Refusal of Preliminary Injunctions – a Recent Case

Interpharma Pty Ltd v Aventis Pharma SA [2011] FCA 32 (1 February 2011)

Interlocutory injunctions – where damages will be an adequate remedy – where there has been undue and inadequately explained delay

The protracted hearing over Apple’s application for an interlocutory (preliminary) injunction against Samsung’s Galaxy Tab 10.1 provides a good opportunity to look back at a decision from earlier in the year, which we did not report at the time.  On that occasion, the requested injunction, pending a full trial on the issues of patent infringement and validity, was refused by the court.

The case involved an application for interlocutory injunctive relief by the owner of Australian patent no. 666859 (the patent), Aventis Pharma SA, and its exclusive licensees, to restrain generic pharmaceutical companies Interpharma and Hospira from threatened infringement.  The patent relates to a pharmaceutical dosage form for two compounds of the taxane family known as Taxol (paclitaxel) and Taxotere (docetaxel) which are used in the treatment of cancers.  It is due to expire on 3 July 2012.

Interpharma and Hospira proposed to supply their docetaxel dosage forms as soon as possible after expiry of another patent relating to the compound docetaxel, on 6 February 2011.  Aventis argued that the proposed supply would infringe claims 1 to 4 and 6 of the patent (which, as noted, does not expire until 3 July 2012), while the generics contended that their supply will not infringe the patent and that the patent is invalid in any event.

The issue to be decided by the court was whether, in these circumstances, a preliminary injunction should be granted.  The application by Aventis was dismissed.

FACTORS TO BE CONSIDERED

We have recently discussed the factors considered by the court in assessing whether the grant of a preliminary injunction is appropriate (see, e.g., Apple and Samsung Return to Court With ‘Eyes Wide Open’):

1. whether there a ‘serious question to be tried,’ i.e. whether the patentee has made out a prima facie case in the sense that, if the evidence remains the same, there is a probability that a court will grant a permanent injunction at trial;
2. whether the patentee will suffer ‘irreparable harm’ for which any damages awarded at trial would not be an adequate remedy; and
3. whether other factors relevant to the ‘balance of convenience’ (i.e. the relative impact of the preliminary decision upon the parties) favour the grant of a preliminary injunction.

These same factors were considered in the Aventis case (at [7]).  Aventis – of course – argued that all three of the factors weighed in its favour.

SERIOUS QUESTION

The court considered the matter of whether there was a ‘serious question to be tried’ only to a limited extent (see [33]-[41]). 

This issue – as also in the Apple and Samsung case – can be complicated to resolve, especially when conflicting evidence is provided, and the validity of relevant patent claims, as well as infringement, is in dispute.  There is some earlier court authority for the proposition that an asserted invalidity defence needs to be fairly strong on its face to negate a prima facie showing by the patentee that it is likely to establish infringement.  However, interlocutory hearings are necessarily based on incomplete evidence and information, and thus reaching a conclusion may be difficult.

In the Aventis case, the judge (Justice Jayne Jagot) determined that even if Aventis had established a serious question to to be tried, it would not succeed in its application for an injunction because it had not established ‘irreparable harm’, or that the ‘balance of convenience’ was tilted in its favour (at [10]).

ADEQUACY OF DAMAGES

The judge accepted (at [13]-[14]) that:

1. the sale of docetaxel by generic competitors would result in lost sales of the patented drugs;
2. the value of those sales would be significant; and
3. further loss would occur due to price competition.

However, the court was satisfied that these losses could be adequately compensated by an award of damages following a full trial (at [15]-[16]).  In particular, the judge did not consider that the market for chemotherapy compounds was analogous to that for certain other drugs (such as anti-depressants) in respect of which interlocutory injunctions have been granted in recent times (at [16]-[18]).

BALANCE OF CONVENIENCE

Aventis argued (see at [25]) that the balance of convenience was tilted in its favour due to:

1. the inadequacy of damages;
2. the fact that that the patent was a long-standing one;
3. Interpharma and Hospira had acted with awareness of the patent;
4. Interpharma and Hospira had delayed in taking revocation proceedings in respect of the patent; and
5. the lack of any real impacts on Interpharma and Hospira.

However, the judge was not persuaded.  Indeed, she was more concerned that Aventis has ‘failed … to acknowledge or adequately explain their own serious delay in the seeking of [an injunction]’ (at [26]).  She concluded (at [30]) that Aventis had known since at least February 2010 of the intentions of Interpharma and Hospira, and that it therefore should have acted earlier if it had wished to obtain urgent relief from the threat of infringement.

Overall, Justice Jagot was satisfied that the balance of convenience was against the grant of an injunction.

CONCLUSION

Despite a recent greater tendency by the Federal Court of Australia to grant preliminary injunctions in patent cases, particularly those involving certain types of pharmaceutical products, a patentee can have no great confidence in obtaining such relief. 

It does not take much for a decision to go against the applicant, even if there is a good argument that the infringement case would succeed at trial.  If damages would be an adequate remedy, or if there are factors in the market for the patented product or in the conduct of the parties that may tip the balance of convenience, a decision can very quickly be turned against the patentee.

As the lawyers representing Apple and Samsung argued their respective cases last week, this is something that must have been much on their minds, which possibly explains why the possibility of a deal arose after more than two days of submissions.

Tags: Australia, Interlocutory injunction