In a long-awaited decision for the pharmaceutical industry, the Commonwealth’s appeal against a 2020 decision to deny it $325m in damages in a dispute relating to the antiplatelet drug clopidogrel has been dismissed by the Full Court of the Federal Court of Australia in Commonwealth of Australia v Sanofi [2023] FCAFC 97.
The damages claim relates to a 2007 injunction to restrain Apotex from infringing Sanofi’s Australian patent relating to clopidogrel (Plavix®) – which was ultimately found to be invalid (noting that comparable claims in counterpart patents were found to be valid in litigation in the USA and Canada) – preventing any launch by Apotex of a generic clopidogrel product. If the injunction had not been granted, and Apotex had launched a generic clopidogrel product, a mandatory price reduction under the Pharmaceutical Benefits Scheme (PBS) would have triggered significant savings for Commonwealth.
Trial Decision
Our detailed report on the trial decision can be found here. In sum, after the patent in suit was held to be invalid, Justice Nicholas was subsequently tasked with determining whether the Commonwealth was entitled to compensation from Sanofi because, if not for the injunction, it would have benefitted from a mandatory price reduction on the supply of clopidogrel as soon as a generic entered the Australian market. In the trial decision, Commonwealth of Australia v Sanofi (No 5) [2020] FCA 543, Justice Nicholas found that:
- the Commonwealth had failed to establish that Apotex would have launched its generic drug had the injunction not been granted (and consequently, no mandatory price reduction would have been triggered); and
- the damages claimed by the Commonwealth did not flow directly from the grant of the injunction.
Appeal Decision
In a unanimous judgment, the Full Court of Justices Besanko, Perram and Yates upheld the decision of the trial judge to refuse damages on the basis of issue (1). However, the Full Court disagreed with the trial judge’s finding as to issue (2). In this matter Apotex had given an undertaking not to list its clopidogrel product on the PBS, that undertaking was not supported by any cross-undertaking as to damages which formed the basis for the Commonwealth’s claim. At trial, Nicholas J was satisfied that this undertaking (and not the injunction) was the direct cause of the Commonwealth’s loss, but the Full Court disagreed, and held that this was an overly strict assessment of causation.
What next?
It is open to the Commonwealth to seek special leave to appeal the decision to the High Court of Australia. Given the size of the damages claim, whatever you might think of the merits, an application for special leave seems likely. We will continue to watch closely given the potentially significant implications for pharmaceutical patentees in Australia should the Commonwealth succeed in its claim.
Also, as we have previously reported in IAM Magazine, the complexity involved in determining claims such as this has seen a shift away from the grant of interlocutory injunctions, which were previously regularly granted in favour of pharmaceutical patent owners in Australia.
In better news for pharmaceutical patentees (and litigants generally), this shift has also seen an emerging trend for expedited trials and stricter case management in Australian pharmaceutical patent litigation. To avoid having to conduct a ‘mini‑trial’ and determine interlocutory injunctions, the court is open to, and has ordered, compressed timeframes for evidence and expedition of a final trial to determine all issues of infringement and validity before the proposed launch date of the generic or biosimilar product in question. This development, in particular, makes early strategic planning crucial in Australian pharmaceutical patent litigation.
How we can help
The risks associated with an unexpectedly invalidated pharmaceutical patent may be very high. Strategically investing time and effort during the prosecution of a patent and in developing pre-litigation strategies will likely pay off in the long term. Griffith Hack has extensive experience helping clients navigate the patent prosecution and enforcement process, with a focus on developing strategic approaches catered to each clients’ unique situation.
If you have any questions about patent prosecution in Australia please contact Amanda Stark or Karen Sinclair in our Patents team. And if you have any questions about this article, please contact Gavin.
