InterPharma Pty Ltd v Commissioner of Patents

REASONS FOR JUDGMENT 1 On 28 July 2008 I made a confidentiality order under which disclosure of confidential information belonging to the applicant (InterPharma) was limited to the second respondent's Australian lawyers (including support and administrative staff employed by them), independent experts nominated by the second respondent, and other persons to whom InterPharma consents in writing. 2 The second respondent and the second cross‑claimant (together Lilly) seek to have two in‑house lawyers, Ms McGraw and Mr Caltrider, brought within the confidentiality regime. 3 No question arises as to the confidentiality of the relevant documents for the purposes of the present application. 4 Ms McGraw is Patent Counsel for Lilly. She has primary responsibility for Lilly's gemcitabine litigation internationally (including in Australia, Canada, the United States, the United Kingdom and China). She is a lawyer and a patent attorney. Her role is purely legal, and she reports to Lilly's General Counsel. She has no role in prosecuting patents for Lilly, in decision making as to the price or other terms on which gemcitabine is sold, or in developing or commercialising new products, except to provide limited legal advice concerning intellectual property. 5 Ms McGraw is the source of Lilly's instructions to its Australian solicitors in this proceeding. She has been involved in gemcitabine patent litigation for Lilly for six years. She has scientific training enabling her to understand technical information relevant to the issues. She is of the view that in order to provide Lilly's Australian solicitors with proper instructions, including as to expert evidence and litigation strategy generally, she requires access to the technical information relating to allegedly infringing products. 6 Ms McGraw has been included within confidentiality regimes applicable in gemcitabine litigation in at least four other jurisdictions. 7 Ms McGraw says she is aware of her legal and ethical obligations in relation to confidential documents and secures them appropriately. I refer to the security safeguards at [11] and [12] below. She is prepared to give a confidentiality undertaking as ordered by the Court. 8 Mr Caltrider is Lilly's Deputy General Patent Counsel. He is Ms McGraw's manager. He is a member of the American Bar Association and is admitted to practice before various State and Federal Courts in the United States. He has oversight and management of all aspects of Lilly's international patent practice and its international intellectual property groups. His role is purely legal and not commercial. 9 Mr Caltrider has been included within confidentiality regimes in litigation in Australia, Canada, the United Kingdom and China. He and Ms McGraw are included in many of the same regimes and they can as a result discuss all aspects of a particular dispute, including confidential matters, in order to determine Lilly's preferred strategy. Mr Caltrider is ultimately responsible for the approval of Lilly's litigation decisions and strategies. He is prepared to provide a confidentiality undertaking. 10 The matters recorded at [4] to [9] are taken from Ms McGraw's affidavit of 24 July 2008. 11 Lilly's Australian solicitor, Mr Tyacke, gave evidence as to Lilly's security system for confidential documents. It stores confidential electronic documents using a login and password system such that only personnel within a confidentiality regime can obtain access to documents the subject of that regime. Confidential physical documents are stored in locked cupboards and filing cabinets for which Ms McGraw keeps the keys. 12 Lilly has express employment policies requiring appropriate protection of confidential information. Mr Tyacke exhibited to his affidavit of 8 September 2008 Lilly's code of business conduct directed to maintaining the confidentiality of Lilly and third party information. 13 Paragraph 11 of the 28 July 2008 Order makes Lilly liable for any direct or indirect loss, damage, costs or expenses occasioned to InterPharma by unauthorised disclosure. Ms McGraw is aware of this part of the Order. 14 InterPharma, Dr Reddy's Laboratories Limited (Dr Reddy's), Shilpa Medicare Ltd (Shilpa) and Ebewe Pharma Ges.m.b.h. (Ebewe Pharma) contend that if the Court is minded to allow Ms McGraw and Mr Caltrider access to InterPharma's confidential information (the information), it put in place the following safeguards: (a) that the information be retained in Australia and Ms McGraw and Mr Caltrider inspect it in Australia; (b) that no copies of the information be made; (c) alternatively, that if the information is to be disclosed to Ms McGraw and Mr Caltrider in the United States, Lilly provide an appropriate security with the Court, or undertake to pay any sum the Court decides is proper compensation, for any wrongful disclosure by either of them; (d) that Ms McGraw and Mr Caltrider be only permitted to use the information for the purposes of this proceeding, and (e) that Lilly execute a confidentiality agreement directly with Dr Reddy's, InterPharma, Shilpa and Ebewe Pharma. 15 In my view Ms McGraw and Mr Caltrider have a need for access to the confidential material. Having regard to Lilly's safeguards to which I have referred, and the professional attributes and background of Ms McGraw and Mr Caltrider set out at [4] to [9], the risk of prejudice to InterPharma and the third parties is slight. Neither of them is involved in competitive decision making. They act only as lawyers on intellectual property related matters. They do not draft or prosecute patents. They have legal ethical obligations and are happy to give appropriate confidentiality undertakings. There is no suggestion that the international confidentiality undertakings they have given in the past have not been honoured, or that there has ever been inappropriate disclosure by either of them. 16 In Conor Medsystems, Inc v The University of British Columbia (No 4) [2007] FCA 324 Finkelstein J included in a group to whom the University's confidential documents could be disclosed its "associate general counsel for litigation" who practised in the United States as a lawyer and a patent attorney. Her role was co‑ordinating patent litigation involving the applicant in five countries - Australia, Ireland, the United Kingdom, the United States and the Netherlands. Counsel's role in the Australian litigation was to instruct the applicant's external legal advisers in the United States who in turn instructed the applicant's Australian lawyers. Her evidence was that it was important to the conduct of the Australian proceedings that she have access to all confidential documents so that she was properly involved in determining strategy and making decisions on behalf of the applicant. She did not participate in competitive decision‑making, that is to say she was not involved in making company decisions that affect contracts, marketing, employment, pricing, product design, or "any or all of the client's decisions … made in light of similar or corresponding information about a competitor". 17 After reviewing cases on confidentiality and safeguards, including Warner‑Lambert Co v Glaxo Laboratories Ltd [1975] RPC 354, Roussel Uclaf v Imperial Industries plc [1990] RPC 45 and Mobil Oil Australia Ltd v Guina Developments Pty Ltd (1995) 33 IPR 82, Finkelstein J said at [15]: Nevertheless, to the extent it is possible to predict what may occur in the future, I do not think there is an unacceptable risk of inadvertent disclosure in the case of Ms Vinitskaya. For one thing she is an attorney of relatively long standing and is well aware of her obligations as regards discovery. More importantly, having regard to her involvement in the applicant's intellectual property enforcement and international litigation, it is unlikely that she will have occasion to use information to further the applicant's commercial interests. This is not to deny that Ms Vinitskaya could make indirect use of confidential information in litigation between the parties that is taking place outside Australia. I rate the risk as slight, but an order can be designed to avoid the risk altogether. Nothing needs be done as regards foreign litigation run in a common law country because if the information is relevant it will be discovered. … It would therefore be appropriate to require as a condition of disclosure to Ms Vinitskaya, that the applicant (Ms Vinitskaya is not amenable to the Court's jurisdiction) undertakes … that the applicant will pay to the respondents any sum the court decides is proper compensation for any wrongful disclosure by Ms Vinitskaya of the confidential information. 18 That passage is in many respects applicable to the present case. 19 I deal now with the safeguards sought to be imposed by InterPharma and the third parties. See [14]. (a) The requirement that the documents be inspected in Australia is unnecessarily burdensome to Lilly. Ms McGraw and Mr Caltrider live in the United States and co‑ordinate gemcitabine litigation internationally from there. Having regard to the electronic age in which these people work it is also inappropriate to require personal inspection here. (b) The requirement that no copies of the confidential information be made is too restrictive. The existing provision in par 12(b) of the 28 July 2008 Order is appropriate, namely that no copies will be made "except as may be reasonably required for the purpose of the Proceedings". (c) This requirement is satisfied by clause 11 of the regime proposed by Lilly at the hearing (appearing at tab 11 in the Bundle of Documents - 12 September 2008): Eli Lilly will be liable for any direct or indirect loss, damages, costs or expenses to or suffered by InterPharma, Dr Reddy's Laboratories or Shilpa Medicare Limited in the event of disclosure to any person other than Eli Lilly Disclosure Persons. I assume Ebewe Pharma will be included. (d) This requirement will be met by clause 2(a) of the proposed undertakings by Ms McGraw and Mr Caltrider. (e) The requirement that Lilly execute direct confidentiality agreements is in my view unnecessary in view of clause 11, adjusted as may be necessary. 20 The confidentiality regime (at Tab 11 in the Bundle of Documents) is in my view in an appropriate form, subject to the making of the adjustments foreshadowed at the hearing and any other necessary adjustments. The parties should confer as to the final form of the document in the light of these reasons. The agreed form should be forwarded to my Associate. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg.