Background
14 Most of the evidence was either documentary or given on information and belief. Accordingly, the findings that I make in these reasons have been made on materials that may well change or develop significantly by the time of final hearing. The parties are members of large multinational pharmaceutical groups well resourced and experienced in the importance of patent and intellectual property rights in the conduct of their businesses.
15 In 1992, Belgian a company called Hubert De Backer NV (HDB) prepared a design for an open plug (the 1992 plug). That appears to show a slight flare at the top end of the plug and, what Glaxo asserted, was an inner step. Glaxo contended that this design anticipated the design was the subject of the patent. However, the evidence of a drawing of this open plug and what Glaxo asserted was a series of three photographs that record either the embodiment of HDB's 1992 plug's design or a further development by HDB do not clearly show that there was an inner step or otherwise identify where this was. There was no evidence that this open plug or design was ever used or shown to anyone outside HDB or about what its precise purpose was.
16 Mr Tiller opined that the 1992 plug was a bottle cap and not a bottle neck insert. That was because the photographs depicted the plug engaging on the outside of the bottle. He said, and I find, that it is fundamentally different in design to the bottle neck liner in the patent. First, the patented invention envisages that the bottle neck liner will be placed inside the neck to seal the bottle. The 1992 plug has smooth sides that run down the outside of the top of the bottle for some distance, unlike the bottle neck liner in the patent, which is secured to the neck by a plastic barrel that fits inside the top of the bottle and has a flange that runs around the rim of the lip of the bottle. Mr Tiller also opined that the 1992 plug, as shown in the photographs, did not appear to have an inward step or bottom at the end of the bottle cap, but rather the barrel appeared to be a bore of constant diameter. That appears to be the case.
17 Glaxo obtained the evidence of the 1992 plug and a number of other documents from HDB during the course of the preparation of its evidence. However, around 14 May 2013, HDB ceased co-operating with Glaxo. I infer that was because Reckitt drew HDB's attention to the agreement HDB had made with Boots Healthcare International Limited on 22 March 2006 (the Boots agreement). Boots assigned the patent to its new parent on 27 March 2006, when it was taken over by Reckitt.
18 The Boots agreement is significant. It provided in its recitals that:
Boots and HDB had worked together to produce a dispensing system for Boots' product, Nurofen for Children, in oral liquid form (Recital A);
Boots desired that the dispensing system consist of a plug and a flat-nosed syringe (Recital B);
HDB already had a plug design for use with flat-nosed oral dosing syringes (Recital C). (However, that particular design, which formed an attachment to the Boots agreement, showed that the plug was of a different kind to the one in the patent.);
Boots had determined that HDB's existing plug design was not fully suitable for its purpose and had proposed modifications to design a plug that was less prone to the collection of liquid medicine. Those modifications were the provision of, first, a connecting wall between the upper ends of the outer wall and the inner sleeve of the plug and, secondly, a flared profile to the upper region of the inner sleeve with (Recital D);
Boots had filed a patent application to protect its modified plug that had been published in the United States of America, Europe and Australia (in the original patent application here) (Recital E);
HDB had not realised that Boots' plug was protectable or that Boots was in fact seeking patent protection and that, acting in good faith, HDB had developed further plugs different in design from Boots' plug, but using similar principles (Recital G).
19 Clauses 1.1, 1.2 and 1.5 provided:
"1. Patent Applications
1.1 [Boots] may progress the Patent Applications provided that the claims thereof are limited to the specific invention made by employees of [Boots].
1.2 [Boots] will revise the claims thereof to cover only embodiments of plug having a connection between the outer wall and the inner sleeve at their upper ends, and with the inner sleeve having a flared upper region. Revised claim 1 will have the wording of Attachment 7, or wording of equivalent meaning, or narrower wording, if required by a Patent Office. No other claim in any of the Patent Application will have any broader meaning.
…
1.5 HBD will not contest the ownership, validity, inventorship or any other issues relating to the [Boots] Patent Applications or any patents granted therefrom."
20 The Boots agreement also provided that HDB promised not to supply the Boots' plug to any other customer for any purpose, but that HDB was able to exploit its further developed plugs and any other product outside the field of paediatric analgesics (cll 2.1, 2.2, 2.5). The Boots agreement was signed by two of the three personnel whom Glaxo alleged were the inventors of the invention the subject of the patent, namely, Jan De Backer senior and Jan De Backer junior. Attachment 2 to the agreement recorded a design that was, in substance, that used for the bottle neck liner in the development of the invention.
21 In the late 1990s, Boots had embarked on a project called "Project Valencia" to produce a more efficient dosage system for children's medicine. The inventors named in the patent were Anne Dallison and her assistant, Shaun Harrison. At that time, they were employed by Boots in its research and development department. Ms Dallison's evidence, on information and belief, was that she and Mr Harrison made the invention in the course of their carrying out their duties as Boots' employees. She had a Diploma in Packaging and over 20 years experience in packaging development, and was in charge of the project. She had been briefed by the Boots' marketing team that they did not want a traditional syringe with a nozzle. That was because children associated such syringes with injections. Hence her brief sought to develop a dosing system that used a flat-nosed syringe and a bottle neck insert. The evidence is that she came into contact with HDB in 1999 as a potential supplier of the dispensing apparatus to be developed under Project Valencia. That was after HDB had been identified as a manufacturer of flat-nosed syringes with the necessary CE approvals to manufacture the syringe and bottleneck insert.
22 According to the evidence on information and belief from Ms Dallison, she and Mr Harrison came up with various ideas. These included having a plug insert that could be fitted into the neck of a bottle with a flared portion at the upper end of the bottle neck insert that could be used in combination with the features of the dispensing apparatus as described in the patent. She said that HDB worked closely with her and Mr Harrison to make the new apparatus according to instructions provided by her and Mr Harrison for use in the Nurofen for Children range of products. The project took about 24 months to complete and required a significant input from a number of business divisions within Boots including its marketing, packaging and research, and development divisions.
23 Ms Dallison and Mr Harrison each signed inventors' acknowledgements in late October 2003 in support of the patent application. Subsequently on 10 May 2005, they each signed a declaration and power of attorney in support of the patent application declaring that they were the original first and joint inventors of the invention the subject of the patent.
24 Paul Leung, a senior executive of a related company of Glaxo, collected evidence on information and belief from HDB's employees immediately prior to HDB ceasing to co-operate. Mr Leung said that Mr De Backer senior believed that he was the HDB employee involved in the design process with Boots. Mr De Backer did not understand Ms Dallison to be a technical person on the project team. He said that HDB had engaged an agent in England, Gareth Pearce, to represent it in its dealings with Boots. Mr Leung collected a number of items of correspondence and drawings from HDB which illustrate the development of the project. Those items include customer visit reports prepared by Mr Pearce.
25 In my opinion, those documents do not demonstrate one way or the other that any particular person had any identifiable role in the creation of the invention, other than that both parties were involved in its development. It is not necessary to analyse those documents in any detail. The fact is that the Boots agreement is prima facie evidence of what it identified and stated. The other material is ambiguous and does not lead to any clear identification of who may or may not have been the true inventor. I accept that that material will leave open to Glaxo the opportunity, at the trial, to seek to prove, on properly admissible evidence, that the acknowledgement by HDB in the Boots agreement that Boots was entitled to the intellectual property rights in the invention is wrong because one or other of Mr De Backer senior or junior, or Mr Pearce, was the true inventor. But even on the present evidence on information of belief, none of those persons said that he was, or they were, the inventor(s).
26 Given the commercial importance to HDB, and the potential for it to oppose Boots' attempt to patent the invention, the Boots agreement appears to be telling evidence against Glaxo. I am satisfied that Reckitt has established a sufficiently strong prima facie case, for the purposes of interlocutory relief, that its (or Boots') employees, Ms Dallison and Mr Harrison, were the inventors. Corporations do not usually give away intellectual property rights of this kind lightly, particularly where, as was the case here, HDB had been in one way or another apparently exploiting rights in relation to the invention that Boots asserted were its.
27 On the other hand, the Boots agreement clearly had a further commercial purpose. That was to protect HDB from any claim that Boots might seek to assert of intellectual property rights of the kind in the more broad-brush claims made in the original wording of its patent application. Rather, the Boots agreement recorded the parties' agreement that the rights that Boots was entitled to assert in its patent were to be limited to those that are now the subject of claim 1. The drafting of the present wording of claim 1 was broadly taken from attachment 7 to the Boots agreement. That formulation was narrower than the original wording of the claims in the patent.
28 In about 2001, Glaxo had begun investigating its own options for new dosing devices. By September 2002, Glaxo had launched in Australia a new baby Panadol preparation that had a syringe and bottle neck-plug dosing device. As events transpired, that dosing system had a defect. That was because the bottle neck insert system used to connect the syringe to the bottle constituted a potential choking hazard. In between June and July 2003, Glaxo withdrew that product from the market.
29 By 2004, Reckitt or its predecessor had begun marketing Nurofen for Children with the patented dosing system. In August 2004 Glaxo made a decision to develop a new range of Panadol with new flavours and new dosing devices including an easy-dose syringe, a dropper and a cup. It began investigating potential suppliers, and by 2006 had identified HDB as a potential supplier for the syringe and plug. Subsequently, Glaxo located an Italian company called, Bormioli Rocco SpA, as the supplier of a bottle neck liner or plug. Bormioli had obtained a patent for a locking lip design that was attractive to Glaxo as a means of preventing the bottle neck liner detaching from the bottle. In this design, that lip fitted over the top of the bottle's sides to attach the bottle neck liner more securely to the bottle.
30 Market research prior to 2013 showed that users of the Panadol and Nurofen products for one to five year olds were satisfied with their respective different dosing systems. However, when users were familiar with both Panadol's and Nurofen's dosing systems, the latter was greatly preferred. This gave Reckitt a real advantage among the particular group of users who were familiar with both products for children in the one to five years age group. The two products were competitors and were largely substitutable, unless a child had an intolerance to an active, or other, ingredient used in one. Glaxo set out to address this issue with its new product the subject of the present claim for interlocutory relief.
31 Mr Tiller gave evidence about the state of the prior art and the understanding of a person familiar with it at the time of the application for the patent. Mr Tiller's evidence was uncontested, however, Glaxo argued that it was not relevant to the issue of infringement for reasons that I will explain shortly. He referred to the concept of a flared portion which provided a lead-in for the syringe, described on page six of the patent. He also referred to the description of the outer surface taper on page eight of the patent, to which I have referred above. He said that in light of those descriptions in the patent it was clear to him what each of the features of claim 1 meant when also read with the definitions of syringe, flat-nosed syringe and sealingly.
32 Mr Tiller said that he had closely examined the product samples of the Panadol dispenser dosing system and that of the Nurofen system. He prepared a set of photographs on which he noted his observations and a chart in which he described his conclusions as to whether the features in claim 1 were present in the Panadol for children one to five years dosing system. Mr Tiller concluded that the features of claim 1 were all present in the Panadol dosing system. In arriving at that conclusion, he again relied on the context of the specification's discussion of what "flared portion" was intended to convey in claim 1, albeit that it was not a term defined elsewhere in the specification. In the photographs and his table, Mr Tiller noted that the Panadol bottle neck liner had both a radius, in the sense that this was a bevelled entry into the bore into which the syringe would be introduced, and a sidewall that extended from that radius some distance into the bore before it narrowed so as to fit sealingly around the introduced syringe. He said that those features expanded the diameter of the sleeve and provided lead-in for the syringe. In his opinion both the radius and the wider side wall, either separately or in combination, constituted a flared portion. He said that those conclusions were consistent with his examination of the Panadol dosing system because, when he inserted the syringe into the opening in the bottle neck liner, it fell with relative ease into the desired position as a result of the radius (on the expanded portion of the sleeve wall) before engaging and reaching the inward step.
33 Both sides led evidence as to the balance of convenience, were the first element necessary to establish Reckitt's entitlement to injunctive relief established, namely, that there was a sufficient prima facie case. Karyn Tomkins, a Glaxo marketing director for Australia and New Zealand, gave evidence of the difficulties Glaxo would experience if an interlocutory injunction were granted. She identified the importance of children's Panadol for one to five year olds as a component of Glaxo's range of three Panadol products for children. The range comprised Panadol products for children aged between, first, one and 12 months, secondly, one to five years, and, thirdly, five to 12 year olds.
34 Importantly, both the Panadol products for one to five year olds and five to 12 year olds, each contain dosing tables for all the ages between one to 12 years. However, the strengths in the respective preparations are different, so that the doses for younger children who had to use the five to 12 year old product would be smaller.
35 Ms Tomkins said that Glaxo had last manufactured its earlier version of the one to five year old Panadol products between October 2012 and January 2013, and that it had subsequently changed its manufacturing lines as it no longer intended to manufacture those products. She asserted that it was not commercially feasible to return to the old manufacturing lines, and that Glaxo held limited stocks of those superceded products which, as at 16 May 2013, she estimated to be about one month's supply. She said that until notified by a letter from Reckitt's solicitors dated and received on 22 April 2013, she was unaware that Reckitt claimed any patent over the dosage system.
36 Glaxo had a global patent consumer healthcare section that utilised patent attorneys and lawyers in the course of its operations. Those patent attorneys and lawyers ordinarily could engage in searches and research to ascertain whether a proposed new product, including its dosage system, might infringe patents. However, no such searches were ever done in respect of this dosage system. Rather, Glaxo appears to have relied on the suppliers of the components of the new dosage system to advise it of any potential patent infringement issues. Thus, HDB was the supplier of the flat-nosed syringe that comes with the Panadol children one to five years product and Bormioli was the supplier of the bottle, bottle neck liner and cap. Each of those suppliers appears to have informed Glaxo's personnel dealing with them that it had the patent or intellectual property rights in its products. Glaxo appears to have acted on that basis and, accordingly, did not investigate the actual position with respect to whatever patents Reckitt had for its dosage system, which Glaxo's product appears to have substantially replicated.
37 Ms Tomkins said that if an interlocutory injunction were granted, it would not be possible to remove the dosing devices from the large volume of packaged stock that Glaxo currently held of the new Panadol for children one to five. She said that the Therapeutic Goods Administration (TGA) had approved and registered the redesigned products in the Australian Register of Therapeutic Goods and it would be necessary to obtain the TGA's approval to sell those products without the syringe and the neck plug. However, Reckitt does not seek to enjoin the sale of the syringe with the Panadol product. Reckitt's concern is only with the bottle neck liner.
38 Ms Tomkins said that even if new TGA approvals could be obtained, it would not be feasible to remove the dosing devices and repackage the existing stock for sale in Australia. That was because it would be expensive, difficult and time consuming to remove the bottle neck plug and that process could both cause damage to the bottles, and also result in contamination of the contents with micro-organisms. She said that she did not know how long it would take Glaxo to replace the children one to five years product within the Panadol range, and that TGA approval would be required to sell the product either without the syringe and neck plug or for any revised dosing system. She asserted that it would take between one month and two years to obtain such an approval, depending on the significance of the changes proposed.
39 In my opinion, if an injunction were granted, the only necessary change that Glaxo would need to make would be not to use the bottle neck liner in future packaging. That would be a minor matter which, on the evidence of Stuart Witherby, who is a category manager employed by Reckitt Australia, relatively simple to achieve. There may also need to be some minor revisions to the packaging for the Panadol for children one to five years to remove references to placing the syringe in the bottle's neck, since there would be no bottle neck liner or inward step to stop its descent into the liquid, but that would appear to be all that would be needed. The other materials used in the approved bottle for the new product would all be available to be used without the bottle neck liner with no apparent difficulty.
40 Ms Tomkins also said that if Glaxo had to return to the already approved, but now discontinued, Panadol product for children one to five years as an alternative to repackaging the new version of Panadol, Glaxo would have to reorder glass bottles in which that discontinued product was packed and reconfigure its production lines, which would be time-consuming and expensive.
41 Glaxo also pointed to the significant marketing disadvantage which an injunction would create. That would involve it having to withdraw the new product and substitute the old product. It argued that, given that its entire range of children's Panadol had been reformulated, a significant gap would be created that would require it to explain to customers why the old one to five formula was being used instead of the new formula in use for the other two versions. I accept that this would create some difficulty in the marketing of such products, and in the orderly and convenient promotion of the new formula and branding for the Panadol children's range.
42 Both parties pointed to the potential impact of the countervailing positions on their marketing for the children's winter cold and flu epidemics that are likely to be experienced shortly, and which would be the target of Glaxo's marketing campaign due to be launched for the Panadol range on 3 June 2013. Glaxo, however, called no evidence of any contingency plan that it had put in place, since receiving the letter notifying it of the claim for patent infringement. The evidence is that it managed to cope with the recall of the product in 2003 that I have described within a reasonably short time and without a significant impact on its brands.