Sigma Pharmaceuticals (Australia) Pty Ltd (ACN 004 118 594) v Wyeth

Federal Court of Australia|2009-06-03|Before: Sundberg J

INTRODUCTION 1 The first respondent/cross‑claimant (Wyeth) is an innovator pharmaceutical company incorporated in the United States. It is the patentee of Australian Patent No 2003259586 entitled "Extended Release Formulation" (the Patent). The Patent is for a method of treating patients using a single daily dosing formulation of venlafaxine hydrochloride, a drug prescribed for the treatment of central nervous system disorders including depression, that provides a peak blood plasma concentration of venlafaxine within a defined period or at a defined level. 2 By its Australian subsidiary, the second cross‑claimant (Wyeth Australia), Wyeth manufactures and sells in Australia an extended release formulation of venlafaxine hydrochloride under the name Efexor‑XR. Efexor‑XR is the leading antidepressant in Australia in terms of units sold and value of sales. 3 The applicant/cross‑respondent (Sigma) is a generic pharmaceutical company. It obtained registration of an extended release formulation of venlafaxine hydrochloride on the Australian Register of Therapeutic Goods (ARTG) on 26 February 2009 under the name Evelexa‑XR, having established that its product was bioequivalent to Wyeth's Efexor‑XR. Evelexa‑XR's registration on the ARTG was first publicly disclosed on 6 March 2009. On the same day, Sigma became aware of the existence of the Patent. Earlier searches made on Sigma's behalf had not identified the Patent. 4 On 1 April 2009 Sigma sued Wyeth for a declaration that each of claims 1 to 17 and 27 (when dependent on claims 1 to 17) of the Patent is invalid and an order that those claims be revoked. The grounds of invalidity alleged are that the alleged invention is not a manner of new manufacture, lack of novelty, lack of inventive step and lack of fair basis. Wyeth's cross‑claim was filed on 1 May 2009. Wyeth Australia was joined as a cross‑claimant on 22 May 2009. 5 On 1 May 2009 Sigma launched Evelexa‑XR. It has commenced importing the product into Australia, and its generics team has visited pharmacies taking orders on the basis that the product will be delivered to pharmacists for sale by 1 June 2009. 6 Wyeth says that Sigma intends to market Evelexa‑XR as appropriate to be administered in a manner that falls within claims 4, 9 (when dependent on claim 4) and 27 (when dependent on claim 4 or claim 9), and contends that Sigma will thereby infringe the Patent pursuant to s 117 of the Patents Act 1990 (Cth) (the Act), or alternatively by authorising the infringement under s 13(1), or alternatively as a joint tortfeasor. 7 Before me is Wyeth's application for an interlocutory injunction to restrain Sigma from supplying Evelexa‑XR pending the final hearing and determination of the proceeding.

THE PATENT 8 The Patent was granted on 11 May 2007 on an application filed on 30 October 2003. It is a divisional of Australian Patent Application No 65442/00 filed on 10 October 2000 (Application 442), which is itself a divisional of Australian Patent Application No 16400/97 filed on 30 March 1997 (Application 400). These earlier applications are incorporated by reference into the specification of the Patent. The Patent claims a priority date of 25 March 1996 (the Priority Date) based on the filing of United States Patent Application No 60/14006 (US Application). 9 Under the heading "Background of the invention" the specification states: Venlafaxine hydrochloride is presently administered to adults in compressed tablet form in doses ranging from 75 to 350 mg/day, in divided doses two or three times a day. In therapeutic dosing with venlafaxine hydrochloride tablets, rapid dissolution results in a rapid increase in blood plasma levels of the active compound shortly after administration followed by a decrease in blood plasma levels over several hours as the active compound is eliminated or metabolized, until sub‑therapeutic plasma levels are approached after about twelve hours following administration, thus requiring an additional dosing with the drug. With the plural daily dosing regimen, the most common side effect is nausea, experienced by about 45% of patients under treatment with venlafaxine hydrochloride. Vomiting also occurs in about 17% of the patients. 10 Under the heading "Brief Description of the Invention" it is stated: In accordance with this invention, there is provided a method for providing a therapeutic blood plasma concentration of venlafaxine over a 24 hour period which comprises administering orally to a patient in need of venlafaxine a single daily dosing formulation of venlafaxine hydrochloride that provides a peak blood plasma level of venlafaxine in from about 4 to 8 hours after administration. 11 Experts called by Wyeth, Professor Charman and Professor Pouton, gave evidence that the method of the invention comprises administering a single daily oral dose of venlafaxine hydrochloride which attains the plasma profile described in the Patent, which is therapeutically effective over a 24 hour period and reduces the level of nausea and incidence of vomiting. The plasma profile is characterised by a "Tmax" (the time after administration at which the maximum concentration is reached) of about 4 to 8 hours (and, preferably, a "Cmax" - the maximum concentration - of no more than 150ng/ml) and a therapeutic plasma level over a 24 hour period. 12 The specification describes a number of further embodiments including two of which are relevant to the claims relied on by Wyeth (see 4th and 5th pars under the heading "Brief Description of the Invention"): In a further embodiment, there is provided a method for treating depression in a patient in need of such treatment, said method including the steps of administering orally to said patient, a single daily dosing formulation of venlafaxine hydrochloride over a 24 hour period with a peak blood plasma level of venlafaxine in from about 4 to 8 hours after administration. In a further embodiment, there is provided a method for providing a therapeutic blood plasma concentration of venlafaxine over a 24 hour period which comprises administering orally to a patient in need of venlafaxine a single daily dosing formulation of venlafaxine hydrochloride that provides a therapeutic blood plasma concentration of venlafaxine over the 24 hour period with a peak blood plasma concentration of no more than 150 ng/ml. 13 The claims defining the invention, so far as presently relevant, are: 4. A method for treating depression in a patient in need of such treatment, which comprises administering orally to said patient, a single daily dosing formulation of venlafaxine hydrochloride that provides a therapeutic blood plasma concentration of venlafaxine over a 24 hour period with a peak blood plasma level of venlafaxine in from about 4 to 8 hours after administration. … 9. A method according to any one of claims 1 to 4 wherein the formulation provides a peak blood plasma level of venlafaxine of no more than 150 ng/ml. … 27. A method according to any one of the preceding claims wherein the formulation is an encapsulated formulation.

INTERLOCUTORY INJUNCTIONS 14 The general principles to be applied are: (a) whether there is a serious question to be tried, or Wyeth has made out a prima facie case in the sense that, if the evidence remains the same, there is a probability that at trial it will be entitled to relief; (b) whether Wyeth will suffer irreparable harm, for which damages will not be an adequate remedy, unless an injunction is granted; and (c) whether the balance of convenience favours the granting of an injunction. See Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 (O'Neill) at [19] and [70]. 15 Factors (a) and (c) are related in this sense, that whether there is a serious question or a prima facie case should not be considered in isolation from the balance of convenience. The apparent strength of the parties' substantive cases will often be an important consideration to be weighed in the balance: Tidy Tea Ltd v Unilever Australia Ltd (1995) 32 IPR 405 at [416]; Interpharma Pty Ltd v Commissioner of Patents (2008) 79 IPR 261 (Interpharma) at [16]. 16 Special considerations apply where, as here, the party seeking interlocutory relief alleges infringement and the other party alleges invalidity. As to this, in Interpharma 79 IPR 261 at [17] Jessup J said: In such a situation, it will not be enough to ask whether the applicant has shown a serious question, or a probability of success, on his or her own case. While the answer to that question may be in the affirmative, it will then be necessary to consider whether that answer should be qualified by the apparent strength of the defence. In a patent case, the fact of registration constitutes prima facie evidence of validity: AB Hassle v Pharmacia (Aust) Pty Ltd (1995) 33 IPR 63 at 69‑70 (AB Hassle); GenRx Pty Ltd v Sanofi‑Aventis (2007) 73 IPR 502 … at [2]‑[6] … It has been said that it is for the respondent to show that want of validity is a triable question: AB Hassle at 69. This seems clear enough, but, in my opinion, the analysis needs to be taken a step further. Is it sufficient that the respondent does show a triable question on validity? In my view, if that is as far as the respondent goes, then, assuming always that the applicant has shown a triable issue on infringement, absent questions of validity, the conclusion would remain that the latter had a triable question. That is to say, as a matter of analysis, unless the case for invalidity is sufficiently strong (at the provisional level) to qualify the conclusion that, overall, the applicant has a serious question, or a probability of success, the court should move to consider the adequacy of damages, the balance of convenience and other discretionary matters. It is the applicant's title to interlocutory relief which is under consideration, and the bottom-line question, as it were, is whether the applicant has a serious question, or a probability of success, not whether the respondent does in relation to some point of defence raised or foreshadowed.

PRIMA FACIE CASE OF INFRINGEMENT 17 Sigma conceded there is a serious question to be tried as to infringement. However, because the comparative strength of the prima facie case is relevant to the balance of convenience, it is desirable to explore the strength of Wyeth's case. Professor Pouton, whose expertise was not challenged, examined two documents provided by Sigma: the Product Information for Evelexa‑XR and a confidential document that it submitted to the Therapeutic Goods Administration in respect of the product. Professor Pouton expresses the view that the Product Information shows that: · the active ingredient of Evelexa‑XR is venlafaxine hydrochloride · Evelexa‑XR is indicated for the treatment of patients with major depression · Evelexa‑XR is to be administered chronically, and orally in a single daily dose · Evelexa‑XR administered once daily has been shown to alleviate the symptoms of depression in patients during the course of treatment · the mean peak plasma concentration of venlafaxine is 150 ng/ml, which is attained within 6.0 ± 1.5 hours. 18 On the basis of the above, Professor Pouton concludes that Evelexa‑XR uses the method of claim 4. He then refers to the confidential document and expresses the view that the product uses the method of claim 9 as it relates to claim 4. The only additional integer in claim 9 is that the peak blood plasma level of venlafaxine must be of no more than 150 ng/ml. Professor Pouton did not express a view about claim 27. The only additional integer in claim 27 is that the formulation is encapsulated. It is common ground that Evelexa‑XR is encapsulated, and there were photographs in evidence disclosing this. There is no evidence to the contrary of Professor Pouton's conclusion. 19 In my view Wyeth's prima facie case on contributory infringement under s 117 of the Act is reasonably strong.

Priority date 20 Sigma contends that to the extent that there is any invention at all disclosed and claimed in the Patent, the invention can only be that claimed in claims 18 and following (except claim 27), wherein the invention is limited to a formulation of venlafaxine hydrochloride consisting of spheroids wherein the drug containing formulation is coated with a mixture of ethylcellulose and hydroxypropylmethylcellulose (HPMC) and the coated spheroid core comprises venlafaxine hydrochloride, microcrystalline cellulose and HPMC. This is said to reflect the Patent as filed in October 2003. As granted in mid 2007, claims 1 to 17 and 27 derive from proposed amendments filed in December 2006 and January 2007. Sigma contends that the onus is on Wyeth to establish that any of claims 1 to 17 and 27 (when dependent on clauses 1 to 17) is entitled to a priority date earlier than 20 December 2006, being the date of the relevant amendments to the specification and claims of the Patent. It asserts that claims 1 to 17 and 27 are not entitled to priority from the matter disclosed in the US Application or Application 400 as the invention was not disclosed in those Applications, but only as a result of the amendments filed on 20 December 2006. 21 In my view Wyeth does not bear any onus in relation to the priority date. Establishing a priority date other than that claimed by the patentee is part of Sigma's attack on validity. 22 Sigma has not persuaded me that it has a prima facie case to challenge Wyeth's claim to priority from the US Application filed on 25 March 1996. Under the heading "Brief Description of the Invention" in the US Patent appears the following: Through administration of the venlafaxine formulation of this invention, there is provided a method for obtaining a flattened drug plasma concentration to time profile, thereby affording a tighter plasma therapeutic range control than can be obtained with multiple daily dosing. In other words, this invention provides a method for eliminating the sharp peaks and troughs (hills and valleys) in blood plasma drug levels induced by multiple daily dosing with conventional immediate release venlafaxine hydrochloride tablets. In essence, the plasma levels of venlafaxine hydrochloride rise, after administration of the extended release formulations of this invention, for between about five to about eight hours (optimally about six hours) and then begin to fall through a protracted, substantially linear decrease from the peak plasma level for the remainder of the twenty four hour period, maintaining at least a threshold therapeutic level of the drug during the entire twenty‑four [hour] period. In contrast, the conventional immediate release venlafaxine hydrochloride tablets give peak blood plasma levels in 2 to 4 hours. Hence, in accordance with the use aspect of this invention, there is provided a method for moderating the plural blood plasma peaks and valleys attending the pharmacokinetic utilization of multiple daily tablet dosing with venlafaxine hydrochloride which comprises administering to a patient in need of treatment with venlafaxine hydrochloride, a one‑a‑day, extended release formulation of venlafaxine hydrochloride. 23 The description goes on to say that the one‑a‑day use reduces the level of nausea and incidence of vomiting attending multiple daily dosing, and concludes: Thus, in accordance with this use aspect of the invention there is provided a method for reducing the level of nausea and incidence of emesis attending the administration of venlafaxine hydrochloride which comprises dosing a patient in need of treatment with venlafaxine hydrochloride with an extended release formulation of venlafaxine hydrochloride once a day in a therapeutically effective amount. 24 Professor Charman, whose credentials were not challenged, after quoting from the US specification the passage set out at [22], said the text is the same as that of the Patent, and accordingly "the US document makes reference to the same method as the '586 Patent". 25 Nothing in Sigma's expert's evidence (Dr James Rowe) throws any doubt on Professor Charman's view, or on the plain words of the US specification. 26 I accept Wyeth's submission that the method references in the US specification are not confined to any particular formulation of venlafaxine hydrochloride. A method so limited would be otiose, since a product claim to a particular formulation would cover any use of that formulation. Further, the same Table 3 plasma blood levels appears in both the US specification and the Patent as filed, together with independent method claims (claims 9 and 10 in both documents).

Inventive step 27 Sigma has satisfied me that there is a prima facie case that the invention would have been obvious to a person skilled in the relevant art in light of the common general knowledge as it existed in Australia before the priority date (25 March 1996). The field of the invention is the formulation of extended release formulations of drug components. Dr Rowe is a formulation chemist. By reference to pre 1996 publications his evidence is that before the priority date the reasons for desiring an extended release formulation were well known, extended release formulations of drugs were known and available on the market, mechanisms for achieving extended release formulations were known, extended release polymers were known and commercially available, control of release rate was a matter of routine variation of the parameters of the delivery system, it was expected that a controlled release formulation would reach peak plasma levels in about four hours, and the desirable period over which an extended release formulation would release an active ingredient was known to be 6 to 18 hours. 28 Wyeth criticised Dr Rowe's conclusions as no more than a routine literature search, falling short of establishing that what was shown by the documents to which he referred had entered the common general knowledge of those in Australia experienced in the practical working of formulating drugs for therapeutic use. See Aktiebolaget Hassle v Alphapharma Pty Ltd (2002) 212 CLR 411 at [45] and [57]. 29 It is true that Dr Rowe does not, in his several reports, use the words of s 7(2) of the Act - "common general knowledge as it existed" in Australia. Nevertheless, on a fair reading of his reports, he does in my view do more than list the matters that he thought could be derived from the publications to which he referred. Dr Rowe first identified the relevant skilled person. He said that during his time at Abbott Laboratories in Sydney in the late 1980s working on new pharmaceutical formulations, he headed a team of six people comprising three analytical chemists and three formulation chemists, as well as several technicians. At the time he had a PhD, and the chemists in the team all had chemistry or pharmacy degrees and between two and fifteen years experience. He said that was the team he considered to be a typical team involved in pharmaceutical formulation, including sustained release formulation, in Australia at the priority date. He went on to say that where in his affidavit he referred to a skilled person, he was referring to what he would have done and what he believed, on the basis of his experiences, other persons with similar experience would be likely to have done at the priority date. Thus, for example, when he later referred (at par 40 of his affidavit) to standard textbooks which he owned "and which would have been routinely referred to by the Skilled Person at the Priority Date", he is to be taken as saying that a team such as the Abbott Laboratories group would have routinely referred to those texts. Throughout his main report (his affidavit) he uses variants of this formulation. Accordingly, when in examining the integers of the various claims, Dr Rowe says that the claims do not "provide anything that is new or surprising or an advance over what was well known and understood by the Skilled Person as at the Priority Date", and that they provide results of routine trial and error testing (at par 78), his opinion is to be understood in the manner I have described. 30 Aspects of Dr Rowe's evidence were challenged (briefly, "given time constraints") by Professor Charman. See pars 161 to 163 of his affidavit of 19 May 2009. It is not possible on an application such as this to come to a conclusion as to which expert's opinion is preferable. That is a matter for close examination at trial. Even taking into account Professor Charman's criticisms, I remain of the view that Dr Rowe's evidence, understood as I have explained it, raises a prima facie case of invalidity for want of an inventive step.

Manner of new manufacture 31 The leading cases, including NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1995) 183 CLR 655 at 661‑666 and Merck & Co Inc v Arrow Pharmaceuticals Ltd (2006) 154 FCR 31 at [63], establish that: (a) the opening words of s 18(1) of the Act - "a patentable invention is an invention that" - impose a threshold requirement that the "patentable invention" be an "invention", that is to say an alleged manner of new manufacture; (b) that requirement will not be met if, on the face of the specification, the subject matter: (i) lacks the necessary quality of inventiveness under the Statute of Monopolies; (ii) is not new; (c) a new use of an old substance is not an invention if its known properties make it suitable for that use - in such a case the new purpose is no more than analogous to the purposes for which the utility of the substance is already known; and (d) there will be an invention if the new use consists in taking advantage of a hitherto unknown or unsuspected property of the substance. 32 Sigma contends that, as at the priority date, it was known to be desirable to have an extended release dosage form of a drug such as venlafaxine which was known to have patient compliance issues and gastrointestinal side effects when administered in an immediate release form two or three times a day. Extended release formulations of drugs were well known as at the priority date, and the polymers used to make extended release formulations were known and commercially available. It submits that the alleged invention as claimed in claims 1 to 17 and 27 consists merely of a method of achieving an outcome, known to be desirable, by administering a formulation the known characteristics of which were known to be useful for achieving that outcome. 33 Dr Rowe's evidence summarised at [27] supports this submission. Professor Charman's evidence was to a different effect. He spoke of the "unexpected finding of this patent … that the described plasma profile is efficacious and unexpectedly reduces the level of nausea and incidence of vomiting while surprisingly maintaining efficacy". 34 Dr Rowe's evidence, if accepted at trial, will likely lead to the conclusion that there is no new manner of manufacture. In those circumstances, I conclude that Sigma has shown a prima facie case to that effect.

Fair basis 35 Section 40(3) of the Act provides that the claims defining the invention must be fairly based on the matter described in the specification. This requires that there be a real and reasonably clear disclosure in the body of the specification of what is then claimed so that the alleged invention as claimed is broadly described in the body of the specification: Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2004) 217 CLR 274 (Lockwood) at [69]. A lack of fair basis is a ground of invalidity independent and distinct from the others and its determination is a matter of construction for the court: Lockwood at [46]‑[48]. 36 Sigma contends that for fair basis purposes it is appropriate to consider the body of the specification prior to its amendment, because any claim supported by material added by the amendment will, because of s 114(1) of the Act, have a later priority date and therefore lack novelty. On this basis Sigma asserts that claims 1 to 17 and 27 are not fairly based on the matter described in the specification insofar as any of them claim the use of a formulation of venlafaxine hydrochloride which does not consist of a spheroid core containing microcrystalline cellulose and HPMC together with venlafaxine coated with an ethyl cellulose and HPMC mixture. 37 For the reasons set out at [21] to [26] I do not accept that fair basis is to be determined by reference to the specification prior to its amendment. 38 In Lockwood 217 CLR at [68]‑[69] the High Court said: Erroneous principles. The comparison which s 40(3) calls for is not analogous to that between a claim and an alleged anticipation or infringement. It is wrong to employ "an over meticulous verbal analysis" … It is wrong to seek to isolate in the body of the specification "essential integer" or "essential feature" of an alleged invention and to ask whether they correspond with the essential integers of the claim in question … "Real and reasonably clear disclosure". Section 40(3) requires, in Fullagar J's words, "a real and reasonably clear disclosure"… But those words, when used in connection with s 40(3), do not limit disclosures to preferred embodiments. 39 The Court then approved the following passage from Rehm Pty Ltd v Websters Security Systems (International) Pty Ltd (1988) 81 ALR 79 at 95 (Gummow J): The circumstance that something is a requirement for the best method of performing an invention does not make it necessarily a requirement for all claims; likewise, the circumstance that material is part of the description of the invention does not mean that it must be included as an integer of each claim. Rather, the question is whether there is a real and reasonably clear disclosure in the body of the specification of what is then claimed, so that the alleged invention as claimed is broadly, that is to say in a general sense, described in the body of the specification. 40 The High Court then said (at [69]): Fullagar J's phrase serves the function of compelling attention to the construction of the specification as a whole, putting aside particular parts which, although in isolation they might appear to point against the "real" disclosure, are in truth only loose or stray remarks. 41 As was said in Lockwood 217 CLR at [69], the words "real and reasonably clear disclosure" do not limit disclosures to preferred embodiments, or I would add examples. The spheroid core example is just that. Sigma's contention cannot be accepted when the specification is read as a whole. The invention is not limited to the example. It relates to a method of treating patients using a single daily dosing formulation of venlafaxine hydrochloride that provides a peak blood plasma concentration of venlafaxine within a defined period or at a defined level. 42 Under the heading "Brief Description of the Invention" there are consistory style statements, three of which are set out at [10] and [12], that reflect various embodiments of the invention. These provide a description of the invention later claimed. See in particular claims 4 and 9. Nothing in the body of the specification suggests that the description of the invention it contains is wider than the invention claimed. The spheroid example is an example of one embodiment later reflected in a claim upon which Wyeth does not presently rely. See page 4B, lines 17 to 34, page 4C, line 1 and claims 18 and 19. The examples given at page 5 of the specification all deal with coated spheroids and are examples of the formulations referred to at page 4D, lines 5 to 16. 43 For the foregoing reasons, I do not consider Sigma has a prima facie case for invalidity on fair basis.

Novelty 44 As I understood it, Sigma's novelty argument was dependent on acceptance of its priority date argument, which I have rejected. In its Amended Particulars of Invalidity it also relied on International Patent Publication No WO94/27589 (Alza). However, in oral argument Counsel said that whilst Alza would be relied on at trial, it was not relied on in this interlocutory application.

IRREPARABLE HARM 45 In addition to establishing the existence of a serious question to be tried or a prima facie case, Wyeth must also demonstrate that unless an injunction is granted it will suffer irreparable harm for which damages will not be adequate compensation. 46 Although Wyeth Australia was added as a cross‑claimant at the hearing, this was solely to enable it to give an undertaking as to damages, Wyeth itself being a foreign corporation. Sigma submits that the enquiry therefore is as to whether Wyeth will suffer irreparable harm for which damages will not be adequate compensation, and that harm suffered by Wyeth Australia is not to be taken into account. According to Sigma, the damage to Wyeth, if Sigma is not restrained and Wyeth is successful at trial, will take the form of a reduced royalty paid by AHP Manufacturing BV (AHP) to Wyeth on the sale of Efexor‑XR products by AHP to Wyeth Australia. 47 At the hearing on 22 May 2009, and earlier on 14 April although in slightly different terms, Sigma offered Wyeth an undertaking that until the final resolution at trial: (a) it will not apply to list Evelexa‑XR on the Pharmaceutical Benefits Scheme (PBS); (b) it will maintain full and complete accounts and records of its sales of Evelexa‑XR and all expenses incurred in relation thereto; (c) it will retain all proceeds from its sales of Evelexa‑XR, without disbursement, in a separate account; and (d) it will not provide any discount or material benefit to purchasers of venlafaxine hydrochloride products which is tied to the purchase of any other pharmaceutical product which is also supplied by it (ie it will not 'bundle' venlafaxine hydrochloride with any other pharmaceutical product supplied by it). 48 It was common ground that Sigma's Evelexa‑XR is the only generic venlafaxine hydrochloride on the Australian market. Because of this, Sigma contended that any loss of sales of Efexor‑XR would translate directly into sales of Evelexa‑XR, and the resulting reduction in the royalty received by Wyeth would be readily quantifiable. It was not in dispute that Sigma would be able to meet any damages award or account of profits if Wyeth were ultimately successful at trial. 49 I do not agree that damages will be adequate compensation for Wyeth simply because it will be able to recover lost royalties in reliance on the undertaking, or that potential loss to Wyeth Australia is irrelevant. Similar arguments were rejected by McLelland J in Appleton Papers Inc v Tomasetti Paper Pty Ltd (1983) 3 NSWLR 208 (Appleton) at 219: The defendant points out that in substance the plaintiff uses its patent to license the manufacture of paper by others and receives a once‑only royalty upon manufacture. It is submitted that if an account of sales by the defendant is kept the damage suffered by the plaintiff is precisely quantifiable. It is also submitted that a distinction should be drawn between the plaintiff and other members of the group in which the plaintiff operates and that it is only the position of the plaintiff that matters. It is submitted that loss of sales or loss of market position by parties further down the distribution chain (whether or not connected with the plaintiff) do not bear upon the balance of convenience between the parties to this litigation. I am unable to accept that potential losses to others with whom the plaintiff is in a relevant commercial relationship dependent upon the validity of the patent, and its effectiveness in conferring a monopoly, are irrelevant to the question of the granting of interlocutory relief. The ability of a party to effectively prevent infringements of its patents must necessarily affect the value of those patents and its commercial standing vis-à-vis others with whom it deals in relation to those patents, and this is not a matter to be ignored, particularly as this kind of injury does not lend itself to ready calculation in monetary terms. 50 The present case is stronger than Appleton because Wyeth is Wyeth Australia's ultimate holding company. Loss to Wyeth Australia thus feeds through directly to Wyeth itself. 51 It is likely that Wyeth Australia (and thus Wyeth) will suffer a loss of market share from Sigma's possible acquisition of up to 50% of the market for venlafaxine products at the expense of Efexor‑XR. It was common ground that unlike originator companies that market to medical practitioners, generic companies market direct to pharmacies. Ms Braithwaite, Wyeth Australia's Pharmaceutical Business Director, said that in view of the size of Sigma's sales force and the presence it has at the pharmacy level, which is where the decision and incentive to substitute a generic product for Efexor‑XR lies, Sigma's product has the ability to quickly take market share from Efexor‑XR, "with consequent considerable and irreparable damage to Wyeth's business". 52 In addition Wyeth Australia is likely to be forced to reduce the price at which it sells Efexor‑XR due to discounting by Sigma. 53 Wyeth challenges the adequacy of Sigma's undertaking not to seek to have Evelexa‑XR listed on the PBS. See [47(a)]. It points out that Sigma intends to supply the product to pharmacies outside the PBS with the expectation that it will compete with Efexor‑XR, and may be provided to patients in place of Efexor‑XR. According to Ms Braithwaite, this creates the serious risk that Wyeth Australia will rapidly lose significant market share for Efexor‑XR, which will continue to decrease over time. She says that loss of market share for originator brands in the first year of generic competition can be as much as 40 per cent. 54 Wyeth contends that it is likely that Sigma will supply Evelexa‑XR to pharmacies at prices that will enable them to offer Evelexa‑XR as a cheaper alternative brand, thus inducing patients to change brands. Ms Braithwaite says that even a price which is cheaper by $1 can make a difference. This she says has the potential to affect the 45 per cent of sales of Efexor‑XR made to general benefit patients (ie non healthcare card holders) and which currently have a value in excess of $50 million. 55 The potential losses at [51]‑[54] will be difficult to quantify. Mr Nobes, Wyeth Australia's Director of Corporate Affairs and Health Strategy, gave evidence that the market for antidepressants is highly competitive and subject to influences such as socio‑economic conditions. Accordingly it is difficult to predict changes to the size of the market or the individual market shares of particular products. Having regard to the fact that Efexor‑XR is currently the largest selling antidepressant, any change will have a greater impact on it relative to any other antidepressant. 56 Even if one looks solely to Wyeth's own potential loss, as Sigma contends one should, its undertaking does not adequately protect Wyeth. The probable scenario, if no injunction is granted, is that other generic companies will enter the market. In 2007 and 2008 there were five applications for ARTG registration of products containing venlafaxine. In March 2009 Alphapharm Pty Ltd obtained registration for a venlafaxine product called Enlafax‑XR. I accept Wyeth's submission that if Sigma is not restrained, other generic suppliers are unlikely to be restrained, and will enter the market. Once a post‑Sigma entity does so, quantification of Wyeth's loss will become impossible. See B Braun Melsungen AG v Terumo Corporation (2004) 61 IPR 71 (Braun) at [29]. Sigma's royalty solution depends on a loss of sales of Efexor‑XR translating directly into sales of Evelexa‑XR. 57 Further, detriment suffered by Wyeth Australia because of Sigma's discounting will not be covered by the undertaking, which is limited to lost sales. It does not cover retained, though discounted, sales. 58 The purpose of an interlocutory injunction is to preserve the status quo pending trial. What was said by Gyles J in GenRx Pty Ltd v Sanofi‑Aventis (2007) 73 IPR 502 at [15] is applicable here. A new entrant into the market would have an effect which may be both unpredictable and irreversible. Once Sigma is in the market, it is likely that other generic manufacturers will also come in. I doubt whether, if Sigma is not restrained and Wyeth succeeds at trial, Wyeth will ever be able to resume the position it now occupies. Cf Interpharma 79 IPR 261 at [71]. In my view it is likely that Wyeth will suffer irreparable harm for which damages will not adequately compensate it, unless an injunction is granted.

BALANCE OF CONVENIENCE 59 The balance of convenience favours the grant of relief. At best Sigma's trade in Evelexa‑XR has just commenced. It launched its product on 1 May 2009, the same day on which Wyeth commenced its cross claim. Sigma has commenced taking orders on the basis that the product will be delivered to pharmacies for sale by 1 June 2009. However there is no evidence that any supply contract has been entered into. On the other hand Wyeth has an established trade. It is much more likely to suffer from a disturbance of the status quo than is Sigma. The relevance of this comparison between a new entrant and an established participant in a market is shown by cases such as Appleton (1983) 3 NSWLR at 219 and Pharmacia Italia SpA v Interpharma Pty Ltd (2005) 67 IPR 397 (Pharmacia Italia) at [52]. 60 Sigma does not, in my view, derive assistance from the fact that it did not become aware of the existence of the Patent before 6 March 2009. It did not make its own searches, but relied on a related entity, Arrow Group ApS, to carry out searches. It seems that Arrow picked up some related patents, but not the Patent. David Tadgell, a patent attorney, gave evidence that, had Sigma placed a watch on Application 400, the status report obtained thereby would have disclosed the filing of Application 442, and a subsequent watch of that application would have disclosed the filing of the Patent Application. 61 After discovering the Patent on 6 March 2009 Sigma persisted with its commercial preparations for a launch of its product. In very similar circumstances to those here present, the High Court in Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 619 (Beecham) dealing with balance of convenience, said at 626: The facts which appear to us to be decisive on this question may be stated quite briefly. In April 1967, after the plaintiff had been building up in Australia a substantial business in ampicillin over a period of several years, the defendant announced its intention of marketing hetacillin in Australia. The plaintiff on 10th May 1967 warned the defendant that if it began to do so proceedings for infringement of the patents would be taken. It was in the face of this warning that the defendant commenced the acts now complained of, and the action was thereafter instituted without delay. Any goodwill the defendant may since have built up for hetacillin would of course be destroyed or damaged by granting an injunction, but that was a risk the defendant took with its eyes open. If it be not restrained, it will presumably take advantage of the time before the hearing to subject the goodwill of the plaintiff's established trade in ampicillin to the prejudice of competition from a product which the defendant maintains has some points of superiority. In no meaningful sense could matters be said to be kept in statu quo if in these circumstances the defendant were left free to pursue its course, merely keeping an account of the profits it makes. (Emphases added.) 62 A similar situation existed in Interpharma 79 IPR 261 where the alleged infringer had proceeded with its preparations to enter the market "with its eyes wide open". Jessup J said at [77] that this significantly compromised that party's attempt to resist an injunction which went no further than to maintain the status quo. See also Pharmacia Italia 67 IPR 397 at [38] and Merck & Co Inc v GenRx Pty Ltd (2006) 70 IPR 286 at [19]. 63 There was much evidence about the risk of patient confusion if Sigma's product entered the market and Wyeth later succeeded at trial. Wyeth's expert, Professor Tiller, said that changes in the appearance of medication by different packaging or appearance can cause confusion in depressed patients, leading to problems with the regular taking of the medication, missed doses or discontinuance. This may lead to a reduction in the beneficial effect of the medication. There was a measure of agreement on patient confusion. Wyeth relied on the evidence of Sigma's Chief Executive, Mr de Alwis. Speaking of confusion caused by changed packaging, he said: In my experience the pharmacist will generally consider it important for a patient to be familiar with the drug which is being taken, so as to ensure the patient complies with taking the medication and to seek to prevent the wrong drug from being taken by mistake because the patient is confused by the changed brand and appearance. This is particularly important with patients who need to take medications regularly and therefore become familiar with the appearance of a particular brand of product, especially elderly patients or those with mental health issues who may readily become confused if different brands of the same medication are supplied. For these reasons, it is my experience that pharmacists generally prefer not to switch customers to a second or subsequent generic brand of a pharmaceutical once a patient has been switched from an originator brand to a generic brand. In my experience, pharmacists generally prefer to maintain patients on a single brand of product. Later, Mr de Alwis said that pharmacists are generally concerned that if patients are converted to a generic equivalent of a product, they should not be required to switch again, either back to the originator brand or to another generic. 64 The last mentioned scenario, as Wyeth pointed out, is exactly what would happen if it is not given relief but succeeds at trial. Patients who switched from Efexor‑XR to Evelexa‑XR would then have to switch back or change to a different drug. 65 The confusion evidence also raises a public interest point. It is not in the public interest that vulnerable people, those with mental health issues, including depression, and elderly patients with a variety of medications, be subjected to confusion as a result of the refusal of interlocutory relief. 66 Wyeth's feared loss or damage is summarised at [51] to [58]. Sigma's feared loss is of a different order. It has just entered the market. It has reached that position with its eyes open to the risk. It has incurred setting up and preparation costs well aware of the risk they may be wasted. The evidence is that Sigma has a portfolio of more than 170 products with others planned for launch during 2009 and 2010. Ms Braithwaite's evidence was that Sigma's projected turnover in sales of Evelexa‑XR would amount to approximately 0.4% of its total company turnover. In some respects Mr de Alwis' evidence of loss seems exaggerated, such as his claims that Evelexa‑XR was to be the jewel in Sigma's crown, that an interlocutory restraint may lead to a decrease in Sigma's share price, and that pharmacists might assume that an injunction reflected adversely on the quality of the product. On this last point, Sigma's own marketing to pharmacists refers to the existence of this patent proceeding and to its undertaking not to list on the PBS until the case is resolved. See also Braun 61 IPR 71 at [30]. 67 As indicated at [56], it is likely that other generic companies will seek to establish their products in the market in competition with Efexor‑XR. Ms Braithwaite says that this will lead to intense competition between generic companies. I refer to what I have said at [56] about:

· Alphaharm Pty Ltd's recent registration for Enlafax‑XR

· the consequent impossibility of qualifying Wyeth's loss.

68 For the foregoing reasons, I am of the view that the balance of convenience favours the grant of interlocutory relief.

WYETH'S ALLEGED DELAY 69 Sigma contends that Wyeth's application should be dismissed because of its delay in seeking interlocutory relief. It says that Wyeth was put on notice on 14 April 2009 that Sigma intended to launch Evelexa‑XR on 29 April 2009. Wyeth did seek interlocutory relief until 28 April. I do not regard this delay as disentitling Wyeth to relief. It could have moved with greater speed, but no detriment is identified as having resulted from the delay complained of. It is apparent from what I have said about Sigma proceeding with its eyes open, that it was never going to voluntarily cease its preparations to launch its product and enter the market.

CONCLUSION 70 Upon the usual undertakings by both cross‑claimants I will grant the relief sought. Having regard to Wyeth's Counsel's observations about the form of relief, I will not include importation in the restraint. I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg.

Associate: Dated: 3 June 2009 Counsel for the Cross‑Claimants: AJL Bannon SC, BN Caine SC and C Dimitriadis

Solicitor for the Cross‑Claimants: Gilbert & Tobin

Counsel for the Cross‑Respondent: D Shavin QC and H Rofe

Solicitor for the Cross‑Respondent: Griffith Hack, Lawyers

At a glance

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Judgment (20 paragraphs)

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Cases Cited (15)