19 May 2012

Appeals Tribunal Preserves Confidentiality as LEXAPRO Saga Extends

Aspen Pharma Pty Ltd and Commissioner of Patents [2012] AATA 281 (10 May 2012)

Practice and procedure – application for leave to rely on confidential documents – obligations of confidence – competing public interests in ensuring the proper administration of justice and in ensuring that contractual provisions as to confidentiality are duly enforced

Lexapro ConfidentialIn an interim decision relating to the ongoing efforts of Lundbeck A/S to obtain an extension of term of its patent no. 623,144 – which covers the S- or (+)-enantiomer of the antidepressant compound citalopram, marketed in Australia as LEXAPRO – the Administrative Appeals Tribunal (AAT) has ruled to preserve confidentiality in a prior agreement between Lundbeck  and Sandoz Pty Ltd by which earlier court proceedings seeking revocation of the patent were settled.

The issue before the Tribunal was this:

When information pertinent to a decision exists in a confidential document (such as a confidential settlement agreement), is it appropriate – and, if so, in what circumstances – to grant leave for the confidential document to be used as evidence in the proceedings, thereby effectively breaking the original confidence?

In this case the Tribunal found that breaking confidence was not justified, at least in-part because there is other evidence in the ongoing proceeding which will allow the same issues to be raised.


The matter currently before the AAT is an appeal from the Patent Office decision last year to grant Lundbeck a ten year extension of the deadline by which it should have filed for an extension of term of the patent (see Extension of Time Granted to Correct Extension of Term Error).  That time extension application itself followed a decision of the Full Federal Court in 2009 refusing an extension of term based upon the registration of LEXAPRO on the Australian Register of Therapeutic Goods (ARTG) on the basis that the request should in fact have been based on the earlier registration of CIPRAMIL (see Pharmaceutical Extensions and International Inequities).

OK, we agree that this is all rather confusing, so we will try to break the long-running saga down into something easier to follow:
  1. Lundbeck’s original citalopram-based antidepressant product was CIPRAMIL, which was approved and listed on the ARTG from 9 December 1997;
  2. CIPRAMIL contains a mixture of two ‘varieties’ (enantiomers) of the citalopram molecule;
  3. when Lundbeck figured out how to separate the two varieties, and which one was the more effective drug, it obtained a new patent (no. 623,144, the ‘LEXAPRO patent’) on the isolated ‘S-enantiomer’;
  4. the resulting improved product, LEXAPRO, was approved and listed on the ARTG on 16 September 2003;
  5. Lundbeck sought an extension of term of the LEXAPRO patent within the time limit allowed following registration of LEXAPRO;
  6. however, the Full Federal Court ruled that because CIPRAMIL effectively ‘contains’ LEXAPRO, any extension of term request should have been based on the registration of CIPRAMIL;
  7. unfortunately for Lundbeck, the deadline for filing a request based on CIPRAMIL expired in 1999;
  8. Lundbeck therefore started again, with a new request for an extension of term, for which it required a ten-year extension of time for late filing;
  9. a number of generic pharmaceutical manufacturers opposed the grant of an extension of time however they were unsuccessful, with the opposition Hearing Officer granting both the time extension, and the extension of term.
Which brings us up-to-date.


The generic pharmaceutical companies Aspen Pharma Pty Ltd, Sandoz Pty Ltd, Apotex Pty Ltd and Alphapharm Pty Ltd are all appealing the Patent Office decision, to prevent the term of the LEXAPRO patent from being extended.  At least one basis for the appeal would be if Lundbeck had knowledge that its request for an extension of term should have been based on CIPRAMIL prior to the decision of the Full Federal Court in 2009.  The generic manufacturers appear to believe that the terms of the confidential settlement deal between Lundbeck and Sandoz would provide some evidence that this may have been the case. 

The question before the Tribunal was thus whether the circumstances of the case justify breaking confidentiality in the agreement so that it could be brought as evidence in the proceedings.

As the Tribunal put the issue (at [14]): ‘There is a public interest in ensuring the proper administration of justice and there is also a powerful public interest in ensuring that provisions in settlement agreements as to confidentiality are duly enforced in the interest of encouraging the efficient settlement of disputes.’

The essence of the balancing act between the competing interests is that an agreed confidence should not be forcibly broken unless clearly outweighed by the public interest in ensuring the proper administration of justice.  Settlement agreements are commonly confidential, and this generally is to the benefit of both parties.  Avoiding potential prejudice in subsequent disputes or proceedings is one reason why parties on both sides of an agreement generally insist on confidentiality.  The whole exercise would be rendered pointless if orders to disclose confidential information could be easily obtained in precisely the prospective circumstances which led to the agreement being confidential in the first place!

If the only way in which the state of Lundbeck’s knowledge at an earlier time could be examined was through confidential provisions of the settlement agreement, then the Tribunal might need to give serious consideration to breaking confidentiality in the interests of justice.  However, in this case the Tribunal (having itself had the opportunity to review the confidential agreement) considers that there is other evidence available ‘to point to an argument that Lundbeck was aware of the availability or possibility of making a different application at an earlier period of time’ (at [17]).

The Tribunal therefore concluded that this is ‘a case in which the ground as to the belief and understanding of Lundbeck can be ventilated without the necessity of disclosing the [confidential] material’ (at [20]).


While the Tribunal declined to order disclosure of confidential material ‘at this stage of the proceeding’, it did note that ‘at some more advanced stage of the proceedings an attempt may be made to reconsider this question and that can be dealt with at the appropriate time’ (at [21]).  It is possible, therefore, that we have not heard the last of this issue.

It is worth noting, however, that it may not be sufficient to show merely that Lundbeck was aware of the possibility of applying for an extension of time at some earlier stage.  The fact that something is possible does not mean that it is necessary, and it hardly seems plausible that Lundbeck would have proceeded with an appeal to the Full Federal Court if it did not believe it could win.  As we noted in July 2010, the legal position in other jurisdictions, such as the US, is entirely different from that found by the Full Federal Court to be the case in Australia (see Pharmaceutical Extensions and International Inequities).
Dr Mark Summerfield is employed by Watermark Intellectual Asset Management, which represented Lundbeck in its application for an extension of term of the LEXAPRO patent, and provided evidence supporting its application for an extension of time.  The views expressed in this article are independent and solely those of the author.  (Also see our 'About' page.)


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