponsive to anti-psychotic medication. Of all patients suffering from schizophrenia, 20 per cent are partially unresponsive, and 5 per cent are totally unresponsive, to anti-psychotic medication, so far as positive symptoms are concerned. 9 Typical anti-psychotic medications were developed first in the 1950s and then further throughout the 1960s. Atypical anti-psychotic medications were discovered in the 1980s. Atypical anti-psychotic medications have fewer side effects than typical anti-psychotic medications and are more widely used in Australia than typical anti-psychotic medications. It is now very rare for a new patient presenting with schizophrenia to be commenced on typical anti-psychotic medications. Most patients who were started on typical anti-psychotic medications would by now have been switched to atypical anti-psychotic medications. 10 Dopamine is a chemical neurotransmitter that facilitates the transmission of an electrical signal from one nerve cell to another. When released by one neuron, it lodges in a dopamine receptor and stimulates that receptor. Partial dopamine agonism is the tendency to stimulate partially some dopamine receptors. In contrast, dopamine antagonism is the blockage of the dopamine receptor, so that the neurotransmitter role of dopamine is completely blocked. Over-activity of dopamine in some parts of the brain is believed by neuroscientists and psychiatrists to be responsible for the positive symptoms of schizophrenia. Dopamine under-activity in other parts of the brain is one of the theories to explain the negative symptoms of schizophrenia. All anti-psychotic medications have their effects on positive symptoms by blocking dopamine receptors, that is, by being dopamine antagonists. They also have additional effects on a variety of other receptors. Since dopamine depletion is one explanation given for the occurrence of negative symptoms, a drug that has dopamine antagonism activity would, on theoretical grounds, have the effect of worsening negative symptoms and cognitive impairment symptoms. Aripiprazole is a partial dopamine agonist with low intrinsic activity. 11 Serotonin is another chemical neurotransmitter. It reacts with serotonin receptors. Aripiprazole has partial agonist properties at the 5-HT1A serotonin receptor. That is to say, it has a tendency to stimulate the 5-HT1A serotonin receptor partially. 12 Professor Bruce Singh, a consultant psychiatrist, gave evidence at the behest of Otsuka. Professor Singh said that, if he were presented with a patient suffering from negative symptoms and cognitive impairment symptoms of schizophrenia, he would, in order to improve that patient's level of engagement with the outside world by reducing negative symptoms and improving cognitive function, take the following steps: treat the patient with an atypical anti-psychotic agent; stop the use of any anticholinergic agent, because such agents can impair cognition; and consider prescribing aripiprazole. The reason for considering the prescription of aripiprazole is that there are certain advantages associated with that drug, including the following: it is less sedating than other anti-psychotic agents; for many patients, it leads to increased energy and movement by the patient; it is not an anticholinergic agent and does not have anti-histamine activity and therefore has little propensity to cause weight gain; its partial agonist activity at the 5-HT1A receptor may add to its cognitive enhancing properties; and it is a partial dopamine agonist and a partial agonist at the 5-HT1A receptor. 13 Professor Singh said that all clinicians are interested in having drugs with a variety of mechanisms to treat schizophrenia. He would expect that anyone who treats schizophrenia would want a drug with the partial dopamine agonist mechanism or partial agonism at the 5-HT1A receptor as part of his or her repertoire. Professor Singh expressed the opinion that aripiprazole's partial agonist activity at the 5-HT1A receptor is advantageous because it may contribute to its cognitive enhancing properties. None of the other anti-psychotic medications have the partial dopamine agonism activity that is a characteristic of aripiprazole. 14 Best practice would suggest that clinicians should always review chronic patients and consider their positive symptoms, negative symptoms and cognitive impairment symptoms, and decide whether an appropriate switch of medication is indicated if the relevant symptoms are not responding. Professor Singh says that aripiprazole is one switching option, which he has used in circumstances where a patient's negative symptoms or cognitive impairment symptoms have been a major problem. He would consider switching, and has switched, patients to aripiprazole in circumstances where those patients have failed to respond to more than one previously prescribed anti-psychotic medication, including certain of the Claim 7 Drugs.

FINDINGS OF THE PRIMARY JUDGE 15 The primary judge found, on the evidence before him, that cognitive impairment is a symptom of chronic schizophrenia and treatment-resistant schizophrenia. His Honour also found that there was evidence that aripiprazole can be used for the production of a medication that is effective in the treatment of cognitive impairment caused by schizophrenia. There was no dispute that the active ingredient of the GH Products is aripiprazole. His Honour also found, on the evidence before him, that aripiprazole is used for first and second line treatment as well as later line treatment for patients suffering from schizophrenia. Thus, his Honour found, aripiprazole is used as medication for schizophrenics who fail to respond to anti-psychotic drugs, including Claim 7 Drugs. 16 As I have said, it is common ground, for the purposes of the application for leave, that the GH Products are not staple commercial products for the purposes of s 117(2)(b) of the Act. However, Generic Health contends that, notwithstanding that concession, the evidence does not support a conclusion that there is a prima facie case that Generic Health had reason to believe that a person to whom it supplied GH Products would put them to an infringing use, so as to make s 117(2)(b) applicable. 17 The primary judge observed that both the GH Products and the Abilify products are registered for the treatment of schizophrenia, including maintenance of clinical improvement during continuation therapy. His Honour found, therefore, that they are interchangeable for that purpose. Significantly, as his Honour said, that use is the only indicated use for the GH Products. His Honour found, on the evidence before him, that the GH Products would not be traded commercially for other uses. His Honour considered that the evidence before him supported the conclusion that the treatment of schizophrenia comprehended the treatment of all of its symptoms and that aripiprazole is used for that range of treatment with respect to schizophrenia. 18 The primary judge was satisfied, on the basis of the evidence before him, that there was a prima facie case that the GH Products, if supplied, would be used for purposes that include the treatment of cognitive impairment caused by chronic schizophrenia or treatment-resistant schizophrenia, including in circumstances where a patient fails to respond to two or more of the Claim 7 Drugs. His Honour was satisfied, on that basis, that Generic Health had reason to believe that the GH Products would be put to such a use. His Honour concluded, therefore, that there was a prima facie case that Generic Health would infringe the Patent if it supplied the GH Products, as it threatened to do. 19 In the light of that conclusion, the primary judge ordered that Generic Health be restrained from engaging in the following acts in Australia without the authority of Otsuka: offering to sell or otherwise dispose of the GH Products; importing the GH Products; keeping the GH Products for the purpose of doing any of the above acts; and authorising other people to engage in any of those acts. 20 A further argument raised by Generic Health concerned the relationship between the primary judge's determinative finding under s 117(2)(b) and his further obiter finding under s 117(2)(c). Generic Health contended that there was an element of inconsistency between the findings of the primary judge in relation to the two provisions. Section 117(2)(c) relevantly provides that, if the use of a product by a person would infringe a patent, where that use is in accordance with any instructions or inducement given to the person by the supplier, or contained in an advertisement published by or with the authority of the supplier, then the supply of that product to that person is an infringement of the patent by the supplier. 21 His Honour considered that Otsuka's case under s 117(2)(c) lay, substantially, in some implied disclosure or inducement to use the GH Products in accordance with the specific integers of Claim 7. His Honour considered, however, that there was no evidence that would enable him to conclude, with any reasonable level of confidence, that prescribing doctors would read into the product information distributed by Otsuka an instruction that the GH Products were to be used, or could be used, in the method of treatment specifically claimed in Claim 7. His Honour based that conclusion upon his construction of the product information. 22 Section 117(2)(c) requires that there be an instruction or inducement. His Honour found that the product information did not give any such instruction or inducement expressly or impliedly and that it was not sufficient that prescribing doctors would or might use the GH Products for a method of treatment as so claimed. On the other hand, his Honour's conclusion in relation to s 117(2)(b) was underpinned by the fact that the only use for the GH Products listed in the Register was a use within claim 7. There is no inconsistency between the conclusions that his Honour reached in relation to the two sub-sections.

PROSPECTIVE GROUNDS OF APPEAL 23 There are three bases upon which Generic Health contends that the primary judge erred in making that order. First, it was suggested that his Honour failed to apply the correct principles in relation to the grant of interlocutory injunctions. Secondly, Generic Health says that the material before his Honour did not support a conclusion that there was a prima facie case that Generic Health had reason to believe that the GH Products would be put to an infringing use. Thirdly, Generic Health also complains about the width of the injunction granted by the primary judge.

Principles for the Grant of Interlocutory Injunctions 24 The jurisdiction to grant an interlocutory injunction in patent cases, as in other cases, is discretionary, being a part of the jurisdiction to make all such orders as are necessary for doing complete justice in the particular case. There are two main enquiries to which the Court must address itself. The first is whether the applicant for interlocutory relief has made out a prima facie case, in the sense that, if the evidence remains as it is, there is a probability that, at the trial of the action, the applicant will be held entitled to relief. How strong that probability needs to be depends upon the nature of the rights asserted by the applicant and the practical consequences likely to flow from the order sought. The requirement for a prima facie case does not mean that the applicant for relief must show that it is more probable than not that, at trial, it will succeed. Rather, it is sufficient if the applicant shows a sufficient likelihood of success to justify, in all of the circumstances, the preservation of the status quo pending final hearing. The strength of the probability that is required depends upon the nature of the rights that are being asserted and the practical consequences likely to flow if the order sought is or is not granted (Beecham Group Limited v Bristol Laboratories Pty Limited (1968) 118 CLR 618 at 622-3; Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 at [65]; Samsung Electronics Co Limited v Apple Inc (2011) 286 ALR 257 at [55]-[59]) (Samsung). 25 However, in a particular case, even though the applicant has shown a probability of success, other considerations may make it unjust to grant an injunction. Thus, the second enquiry is whether the inconvenience or injury that the applicant would be likely to suffer, if an injunction were refused, outweighs or is outweighed by the injury that the respondent would suffer if an injunction were granted. The fact that the grant or refusal of an injunction would have the effect of resolving the commercial dispute between the parties is an important aspect of determining where the balance of convenience will lie. 26 Where the grant, or refusal, of the injunction sought would, in effect, dispose of the matter in favour of one of the parties, an injunction would, in a practical sense, function as final relief. In such a case, the probability of the applicant's ultimate success will need to be particularly high. In a case where the grant or refusal of interlocutory injunctive relief will have the practical consequence of deciding the applicant's claims for final relief, and thus deciding the commercial dispute between the parties, the applicant must demonstrate a relatively strong case. That requires that an assessment be made of the strength of the case (Samsung at [35], [37], [49], [87] and [88]). 27 Where, as in this case, the grant of interlocutory relief will not effectively decide the case, it is not necessary to demonstrate as strong a case as would be required if the grant of injunction would have that consequence. There has been no suggestion in the present case that the grant of the injunction ordered by the primary judge would have the consequence of deciding the dispute between Generic Health and Otsuka. The question is whether his Honour failed to make an assessment of the strength of Otsuka's case. The primary judge correctly observed that, when considering an application for an interlocutory injunction, the Court must address itself to the two enquiries mentioned above. 28 The question of whether damages will be an adequate remedy for the alleged infringement of an applicant's rights involves an assessment by the Court as to whether, absent an injunction, the applicant would, in material respects, be in as good a position as if confined to a remedy in damages. The primary judge accepted the proposition that, in order to obtain an interlocutory injunction, the applicant must demonstrate that, if no injunction is granted, it will suffer irreparable harm for which damages will not be adequate compensation. His Honour accepted that the issue of whether the applicant had made out a prima facie case, and the question of the balance of convenience and justice, were related inquiries. 29 The primary judge considered the various factors advanced by the parties as to the balance of convenience and justice. That included the assertion by Generic Health that its case on the invalidity of Claim 7 of the Patent was strong and that the prima facie case on infringement was extremely weak, all the more so when weighed against its case on invalidity. His Honour accepted that it was necessary to weigh in the balance the apparent strengths and weaknesses of the parties' respective cases, along with all other matters that assist in informing the Court where the balance of convenience and justice lay. There is no reason to conclude that his Honour did not do so. Having concluded that there was a prima facie case that the GH Products, if permitted to be supplied, will be administered in a method of treatment that would infringe Claim 7, his Honour weighed the strengths and weaknesses of the parties' respective cases, along with all other matters, in order to determine where the balance of convenience and justice lay. 30 In the circumstances of this case, the primary judge made no error in his summary of the principles appropriate to the granting of interlocutory injunctions. His Honour identified and correctly applied the relevant principles.

Reason to Believe 31 Generic Health complains that the conclusion of the primary judge that it had reason to believe that the GH Products would be put to an infringing use was not supported by any reasons. It also complains that there was no positive evidence that it had the requisite reason to believe. Generic Health says that its product information did not refer to the infringing use and it did not induce doctors to prescribe it for that purpose. Further, Generic Health's General Manager gave unchallenged evidence that he was not aware that the GH Products might be prescribed for an infringing use. 32 Generic Health contends that, at its highest, the evidence of Professor Singh is no more than evidence, in a general sense, that aripiprazole may be used to treat negative symptoms or cognitive impairment symptoms where patients have failed to respond to more than one anti-psychotic drug. It says that that is not evidence that the method of treatment in Claim 7 of the Patent has been carried out and that there was no evidence that the switching described by Professor Singh was in order to treat a disorder of cognitive impairment caused by one of the three sub-forms of schizophrenia. It says that there was no evidence that a patient who switched to aripiprazole had failed to respond to two of the Claim 7 Drugs, as opposed to one of the Claim 7 Drugs and another anti-psychotic drug. 33 Generic Health accepts that there was evidence that patients may be switched to aripiprazole, but asserts that that evidence was not a sufficient basis for finding that there was a prima facie case that it, Generic Health, had reason to believe that the GH Products would be used for an infringing purpose. It says that there is no evidence that the GH Products would be used in a method of treatment that has all of the integers of Claim 7 and that there is no objective criteria by which a finding that Generic Health had reason to believe that the GH Products could be used in that way can be supported. 34 Generic Health characterises as hypothetical Otsuka's case that Generic Health has reason to believe that the GH Products would be put to an infringing use. It says that Otsuka's case rests essentially on a prospect that clinicians may switch a patient suffering from cognitive impairment caused by one of the three sub-forms of schizophrenia from one of the Claim 7 drugs to aripiprazole after that cognitive impairment failed to respond to treatment by two or more of the Claim 7 drugs. Generic Health contends that, considered objectively, the evidence before the primary judge did not rise any higher than that there was a prospect of such a switch being made and that the evidence did not address the likelihood that clinicians would in fact switch patients in the manner disclosed. It says that there was no evidence that would enable the Court to conclude, with any reasonable level of confidence, that prescribing doctors would read into the product information published by Generic Health in relation to the GH Products an instruction that the GH Products are to be used or can be used in the method of treatment disclosed in Claim 7. Therefore, Generic Health contends, the evidence did not meet the objective standard required to establish a prima facie case that it had reason to believe that the GH Products would be put to an infringing use. 35 The question is whether there were factual matters known to Generic Health that would lead a reasonable person to believe that the GH Products would be put to an infringing use. It is not to the point that Generic Health, through its relevant officers, did not actually have such a belief. The question is whether there was material before the primary judge that could support a finding that a reasonable person in the position of Generic Health would have reason to hold such a belief. 36 The primary judge set out all of the evidentiary material on which his conclusions were based (see [84]-[97]), before stating his conclusion that Generic Health had, on the basis of that material, reason to believe that the GH Products would be put to an infringing use (see [98]). The unchallenged prima facie factual findings, upon which his Honour's conclusions were based, included the following critical findings: both the GH Products and Abilify are registered in the Register for the treatment of schizophrenia, including maintenance of clinical improvement during continuation therapy; the GH Products and Abilify are therefore interchangeable for that purpose; and that use is the only indicated use for the GH Products (see [94]). His Honour also found that the GH products would not be traded commercially for any other use than their sole indicated use (see [94]) and that the treatment of schizophrenia comprehended the treatment of cognitive impairment symptoms (see [97]), the inference being that the GH Products' sole indicated use on the Register fell within Claim 7 of the Patent. Those findings are capable of supporting the conclusion that Generic Health had sufficient knowledge for a reasonable person in Generic Health's position to reasonably believe that the GH products would be put to an infringing use. 37 Generic Health's contentions would invite the Full Court to weigh again the material already considered by the primary judge in order to determine whether there is a prima facie case that Generic Health had reason to believe that the GH Products would be put to an infringing use. The decision to grant or not to grant an interlocutory injunction is a discretionary one. In respect of appeals against decisions involving the exercise of such discretion, there is a strong presumption in favour of the correctness of the decision appealed from. Such a decision should be affirmed unless the appellate court is satisfied that it is clearly wrong (see Australian Coal and Shale Employees' Federation v The Commonwealth (1953) 94 CLR 621 at 627). 38 It was open to the primary judge, on the evidence before him, to find that Generic Health would have reason to believe that, if it supplied the GH Products in Australia, they would be used for treating patients who were suffering from cognitive impairment caused by treatment-resistant schizophrenia and who had failed to respond to two or more of the Claim 7 Drugs. That would be an infringing use. I consider that there is insufficient doubt as to the correctness of the conclusion reached by the primary judge in that regard to justify the grant of leave to appeal.

Form of Relief 39 Generic Health asserts that the form of injunctive relief granted by the primary judge is broader than the relief that should be imposed where liability for indirect infringement of a pharmaceutical product for a specific form of treatment has been established at a provisional level. It complains that the order made would restrain Generic Health from distributing the GH Products for the purpose of treatment of schizophrenia per se, which, it says, is not within the scope of the monopoly granted by the Patent. Rather, it says, the monopoly is limited to a specific treatment regime, where the alleged disorder was caused by one of the three subforms of schizophrenia and failed to respond to treatment by at least two of the Claim 7 Drugs. Generic Health says that the injunction granted is in wider terms than are necessary to do justice in the particular case, because the effect of the order is to prevent Generic Health from supplying an unpatented product for an unpatented purpose. 40 Following the hearing of the application by the primary judge, Generic Health proffered an undertaking to the Court with respect to the marketing of the GH Products. In substance, Generic Health undertook not to advertise or promote the GH Products specifically for the treatment of the Claim 7 Disorders in circumstances where the patient has failed to respond to at least two of the Claim 7 Drugs. Generic Health also proffered an undertaking that it would send a letter to pharmacists every three months advising that the GH Products were not to be substituted for the Abilify products on any non-Pharmaceutical Benefits Scheme prescription. In addition, Generic Health had offered an undertaking, prior to the hearing of the application for interlocutory relief, to keep full and proper accounts of all of its sales of the GH Products. 41 The primary judge was not satisfied that those undertakings should be accepted in lieu of interim injunctive relief that would restrain Generic Health from importing and supplying the GH Products or keeping those products for supply in Australia. His Honour considered that, although the proffered undertakings may, to some extent, alleviate the injury that was likely to be suffered through the supply of the GH Products, the extent to which the injury would be alleviated was uncertain and would never be clear. More fundamentally, his Honour considered, the undertakings would not prevent the consequences that would ensue for Otsuka by reason of the reduction in price of the Abilify products in relation to the Pharmaceutical Benefits Scheme. 42 The evidence does not support a conclusion that not advertising the GH Products specifically for use in the method of treatment described in Claim 7 of the Patent would prevent the GH Products from being used in that way. Rather, the unchallenged primary findings made by the primary judge, albeit on a prima facie basis, suggest the contrary. The material before his Honour demonstrates that, from an objective point of view, there was reason to believe that the GH Products, being a generic form of aripiprazole, would be put to an infringing use. 43 The complaint as to the terms of the injunction ignores the clear language of s 117. If the prerequisites specified in s 117 are satisfied in relation to the Patent, any supply of a product by one person to another is an infringement of the Patent. The order made by the primary judge does not go beyond the language of s 117. There is insufficient doubt as to whether the prerequisites were satisfied, at least on a prima facie basis, to warrant the grant of leave to appeal on that ground.

CONCLUSION 44 The application for leave to appeal should be refused with costs. I certify that the preceding forty four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate: Dated: 6 March 2013 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 490 of 2012

JUDGES: EMMETT, BENNETT AND GREENWOOD JJ DATE: 6 march 2013 PLACE: SYDNEY

BENNETT J 45 Otsuka Pharmaceutical Co., Ltd (Otsuka) is the patentee of Australian Patent No 2005201772, titled 'Substituted carbostyril derivatives as 5-HT1A receptor sub-type agonists' (the 772 Patent) and Australian Patent No 2002226752 with the same title (the 752 Patent). The 772 Patent was a divisional application of the complete application for the 752 Patent. Both patents claim a priority date of 29 January 2001 and claim the use of a carbostyril compound (relevantly, aripiprazole) for the production of a medicament having certain features and a method for treating a patient involving the use of aripiprazole. Aripiprazole is used for the treatment of schizophrenia and other disorders of the central nervous system said to be associated with the 5-HT1A receptor. 46 A packaged tablet formulation containing aripiprazole is marketed by Bristol-Myers Squibb Company, by its Australian subsidiary, under licence from Otsuka under the name "Abilify". A number of Abilify products are registered on the Australian Register of Therapeutic Goods (the ARTG) and are indicated for three treatments, including, relevantly, for the treatment of schizophrenia including maintenance of clinical improvement during continuation therapy. 47 Generic Health Pty Ltd (Generic Health) has obtained registration of a number of aripiprazole products on the ARTG. The products that are registered under the ARIPIPRAZOLE GH label (the GH Products) are registered for the first of the three indications for which the Abilify products are registered, that is, the treatment of schizophrenia including maintenance of clinical improvement during continuation therapy. 48 Otsuka sought interim relief on the basis that Generic Health's intended sale of the GH Products would infringe claims 1 and 7 of the 772 Patent and claims 1 to 3 and 8 to 10 of the 752 Patent. Generic Health cross-claimed seeking revocation of both patents. 49 The primary judge found that there was a prima facie case that claim 7 of the 772 Patent would be infringed by the proposed supply by Generic Health of the GH Products. His Honour found that there was a prima facie case that the sale of GH Products would constitute infringement of claim 7 under s 117(1) of the Patents Act 1990 (Cth) (the Act), based on s 117(2)(b) of the Act. 50 Generic Health seeks leave to appeal from the grant of an interlocutory injunction which is in the following terms: Until further order of the Court, the Respondent by itself, its directors, officers, servants and agents or otherwise be restrained from engaging in the following acts in Australia without the licence or authority of the First Applicant: (a) offering to sell or otherwise dispose of the [GH Products]; (b) importing the GH Products; (c) keeping the GH Products for the purpose of doing any of the acts described in sub-paragraphs 1(a) and 1(b) above; (d) authorising other people to engage in any of the acts described in sub-paragraphs 1(a) to 1(c) above. 51 Infringement by the 'use of a product', is determined by s 117 of the Act, which provides: (1) If the use of a product by a person would infringe a patent, the supply of that product by one person to another is an infringement of the patent by the supplier unless the supplier is the patentee or licensee of the patent. (2) A reference in subsection (1) to the use of a product by a person is a reference to: (a) if the product is capable of only one reasonable use, having regard to its nature or design - that use; or (b) if the product is not a staple commercial product - any use of the product, if the supplier had reason to believe that the person would put it to that use; or (c) in any case - the use of the product in accordance with any instructions for the use of the product, or any inducement to use the product, given to the person by the supplier or contained in an advertisement published by or with the authority of the supplier. 52 The issue in this appeal concerns s 117(2)(b) of the Act. For the purposes of this application for leave to appeal, it is not relevantly in dispute that aripiprazole is not a 'staple commercial product'. The issues that arise in the appeal are: Did the primary judge err in holding that Otsuka had established a prima facie case of infringement? If the conditions of s 117(2)(b) are satisfied, does the prohibited supply extend to supply for methods of treatment that fall outside the claimed use? Did the primary judge properly consider whether Generic Health had the requisite reason to believe within s 117(2)(b) of the Act? Whether the primary judge, having found a prima facie case, was obliged to consider and did consider the strength of that case as required by the principles set down in Samsung Electronics Co Limited v Apple Inc [2011] FCAFC 156; (2011) 286 ALR 257. Did the order made by the primary judge go beyond what is reasonable protection of the patentee's rights which may be enforced by a judgment (Jackson v Sterling (1987) 162 CLR 612 at 621)? Should Generic Health be granted leave to appeal from the interlocutory injunction?

THE 772 PATENT 53 There is no need to traverse the specification in terms of the background or related art. Relevantly, the specification sets out the following: The invention relates to a method of treating a patient suffering from a disorder of the central nervous system associated with the 5-HT1A receptor sub-type. Previous reports were that aripiprazole acted as an antipsychotic but it had not been reported that it had agonistic activity at the 5-HT1A receptor sub-type. Previous reports indicated that drugs that act via the 5-HT1A receptor are used for treatments for alcohol abuse and disorders associated with neuronal degeneration and, inter alia, neuroprotective effects. 5-HT1A agonists are said to be effective in the treatment of cognitive impairment in Alzheimer's disease, Parkinson's disease and senile dementia. Partial agonists have been used for the treatment or prevention of cognitive disorders associated with Alzheimer's disease, Parkinson's disease or senile dementia. A number of other uses for 5-HT1A agonists and partial agonists are set out. Turning to schizophrenia, the specification explains that a variety of antipsychotic drugs have been developed during the last decade, which were reported to be more effective against the negative symptoms and cognitive impairments associated with schizophrenia than typical anti-psychotic drugs. The specification then describes the fact that patients may become treatment-resistant and not respond, or become refractory in response, to antipsychotic therapy. These patients are referred to as treatment-resistant and treatment-refractory schizophrenic patients. Such patients may display positive symptoms, negative symptoms, as well as cognitive impairments such as cognitive dysfunction or cognitive disturbances. The specification says that cognitive impairment exists separately from the psychic symptoms in a schizophrenic individual. Generally speaking, the specification draws a connection between 5-HT1A receptor agonist activity and improvement in cognitive impairment. 54 Clozapine is an antipsychotic drug that is effective against treatment-resistant schizophrenia and has been reported to be effective against cognitive impairments in treatment-resistant schizophrenics. The 5-HT1A receptor has been demonstrated to play a role in the therapeutic efficacy of clozapine against treatment-resistant schizophrenia and chronic impairments. While clozapine was effective, its use was limited due to severe side-effects. 55 The need expressed in the specification was for the development of a safe antipsychotic drug with potent, full or partial agonist activity at 5-HT1A receptors: the carbostyril compound of the invention. This was said to be: a more potent and highly safe drug for curing treatment-resistant schizophrenia, cognitive impairments caused by treatment-resistant schizophrenia, inveterate schizophrenia, cognitive impairments caused by inveterate schizophrenia, chronic schizophrenia, cognitive impairments caused by chronic schizophrenia and the like. 56 In particular, it is stated, the compound may be a potent and highly safe drug therapy for those conditions which fail to respond adequately to other named antipsychotic drugs. 57 The relevant claim for the purposes of the alleged infringement is claim 7, relevantly: A method for treating a patient suffering from disorders of the central nervous system associated with 5-HT1A receptor sub-type, which disorder (i) selected from cognitive impairment caused by treatment-resistant schizophrenia, cognitive impairment caused by inveterate schizophrenia, or cognitive impairment caused by chronic schizophrenia, and (ii) fails [to respond] to antipsychotic drugs selected from [twelve named compounds], comprising administering to said patient a therapeutically effective amount of [aripiprazole]. (emphasis added) 58 It was not in dispute that the failure to respond in (ii) must be to two or more of the named drugs. 59 It can be seen that claim 7 is directed to a method for treating a patient suffering from cognitive impairment caused by schizophrenia and not to a method of treatment for schizophrenia itself.

Collins v Northern Territory 60 Section 117(2)(b) of the Act was relevantly considered by the Full Court in Collins v Northern Territory (2007) 161 FCR 549 (Collins FC) and by the High Court in Northern Territory v Collins (2008) 235 CLR 619 (Collins HC). 61 As to the words "reason to believe" in s 117(2)(b) of the Act, French J observed in the Full Court that they and similar formulae frequently condition the exercise of statutory powers and require, at least, an objective basis of the relevant belief and, according to context, require actual belief (at [64]), and not unsupported belief (at [65]). Justice French said (at [64]), that "reason to believe" in s 117(2)(b) should be construed as purely objective, 'in the sense that there were factual matters known to the supplier which would lead a reasonable person to believe that the product would be put to an infringing use'. Justice French, who said at [66] that his observations were 'strictly obiter', expressed the opinion that to construe s 117(2)(b) as requiring actual knowledge supported by reasonable grounds would render the scope of liability for contributory infringement under Australian law narrower than that under United States or United Kingdom law. It would require both subjective belief and the objective basis for it to be proven. His Honour considered that the better construction would be an objective one. 62 These views were not the subject of comment by Branson and Sundberg JJ. Justices Branson and Sundberg did make other observations, such as (at [135]): The use the subject of s 117(2)(b) is also an expansion of the common law, even though restricted to non-staple products. A supplier's "reason to believe" was never sufficient to found contributory infringement at common law. Even knowledge that the purchaser would use the article for infringement was not enough. The use the subject of s 117(2)(c) would appear to reflect the common law position. (emphasis original) 63 On appeal to the High Court, Hayne J at [34] - [51] considered the proper construction of s 117 of the Act: Section 117 imposes liability on the supplier where the supply would otherwise not infringe but where use of the product supplied by the person to whom it is supplied would infringe the patent (at [42]). A variety of quite different cases may arise for consideration under s 117 and may present 'radically different issues about the relationship between the relevant use and the patentee's exclusive rights to exploit the relevant invention' (at [38]). From the drafting history of the provision, it appears that s 117(2)(b) was seen, in the Explanatory Memorandum, as 'cognate with, if not a species of, supply accompanied by "a positive inducement … to perform actions which would innocently or knowingly infringe". This points against reading s 117(2)(b) as having extended or expansive reach' (at [46]). Section 117(2)(b) addresses "known use" in contrast to "only use" in s 117(2)(a) and "instructed use" in s 117(2)(c) (at [35]). Section 117(2)(b) deals with cases where the supply of a product can have more than "one reasonable use" (at [47]). Because the act of supply is not otherwise an infringement of the patentee's monopoly, "staple commercial product" as used in s 117(2)(b) should not be given a narrow meaning (at [43]). To do so would expand the classes of supply which are reached by s 117, thus expanding the rights of the patentee. The question posed by s 117(2)(b) concerns the uses to which the product is in fact put. If it is supplied commercially for various uses, it is a staple commercial product and beyond the reach of s 117(2)(b). If it is not a staple commercial product and was previously traded for only one use, s 117(2)(b) would apply where the supplier has reason to believe that it will be used for a new and infringing use (at [50] - [51]). 64 Acting Chief Justice Gummow and Kirby J approved the reasoning of Hayne J and noted at [21] that s 117 of the Act 'does not itself speak to the exclusive rights given by the patent. Rather, the provision identifies the conduct and prescribes conditions in which that conduct will be an infringement of the patent'. Their Honours also said (at [21]) that the critical condition for the imposition of liability is that the use of the product by the person to whom it is supplied would infringe the patent. Justice Crennan, with whom Heydon J agreed, confirmed (at [131]) that s 117 can be engaged in respect of a supply of a raw material for carrying out a patented method, depending on the construction of the claims.

Apotex v Sanofi-Aventis 65 In Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd (No 2) (2012) 204 FCR 494, the supplier, Apotex Pty Ltd (Apotex), was found to have reason to believe that the supplied product would be put to the infringing use to which s 117(2)(b) applied. The reasons for that conclusion were explained by the primary judge and by the Full Court. The primary judge found that the use of the compound as directed by Apotex would inevitably have included the infringing use and the primary judge had found that Apotex's approved product information instructed a medical practitioner to use the relevant product for the claimed use. Her Honour said that it followed from her analysis that Apotex had the requisite reason to believe. 66 Chief Justice Keane said (at [54]) in the Full Court that Apotex's instruction meant that it had 'ample reason' to believe that medical practitioners would put the product to the use as a method of treating psoriasis which is associated with, and a diagnostic criterion for, the subject of the directed use, psoriatic arthritis. Justices Bennett and Yates considered the medical evidence, which differed as to how medical practitioners of different specialties would use the product. In response to a submission that the primary judge had been in error in finding reason to believe on the part of Apotex based on a finding that the administration of the product to treat one psoriatic arthritis would inevitably treat or prevent psoriasis, their Honours Bennett and Yates JJ emphasised an instruction in the Apotex product information as an acknowledged reality that rheumatologists do seek, and will seek, to treat both conditions when patients present with psoriatic arthritis and psoriasis concurrently (at [154]). 67 I note that on 14 December 2012, the High Court granted Apotex special leave to appeal from the Full Court's decision in Apotex v Sanofi-Aventis.

Grimme v Scott 68 In Grimme Landmaschinenfabrik GmbH & Co KG v Scott [2010] EWCA Civ 1110; [2011] FSR 7, the England and Wales Court of Appeal considered contributory infringement under s 60(2) of the Patents Act 1977 (UK) (the UK Act). Section 60(2) provides: Subject to the following provisions of this section, a person (other than the proprietor of the patent) also infringes a patent for an invention if, while the patent is in force and without the consent of the proprietor, he supplies or offers to supply in the United Kingdom a person other than a licensee or other person entitled to work the invention with any of the means, relating to an essential element of the invention, for putting the invention into effect when he knows, or it is obvious to a reasonable person in the circumstances, that those means are suitable for putting, and are intended to put, the invention into effect in the United Kingdom. (emphasis added) 69 Section 60(3) of the UK Act deals with the application of subsection (2) in circumstances where there is a supply or offer of a staple commercial product. 70 It can be seen that the language of s 60(2) of the UK Act differs from that of s 117 of the Act. Despite those differences, the reasons of the Court (delivered by Jacob LJ) bear consideration. Relevantly, the question before the Court of Appeal was whether s 60(2) of the UK Act requires proof that the supplier knew that, or the circumstances made it obvious that, the user actually intended to use the machine in a way in which it would infringe by switching steel rollers for rubber rollers. This bears some similarity to the question in s 117(2)(b) of the Act as to whether the suppliers must know that the user would use the supplied goods for an infringing use. At [76], the Court observed that the extent of switching 'in the real world' was a matter that was premature at that stage and said that this question really arises in the consideration of damages. The Court said that they would proceed on the basis that switching sometimes happens. 71 The Court considered the origins of s 60(2) of the UK Act and noted the approach of Patent Courts in other countries of Europe, notably the Netherlands and Germany. The Court also referred to US law but observed that the different terminology in the US Patent Act 1952 was a reason why US laws were not of direct assistance in resolving any obscurities in the meaning of the provision before them. 72 It is, of course, the case that each statutory provision must be construed according to its terms but it remains helpful to consider the reasoning directed to infringement by supply under the UK Act in the context of the European Patent Union and the Community Patent Convention there discussed. 73 At [88] the Court said: Section 60(2) creates a statutory tort, but it does not spring from any previous notional or common law tort. Its distinctive features, by way of contrast with common law tortious claims, are that the tort is actionable (1) even though what is supplied is capable of perfectly lawful, non-infringing use, (2) even though what is supplied never has been and may never in fact be used in a way directly infringing the patent in suit, (3) without any damage being suffered by the patentee, and (4) at the moment of supply, irrespective of anything that may or may not occur afterwards. (emphasis added) 74 This, the Court observed (at [89]), stands in contrast with the common law principle. It also, as the Court said, makes the description "contributory" as opposed to "indirect" infringement something of a misnomer (at [90]). This partially reflects the observation by Branson and Sundberg JJ in Collins (FC) as to the contrast between s 117(2)(b) and the common law. 75 In turning to the requirement of knowledge, the Court returned to the common law, recognising that it was not applicable to resolve the meaning of s 60(2) of the UK Act (at [106]). However, the Court observed that in the context of the economic tort of inducing a breach of contract and of causing loss by an unlawful means, it is established that nothing other than a specific subjective intention is sufficient for liability. However, the Court concluded, it is not the case that there is no infringement unless there is actual direct infringement. This observation was made in part by reference not only to supply but also to the fact that there can be infringement by 'offers to supply', although that inclusion of 'offers to supply' in s 60(2) did not form the sole basis of the Court's conclusion. 76 The Court found that the relevant intention for s 60(2) of the UK Act was not that of the supplier, but that of the ultimate user of the product. The question before the Court, the Court said (at [108]), was what the supplier knows or ought to know about the intention of the person who is in a position to put the invention into effect - the person at the end of the supply chain. The Court adopted what had been said by Arnold J in KCI Licensing Inc v Smith & Nephew Plc [2010] EWHC 1487 (Pat); [2010] FSR 740 at [200]. That is, there can be infringement 'not merely if the supplier knows that the means are intended to put the invention into effect, but also if that would be obvious to a reasonable person in the circumstances' (which accords with the conclusion of French J in Collins (FC)). The user, as noted at [111], would not necessarily have formed the intention at the time of supply. 77 At [112] the Court adopted what their Lordships described as the 'inherently probable' view, which was that it was enough if the supplier knew (or it was obvious in the circumstances) at the time of his supply that some (disregarding maverick or unlikely use) ultimate users would infringe. The Court acknowledged the force of the 'linguistic point' that the relevant provision requires the alleged infringer to know that the means are intended to put the invention into effect, and that it could be said that the use of the present tense would mean that a future intention is not enough. Notwithstanding that, the Court concluded that the inherently probable view was the correct construction. 78 The Court set out its reasons for adopting the 'inherently probable' view at [115] - [131]. The Court said that whether the invention will be put into effect by some users would need to be established in the usual way on the balance of probabilities. The Court also rejected the linguistic point by taking a purposive approach to construction because, their Lordships said, the provision is clearly aimed at people who supply things which will be used to infringe in circumstances when they know or ought to know that infringement will be the result (at [119]). The Court rejected a requirement that the intention of the individual ultimate user must be known at the moment of the alleged infringement and said that, while the intention of the ultimate buyer is the relevant factor, 'a future intention of a future buyer is enough if that is what one would expect in all the circumstances' (at [125]). 79 The Court said (at [131]): '[i]t is not enough merely that the means are suitable for putting the intention [sic] into effect (for that is a separate requirement), but it is likely to be the case where the supplier proposes or recommends or even indicates the possibility of such use in his promotional material'. There was, in that case, a suggestion or proposal from the supplier for an infringing use. That is, the circumstances in Grimme fell within circumstances in which, had the case been heard in Australia, s 117(2)(c) of the Act would have been the relevant statutory provision. However, the reasoning extended to circumstances where there was no such suggestion or proposal; that is, to s 117(2)(b). 80 The decision in Grimme was followed by the England and Wales Court of Appeal in KCI Licensing Inc v Smith & Nephew Plc [2010] EWCA Civ 1260; [2011] FSR 8. In the reasons of the Court, delivered by Jacob LJ, the Court at [53] summarised the principles from Grimme: i) The required intention is to put the invention into effect. The question is what the supplier knows or ought to know about the intention of the person who is in a position to put the invention into effect - the person at the end of the supply chain, [108]. ii) It is enough if the supplier knows (or it is obvious to a reasonable person in the circumstances) that some ultimate users will intend to use or adapt the "means" so as to infringe, [107(i)] and [114]. iii) There is no requirement that the intention of the individual ultimate user must be known to the defendant at the moment of the alleged infringement, [124]. iv) Whilst it is the intention of the ultimate user which matters, a future intention of a future ultimate user is enough if that is what one would expect in all the circumstances, [125]. v) The knowledge and intention requirements are satisfied if, at the time of supply or offer to supply, the supplier knows, or it obvious [sic] to a reasonable person in the circumstances, that ultimate users will intend to put the invention into effect. This has to be proved on the usual standard of the balance of probabilities. It is not enough merely that the means are suitable for putting the invention into effect (for that is a separate requirement), but it is likely to be the case where the supplier proposes or recommends or even indicates the possibility of such use in his promotional material, [131]. 81 As recognised by French J in Collins (FC) and the majority of the High Court in Aktiebolaget Hassle v Alphapharm Pty Ltd (2002) 212 CLR 411, it is appropriate to take account of the approach of the courts of other countries to similar provisions of legislation governing patents. Such approaches cannot be determinative of the construction of the Australian legislation but, where there is a degree of uncertainty in the drafting of a provision concerning an issue addressed in such legislation in other countries, the principles of approach can be helpful.

Supply for methods of treatment that fall outside the claimed use 82 At [171], the primary judge concluded: When s 117(1) is invoked by reference to s 117(2)(b), any use of the product that would infringe the patent imposes a liability on the supplier by reason of the supply of the product, if the supplier has reason to believe that the product would be put to that use. Thus, in the present case, the respondent's liability for infringement, if finally established, would be fixed by the fact of its supply of the GH products. 83 This conclusion follows from s 117. The primary judge found, and it is not challenged for the purposes of this application for leave to appeal, that the GH Products are not staple commercial products for the purposes of s 117(2)(b) of the Act. If the supplier had reason to believe that the supplied product would be put to the infringing use, then supply for any use of the product, being a non-staple commercial product, is an infringement, even if the use for which it is actually supplied is a non-infringing use.

Evidence as to schizophrenia and its treatment 84 The primary judge set out in some detail the evidence concerning schizophrenia and its treatment, as to which there is no dispute. Relevantly: It has been known since schizophrenia was first identified nearly a hundred years ago that cognitive deterioration can occur in patients suffering from the illness. Cognitive impairment is understood to be an accompaniment of schizophrenia. The current view, as expressed in the literature, is that the majority of all patients with schizophrenia suffer from some degree of cognitive impairment. In some cases this impairment is identifiable when the patient first presents with the illness. Generally speaking, a broad distinction is made between "acute" schizophrenia and "chronic" schizophrenia. Schizophrenia is treated with antipsychotic medications described as being "typical" or "first generation" and "atypical" or "second generation" medications. Second generation antipsychotics have fewer side effects. Aripiprazole is a second generation antipsychotic (although some regard it to be the first in a new generation of antipsychotics). Currently, second generation antipsychotics are more widely used in Australia than first generation antipsychotics. It is presently rare for a new patient to be commenced on a first generation antipsychotic. The primary judge discussed the positive and negative symptoms of schizophrenia. Positive symptoms include hallucinations, while negative symptoms include "poverty of thinking". The primary judge discussed the nature of cognitive impairment and the main manifestations of this impairment with schizophrenia. Chronic schizophrenia includes "treatment-resistant" and "treatment-refractory" schizophrenia. Practising psychiatrists tend to distinguish between "acute" treatment and longer-term treatment. The Royal Australian and New Zealand College of Psychiatrists clinical practice guidelines (the Guidelines) recommend switching to second generation antipsychotic medication where there are persistent positive or negative symptoms or distressing side-effects with conventional medications. The guidelines recommend that clozapine be introduced if evidence of treatment-resistant schizophrenia is present. 85 The primary judge accepted the evidence of Professor Singh, a consultant psychiatrist called on behalf of Otsuka, that it would now be very rare for a new patient presenting with schizophrenia to be commenced on a first generation antipsychotic. While a small proportion of patients who are stable on a first generation antipsychotic will continue with the therapy, most patients who were started on antipsychotics will have been switched to second generation antipsychotics, or are likely to be switched to that therapy. Professor Singh estimated that about 25% of all patients suffering from schizophrenia would be switched from one second generation antipsychotic to another and the majority of patients suffering from chronic schizophrenia will need to switch medications at some stage. 86 This evidence of Professor Singh was not in dispute. Professor McGorry, a consultant psychiatrist called on behalf of Generic Health, generally agreed with Professor Singh's evidence concerning schizophrenia, its symptoms and treatment (as noted by the primary judge at [37]). Professor McGorry also drew attention to the recommendations in the Guidelines referred to above. Professor McGorry's evidence was that he would commence a patient on a second generation medication and employ a switching of antipsychotic medications in an effort to optimise response. 87 Professor McGorry said that he did not believe that aripiprazole was commonly used to treat acute episodes, leading his Honour to infer that Professor McGorry saw its use to be mainly in the treatment of chronic schizophrenia. Professor McGorry saw its characteristics as an advantage when treatment was initiated in more stable outpatients, either for the first time or through switching. 88 Professor Singh and Professor McGorry did not agree on the significance of aripiprazole in contributing to cognitive enhancing properties if a patient suffered schizophrenia. The debate concerned the relevance or consequence of the fact that aripiprazole acts as a partial agonist at the 5-HT1A receptor. 5-HT1A is a serotonin receptor. A drug that has partial agonist properties at the 5-HT1A receptor has a tendency partially to stimulate some serotonin receptors. Dopamine is a chemical transmitter that facilitates the transmission of an electrical signal from one nerve cell to another. Dopamine activity is believed to be responsible for the symptoms of schizophrenia; overactivity of dopamine in some parts of the brain is believed to be responsible for the positive symptoms and underactivity in other parts of the brain is one of the theories used to explain negative symptoms. Dopamine receptors are referred to as D1, D2 and D3, etc. Partial dopamine agonism is the tendency partially to stimulate some dopamine receptors. Dopamine antagonism is the blockage of the dopamine receptor so that the neurotransmitter role of dopamine is completely blocked. All antipsychotics act as dopamine antagonists. Aripiprazole is a partial dopamine agonist at the D2 receptor. 89 The expert witnesses did not agree on the consequences of aripiprazole's action on the 5-HT1A receptor with respect to cognitive enhancing properties. The primary judge said that it was not necessary to resolve this debate between the experts, concerning the significance and mechanism of the activity of aripiprazole in improving cognitive impairment. His Honour said that it was sufficient to note that both experts appeared to agree that aripiprazole acts as a partial agonist at the 5-HT1A receptor. 90 There was also a debate between Professor Singh and Professor McGorry as to the efficacy of aripiprazole in the context of other second generation antipsychotics. The primary judge noted at [49] that there was at least agreement between them that second generation antipsychotic drugs are used in the treatment of cognitive impairment associated with schizophrenia. The primary judge (at [50]) referred to Professor Singh's evidence that, if he were presented with a patient suffering from negative and cognitive symptoms of schizophrenia, he would consider prescribing aripiprazole because of its characteristics, including what he saw as its particular advantages, including that it is a partial agonist at the 5-HT1A receptor.

The primary judge's conclusions on whether there was a prima facie case 91 The primary judge concluded (at [84]) that the evidence showed that: Cognitive impairment is a symptom or domain of schizophrenia, including chronic and treatment-resistant schizophrenia. Chronic schizophrenia is the outcome of the majority of those who suffer the illness. Aripiprazole is recommended for use as, and is used for, first and second line treatment as well as later line treatment for patients suffering from schizophrenia. It is used as a medication for schizophrenics who fail to respond to antipsychotic drugs, including the first generation and other second generation antipsychotics identified in claims 1 and 7 of the 772 Patent. The GH Products are registered on the ARTG for the treatment of schizophrenia, including maintenance of clinical improvement during continuation therapy. This is the only indicated use for the GH Products. The evidence supports the conclusion that the treatment of schizophrenia comprehends the treatment of all of its symptoms and domains. Aripiprazole is used for that range of treatment with respect to schizophrenia, including the treatment of cognitive impairment caused by chronic schizophrenia or treatment-resistant schizophrenia and including where a patient fails to respond to other antipsychotic drugs selected from those identified in claim 7. It is not uncommon (on the view of Professor McGorry) that negative symptoms and other domains of schizophrenia are treated in continuation therapy with an antipsychotic agent. Professor Singh placed greater importance on the use of antipsychotic drugs in continuation therapy (at [96]). 92 The primary judge concluded (at [98]), from the evidence, that there was a prima facie case that the GH Products would be used for purposes that included the treatment of cognitive impairment caused by chronic schizophrenia or treatment-resistant schizophrenia, including where a patient fails to respond to other antipsychotic drugs selected from those identified in claim 7. His Honour was satisfied on the evidence that there was a prima facie case that Generic Health had reason to believe that the GH Products would be put to that use. Again, the primary judge said (at [99]) that 'there is a prima facie case that [Generic Health's] intended acts will infringe the 772 patent by reason of s 117(1) of the Act'. 93 The primary judge expressed himself satisfied that Otsuka had made out a prima facie case of threatened infringement of the 772 Patent pursuant to s 117(1) of the Act by reason of s 117(2)(b), that would justify the granting of the interim relief (at [83]). 94 His Honour considered the question of "staple commercial product" and said (at [93]) that the approach contended for by Otsuka was 'open on the present evidence'. His Honour said that it was not necessary to express a final view on whether the GH Products were, or were not, staple commercial products and declined to do so, but said that it was sufficient to be satisfied that there was a prima facie case that the GH Products were not staple commercial products.

Submissions on prima facie case 95 Generic Health submits that the primary judge gave no basis for his conclusion that there was, objectively, a reason to believe on its part that the GH Products would be put to an infringing use. 96 Generic Health says that that there was no evidence of knowledge on its part of the use to which the GH Products would be put. None of the evidence cited by the primary judge related to actual knowledge on the part of Generic Health of the matters arising from the evidence of Professor Singh and Professor McGorry. 97 Generic Health says that the case presented by Otsuka rises no higher than there being a prospect that clinicians may switch a patient in the manner disclosed in claim 7. It also points out that there is no evidence that the GH Products will be used in a method of treatment that has all of the integers of claim 7. That is, it submits, there are also no objective criteria by which a finding that it had reason to believe that its products would be used in the method of claim 7 can be supported. 98 There was no product information or other direction from Generic Health instructing that the GH Products be used for the infringing use. 99 Generic Health relies upon the finding of the primary judge at [103] that there was no evidence that would enable him to conclude, with any reasonable level of confidence, that prescribing doctors would read into the Generic Health product information an instruction that the GH Products are to be used or can be used in the method of treatment specifically claimed in claim 7. The product information did not give that instruction expressly or impliedly. Accordingly, s 117(2)(c) did not apply. Generic Health relies on this finding as antithetical to a conclusion that s 117(2)(b) applies, saying that the evidence did not rise above there being a prospect of a 'switch' being made. 100 This is not a case where the supplier has provided instructions or directions for an infringing use (cf Apotex v Sanofi-Aventis). For the purposes of this appeal, it is not contended that the product supplied is a staple commercial product (cf Collins (HC)). The question is whether the supply of aripiprazole to treating doctors, who then prescribe it, is an infringement of s 117(2)(b). There is no present suggestion that Generic Health had actual knowledge that the product would be put to an infringing use. The primary judge explained the use to which at least some doctors would put the product, to treat not only schizophrenia but also the cognitive impairment with which the forms of schizophrenia are associated. This arises, at least, from the use of aripiprazole as a second generation treatment of schizophrenia. 101 The question is whether it is necessary to establish that Generic Health had reason to believe not only that the product might be used for an infringing use but also that it would, in fact, be so used.

Construction of section 117 of the Act 102 Section 117 of the Act provides that infringement may be found, although the actual supply is for a use not invented and not claimed, where the supplier has reason to believe that its supplied product would be used in an infringing manner. Section 117 is directed to supply of the product and infringement by supply. "Supply" is defined in Sch 1 to the Act to include "offer to supply". 103 The question that arises in this application is the meaning to be attributed to the phrase 'reason to believe that the person would put it to that use'. The reason to believe is that of the supplier and may be subjective: an actual belief, or objective: that there are reasonable grounds to believe. In each case, the belief is determined on the balance of probabilities. 104 What is the object of that belief? It is the action of the person to whom the goods are supplied or to whom the offer of supply is made. The infringement is complete after supply, when the relevant user later uses the product. The actual intent of the person, or the use which that person later makes of the goods, would not necessarily be known to the supplier at the time of supply. If there are instructions from the supplier as to an infringing use of the product, it may be easier to establish that there is a reason to believe that the person would put it to that use under s 117(2)(b) (cf Grimme) but such instruction is not necessary for the application of s 117(2)(b). Such circumstances are covered by s 117(2)(c) and would leave no room for the additional operation of s 117(2)(b). It follows that a finding that there was no instruction under s 117(2)(c) is not antithetical to a conclusion that there is a prima facie case under s 117(2)(b). 105 However, the reasoning in Grimme suggests that s 117(2)(b) cannot apply where there is unlikely, freak or maverick use. Such use may not be a form of "known use". Otherwise, s 117(2)(b) may have too extended or expansive a reach (cf Collins (HC) at [35], [46] per Hayne J). It would not apply, in my view, if the use by the person to whom supply is made is, without more, contrary to instructed use from the supplier in the absence of further evidence to establish that the supplier had reason to believe that such use would be made. It is not sufficient if the supplier had reason to believe that the person might put the product to the infringing use. Something more is required, as is made clear by the use of "would" rather than "may" or "might" in the subsection. 106 The proper construction of s 117(b) must be that there is a reasonable belief of a significant likelihood that a person will put a product to that use. This construction is assisted by the use of the words 'reasonable belief', rather than "knowledge". A person may have a reasonable belief that an event will or would happen without having knowledge that the event will or would necessarily happen. A reasonable belief that an event would happen arises from a belief in the likelihood of that event. That likelihood must be significant. A belief that an event is of a low likelihood would amount to a reasonable belief that the event may happen. The word used by s 117(b) is that that a person would put the product to that use.

Conclusion 107 In the present case, the primary judge set out the evidence that, reasonably, would give rise to the conclusion that there was a reasonable belief at a prima facie level. His Honour did not explain, in terms, how the reasonable belief condition of s 117(2)(b) was satisfied but such a conclusion is implicit from his Honour's recitation of the facts as to the use to which aripiprazole is put, as is his Honour's construction of that sub-section. His Honour did not discuss the belief of Generic Health, nor did he attribute the facts as found to the knowledge of Generic Health. 108 The claimed infringement is the administration of aripiprazole which would, relevantly, treat a patient suffering from cognitive impairment caused by schizophrenia. Importantly, the evidence was that cognitive impairment is associated with and is a symptom of schizophrenia. Abilify is registered for, inter alia, the maintenance of clinical improvement during continuation therapy. The evidence addresses the facts that give rise to a reason to believe that doctors administer aripiprazole to patients suffering from schizophrenia, that such patients suffer from cognitive impairment caused by the schizophrenia and that aripiprazole is a method of treating such patients. The medical evidence addresses the use of aripiprazole in the treatment of schizophrenia-associated cognitive impairment and the basis of such action. There is evidence that patients may be "switched" to aripiprazole. This was not a case of possible hypothetical infringing use. The evidence established, at a prima facie level, that there was reason to believe on the part of the supplier, a supplier of pharmaceutical products, that it would be put to the claimed use. 109 That is, claim 7 of the 772 Patent is for treatment of a symptom of the disease for which the GH Products are indicated as treatment. The use of the GH Product is linked to the use of the method of claim 7 of the 772 Patent. The evidence referred to by the primary judge rises above a mere "prospect" that claim 7 of the 772 patent might be infringed. It was open to his Honour to conclude on the evidence that Generic Health had a reasonable belief that GH Products would be put to an infringing use.

Interlocutory Injunction 110 Generic Health contends that the primary judge erred in failing to carry out the necessary assessment of the strength of Otsuka's probability of success and, in the alternative, that the primary judge erred in the form of relief granted. 111 In Samsung, the Full Court said (at [59]) that the "critical integer" in the test for the grant of an interlocutory injunction, as explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618, is 'the need for the Court to assess the strength of the probability of ultimate success on the part of the [applicant]. The strength of that probability will depend on the nature of the rights asserted and the practical consequences likely to flow from the grant of the injunction which is sought'. At [87] and [88] the Full Court explained that this necessitates an assessment or "evaluation" of the case there, as here, of patent infringement, in order to decide whether there existed a prima facie case of sufficient strength to justify the grant of an interlocutory injunction and to enable the strength of the case to be taken into account in the assessment of the balance of convenience and justice.

The primary judge's reasons 112 The primary judge set out the principles relating to the grant of interlocutory relief at [78]-[82], referring to, inter alia, Samsung, Beecham and Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57. In the latter case, the High Court explained the application of Beecham to the consideration of the grant of an interlocutory injunction and set out the correct approach. The primary judge said (at [79]) that it was not necessary that Otsuka show that it was more probable than not that at trial it would succeed; it was sufficient to show a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending trial. His Honour observed that the strength of the probability required depends on the nature of the rights that are being asserted and the practical consequences likely to flow from the order sought. The primary judge recognised (at [78]) that it was necessary to address two main inquiries: whether Otsuka, as the applicant for relief, has established a prima facie case 'in the sense explained in Beecham' and whether the balance of convenience and justice favours the grant of an injunction or the refusal of that relief. His Honour noted (at [82]) that these are related enquiries and that 'the apparent strength of the parties' substantive cases will often be an important consideration to be weighed in the balance'. 113 Having concluded that there was a prima facie case, the primary judge said (at [142]) that he turned to a consideration of the balance of convenience and justice. His Honour considered the various factors advanced by the parties as to the balance of convenience and justice. That included the assertion by Generic Health that its case on the invalidity of claim 7 of the 772 patent was strong and that the prima facie case on infringement was extremely weak and all the more so when weighed against its case on invalidity. 114 The primary judge responded by saying, at [167]: These submissions are answered, to a large extent, by my conclusion that [Otsuka has] established a prima facie case of infringement of the 772 patent as it concerns claim 7. I accept, however, that it is necessary for me to weigh in the balance the apparent strengths and weaknesses of the parties' respective cases, along with all other matters that assist to inform me where the balance of convenience and justice lies at the present time. 115 His Honour observed (at [171]) that the liability for infringement stems from the operation of s 117(1) and therefore indirectly from the actual implementation of the method of treatment claimed in claim 7 of the 772 Patent. He again expressed himself satisfied that there was a prima facie case that the GH Products, if supplied, will be administered in a method that does infringe the claim. 116 His Honour considered further some of the factors going to balance of convenience and then said that even accepting that there will be cases when aripiprazole can be administered as a method of treatment that does not infringe claim 7, he was satisfied that there is a prima facie case that the GH Products, if permitted to be supplied, will be administered in a method of treatment that does infringe the claim. His Honour concluded that '[t]hus, in the present case, [Generic Health's] liability for infringement, if finally established, would be fixed by the fact of its supply of the GH products'. 117 At [181], his Honour said: At the end of the day I must come to my own evaluation, weighing up the competing circumstances of the parties that have been presented in the evidence, as well as the competing strengths of the parties' respective cases. 118 The primary judge weighed the factors advanced for balance of convenience and justice and concluded at [182] that the balance of convenience and justice favoured the grant of the interim injunctive relief. The primary judge found that this conclusion was not affected by Generic Health's offer of undertakings to the Court with respect to the marketing of GH Products.

Consideration 119 The primary judge said that he recognised the need to take into account the strength of the parties' substantive cases but his Honour did not set out an assessment or evaluation. 120 In Samsung at [59], the Full Court emphasised the importance of the need to assess the plaintiff's probability of success at trial. Their Honours considered that a statement of satisfaction that there was a prima facie case 'in the O'Neill sense' (cf in the sense explained in Beecham) was not a sufficient "assessment" of the strength of the prima facie case in the circumstances of that case. 121 The Full Court said (at [87]) that there was error where there was not 'revealed any assessment or evaluation of' the case of infringement. The Full Court said that the primary judge was 'obliged to make such an assessment for the purpose of deciding whether Apple had made out a prima facie case of sufficient strength to justify the grant of an interlocutory injunction' (emphasis added). In the circumstances of that case, the Full Court stated that the applicant was required 'to demonstrate a relatively strong case'. Again, at [88], the Full Court added that, in addition to deciding whether the applicant had made out such a prima facie case, that is, a relatively strong case, the primary judge also was required to assess the strength of that case so that it could be taken into account in the assessment of the balance of convenience and justice. At [89] the Full Court made it clear that these were distinct 'evaluative tasks' and that the failure to conduct them 'constituted important errors' such that the decision was liable to be set aside. In the present application, no such "evaluation" of the strength of the prima facie case was set out in the primary judge's reasons. 122 I see no error in the primary judge's approach, for the reasons set out below. 123 From observations made by the Full Court, it seems that the requirement to set out an assessment and evaluation of the strength of the prima facie case is limited. The Full Court said that, in the appeal, both parties accepted that the grant or refusal of interlocutory relief would effectively determine the matter on a final basis (at [18]), would effectively finally dispose of the matter (at [37]), was effectively final (at [49]) and was, in effect, a final injunction (at [35]). 124 This factor was, appropriately, mentioned in the transcript of the special leave application before the High Court (Apple Inc v Samsung Electronics Co Ltd [2011] HCA Trans 341). French CJ observed (at [20]) that: 'This appears to have been a case where the decision on the interlocutory application effectively would determine the outcome of the dispute, hence, as the Full Court emphasised, the requirement for a reasoned examination of the strength of Apple's case'. 125 Justice Gummow observed that the case was an extreme example (at [6]) and that Beecham was a very different circumstance, as the product in that case was not going to have a short commercial life (at [10]). As French CJ noted, otherwise: The organising principles upon which applications for interlocutory injunctions are determined are set out in O'Neill and, as is emphasised in those passages, the governing consideration is that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted by the plaintiff and the practical consequences likely to flow from the grant of interlocutory relief, the reference to "practical consequences" including the considerations which are present where the grant or refusal of an interlocutory injunction, in effect, disposes of the action in favour of the successful party on that application. 126 The requirement to set out a reasoned evaluation of the strength of a case during the determination of an interlocutory injunction appears to be limited to the circumstance in which the decision on the interlocutory application effectively would determine the outcome of the dispute (see Jonker v Platform Solutions Pty Ltd [2012] FCA 237 at [13]-[14] and [33] per Reeves J, where his Honour, referring to Samsung, linked the need for such an evaluation of the strength of the case to circumstances where the injunction will have the practical effect of finally determining the whole case). 127 It is apparent that the primary judge assessed the strength of the prima facie case in the sense required in Beecham and O'Neill, in that he clearly weighed the competing arguments and formed the view that there was a prima facie case sufficient to justify an interlocutory injunction. His Honour did not evaluate, in the sense of quantify, the strength of the case. There was no error, as the requirement to do so (as decided in Samsung) is limited to circumstances where the interlocutory injunction finally resolves the dispute between the parties. 128 Where there are ongoing proceedings between the parties for final relief, it is appropriate that the trial judge assess the strength of the probability of success in the sense of seeking to determine whether a sufficient probability of success is made out for a prima facie case to be established, as explained in Beecham, and take the strength of the competing cases into account when determining where the balance of convenience lies. This does not extend to providing a reasoned evaluation of the strengths and weaknesses of the respective cases. 129 The primary judge has identified and correctly applied the relevant principles. His Honour considered the competing cases of the parties, found that there was a prima facie case in the Beecham sense, recognised the requirement to take into account the strength of the parties' competing cases in determining where the balance of convenience lay and found that the balance of convenience favoured the granting of an interim interlocutory injunction. This was sufficient in the circumstances of this case.

The scope of the orders 130 Generic Health contends, in effect, that the orders made by the primary judge are beyond what is necessary or incidental to the exercise of the Court's jurisdiction. It argues that the orders extend the monopoly claimed in the 772 Patent. I agree with the observations of Emmett J. Where the primary judge found infringement by reason of s 117(1) and s 117(2)(b) of the Act, the orders were appropriate and did not go beyond what is reasonable protection of the patentee's rights which may be enforced by a judgment. If the conditions of s 117(2)(b) are satisfied, the prohibited supply extends to supply for methods of treatment that fall outside the claimed use. 131 I agree with Emmett J that the application for leave to appeal should be refused with costs. I certify that the preceding eighty six (86) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett.

Associate: Dated: 6 March 2013 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 490 of 2012

JUDGES: EMMETT, BENNETT AND GREENWOOD JJ DATE: 6 march 2013 PLACE: SYDNEY

GREENWOOD J 132 These proceedings concern an application (reserved to the consideration of the Full Court by Katzmann J on 23 April 2012) by Generic Health Pty Ltd ("Generic Health") for leave to appeal from the following interlocutory orders made by the Court (by Yates J) on 22 March 2012: 1. Until further order of the Court, [Generic Health] by itself, its directors, officers, servants and agents or otherwise be restrained from engaging in the following acts in Australia without the licence or authority of the First Applicant: (a) offering to sell or otherwise dispose of the products the subject of [Australian Register of Therapeutic Goods] registration numbers 176806, 176808, 176810, 176813 and 176815 (GH Products); (b) importing the GH Products; (c) keeping the GH Products for the purpose of doing any of the acts described in sub-paragraphs 1(a) and 1(b) above; (d) authorising other people to engage in any of the acts described in sub-paragraphs 1(a) to 1(c) above. … 133 Order 2 of the orders of 23 April 2012 contemplates that, subject to any contrary direction of the Full Court, the application for leave to appeal be heard concurrently with or, alternatively, immediately before the appeal. 134 In the principal proceeding, the primary judge made the above orders on the footing that his Honour was satisfied that the scope of the interlocutory restraints gave proper interlocutory remedial expression (having regard to the required discretionary considerations) to the prima facie case made out, as the primary judge found, by the patentee, Otsuka Pharmaceutical Co. Ltd ("Otsuka"), of infringement under s 117(1) of the Patents Act 1990 (Cth) of claim 7 of one of the patents in suit (Australian Patent No. 2005201772, "Patent 772") by reason of Generic Health's supply of particular products described as the "GH Products": Otsuka Pharmaceutical Co. Ltd v Generic Health Pty Ltd [2012] FCA 239. 135 Section 117(1) is engaged on the statutory premise that if the use of a product by a person would infringe a patent, the supply of that product by one person to another is an infringement of the patent by the supplier, unless the supplier is the patentee or a licensee of the rights conferred by the patent. The notion of "use of a product by a person" in s 117(1) is given expression relevantly for the purposes of this application by s 117(2)(b) which provides that use of a product is a reference (assuming the product supplied is not a "staple commercial product", and in this case the parties are now agreed that the GH Products are not staple commercial products) to any use of the product, if the supplier had reason to believe that the person would put the product to that use. Section 117(2)(b) contemplates a supplier having a reason to believe, rather than a belief. This suggests an objective assessment of whether the supplier, acting reasonably, had reason to believe a certain state of fact. 136 So, transposing the amplifying effect of s 117(2)(b) (as Hayne J describes the role of subsection (2)(b), at [35] in Northern Territory v Collins (2008) 235 CLR 619) into the operative part of s 117, s 117(1) provides, as applied in the circumstances of this application, as follows: If any use of a GH Product by a person would infringe claim 7 of Patent 772, the supply of that product by Generic Health to another is an infringement of the patent by Generic Health, if Generic Health as supplier had reason to believe that the person would put the product to a claim 7 use (recognising that Generic Health is neither the patentee nor a licensee of the patent). 137 It follows that where a product has, for example, three uses, one of which would infringe a patent and two would not, it is nevertheless an infringement of the patent for a supplier to supply the product to another in circumstances where the supplier had reason to believe that the product would be put to the infringing use, rather than a non-infringing use (a consideration described by Hayne J at [35] of Collins as the "known use" limb of s 117(2)). At least one important aspect of the relevance of a product having non-infringing uses and an infringing use, is the potential difficulty, as a matter of fact, of demonstrating that the supplier had reason to believe that the product would be put to the infringing use rather than simply one of the non-infringing uses. 138 Otsuka's Patent 772 is entitled: "Substituted carbostyril derivatives as 5-HT1A receptor sub/type agonists". 139 The complete specification describes the invention the subject of the claims as one that "relates to a method of treating a patient suffering from a disorder of the central nervous system associated with the 5-HT1A receptor sub/type" where the "active ingredient comprises a carbostyril derivative or salt thereof", described as aripiprazole. 140 Claim 1 claims the use of, put simply, aripiprazole, for the production of a medicament, effective in the treatment of disorders of the central nervous system associated with 5-HT1A receptor sub-type where the disorder exhibits the characteristics set out at (i) and (ii) below. 141 Claim 7 claims a method for treating a patient suffering from disorders of the central nervous system associated with 5-HT1A receptor sub-type where the disorder exhibits the features described at (i) and (ii) below. Claim 7 is in these terms: A method for treating a patient suffering from disorders of the central nervous system associated with 5-HT1A receptor sub-type, which disorder (i) [is] selected from cognitive impairment caused by treatment-resistant schizophrenia, cognitive impairment caused by inveterate schizophrenia, or cognitive impairment caused by chronic schizophrenia, and (ii) fails to response to antipsychotic drugs selected from chlorpromazine, haloperidol, sulpiride, fluphenazine, perphenazine, thioridazine, pimozide, zotepine, risperidone, olanzapine, quetiapine, or amisulpride, comprising administering to said patient a therapeutically effective amount of [aripiprazole] ... [emphasis added] 142 In this application only claim 7 of Patent 772 is relevantly in issue. 143 Before turning to a consideration of the primary judge's assessment of the evidence and the conclusions reached by his Honour, the proposed grounds of appeal the subject of the application for leave can be conveniently mentioned. 144 Generic Health contends, first, that the primary judge fell into error in finding that the present respondents had established a prima facie case that Generic Health's intended supply of the GH products would infringe claim 7 of Patent 772 by reason of s 117(1) of the Patents Act: Ground 1. 145 Second, the primary judge erred in holding that a prima facie case had been made out that the GH products if supplied, would be administered in a method of treatment that infringes claim 7 of Patent 772: Ground 2. 146 Third, the primary judge erred in finding that a prima facie case had been made out that Generic Health had reason to believe that the GH products would be used in a method of treatment that infringes claim 7 of Patent 772: Ground 4. 147 Fourth, the primary judge, in finding that a prima facie case had been made out that use of the GH products would infringe claim 7 of Patent 772, erred by failing to consider all of the integers of claim 7 by failing to take account of the fact that there was no evidence that aripiprazole is used in the method of treatment claimed in claim 7 or that the disorder or the method of treatment claimed in fact exist, and, in failing to state any basis for findings that Generic Health had reason to believe that the GH products would be put to a claim 7 use: Ground 6. 148 Fifth, the primary judge erred by failing to assess the strength of the probability of ultimate success on the part of the respondents and to identify a sufficient probability of success to as to justify, in the circumstances, the grant of an interlocutory injunction pending trial: Ground 10. 149 Sixth, the primary judge erred in failing to limit the form of relief granted to reflect the limited scope of the monopoly rights of the respondents: Ground 11. 150 Grounds 3, 5, 7, 8 and 9 of the Amended Draft Notice of Appeal were not pressed.

Aspects of the evidence considered by the primary judge 151 Otsuka has granted Bristol-Myers Squibb Company ("BMSC") an exclusive licence to sell pharmaceutical products containing aripiprazole in Australia. Otsuka supplies aripiprazole as a raw material to a BMSC subsidiary which produces aripiprazole in a packaged tablet formulation. Bristol-Myers Squibb Australia Pty Ltd ("BMSA"), a BMSC subsidiary, markets the packaged tablet formulation in Australia under the name Abilify. It is a prescription medicine. 152 A number of Abilify products are registered in the Australian Register of Therapeutic Goods (the "Register" or "ARTG"). The products are "indicated" in the Register for these treatments: (a) the treatment of schizophrenia including maintenance of clinical improvement during continuation therapy; (b) acute treatment of manic or mixed episodes associated with Bipolar 1 Disorder in adults as monotherapy and in combination with lithium or valproate; and (c) maintenance treatment of manic or mixed episodes in Bipolar 1 Disorder in adults as monotherapy. 153 Generic Health supplies low cost, high volume generic medicines to pharmacists and hospitals throughout Australia. Generic Health has obtained registration of a number of aripiprazole products in the Register under either the ARIPIPRAZOLE GENERICHEALTH label or the ARIPIPRAZOLE GH label. Those products under the latter label are described by the primary judge as the "GH products". The GH products are registered in the Register for, and only for, "the treatment of schizophrenia including maintenance of clinical improvement during continuation therapy" which is the first of the indications for which the Abilify products are registered. Generic Health had proposed to import the GH products into Australia and supply them to wholesalers for re-supply to pharmacists and hospitals, which led to the application for the interlocutory orders. 154 The application before the primary judge concerned the conduct of Generic Health in relation to the GH products only.

Schizophrenia 155 Schizophrenia is a serious mental disorder affecting 1% of the population worldwide. It generally becomes manifest in early adulthood. 156 Schizophrenia is a condition characterised by disturbances in the ability to experience reality, a lack of capacity to engage with others and disturbances in thinking, behaviour and emotional responses. The condition must endure for at least six months for a diagnosis to be made. The condition is chronic in the majority of cases and its cause appears to be unknown. The symptoms reflect four dimensions of classification which are: (a) positive symptoms; (b) negative symptoms; (c) cognitive symptoms; and (d) mood symptoms. Some clinicians and researchers consider that cognitive impairment falls within the category of negative symptoms. Others believe that cognitive impairment constitutes a totally separate symptom category. 157 The positive symptoms include hallucinations and delusions. The negative symptoms include a blunting of emotional response, apathy, amotivation and poverty of thinking. The mood symptoms include anxiety and depression. 158 Cognitive impairment refers to a range of impaired higher cognitive functions including problems with attention, long term memory, abstraction and planning difficulties. The primary manifestations of cognitive impairment are disturbances in attention and memory and disturbances in the ability to generate and implement plans. A patient suffering from cognitive impairment will generally exhibit difficulty in thinking and in articulating thoughts. 159 At [24], the primary judge notes that the current view reflected in the literature is that the majority of all patients with schizophrenia suffer from some degree of cognitive impairment and in some cases the impairment will be manifest when the patient first presents with the illness. 160 Chronic schizophrenia includes particularly severe forms of the condition, known as "treatment-resistant" and "treatment-refractory" schizophrenia. Acute schizophrenia lasts for more than six months and the patient may then experience remission of symptoms (with recovery by the patient), although the patient may relapse into acute schizophrenia from time to time. 161 Chronic schizophrenia lasts significantly longer than six months and a patient suffering from this form of the condition may have his or her positive symptoms under therapeutic control but the negative symptoms will persist. 162 The symptoms of chronic schizophrenia are the negative symptoms mentioned earlier and cognitive impairment. However, a patient may also relapse into exhibiting positive symptoms from time to time. 163 Treatment-resistant schizophrenia is schizophrenia in which the patient's positive symptoms (in addition to negative symptoms and cognitive impairment) are unresponsive to antipsychotic medications. Approximately 20% of patients suffering from schizophrenia are partially unresponsive and approximately 5% are totally unresponsive to antipsychotic medications. 164 Antipsychotic medications are described as either first generation (or "typical") medications (developed in the 1950s and 1960s) or second generation (or "atypical") medications (developed in the 1980s). 165 Aripiprazole is a second generation antipsychotic medication although some regard it to be the first of a new generation of antipsychotic medications. 166 At [34] to [36], the primary judge examined some aspects of the evidence of a consultant psychiatrist, Professor Singh, called on behalf of Otsuka and BMSC. 167 Professor Singh gave evidence that it would be "very rare" for a new patient presenting with schizophrenia to be commenced on a first generation antipsychotic medication. Professor Singh gave evidence that a small proportion of patients suffering from schizophrenia for some time who were originally started on first generation medications and who have remained stable will continue with that therapy although "most patients" that were started on first generation antipsychotic medications "will have been switched to second generation antipsychotics, or are likely to be switched to that therapy". Professor Singh gave evidence that when treating patients suffering from schizophrenia, he uses a range of antipsychotic medications determined by his assessment of the needs of the patient. Because certain patients may not respond well to a particular medication when first prescribed, or might suffer unacceptable side effects, a different medication commonly will then be tried and prescribed. 168 At [35], the primary judge notes that Professor Singh estimated that about 25% of all patients suffering from schizophrenia would be "switched" from one second generation antipsychotic to another and that the "majority of patients" suffering from chronic schizophrenia will "need" to switch medications at some stage. Professor Singh suggested that this may be because the positive symptoms have not been brought under control or because the negative or cognitive symptoms persist. Professor Singh gave evidence that it was "not uncommon" for patients to fail to respond to the second medication and such patients are then switched to a third medication in order to bring their symptoms under control. 169 At [36], the primary judge notes Professor Singh's evidence that practising psychiatrists tend to distinguish between two types of treatment for schizophrenia. The first is acute treatment where emphasis is placed upon getting the positive symptoms under control and the second is longer-term treatment in which the aim is to maintain control of the positive symptoms and to try and counter the negative symptoms and cognitive impairment. 170 At [37], the primary judge considered the evidence of Professor McGorry called on behalf of Generic Health. 171 The primary judge observes that Professor McGorry generally agreed with Professor Singh's evidence, subject to the matters mentioned later in these reasons. 172 Professor McGorry drew attention to clinical practice guidelines for the treatment of schizophrenia published by the Royal Australian and New Zealand College of Psychiatrists. The guidelines recommend that second generation antipsychotic medications should be prescribed as first and second line treatment in "first episode psychosis" with initial low dosage. At [37], the primary judge notes that the guidelines recommend that patients currently receiving conventional antipsychotic medications "in whom there are persistent positive or negative symptoms, or who are experiencing distressing side-effects, should be switched to second generation antipsychotic medication". Also, the guidelines recommend that clozapine should be confidently introduced "at the earliest opportunity if evidence of treatment-resistant schizophrenia is present" [emphasis added]. 173 As to the practice protocols, Professor McGorry said that he would firstly treat a patient with schizophrenia for at least six to 12 months with antipsychotic medication following a first psychotic episode, with low dose second generation medication. Professor McGorry gave evidence that about 80% of patients will suffer a relapse of positive symptoms and those with multiple relapses will need to have significant ongoing therapy. 174 As to switching, Professor McGorry said that the switching of antipsychotic medications is a practice that is employed in an effort to "optimise response" and that it can lead to a worsening as well as an improvement of symptoms during the switch period due to non-response or delayed response to the new drug. Professor McGorry gave evidence that the response rate to medication diminishes with more drugs that are tried, and the "chance" of a patient responding to a second or third antipsychotic drug is much less than a patient's likely response to the first drug.

Aripiprazole 175 Dopamine is a chemical neurotransmitter that facilitates the transmission of an electrical signal from one nerve cell to the other. The electrical signal released by one neuron engages a dopamine receptor (D1, D2, D3 etc) which stimulates that receptor. At [40], the primary judge notes that the evidence is that partial dopamine agonism is the tendency to partially stimulate some dopamine receptors and dopamine antagonism is the blocking of the dopamine receptor so that the neurotransmitter function of dopamine is completely blocked. Positive symptoms of schizophrenia are thought by some clinicians to be a result of overactivity of dopamine in some parts of the brain, and dopamine underactivity is thought to explain the negative symptoms of schizophrenia. All antipsychotic medications bring about their effects on the positive symptoms of the condition by blocking dopamine receptors. However, dopamine antagonism is likely to worsen the negative symptoms and the symptoms of cognitive impairment. 176 However, aripiprazole operates as a partial dopamine agonist at the D2 receptor. 177 Serotonin is another chemical neurotransmitter. 178 It reacts with serotonin receptors which are currently designated as 5-HT1A up to 5-HT7. Aripiprazole has partial agonist properties at the 5-HT1A receptor and has a tendency, therefore, to partially stimulate the 5-HT1A serotonin receptor. 179 At [43], the primary judge notes Professor Singh's evidence that aripiprazole's partial agonist activity at the 5-HT1A receptor is an advantageous property because it may "contribute to the cognitive enhancing properties of the drug"; this view is shared among psychiatrists and neuroscientists; and, aripiprazole is "unique in having partial dopamine agonist activity, and partial agonist activity at the 5-HT1A receptor" [emphasis added]. 180 At [44], the primary judge notes Professor Singh's evidence that aripiprazole has found its "niche" with clinicians who deal with patients in long term treatment for schizophrenia. 181 Professor Singh says that the advantages associated with using aripiprazole are: (a) aripiprazole is less sedating than other antipsychotic medications; (b) it leads to increased energy for the patient; (c) it is not an anticholinergic agent (with the result that the patient is not sedated and has little propensity to gain weight); and, (d) its partial agonist activity at the 5-HT1A receptor may add to its cognitive enhancing properties. 182 Professor McGorry disagreed with that view as to the last matter (at (d)) as the conclusion could only be "theoretical" given the current state of knowledge; other antipsychotic medications also affect the 5-HT1A receptor; and aripiprazole does not seem to have a more potent effect at the receptor site than other second generation antipsychotic medications. 183 Nevertheless, at [46], the primary judge notes that both Professor Singh and Professor McGorry "appear to agree that aripiprazole acts as a partial agonist at the 5-HT1A receptor" although the significance of that activity in improving cognitive impairment is in contest. 184 As to the matter of use of aripiprazole, the primary judge notes at [47] Professor McGorry's evidence of his experience that aripiprazole "can be used to treat acute episodes of schizophrenia, although he did not believe that it was commonly used in this phase because it was not especially sedative" [emphasis added]. The primary judge drew an inference from this evidence that Professor McGorry considers aripiprazole's use to be mainly in the treatment of chronic schizophrenia. 185 Professor McGorry gave evidence that aripiprazole has a lower impact on weight gain and is less sedating than other second generation antipsychotic medications. He also said that these characteristics provide an advantage when treatment is initiated in more stable outpatients either for the first time or "through switching", because avoiding sedation is a "major advantage" and the lesser impact of weight gain in most patients is also desirable. 186 As to the treatment of cognitive impairment, Professor McGorry gave evidence that while it is better to prescribe a second generation antipsychotic medication than a first generation one in "continuation therapy as part of the ongoing treatment plan for a patient", second generation antipsychotic medications represent only one component of treatment of a patient whose positive symptoms are under control. Professor McGorry considers that second generation antipsychotic medications "are not the most potent intervention for improving cognition, though they can have modest effects". Cognitive remediation is thought by Professor McGorry to be a better treatment option, building upon modest improvements associated with drug therapies. 187 At [49], the primary judge in the evaluation of the evidence of Professor Singh and Professor McGorry observes that the debate about best practice for the treatment of cognitive impairment did not need to be resolved for the purposes of the interlocutory application but that the evidence did show that there is at least agreement between Professor Singh and Professor McGorry that "second generation antipsychotic drugs are used in the treatment of cognitive impairment associated with schizophrenia". 188 At [50], the primary judge notes Professor Singh's evidence that if he were presented with a patient suffering from negative symptoms of schizophrenia and symptoms of cognitive impairment, he would, in order to improve that patient's level of engagement with the outside world (by reducing the negative symptoms and/or improving cognitive function), do the following things: (a) treat the patient with an atypical antipsychotic medication and, in that regard, he would consider using less sedating agents (such as aripiprazole) and, perhaps, he would also use an antidepressant; (b) stop the use of any anticholinergic agent because those agents can impair cognition; (c) consider prescribing aripiprazole because of the particular advantages he described in his evidence; and, (d) consider prescribing aripiprazole because it is a partial dopamine agonist and a partial agonist at the 5-HT1A receptor. 189 At [51] to [57], the primary judge considers the state of the evidence in relation to Bipolar Disorders and the treatment for those disorders. Bipolar Disorder, otherwise known as manic depression, is a psychiatric illness characterised by recurrent attacks of mania and depression. Disturbance of mood is its predominant feature and the main mood disruption is the manic or hyper-manic episode (upswings in mood). The other mood disruption is characterised by depressive episodes. Manic episodes are characterised by persistent and abnormally elevated, expansive or irritable mood and, in contrast, depression is characterised by many features including sadness, isolation, hopelessness, guilt, apathy, disturbances in sleep and appetite, lack of motivation and a loss of interest in enjoyable activities. 190 Professor Singh gave evidence that drugs which act on the 5-HT1A receptor as well as other 5-HT receptors are used in, and are considered to be helpful for, the treatment of depression and the treatment of the depressive phase of Bipolar Disorders. At [56] and [57], the primary judge describes the evidence of Professor Singh concerning his evidence of his own practice in treating patients suffering from bipolar disorder. Professor Singh gave evidence that antipsychotic medications would be prescribed as an adjunct to antidepressant medications "because of its 'synergistic' effect [of making] the antidepressant medication more effective in treating the patient's depression", and that he "prescribes aripiprazole in conjunction with an antidepressant in order to treat depressive episodes and mixed episodes of Bipolar 1 Disorder".

Claim construction 191 At [69], the primary judge recognises that claim 7 of Patent 772 "plainly involves the use of a product". Claim 7 is directed to a method of treating a patient, by the use of aripiprazole, who suffers from disorders of the central nervous system associated with 5-HT1A receptor sub-type. At [68], the primary judge recognises the qualifying integers of claim 7 by recognising that the method is qualified by, first, the selection of a particular disorder of cognitive impairment caused by one of three things: treatment-resistance schizophrenia; inveterate schizophrenia; or chronic schizophrenia, and secondly, the patient's cognitive disorder fails (has failed) to respond to treatment by the use of antipsychotic drugs selected from the 12 compounds identified at (ii) of claim 7 (as to which, see [10]). 192 The primary judge recognises that it follows that use of a therapeutically effective amount of aripiprazole in the treatment of a patient suffering from a central nervous system disorder (associated with a 5-HT1A receptor) of cognitive impairment where the patient's cognitive impairment is caused by treatment-resistant schizophrenia or inveterate schizophrenia or chronic schizophrenia and where the patient's cognitive impairment has failed to respond to the use of drugs selected from the 12 compounds recited in claim 7(ii), that use would infringe claim 7 of Patent 772. 193 The primary judge observes at [68] that the compounds recited at claim 7(ii) are either first or second generation antipsychotic medications and the novelty in the claimed method lies "in the asserted newly discovered therapeutic effect" of aripiprazole. 194 At [59], the primary judge sets out the teaching of the complete specification in the context of the known understanding of the treatments for symptoms of schizophrenia. It is not necessary to set out in these reasons the detail of the primary judge's assessment of those matters. However, these matters should be noted. 195 First, the specification recites that it has not been reported, prior to the priority date, that compounds in the invention (that is, aripiprazole) have agonistic activity at a 5-HT1A receptor site. 196 Second, a range of atypical antipsychotic drugs have been developed (including clozapine) which are more effective in the treatment of cognitive impairment associated with schizophrenia than typical antipsychotic drugs. 197 Third, some patients either do not respond to these atypical drugs or become "refractory". The symptoms of treatment-resistant and treatment-refractory schizophrenia involve positive and negative symptoms, emotional disorder and cognitive impairment. 198 Fourth, it is well known that 5-HT1A receptor agonist activity or 5-HT1A partial agonist activity plays an important role in treatment-resistant schizophrenia and cognitive impairment. 199 Fifth, although clozapine has been reported to improve cognitive impairment, and the 5-HT1A receptor has been demonstrated to play a role in the therapeutic efficiency of clozapine against treatment-resistant schizophrenia and cognitive impairment, clozapine has limited use due to its severe side-effect of producing agranulocytosis (a severe acute and usually fatal disease). Thus, a safe antipsychotic drug with potent, full or partial agonist activity at 5-HT1A receptors is "earnestly desired". 200 Sixth, the compound of the invention (aripiprazole) binds with high affinity and displays a potent, partial agonist activity at 5-HT1A receptors and has higher intrinsic activity than clozapine with the result that the compound may represent a more potent, and highly safe drug, for curing treatment-resistant and other forms of schizophrenia, as well as cognitive impairment caused by treatment resistant and other forms of schizophrenia.

The prima facie case 201 At [83], the primary judge observes that a prima facie case of infringement justifying the granting of the interim relief had been made out. 202 The primary judge observes at [84] that the evidence, as presently advanced, demonstrates that cognitive impairment is a symptom or domain of schizophrenia, including chronic schizophrenia and treatment-resistant schizophrenia. The basis for that observation arises out of the primary judge's contextual analysis of the evidence described at [156], [158], [159], [162], [163], [168], [169], [171], [179], [181], [186] and [187] of these reasons. 203 At [84], the primary judge observes that chronic schizophrenia is the outcome of the majority of those who suffer the illness. That observation is based upon the evidence derived from the literature referred to by his Honour. 204 The primary judge observes at [84] that there is evidence that aripiprazole can be used for the production of a medicament that is effective in the treatment of cognitive impairment caused by schizophrenia. The basis for that observation arises out of the primary judge's contextual analysis of the evidence described at [175] to [184], [186] and [188] of these reasons. 205 The primary judge also observes that there was no dispute between the parties that the active ingredient of the GH products is aripiprazole. 206 The primary judge also observes that the degree of efficacy of aripiprazole in the treatment of cognitive impairment caused by schizophrenia is a matter of debate as between Professor Singh and Professor McGorry but the resolution of that debate is ultimately a matter for trial. 207 At [85], the primary judge observes that the evidence shows that aripiprazole is recommended for use as, and used for, first and second line treatment as well as a later line treatment for patients suffering from schizophrenia. That observation arises out of the primary judge's contextual analysis of the evidence described at [169], [175] to [161], [184] to [188] and [212] and [213] of these reasons. The primary judge concludes that aripiprazole is used, on the evidence, as a medication for schizophrenic patients who fail to respond to antipsychotic drugs, including the first generation and other second generation antipsychotic compounds identified at claim 7(ii) of Patent 772. The primary judge had addressed the considerable evidence of "switching", described earlier in these reasons. 208 At [94], the primary judge observes that the evidence shows that the GH products and the Abilify products are registered in the ARTG Register for "the treatment of schizophrenia including maintenance of clinical improvement during continuation therapy". The primary judge observes that the products are therefore interchangeable or direct substitutes in terms of the registered indication or purpose. The primary judge gave emphasis to the fact that such use is the only "indicated use" in the Register for the GH products and thus, on the evidence, the GH products could not be said to have "various uses" beyond the indicated use. 209 The primary judge also observed that the evidence did not suggest that the GH products would be "traded commercially for various uses". 210 The primary judge also notes at [95] the evidence of Professor McGorry on the notion inherent in the words "including maintenance of clinical improvement during continuation therapy" as used as a registered indication for the GH products. Professor McGorry said that the phrase means, the longer-term treatment of schizophrenia required to maintain control of positive symptoms and that continuation therapy is the administration of antipsychotic medication in a dosage that is as low as possible so as to maintain the patient's response or remission from positive symptoms. Professor McGorry considered that if the treatment results in any other benefit in treating the negative symptoms and other domains of schizophrenia then that benefit is seen by Professor McGorry as "a bonus". 211 At [95], the primary judge notes the acceptance by Professor McGorry that it is "not uncommonly the case" that the negative symptoms and other domains of schizophrenia are treated in continuation therapy with an antipsychotic agent. 212 At [96], the primary judge notes that Professor Singh described the longer-term treatment of patients as being aimed at maintaining the control of positive symptoms and countering negative symptoms and cognitive impairment, with the result that the primary judge understood Professor Singh to be placing "some greater importance on the treatment of negative symptoms and cognitive impairment" using antipsychotic drugs in continuation therapy, than the views of Professor McGorry. 213 Having assessed the evidence of Professor McGorry and Professor Singh on this topic in the context of all of the evidence, the primary judge concluded at [97] that the evidence before him supported the conclusion, on a prima facie basis, that "the treatment of schizophrenia comprehends the treatment of all of its symptoms and domains, notwithstanding Professor McGorry's emphasis on the treatment of positive symptoms" and "[a]ripiprazole is used for that range of treatment with respect to schizophrenia". 214 At [98], the primary judge said this: I am satisfied that there is a prima facie case on the present state of the evidence that the GH products would be used for purposes that include the treatment of cognitive impairment caused by chronic schizophrenia or treatment-resistant schizophrenia, including where a patient fails to respond to other antipsychotic drugs selected from those identified in claim 7 and [Generic Health] has reason to believe that the GH products would be put to that use … 215 The concluding words of [98] of the primary judge's reasons reflect a finding that a prima facie case is made out in relation to Generic Health's "reason to believe", for the purposes of s 117(1) and (2)(b). Generic Health contends, first, that no part of the exposed reasons of the primary judge contain an analysis of the basis upon which the primary judge could be or was satisfied that Generic Health had reason to believe the relevant matters and, secondly, no affirmative evidence was put before the primary judge that Generic Health had reason to believe that the GH products would be put to an infringing use having regard to the integers of claim 7 of Patent 772. 216 More particularly, Generic Health says that while the evidence might suggest that aripiprazole may be deployed by clinicians when circumstances of "switching" might be required to meet the needs of a patient (in cases of a particular failure of the patient to respond to one or more first or second generation antipsychotic drugs) so as to treat negative symptoms of schizophrenia or symptoms of cognitive impairment as Professor Singh suggests both in his evidence on switching and in relation to continuation therapy, there is nothing in the evidence to suggest that first, a patient's cognitive impairment disorder, so treated, was caused by the claim 7(i) causes or secondly, that aripiprazole was used consequent upon a failure of the patient to respond to two or more of the claim 7(ii) drugs, rather than some other less specific failed drug treatment (use) regime. 217 Generic Health says that unless there is evidence that all of the integers of claim 7 are engaged concerning the use of the GH products, there is no objectively demonstrated reason for Generic Health to believe that the GH products would be put to the claim 7 infringing use. 218 Generic Health says that although a clinician treating a patient suffering from cognitive impairment disorder caused by, for example, chronic schizophrenia or treatment-resistant schizophrenia might switch the patient from one of the 12 drugs recited in claim 7(ii) (then being prescribed) to aripiprazole after a failure of the patient to respond to at least two (and the parties accept that claim 7 requires a failure of at least two of the para (ii) drugs) or more, of the para (ii) drugs, the evidence does not objectively demonstrate that clinicians have adopted a practice (giving rise to a real likelihood of particular use) of prescribing the use of aripiprazole for patients suffering from cognitive impairment disorder (caused in one of the para (i) senses) after a demonstrated failure in the use of two or more of the para (ii) drugs. In the absence of such a practice or real likelihood, Generic Health has, it is said, no objective reason to believe that the GH products would be put to a claim 7 infringing use. 219 Generic Health also says that it was not actually aware that the GH products would be put to an infringing claim 7 use. 220 The finding of a prima facie case of Generic Health having a reason to believe that the GH products would be put to an infringing use rests on all of the considerations at [83] to [85] and [94] to [99] of the primary judge's reasons and the evaluation of the evidence upon which those paragraphs depend, as earlier described. 221 The primary judge took the following matters into particular account either directly or as a matter of inference drawn from the evidence. 222 First, Generic Health is a pharmaceutical company that supplies generic pharmaceutical products and other products. It commenced operating in 2004 and its business model involves the supply of low cost, high volume generic medicines to pharmacists and hospitals throughout Australia. In that sense, Generic Health is, objectively viewed, an interested observer of factors relevant to the use of its GH products supplied to pharmacists and hospitals for re-supply to patients for the indicated use. 223 Second, the active ingredient of the GH products is aripiprazole. 224 Third, Generic Health has registered the GH products containing the aripiprazole compound in the Register for "the treatment of schizophrenia including maintenance of clinical improvement during continuation therapy". The evidence before the primary judge demonstrates that aripiprazole can be, and is used, as a medicament, that is effective in the treatment of cognitive impairment caused by schizophrenia including cognitive impairment caused by chronic schizophrenia or treatment-resistant schizophrenia. 225 Fourth, having regard to the evidence of Professor Singh, the maintenance of clinical improvement during continuation therapy involves maintaining the control of positive symptoms and the countering of negative symptoms and cognitive impairment with the result that the evidence supports the conclusion that the treatment of schizophrenia in continuation therapy comprehends the treatment of all of its "symptoms and domains". 226 Fifth, aripiprazole is used for all of the symptoms and domains of schizophrenia. 227 Sixth, Generic Health has registered its GH products in the Register for only an indication that precisely corresponds with the first of the indications for which the Abilify products are registered, and in that sense, the GH products are "interchangeable" with the Abilify products for this indication and purpose. No other indication is recorded in the Register for the GH products. 228 Seventh, Generic Health must be taken, objectively, to have reason to understand that its GH products as registered are interchangeable with (or substitutes for) the Abilify products. On the evidence before the primary judge, the GH products do not have other "indicated uses" and the evidence does not suggest that the GH products would be traded commercially for "other uses". 229 The question of whether Generic Health had reason to believe, objectively viewed, that the GH products would be put to a claim 7 infringing use is to be assessed having regard to the nature of the products, their use at least as reflected in the public Register identifying Generic Health's indication of the use to which the products can be put properly, and the nature of the undertaking conducted by Generic Health. Since Generic Health, acting reasonably, must be taken to understand the use of the GH products reflected in the indication contained in the Register, and the evidence before the primary judge in support of use, in fact, has given content to that use as a claim 7 use, the evidence supports the conclusion that objectively viewed Generic Health had reason to believe that its GH products containing aripiprazole would be used or deployed by clinicians for use by patients in the circumstances of the integers of claim 7 of Patent 772. 230 The evidence before the primary judge supported a finding of a prima facie case that, on all of the evidence analysed by the primary judge, a use of the GH products by a person in Australia would infringe claim 7 of Patent 772 and the supply of the GH products to persons in Australia is an infringement of claim 7 of Patent 772 as Generic Health had reason to believe that its products would be put to use in treating patients suffering from cognitive impairment caused by either chronic schizophrenia or treatment-resistant schizophrenia in circumstances where those patients had failed to respond to two or more of the antipsychotic drugs listed in para (ii) of claim 7 of Patent 772. 231 At [100] to [104], the primary judge dealt with the question of whether a prima facie case had been made out of the contravention of s 117(1) having regard to s 117(2)(c) which is concerned with use of a product "in accordance with any instructions for the use of a product", or any inducement to use the product, given to the person by the supplier or contained in an advertisement published by or with the authority of the supplier. The primary judge considered the application of these provisions to facts relating to the question of whether prescribing doctors would read into the supplier's Product Information, an instruction that the GH products are to be used or can be used in the method of treatment specifically claimed in Claim 7. The primary judge observed at [103]: "Certainly the Product Information does not give that instruction or inducement expressly". In the context then of s 117(2)(c), the primary judgment also observed that "it is not sufficient that prescribing doctors will or might use the GH products for a method of treatment as so claimed". The primary judge observed that s 117(2)(c) requires there to be an instruction or an inducement. 232 These observations at [103] are said to be inconsistent with earlier observations made in the context of s 117(2)(b). However, the observations at [103] are confined to Product Information instructions. The point of the earlier findings is that the primary judge gave emphasis to the fact that the only ARTG registered use for the GH products was the same use as that for which the Abilify products are registered and, on the state of the evidence, the GH products could not be said to have "various uses" beyond the indicated use (see [94] of the primary judge's reasons). The matters at [103] provide no answer to the prima facie findings in relation to s 117(1) and s 117(2)(b). 233 Two other questions remain. 234 The first concerns the question of whether, in a methodological sense, the primary judge failed to have proper regard to settled principle governing the determination of whether a prima facie case had been made out, and the discretionary considerations to be taken into account in the grant or withholding of interlocutory relief. 235 The primary judge sets out an assessment of the organising principles at [78] to [82]. 236 In particular, the primary judge had regard to the considerations extensively discussed by the Full Court of this Court in Samsung Electronics Co Limited v Apple Inc [2011] FCAFC 156. 237 The primary judge observed that it was not necessary to recite those principles in detail and said that it was sufficient to note that when considering an application for an interlocutory injunction, the Court must address itself to two main inquiries of whether the applicant for relief has established a prima facie case in the sense explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) (Beecham) 118 CLR 618 at 622-623, and whether the balance of convenience and justice favours the grant or refusal of the relief. Moreover, the primary judge took into account the organising principles discussed by Gummow and Hayne JJ in Australian Broadcasting Corporation v O'Neill (O'Neill) (2006) 227 CLR 57 at [65] to [72]. 238 The primary judge observed that a prima facie case does not mean that the applicant must show that it is more probable than not that it will succeed at trial, but rather the burden for the applicant is to demonstrate a sufficient likelihood of success to justify, in the circumstances of the case, the preservation of the status quo pending the trial of the action. The primary judge correctly observed, derived from Beecham and O'Neill, that the question of how strong the probability needs to be in order to demonstrate a sufficient likelihood of success depends upon the nature of the rights being asserted by the applicant and the practical consequences likely to flow from the order, if made. 239 At [80], the primary judge returned to some of the considerations discussed by the Full Court in Samsung and observed that at [61] of the Full Court's reasons, the Court had discussed the requirement that in order to obtain an interlocutory injunction the applicant must demonstrate that if no injunction is granted it will suffer irreparable injury for which damages will not be adequate compensation. The primary judge noted the Full Court's observation to the effect that regardless of whether "irreparable harm" is properly considered as a matter to be addressed in the Court's consideration of the balance of convenience and justice, (rather than as a distinct and antecedent consideration), the assessment of prejudice or harm to the applicant, if there be no injunction, and the assessment of prejudice or harm to the defendant, if an injunction is granted, is "at the heart of the basket of discretionary considerations which must be addressed and weighed". 240 The primary judge also observed that the notion of irreparable harm contemplates harm for which damages would not be adequate compensation. 241 Returning to Samsung, the primary judge noted that the Full Court at [62] had said that the question of whether damages will be an adequate remedy for the alleged infringement of the applicant's rights involves an assessment by the Court of whether, absent an injunction, the applicant would in all material respects be in as good a position if confined to a remedy in damages. 242 Further, the primary judge recognised that it is well recognised that the issue of whether the applicant has made out a prima facie case, and the question of balance of convenience and justice, are necessarily related inquiries (Samsung at [67]; Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (2009) 81 IPR 339 at [15]) and, in short, the apparent strength of the parties' substantive cases will often be an important consideration to be weighed in the balance. 243 At [143] to [182], the primary judge considers all of the factors to be taken into account in weighing the balance of convenience and the interests of justice. 244 I do not propose to closely examine all of those matters in these reasons. I am satisfied that the primary judge has properly identified the principles governing the granting or withholding of interlocutory relief and has weighed all of the considerations relevant to the question of where the balance of convenience lies and where the interests of justice lie. 245 By Ground 10 of the proposed Amended Notice of Appeal for which leave was sought, Generic Health contends that the primary judge erred by failing to assess the strength of the probability of ultimate success on the part of the respondents and failed to identify a sufficient probability of success to justify, in the circumstances of the case, the grant of an interlocutory injunction pending trial. 246 I reject that contention. 247 The primary judge has carefully examined all of the evidence, identified and taken into account all of the relevant principles, and has assessed the strength of the probability of success in the sense of seeking to determine whether a sufficient probability of success is made out. To the extent that it is suggested that the primary judge has departed from the considerations identified by the Full Court of this Court in Samsung, in which consideration is given by the Full Court to the methodological application of the principles derived from the High Court decisions in Beecham and (the organising principles identified) in O'Neill, I am satisfied that the primary judge has not departed from those principles. 248 Although the primary judge has not found it necessary to recite the principles in detail, the passages I have referred to seem to me to make it clear that the primary judge was familiar with the relevant principles, isolated them correctly and applied them in a way consistent with settled principle. It should also be remembered that the primary judge was a member of the Full Court in Samsung which was constituted by Dowsett, Foster and Yates JJ. 249 One final matter concerning Ground 10 of the appeal should be noted. 250 Generic Health in contending that the primary judge failed to assess the strength of the probability of ultimate success at trial of the case relied upon by the respondents, contended that the primary judge had failed to conduct an "evaluative analysis" of the strength of the prima facie case as required by Samsung. However, the primary judge was expressly conscious of the need to form a view about the apparent strength of the substantive case advanced by the applicant respondents. 251 In Beecham, Kitto, Taylor, Menzies and Owen JJ observed (at (1968) 118 CLR 618 at 622) that the strength of the probability of success depends, no doubt, upon the nature of the rights asserted and the practical consequences likely to flow from the order sought. If the case is that class of case where the practical consequence of granting an interlocutory injunction is that the order will, for all practical purposes, determine the outcome of the substantive controversy, the depth and scope of the assessment or evaluation of the probability of success informing the exercise of the discretion will likely be greater than that class of case where the making of the interlocutory injunction does not have such a practical consequence. 252 However, lest there be any doubt about the matter, Beecham makes it plain at p 622 and O'Neill affirms it to be so as part of the organising principles governing the exercise of the discretion to grant or withhold the making of an interlocutory injunction (at [65] to [72] and [19]), that in every case in which an interlocutory injunction is sought the primary judge must form a view about the strength of the probability of the plaintiff succeeding at trial having regard to the case advanced at the interlocutory hearing. 253 How strong the probability needs to be will depend upon the matters already mentioned, namely, the nature of the rights asserted and the practical consequences likely to flow from the order sought by the applicant. However, there is no authority in the High Court for the proposition that in exercising the discretion according to settled principle (Beecham and O'Neill), a primary judge need only form a view about the strength of the probability of success in that class of case where the practical consequence of making the interlocutory order will determine the outcome of the substantive controversy. The point about such a practical consequence is that the depth, scope and scale of the assessment of the probability of success is likely to be significantly different to the nature of the assessment made where the interlocutory order will not have that particular practical consequence. 254 In that sense, I respectfully disagree with Emmett J in the absolute way his Honour has expressed the principle at [26]. There is necessarily a question of emphasis involved in making the assessment having regard to the class of case presented to the primary judge. 255 Ultimately, a qualitative assessment must be made by the primary judge of the strength of the probability of success and, as the High Court observes in Beecham, as affirmed by O'Neill, the emphasis in that assessment will take account of both the nature of the rights asserted and the practical consequences likely to flow from the order sought by the applicant for the relief. There is no proper basis for, and nor is it desirable to, narrow the broad sweep of those two important considerations by adopting a default rule that the primary judge need only consider the strength of the applicant's probability of success at trial in that class of case where the interlocutory order will determine the outcome of the controversy overall. The primary judge ought to have the greatest flexibility in applying the tests according to the circumstances of the particular case. Where the practical consequence likely to flow from making the orders sought by the applicant (or not making the orders) is, in substance, the determination or practical resolution of the controversy over all, the primary judge will, as a matter of emphasis, engage in greater depth, scope and scale, in an assessment of the strength of the probability of success, than would be likely to be the case where such a practical consequence does not arise. 256 Nevertheless, in the latter class of case, a view must be formed by the primary judge about the strength of the probability of the plaintiff succeeding at trial but the burden and depth of that assessment will be of a different quality and kind than the assessment appropriate to the former class of case. 257 In this case, the primary judge was conscious of the need to form a view about the strength of the probability of success at trial of the case made by the respondents as applicants and the primary judge made an evaluation of the strength of the probability of that success in the context of an appreciation of the nature of the rights asserted by the respondents and the practical consequences likely to flow from the making of the order. In this case, a proper contextual reading of the reasons of the primary judge demonstrates that throughout the course of the primary judge's analysis of the evidence, his Honour was constantly and incrementally informing himself of the quality of the evidence and the strength of the probability of the applicant's success in the proceeding (or not), as framed by the evidence. Whilst I accept that the primary judge has not, in terms, separately addressed detailed reasons to the express topic of the strength of the applicant's probability of success, it seems clear to me that the primary judge was informing himself about that question as his Honour evaluated all of the evidence. Moreover, his Honour expressly turned his mind to the obligation to form a view about the strength of the probability of success. 258 There can be no suggestion that the primary judge was not astute to the obligation to form a view about the strength of the applicant's probability of success in exercising the discretion. 259 There is no demonstrated error on the part of the primary judge. 260 The second remaining question concerns the scope of the interlocutory orders. 261 As to this question, I agree with the observations of Emmett J at [39] to [43] of his Honour's reasons. 262 Fundamentally however, it seems to me that the question is answered by recognising that once a prima facie case of infringement is made out for the purposes of s 117(1) having regard to s 117(2)(b), the conduct on the part of Generic Health which, under the section, "is an infringement of the patent by the supplier" is "the supply" of the product. Section 3 together with Schedule 1 of the Patents Act has the effect of defining supply as including: "(a) supply by way of sale, exchange, lease, hire or hire-purchase; and (b) offer to supply (including supply by way of sale, exchange, lease, hire or hire-purchase". The question then is whether interlocutory orders ought to be framed which provide remedial protection in relation to the conduct of supply as defined and conduct properly regarded as forming part of the conduct of supply. The interlocutory orders are framed (see [132] of these reasons) in terms of restraining Generic Health from offering to sell or otherwise dispose of the products; importing the products; keeping the products and authorising others to engage in any of those acts. The first class of conduct involves supply directly and the second and third classes of conduct are aspects of, or incidental to, threatened supply. 263 I am satisfied that the scope of each of the interlocutory orders is appropriate once it is recognised that a prima facie case of infringement of s 117(1) is made out having regard to all of the relevant factors discussed in these reasons. I certify that the preceding one hundred and thirty-two (132) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.

Patents Act 1990(Cth)ss 117(1), 117(2)(a), 117(2)(b), 117(2)(c)

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Cases Cited (14)