4.4 Consideration of the balance of convenience
140 As I have noted, in considering the balance of convenience, it is necessary to assess the harm to the applicant if there is no injunction, and the prejudice or harm to the respondent if there is an injunction imposed. In this context whether or not one or the other will suffer "irreparable harm" is one of the matters that must ordinarily be factored into the Court's consideration of the balance of convenience and justice; Samsung at [61]. Included in this is consideration of whether or not damages are likely to be an adequate remedy for the applicant, in the event that its rights are vindicated in a final hearing but no injunction is granted. On the other hand, given that a condition for the grant of interlocutory relief is the provision by the applicant of an undertaking as to damages, a countervailing consideration is whether or not a claim on the undertaking as to damages is likely to give adequate recompense to the respondent and any affected third party in the event that the interlocutory injunction is subsequently found to be wrongly granted, and, in a related context, whether the respondent is likely to suffer irreparable harm.
141 I commence by considering the position in the event that an interlocutory injunction as sought is not granted.
142 The evidence indicates that Alphapharm was prepared to and would have obtained PBS listing for the Semglee product on 1 December 2018. Shortly before the hearing, Alphapharm indicated that it is now seeking a PBS listing date of 1 April 2019. I consider that, if Alphapharm is not restrained, the Semglee product is likely to be listed on the PBS Schedule from that date. As stated in paragraph [21] above, the PBAC has recommended that the Semglee product be listed on the PBS and 'a' flagged against Lantus SoloStar. The evidence indicates that the Minister is likely to accept that recommendation. As a consequence, a pharmacist can dispense the Semglee product in place of the Lantus SoloStar product where a patient presents a prescription that specifies the active ingredient as insulin glargine (as opposed to the brand name) or "Lantus SoloStar" is prescribed by reference to the brand name but the prescriber has not indicated that brand substitution is not permitted.
143 The effect of the "a" flag will be that the Semglee product can only be dispensed as a substitute for Lantus SoloStar and not for Lantus Cartridge or Toujeo products. In relation to Toujeo, it is apparent that it is considered to be sufficiently clinically different to Lantus SoloStar (and therefore also the Semglee product) that medical practitioners would not treat them as directly interchangeable. For instance, the Product Information Sheet for Toujeo published by Sanofi in June 2015 provides:
Switch between insulin glargine 100 units/mL and Toujeo
Insulin glargine 100 units/mL and Toujeo are not bioequivalent and are not directly interchangeable.
• When switching from insulin glargine 100 units/mL to Toujeo, this can be done on a unit-to-unit basis, but a higher Toujeo dose … may be needed to achieve target ranges for plasma glucose levels.
• When switching from Toujeo to insulin glargine 100 units/mL, the does should be reduced … to reduce the risk of hypoglycaemia.
Close metabolic monitoring is recommended during the switch and in the initial weeks thereafter.
144 Indeed, as discussed in paragraph [16] above, Sanofi's evidence is that Toujeo provides not only real clinical advantages but also measurable financial and quality of life outcomes over insulin glargine U100 products, including the Lantus Products and the Semglee product, and it is reasonable that clinicians would choose to prescribe Toujeo in preference to U100 products for patients for whom clinicians consider Toujeo will provide improved health outcomes when compared to U100 products.
145 Several revenue effects will be visited upon Sanofi as a result of the listing of the Semglee product on the PBS Schedule and the subsequent sale of the product.
146 The first is the immediate minimum 25% mandatory price reduction discussed in section 4.1 above. This will cause a minimum 25% mandatory price reduction not only for Lantus SoloStar but also Lantus Cartridge and Toujeo products.
147 Whilst the Minister has a discretion to decline to apply the minimum 25% price drop (see discussion at paragraph [130] above), there is significant uncertainty surrounding how such a discretion would be exercised and Mr Brindell's opinion is that the Minister is unlikely to exercise his discretion to reduce or not implement the minimum 25% mandatory price reduction in relation to any of Sanofi's insulin glargine products listed on the PBS Schedule following PBS listing of the Semglee product. Nevertheless, as a defensive mechanism in response to Alphapharm's threatened launch, Sanofi has written to the Minister in respect of Toujeo and asked that he exercise his discretion not to implement the price drop in relation to that product only, should the circumstance arise.
148 Further, whilst the Minister also has the discretion to reverse or reduce the mandatory price reduction if the generic or biosimilar is removed from the market for some reason (see discussion at paragraph [129] above), Sanofi is not aware of the circumstances in which the Minister might exercise his discretion.
149 Having regard to these matters, it is unsafe to assume that the Minister would exercise a discretion either not to lower the price of the Sanofi Products (including Toujeo) or to reinstate the price in the event that Alphapharm was ultimately restrained from selling the Semglee product.
150 Alphapharm submits that the mandatory price reduction that would occur upon the listing of the Semglee product on the PBS Schedule is not a relevant consideration. This is because the Full Court held in Warner-Lambert Company LLC v Apotex Pty Ltd [2017] FCAFC 58; (2017) 249 FCR 17 that the acts of applying for PBS listing and providing the guarantee of supply that accompanies that application are not acts of infringement within the meaning of the Act; see also Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2018] FCA 1556; (2018) 136 IPR 8 at [283] per Jagot J. Alphapharm submits that the price reduction would be the consequence of the coming into force of a determination made under a provision of the National Health Act, and the Minister's acceptance of Alphapharm's application to list the Semglee product on the PBS Schedule. Alphapharm submits that any purported loss arising directly as a result of the mandatory price reduction should be disregarded for the purpose of assessing the balance of convenience because it is not by reason of any infringing conduct on the part of Alphapharm.
151 I reject this submission. In considering the grant of interlocutory relief, the Court has regard to the likely harm that would be suffered, should the injunction be refused. It is true that the provision of a signed guarantee of supply provided as a part of an application for listing of a pharmaceutical item on the PBS Schedule does not fall within the definition of "exploit" in the Act. This is because the undertaking does not represent an "offer"; Warner-Lambert at [15] - [17]. However, it would be to ignore the reality of the situation to fail to recognise that a direct consequence of the Minister's determination under s 85(6) of the National Health Act that the Semglee product be listed on the PBS Schedule will be the mandatory price drop. There is no dispute that, upon listing, Alphapharm will supply the Semglee product. The assessment of the likely harm that the patentee will suffer flows from consideration of the combined effect of these events.
152 The second revenue effect is that Alphapharm may offer the Semglee product to pharmacies at a discount to the PBS price, which will also result in Sanofi further lowering its prices in order to compete with Alphapharm. Ms Bramich gives evidence that if the Semglee product is offered to pharmacies at a discount to the PBS price, then Sanofi Australia will initiate rebates or discounts offered to pharmacies to compete. She gives confidential evidence of the range of the discounts that she expects will be applied. This discounting will feed into a further revenue effect, which is the trigger of yet further price reductions as a result of the price disclosure regime described in section 4.1.2 above.
153 Sanofi submits that there may be a further price effect, which is that a price reduction in Australia could also trigger commensurate price reductions in other countries which adopt International Reference Pricing, that is countries who set the price of pharmaceutical products by reference to Australia. However, there is insufficient evidence as to the nature, size and consequences of International Reference Pricing for it to play a significant role in my assessment of the balance of convenience.
154 In relation to the likely effect on market share, the evidence indicates that insulin glargine is most often prescribed by GPs and is not required to be administered in a hospital setting. Nearly all insulin glargine is dispensed from retail pharmacies. Whilst there has typically been a higher barrier to entry in the case of biosimilar medicines than for generic small molecule drugs, Alphapharm contends that insulin glargine is different to other biosimilar drugs already launched in Australia. This is because, first, it considers that the desired therapeutic effects of insulin glargine (that is the changing of blood sugar levels) can be observed almost instantaneously and are experienced by patients themselves. This is said to be in contrast to other biosimilar drugs where the effects will only be apparent after a longer period of time and which generally require testing by a healthcare professional in order to determine whether the drug has the desired therapeutic effect. Secondly, in Ms Mollica's opinion, GPs are becoming less reluctant to switch patients from a biological medicine to a biosimilar medicine. Thirdly, in contrast to other biosimilar examples cited by Sanofi, insulin glargine is most often prescribed by GPs instead of specialists and is not required to be administered in a hospital or other clinical setting. Sanofi disputes the first of these propositions, but nevertheless accepts that Alphapharm will attract a substantial share of the insulin glargine U100 market if it launches the Semglee product. Ms Bramich estimates that within 3 years of launch, Alphapharm may have achieved at least 35% of the market. She notes that the Commonwealth Government has in 2017 committed to support the ongoing supply of generic and biosimilar medicines in Australia by supporting various initiatives to encourage the use of such medicines. If these initiatives are successful, Ms Bramich is of the view that Alphapharm may increase its market share by a greater amount within three years.
155 The upshot of this is that if Alphapharm is not restrained pharmacists will have the incentive to offer patients the Semglee product in lieu of Lantus SoloStar and I infer that a number would do so. There is no dispute that Alphapharm is an experienced participant in the Australian market for the supply, in particular, of generic pharmaceuticals. It has an extensive product portfolio and an extensive network of relationships with retail pharmacy accounts and stores to assist it in marketing and selling products.
156 Ms Bramich gives confidential evidence concerning the worldwide experience of Sanofi of market penetration of the Eli Lilly product BASAGLAR/ABASAGLAR, which is another biosimilar insulin glargine U100 product that has been launched in a number of other countries, but not Australia. That evidence shows that there has been a mixed reception to the biosimilar in different countries, with such a diverse range of percentages of market share (as set out in item 1 of Confidential Annexure A to these reasons) as to be of little assistance in guiding predictions as to the likely market share that Alphapharm may take. It also tends to suggest that Ms Bramich's estimate that within 3 years Alphapharm may have achieved 35% of the market (a figure that is stated but not explained by reference to the comparable figures for BASAGLAR/ABASGLAR) may be regarded as speculative. Ms Mollica also provides confidential evidence of a percentage range of expected market share that Alphapharm may take in two years (as set out in item 2 of Confidential Annexure A to these reasons). The upshot of these predictions is to indicate that the estimation of likely share of a hypothetical launch is, even for witnesses who are intimately involved in the market, largely an exercise in crystal ball gazing. This points to a difficulty in assessing loss to Alphapharm if it were injuncted because of the necessarily hypothetical task of estimating the effects of market entry, a subject to which I return below.
157 The final form of loss that Sanofi identifies it would likely suffer as a result of the launch of the Semglee product is consequential damage to the business of Sanofi Australia. Ms Bramich gives evidence that if the Semglee product was PBS listed, the operational expenditure for the Diabetes and Cardiovascular Unit of Sanofi Australia would need to be reduced by a confidential amount which would have further confidential flow on effects for the business.
158 Alphapharm submits that the Court should pay no heed to the harm said to be suffered by Sanofi Australia because it is neither the patentee nor an exclusive licensee. It relies on Janssen at [136]-[138] and [169] in support of its contention that, by reason of its status as a third party, less emphasis should be placed on Sanofi Australia's asserted loss. However, I do not think, with respect, that this submission takes Alphapharm very far. It is true that Sanofi Australia does not have an entitlement in its own right to bring proceedings for infringement of the Patent, but in considering the exercise of its discretion to grant or refuse an injunction, the Court is entitled to and must consider the effect on third parties, which includes Sanofi Australia (Samsung at [66] and [68]; Janssen at [169]). Furthermore, whilst Alphapharm criticises the level of detail in the (mostly confidential) evidence of Mr Huth, I am satisfied that it nevertheless indicates that there is a sufficient relationship between a loss of sales suffered by Sanofi Australia in respect of the Sanofi Products and a financial loss suffered by Sanofi Deutschland.
159 For reasons related to my discussion in paragraphs [150] - [151] above regarding Warner-Lambert, I also set to one side the contention advanced by Alphapharm that it would be an unfair result to restrain Alphapharm's entry into the market for insulin glargine by reason of the existence of the Patent, which is not for the active ingredient, but for an injector pen. Alphapharm submits that by the interlocutory application Sanofi is attempting to secure monopoly protection for the entire insulin glargine market and that all of the harm to which Sanofi points arises from competition in that market in circumstances where the use of the injector pen is incidental and would not per se cause any loss to Sanofi. Accordingly, Alphapharm submits, it would be a disproportionate remedy. However, the assessment of relative harm in the present case includes consideration of the effects of the allegedly infringing conduct. The Semglee product is an insulin pen which, for the purpose of considering loss, prima facie infringes the Patent. Alphapharm is free to cast about and find and supply injector pens containing insulin glargine that do not infringe in competition with the Sanofi Products.
160 As to the quantification of the loss suffered, Sanofi contends that the loss, should Alphapharm be permitted to launch, would be difficult to calculate because the market for basal insulin, of which insulin glargine is an example, is a dynamic and evolving market. Sanofi has multiple insulin glargine products on the market. It submits that whilst some of the Sanofi Products are not 'a' flagged and therefore are not directly substitutable with the Semglee product, they are nevertheless competitive products because the Semglee product may itself be prescribed by name (instead of Toujeo or Lantus SoloStar). As a consequence, Sanofi submits that there could be considerable complexity in determining whether a sale of the Semglee product represents a lost sale of Lantus SoloStar, Lantus Cartridges, or even Toujeo, requiring consideration of additional counterfactual scenarios.
161 Sanofi also contends that further complications would arise in circumstances where one or more additional biosimilar insulin glargine product(s) entered the market, particularly in circumstances where it cannot be assumed that any such biosimilar would use a device which infringes the Patent. Sanofi submits that, in that circumstance, there would be substantial complexity in calculating the quantum of any claim to damages including; (a) the relative market shares that Sanofi Australia and the legitimate third party entrant(s) would have achieved in the absence of Alphapharm's infringing conduct; (b) the price of the Lantus Cartridge, Lantus SoloStar and Toujeo products in the relevant period (for example, whether any of the applied price disclosure associated price reductions should not have been applied or a lesser reduction would have applied if the Semglee Product was not in the market); (c) the profit which Sanofi Australia would have derived from sales of the Lantus Cartridge, Lantus SoloStar and Toujeo products; and (d) whether any discounting by Sanofi Australia would not have been implemented if Alphapharm was not in the market, and similarly, in relation to any discounting by the legitimate third party entrant(s).
162 Moreover, Sanofi considers that the Court would be required to consider the ongoing loss into the future, including assessing hypothetical matters such as the extent to which the PBS price would in any event have fluctuated in the counterfactual world.
163 Despite these matters, in my view the effects of the launch of the Semglee product are generally capable of being remedied by an award of damages. If Alphapharm enters the market and is subsequently found to infringe the Patent, then Sanofi will be able to pursue damages (or an account of profits). The market share of Sanofi Australia prior to the launch will be a known fact. The market consequences caused by the introduction of the Semglee product will be apparent from the figures. It is true that there may be complications, such as those identified by Sanofi, but the starting point of the market and the various actions of those involved will be known. By contrast, in the event that Alphapharm is restrained the question of what would have happened in the market will be highly speculative.
164 I have addressed above the question of market share. Accompanying this are hypothetical questions about the likely impact of the launch of the Semglee product on the market based on a significant number of hypothetical scenarios. In Hoffman at [186] - [190] and [223] I referred to the type of considerations that have been taken into account in considering the difficulties in proving the hypothetical loss that the restrained parties in recent proceedings have encountered. They have included; (a) the hypothetical consideration of whether the product would have been launched in the face of a potential damages claim based on the mandatory price drops flowing from a PBS listing; (b) when in fact the product would have been listed; (c) the total size of the market for the products in each month of the claim period; (d) the prices at which the products would have been sold by each market participant each month during the claim period; (e) the portion of the market that would have been captured by the generic; and (f) whether the originator would have launched its own generic or authorised a third-party to do so or taken other measures to protect its market.
165 In particular, the estimation of the precise level of discounting that would have occurred during the period of the injunction would be dependent on factors such as; (a) the number of biosimilar competitors in the market; (b) the timing of entry of those biosimilar competitors; (c) how Sanofi Australia might respond to any biosimilar competitors who enter the market including whether it would have launched its own second brand (or authorised another pharmaceutical company to do so), and its approach to price discounting (both in relation to any such second brand, and its existing products); (d) the effect on third parties who are involved in the supply chain; (e) the loss Alphapharm will suffer on the basis of the interruption of its preparations to educate prescribers about the benefits of the Semglee product; (f) any improvements in the manufacturing processes for any biosimilar drug (including in reducing cost of goods sold); and (g) the bargaining power of each customer negotiating competitive pricing with the pharmaceutical companies.
166 Many of these considerations may be seen to have played out in Sigma. In the judgment of Jagot J, her Honour said:
[1336] It is difficult to imagine that when Sundberg J and then I granted the interlocutory injunctions in 2009 we anticipated that if those injunctions turned out to be wrongly granted, the resulting exercise would bear any resemblance to this one. Hindsight makes one thing certain. Knowing what has occurred, it could never have been concluded, for example, that insofar as relevant to the balance of convenience it would be easier for the generics to prove their loss if the interlocutory injunctions were wrongly granted than for Wyeth to prove its loss if the interlocutory injunctions were withheld and the method patent was valid.
167 I accept, as Sanofi submits, that complications may arise within the insulin glargine market if other non-infringing products are launched. However, in my view if such an event occurs before the question of final relief is determined, then the effects of that on market share can be assessed against a background of comparative figures, starting with the status quo as at the time of the launch. In any event, the launch of other non-infringing products would be just as much if not more of a complicating factor in the assessment of Alphapharm's claim pursuant to an undertaking as to damages as it would be in the assessment of any loss suffered by Sanofi.
168 In this regard there is no dispute that sales of goods listed on the PBS Schedule are highly regulated. The mandatory price disclosure process ensures that sales of all such insulin glargine products are well recorded. Alphapharm has stated that if allowed to enter the market it will keep detailed records of its Semglee sales including records of its agreements with its customers; invoices and order forms; and records of its sales revenue, volume sold and the kind and value of incentives given. Furthermore, there is no suggestion that Alphapharm will not be able to meet any successful claim for damages. If it transpires that the effects of the mandatory price reductions and any price erosion are not reversed by the Minister upon the grant of a final injunction, then Alphapharm adopts the risk of liability for damages flowing from any conduct found to be infringing.
169 I turn now to consider the consequences to Alphapharm and third parties in the event that an interlocutory injunction is granted.
170 In addition to the complications caused by the necessarily hypothetical nature of calculating financial loss to Alphapharm that I discuss above, several factors indicate that the harm suffered by it in the event that an injunction is granted may be significant and not readily compensable.
171 First, a significant complicating factor for the calculation of harm to Alphapharm in the present case arises in the context of Sanofi's launch in April 2018 of Toujeo. This is a product that, on the evidence adduced by Sanofi, which I accept for present purposes, is in a number of respects superior to insulin glargine U100 products, including the Lantus Products and the Semglee product. In this regard the evidence of Ms Bramich is that Toujeo is a second generation insulin product with a long-acting, higher concentration formulation which reduces the insulin release rate and provides more gradual dissolution and prolonged insulin activity compared to insulin glargine U100 products. This provides clinical advantages over those products, to which I have referred in paragraphs [16] and [144] above.
172 The evidence permits the conclusion that Toujeo is being promoted by Sanofi as a superior replacement for Lantus SoloStar which has for several years been the dominant insulin glargine product in the market. Confidential information provided from an organisation called "IQVIA", a distributor of market information relating to the pharmaceutical and health industry, indicates that Sanofi actively promotes these advantages of Toujeo over Lantus Products.
173 The confidential sales and market figures indicate that at present Lantus SoloStar occupies a dominant position for insulin glargine. Sanofi points to the market figures which demonstrate that Lantus, which currently has 200,000 patients prescribed, is still the substantial market leader in comparison to the 11,000 patients prescribed Toujeo. That said, Alphapharm points out that Toujeo has only been on the market for approximately 7 months and any injunction would provide Sanofi with more time in which to increase the market share for Toujeo, in place of Lantus. Ms Mollica observes in evidence to which Sanofi did not respond, that there is a low prospect that a doctor who commences a patient on Toujeo would be switched to Lantus. The evidence permits the conclusion that it is likely that the market for Lantus will progressively be taken over by Toujeo and that patients who move from Lantus to Toujeo are unlikely to turn either to Lantus or to the Semglee product.
174 Depending on the speed of the success of Toujeo, the market for the Semglee product could diminish or even disappear before any interlocutory injunction is lifted after a final hearing, especially if (as is not unusual in these cases) an appeal is involved. A significant aspect of the subject matter of the proceedings - being Alphapharm's ability to sell the Semglee product including in competition with the Lantus SoloStar - will be removed before the litigation is resolved. It is not possible to say, on the basis of the present evidence, how likely this could be other than to observe that it is a real possibility.
175 Secondly, Alphapharm contends that it will be deprived of the benefit of the "first mover advantage" if it is restrained from launching the Semglee product. Ms Mollica gives evidence that the launch of a first biosimilar drug to compete with an established reference biologic is likely to affect both volume and price in the market for that product and that the first biosimilar product is likely to enjoy a significant, lasting and unique commercial advantage. This advantage is, Ms Mollica contends, reflected in a period of exclusivity as a biosimilar and, in this respect, timing is critical, the first few months being of prime importance. Ms Mollica gives the opinion that a first biosimilar will generally secure a substantial market share and profit advantage over later biosimilar entrants because; (a) when the first biosimilar becomes available, most pharmacists will order stock of that product because it is their first opportunity to provide patients with an alternative that is more profitable for the pharmacist; (b) many pharmacists will likely chose to carry only one biosimilar product; (c) unlike generic small molecules, the first mover in the biosimilar market is more likely to retain substantial market share once patients have switched because the second biosimilar supplier will need to convince and educate prescribers and pharmacists about the benefits of its product over the first biosimilar and the reference biologic and convince them to switch again. Sanofi disputes that there is a first mover advantage and responds to examples given by Ms Mollica of cases where Alphapharm obtained market share advantages as a result of being the first mover with different examples suggesting that Ms Mollica's examples are unreliable.
176 The evidence available to me does not permit firm conclusions in relation to first mover advantage in terms of likely market share or the duration of any such advantage. As I noted in Hoffman at [204], logic suggests that typically there will be some advantage but the variables make it difficult to assess. As discussed above, there is evidence that Eli Lilly has obtained ARTG listing for its own insulin glargine U100 product. That listing has been in place since November 2014 and it received a positive PBAC recommendation in March 2015. Although Eli Lilly has launched this product elsewhere in the world, it has not done so in Australia. It is not known whether the Eli Lilly devices fall within the scope of the claims of the Patent. The evidence does not permit any more than the conclusion that there is a possibility that that product may be launched in Australia, but Alphapharm has itself increased the risk that it will lose a first mover advantage by delaying its launch until 1 April 2019.
177 Nevertheless, on the basis of the evidence now available, I consider that it is more likely than not that, if not restrained, the launch of the Semglee product in April 2019 will be the first biosimilar in the market for insulin glargine. Alphapharm is likely to accrue advantages by doing so, although the extent and duration of those advantages are not possible to predict in advance. As I noted in Hoffman at [204], this plays to the benefit of Alphapharm in the calculation of where the balance of convenience lies. The difficulty in knowing precisely what advantage Alphapharm would have as a first mover and the contest between the parties in this respect further emphasises the difficulty of assessing any claim pursuant to an undertaking as to damages.
178 Thirdly, in addition to the lost benefit of sales that Alphapharm may suffer, which Alphapharm contends would be difficult to quantify, it submits that as a relatively new player in the biosimilar market in Australia, it will also suffer reputational damage if its first mover advantage is lost or diluted which it asserts will significantly adversely affect its ability to launch other biosimilars should it choose to do so in the future. It notes that statements have already been made to the market in relation to Alphapharm's ARTG approval. This includes a press release in April 2018 in which Rajiv Malik (current president of Alphapharm's parent company, Mylan) announced the development of the Semglee product in the Australian market. However, Alphapharm operates in a sophisticated market where the cut and thrust of patent rights are frequently observed. On the basis of the evidence, I do not attribute any significant weight to this factor. It is most likely that customers will be disappointed if Alphapharm is delayed in delivering the Semglee product. Reputational harm, however, seems unlikely.
179 A further factor to consider is the question of third parties affected by the grant of any interlocutory injunction. In this regard I note that the Commonwealth has commenced a claim on the undertaking as to damages in relation to several drugs including venlafaxine (which was the subject of the decision in Sigma), clopidogrel and rosuvastatin (the latter two are yet to be determined); Hoffman at [185]. In Sigma the Commonwealth settled its claim after the hearing; Sigma at [3]. Nevertheless, harm to the Commonwealth as a party that is responsible for making payments pursuant to the PBS is to be considered. Given the observations made by Jagot J in Sigma (which I consider would also have applied in relation to the claim by the Commonwealth had it proceeded), in my view the challenges likely to be associated in calculating the loss to the Commonwealth, in the event that that an injunction is allowed but subsequently found to be wrongly made, is a further factor to take into account, although it is on the low end of the spectrum.
180 Finally, Alphapharm submits that the unresolved application to amend the Patent brought by Sanofi Deutschland to amend the claims of the Patent provides a further basis upon which the Court should decline to grant any interlocutory injunction.
181 At the same time that infringement proceedings were commenced against Alphapharm in August 2018, Sanofi Deutschland filed an interlocutory application in the present proceeding seeking orders pursuant to s 105 of the Act that claims 1, 5, 7, 15 and 16 of the Patent be amended. The amendment application has not been progressed since that date.
182 For present purposes it is only necessary to refer to the proposed amendments to claim 1, which are:
1. A drug delivery device comprising:
a housing with a proximal end and a distal end,
a cartridge adapted to accommodate a drug,
a cartridge retaining member adapted to retain the cartridge, the cartridge
retaining member being secured to the housing, wherein
a spring washer is arranged within the housing so as to exert a force on the cartridge and to secure the cartridge against movement with respect to the cartridge retaining member, the spring washer being arranged so as to abut the cartridge on a side of the cartridge that faces the proximal end of the housing,
wherein a sleeve member is fixed to the housing characterized in that the spring washer is fixed to the sleeve member on an outer surface of the sleeve member, wherein the spring washer is fixed to the sleeve member by fixing elements of the spring washer and wherein the fixing elements extend in an axial direction.
183 The material amendment is the addition of an integer in the form of a sleeve member. This will necessarily have the effect of narrowing the scope of the monopoly claimed. The evidence of Ms Taliadoros indicates that these amendments are the same in form as those proposed to an equivalent claim in the EU Patent. The claims of the EU patent were amended following opposition proceedings commenced in May 2013 in which the EPO determined (in November 2015) that the relevant original claims were invalid for want of novelty in light of Schofield and a German equivalent to Burren. A subsequent auxiliary request to amend the European equivalent claims to their current form was allowed by the EPO in January 2016. The EPO considered that those amendments met the patentability requirements of the European Patent Convention, and in particular that the amended claims were novel and inventive over the prior art. In March 2016, Sanofi Deutschland appealed the EPO's decision, contending inter alia that the original claims of the European equivalent should be maintained. The hearing of that appeal is yet to be set. In early to mid 2018, Sanofi Deutschland also commenced proceedings against various companies in France and Germany based on the amended claims of the EU Patent.
184 Alphapharm contends that Sanofi's amendment application gives rise to a substantial risk that the foundation of the claim for interlocutory relief, namely the prima facie case of infringement by reference to the claims currently in force, will not be the subject of the ultimate trial in this proceeding, which it alleges is inconsistent with the requirement to establish a prima facie case in the sense described in Beecham at 622-623. This is because the asserted claims will no longer exist and therefore will not provide the basis for any final relief. In this regard, Alphapharm relies on the United Kingdom decision of Molnlycke AB v Procter & Gamble Limited (No 2) [1990] RPC 487. It submits that the amendment application demonstrates that it is the intention of Sanofi Deutschland not to proceed with the claims in their unamended form with the result that it creates ambiguity as to the final form of the Patent. It also contends that it creates intricacies and uncertainty in relation to the ability of Alphapharm to claim on the undertaking as to damages, because if the claims are amended before final hearing, the validity of the unamended claims may never be tested, and Alphapharm would not be able to establish its claim.
185 Sanofi does not accept these concerns. It emphasises that a plaintiff seeking an interlocutory injunction must show at least a probability that it will succeed in establishing its right to final relief; Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199 at [11]. As the injunction sought is referable to the Semglee product, rather than infringement of particular claims, Sanofi submits that the injunction can be sustained at final hearing and, therefore, whether Sanofi succeeds at final hearing on the amended or unamended claims is irrelevant provided that there is a basis for sustaining final relief at the end of the day. Further, Sanofi submits that the proposed amendments provide additional comfort because the amendments are, on their face, narrowing the scope of the claims which could only improve the validity position at final hearing, and because, in their independent expert's view, the Semglee product will still infringe the narrower claims. That of course, provides no "comfort" in a legal sense, because, as Sanofi accepts, the application for interlocutory relief is to be determined having regard to the scope of Sanofi's present monopoly rights as conferred by the Patent, rather than potential rights in the event that it prosecutes its amendment application to conclusion and is permitted to amend; see Interpharma at [33].
186 In the alternative, Sanofi posits possible solutions, namely:
(1) Alphapharm could make a claim on the undertaking as to damages in due course if it wishes to contend that the fact that the unamended claims were invalid meant the interlocutory injunction was wrongly granted, which could be considered by the Court at that stage if the Court considered it a legitimate argument.
(2) The grant of the interlocutory relief could be made conditional on the amendment application being dealt with at the final hearing, which would enable the unamended claims to remain in place and their validity to be determined.
(3) The grant of the interlocutory relief could be made conditional on the unamended version of claim 1 being retained, with the addition of a further dependent claim having the additional feature sought by the amendment application, so as to enable Alphapharm to test the validity of the unamended claim at final hearing.
(4) That the interlocutory injunction orders be revisited upon the granting of the amendment application.
187 It is not necessary for me to resolve these matters in light of the conclusion that I have reached that the interlocutory injunction be refused. However, in my view, the present case is distinguishable from Molnlycke where there was an unequivocal abandonment on the part of the applicant for interlocutory relief of the claims in their unamended form; Molnlycke at 491. Sanofi does not abandon its present claims. Furthermore, one or other of options (2) - (4) could provide solutions to the question of the entitlement of Alphapharm to relief on the basis of its undertaking as to damages.