The 842 or cation salt patent
20 Despite the different evidence and submissions of Watson Pharma and Ascent, it is apparent that the two issues of construction between the parties in respect of the 842 or cation salt patent are the same as those considered by Emmett J and resolved, at least for interlocutory purposes, in Astra's favour.
21 Astra's case on infringement of the 842 or cation salt patent depends on the presence of titanium dioxide in the coating of the proposed Watson Pharma and Ascent products (as it did for the Apotex product). Astra contends titanium dioxide is "an inorganic salt in which the cation is multivalent" so that there is threatened infringement of the patent. Watson Pharma and Ascent contend that there is no infringement because: - (i) titanium dioxide is not "an inorganic salt"; to a person skilled in the art (such as Dr Pitman who has given evidence to this effect) a "salt" is the product of the reaction between a base and an acid, and (ii) even if titanium dioxide is "an inorganic salt" it is present only in the coating of the product whereas the invention claimed is a composition complete without any coating (the coating being "an optional addition"); in other words, the salt must be admixed with or in close connection to the agent (rosuvastatin).
22 In addition to Dr Pitman's evidence, Watson Pharma and Ascent submitted that it should be doubted that the statements in the claims and specification that the counter anion of the inorganic salt may be oxide support the broader construction of "salt", as the specification is replete with erroneous references and inconsistencies (particularly repeated references to the counter anion being able to be a phosphate when phosphate is expressly excluded from the permissible counter anions on p2.11 of the patent, as well as a meaningless range for the percentage of the agent at p2.20-23). Otherwise, in respect of the asserted admixture or close connection requirement, Watson Pharma and Ascent submitted that its construction was supported by numerous aspects of the specification including that: - (i) p3.14-18 refers to the composition having a good flow rate to assist processing into tablets, (ii) p3.24 refers to the pharmaceutical composition of the invention preferably being formulated into a tablet, (iii) p5.18 refers to the ways in which the pharmaceutical composition of the invention may be prepared, (iv) p6.6 refers to the fact that a tablet coating "may then be applied", and (v) p6.15 refers to the composition "having a...coating" (not, as Watson Pharma and Ascent put it, "including" a coating). According to Watson Pharma and Ascent these references (as well as Dr Pitman's evidence) all support a construction in which the "pharmaceutical composition" in claim 1 of the 842 or cation salt patent is the composition irrespective of the subsequent processing into a particular tablet form or application of a coating. Watson Pharma and Ascent also submitted that if Astra's construction is correct, the effect of it would be to deny the patent any quality of invention. As the specification discloses, before the priority date of the patent, rosuvastatin was a known agent, with a known effect, and the coatings in question were also known and commercially available. Accordingly, the patent as construed by Astra would be obvious and involve nothing inventive at all.
23 For its part Astra relied on the reasons set out in Emmett J's judgment to support its construction and particularly noted the reference on p6.10 of the specification identifying a coating to tablet weight ratio which treats the coating as part of the composition. As Emmet J put it at [22]-[23] and [25] on this point:
22 The term pharmaceutical composition encompasses all typical dosage forms. Thus, claim 7 of the Cation Salt Patent refers to a pharmaceutical composition that is a tablet or powder. It draws no distinction between the different parts of the tablet, being, for example, a tablet core and a tablet coating. The Specification does not indicate that the coating is something separate from, and not forming part of, the pharmaceutical composition. The language of the Specification suggests that the coating is a feature of the composition. Thus, the Specification states that a feature of the invention is a pharmaceutical composition comprising rosuvastatin, the composition having a ferric oxide light protective coating. That suggests that the coating is part of the composition.
23 On the other hand, the Specification then goes on to state that a further aspect of the invention comprises a method of preparing a stabilised pharmaceutical composition which comprises admixing rosuvastatin with a an inorganic salt in which the cation is multivalent. It states that a yet further aspect of the invention comprises a method of producing a stabilised pharmaceutical composition which comprises incorporating an inorganic salt in which the cation is multivalent in a pharmaceutical composition containing rosuvastatin. The Apotex products do not satisfy that description. Nevertheless, there is nothing in claim 1, or in the consistory clause of the Specification, to say that that is an integer of the invention.
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25 There is some evidence that both ferric oxide and titanium dioxide may provide a stabilising effect on rosuvastatin, even if they are incorporated as part of the coating of a tablet rather than in its core. Even if the objective of a stabilising effect is to be taken into account in construing the claims, it is arguably present on the construction proposed by Astra. The invention is concerned with the provision of an effect, not the mechanism by which it is produced.
24 Astra also said the submission that its construction leads to the invention being obvious was misconceived. The specification identifies the issue as one of stability. The patent solves the stability problem by selection of an inorganic salt to be added to the composition. Solving that problem by even a mere coating was not obvious.
25 As to the salt argument, and in common with Emmett J, it is certainly arguable that the 842 or cation salt patent uses "salt" in the broader or compositional sense. The arguments mounted by Watson Pharma and Ascent to the contrary are not without some force but it is apparent from the evidence that "salt" can take two meanings. There are also strong indicators in the specification in favour of the broader meaning; indeed, to conclude otherwise would involve finding that the references to the counter anion of the salt possibly being an oxide in the specification are an error. The only basis upon which it might be supposed that these references are an error, apart from the narrower meaning itself which is incompatible with the references, are the inconsistencies and references to phosphate which Watson Pharma and Ascent identified. Neither, in my view, provides a sufficiently persuasive basis to conclude that the construction of salt proposed by Watson Pharma and Ascent should be preferred.
26 As to the admixture argument, it may be that I perceive greater ambiguity than Rares or Emmett JJ in the references to "pharmaceutical composition" in the claims. Nevertheless, it is true that nothing in the claim suggests that the inorganic salt must be mixed or in intimate contact with the agent rosuvastatin. Moreover, construing claim 1 in context, it is apparent (for example) that claim 7 treats the pharmaceutical composition as one that "is a tablet or powder". In other words, and as Emmet J said, the phrase pharmaceutical composition encompasses all dosage forms. On balance, I am not persuaded to reach a view on this issue different from that reached by Rares and Emmett JJ.
27 It follows that, on the evidence, Astra has established a prima facie case of infringement of the 842 or cation salt patent.
28 Watson Pharma and Ascent argued that the 842 or cation salt patent is invalid on the basis of alleged lack of inventive step and manner of manufacture (see above) and lack of fair basis (an inconsistency in the exclusion of phosphate from the specification and its inclusion in the claims). As to the first two grounds, I accept Astra's submission that while the issues put forward by Watson Pharma and Ascent are not hopeless, they are by no means of sufficient persuasive force to weigh against the grant of interlocutory relief. As to the lack of fair basis ground, and again as Astra submitted, phosphate is clearly excluded by the consistory style clause commencing at p2.6 of the patent in terms consistent with claim 1. Other references to phosphate in the body of the specification have to be read as subject to the exclusion. The claim does not travel beyond the matter disclosed in the specification. This argument also has force.
29 Watson Pharma and Ascent otherwise argued that damages would be an adequate remedy for infringement and the balance of convenience weighed against Astra. Watson Pharma and Ascent relied on the evidence of Mr Waters, the Managing Director of Spirit Pharmaceuticals Pty Ltd (another company in the Watson Pharma group of which Watson Pharma and Ascent also form part). Mr Waters provided extensive evidence discussing: - (i) that the Watson Pharma and Ascent products (in common with Apotex's approach) will not be indicated for heterozygous familial hypercholesterolemia, relevant particularly to the 165 or HeFH patent, (ii) the effect of generics first entering the market including first mover or shared first mover advantages, (iii) the capacity for Astra to introduce generics into the market (in respect of which cross-undertakings were suggested), and (iv) the impossibility of assessing losses to Watson Pharma and Ascent. Mr Waters concluded in these terms:
140 Based on the matters discussed above, I expect that an injunction which prevents Watson from entering the market with the Watson rosuvastatin product will have the following effect:
(a) any first mover advantage or joint first mover advantage would likely be diluted substantially (or even lost altogether) if the time before an injunction is lifted allows other generic manufacturers to "catch up" to Watson, Ascent, Actavis and Apotex;
(b) separately Watson may lose the advantage of being the first or joint first generic to enter the market because during the pendency of the interlocutory injunction, AstraZeneca may enter the market with its own generic version of rosuvastatin, or license a generic brand. This is consistent with market factors including the size and value of the market, the fact that AstraZeneca has already registered on the ARTG five alternative brands of rosuvastatin, and the past behaviour of originator pharmaceutical companies of which I am aware;
(c) Watson will not be able to make sales of the product to customers. It is impossible to estimate the amount of damage suffered from losing those sales because of uncertainty in respect of:
(i) the volume of market (ie market share) that Watson would have obtained;
(ii) the price at which Watson would have been able to sell the product. This is dependent on a number of unpredictable factors, including Watson's internal costs, the price at which other generics and the originator are prepared to sell their product, and the relative bargaining power of Watson and the particular customer;
(iii) the effect of Ascent, Actavis and any other generic manufacturers which may enter the market;
(d) Watson will be left storing large volumes of stock which it cannot supply to Australian customers. Depending upon the time period until the injunction is lifter, Watson will be forced to either incur storage costs or face the prospect of the entire stock becoming worthless; and
(e) notwithstanding the effects on Watson as an intending supplier of rosuvastatin, financial benefits which would otherwise accrue to pharmacists due to the reduction in market price (while the amount of reimbursement remains unchanged) will not arise.
141 Alternatively, if Watson is not prevented from entering the market with a generic rosuvastatin product, it will be able to sell its product to customers. If the Court later imposes an injunction requiring Watson to withdraw the product, it will be possible to accurately calculate:
(a) the volume of product that Watson sold (and thus its share of the total market), from Watson's internal financial records;
(b) the volume of product that any other generic has sold, from the generic's internal financial records;
(c) the price at which Watson sold each product, from Watson's internal financial records;
(d) the price at which any other generic has sold each product, from the generic's internal financial records; and
(e) the price at which AstraZeneca's internal financial records.
142 Once Watson and any other manufacturers have withdrawn their products, there will be no ongoing impact on the volume of AstraZeneca's sales, as its product/s will be the only available brand/s of rosuvastatin available, thus returning AstraZeneca's sales, as it product/s will be the only available brand/s of rosuvastatin available, thus returning AstraZeneca to capturing 100% of the rosuvastatin market.
143 Accordingly, based on my experience in the pharmaceutical industry particularly in relation to the introduction of new generic products into the market, for the reasons I have described above I consider that:
(a) Watson will suffer irreparable harm should it be prevented from entering the market; and
(b) it will be much more difficult to quantify Watson's damages on the basis of a hypothetical situation with a high number of unknown variables if it is prevented from entering the market when it should not have been, than it will be to later measure the effect of AstraZeneca's product entering the market if it should not have been allowed to do so.
30 Although each case must be determined on its own merits and having regard to the particular evidence which is available, it is relevant that this type of evidence was also considered by Rares J in the Apotex proceedings but was not accepted as leading to a conclusion that the balance of convenience weighed against the grant of relief to Astra (which itself relied on the same evidence as to balance of convenience as in the Apotex proceedings). Apotex, of course, is one of the competitors to Watson Pharma and Ascent, and wishes to enter the same market with its own generic rosuvastatin product and obtain for itself the "first mover" advantages which Watson Pharma and Ascent also seek.
31 Without wishing to be seen as discounting the extent or cogency of the evidence on which Watson Pharma and Ascent relied in respect of the balance of convenience, the fact is that I share the view Rares J reached that the balance of convenience, fairly overwhelmingly, favours preservation of the status quo pending the final outcome of the proceedings between Astra and the multiple other parties. As Astra submitted: - (i) the proposed trade of Watson Pharma and Ascent is new and, indeed, does not presently exist, (ii) in contrast, Astra has marketed and sold Crestor for five or more years, it being a highly successful product, (iii) the patents are long-standing (sealed in 2004, 2005 and 2007 respectively) and have not been challenged as invalid during their existence until now, (iv) Watson Pharma and Ascent have acted with their "eyes open" and must have known that Astra would seek to enforce its patents (revocation proceedings were not commenced until 23 December 2011), and (v) the relative harm to Astra if no injunction is granted for the threatened infringement would far outweigh the harm Watson Pharma and Ascent will suffer if an injunction is granted. On the evidence I am not persuaded either that damages would be an adequate remedy for Astra (especially given the pressure to which Astra will be subject to reduce prices in the face of the entry of generics into the market and the irreversible impact which Astra will suffer in terms of its market share) or that damages in the case of Watson Pharma and Ascent will be impossible to quantify. It seems to me that the real position is that damages cannot adequately compensate Astra in the circumstances but can adequately compensate Watson Pharma and Ascent, irrespective of any difficulties in quantification.
32 For these reasons I am satisfied that Astra has made good its case for interlocutory relief against Watson Pharma and Ascent based on threatened infringement of the 842 or cation salt patent. At this time I see no reason why the injunctions should not be in the same general form as that which Rares J made. I accept that Astra should give adequate notice to Watson Pharma and Ascent if it proposes to exploit or authorise the exploitation of its patents in respect of rosuvastatin other than by its Crestor product. At this time I see no reason why notice does not sufficiently protect the interests of Watson Pharma and Ascent in this regard. However, and contrary to the agreed position in the hearing that the form of the interlocutory orders could be resolved without hearing further from the parties, both parties indicated by subsequent email that they did wish to be heard if I did not accept their form of the orders. As I do not presently accept the form of orders proposed by Watson Pharma and Ascent the matters will have to be listed for a further hearing about the form of the orders.
33 Given these conclusions about the 842 or cation salt patent I propose to deal with the 051 or low dose patent and the 165 or HeFH patent in summary terms only.