Justice Griffiths of the Federal Court of Australia refused to grant a patentee an interlocutory injunction to restrain a generic pharmaceutical company’s supply of the pharmaceutical compound pregabalin for the treatment of a particular medical condition.1
Following this decision, and the High Court’s decision in Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd  HCA 50, pharmaceutical patent holders for a method of medical treatment may not be able to enforce their monopoly and secure an interlocutory injunction where they do not have a patent claim for the particular indication for which the generic product is supplied.
Subject to final relief at trial, this decision suggests that generic manufacturers may effectively segment the market between different indications, and enter the market early for indications not the subject of a patent claim.
To reduce the risk of an interlocutory injunction to restrain indirect infringement of a patent for one indicated treatment by supply of a drug for another indication, generic companies should consider taking steps to:
The decision also demonstrates that the Court will scrutinise the merits of a case when considering whether or not it is appropriate to grant an interlocutory injunction, and clear and convincing evidence is required to establish a prima facie case of infringement.
Pregabalin is marketed by Pfizer Australia Pty Ltd as ‘Lyrica’, a prescription-only drug approved in Australia for the treatment of neuropathic pain and seizures. Pregabalin is listed on the Schedule of Pharmaceutical Benefits, however it is only listed on the Schedule for the treatment of neuropathic pain. That is, only prescriptions for treatment of neuropathic pain receive a government subsidy under the Pharmaceutical Benefits Scheme (PBS), whereas prescriptions for treatment of other conditions do not.
Warner-Lambert Company LLC, a member of the Pfizer group of companies (together, Pfizer), holds two patents relating to the use of pregabalin for methods of treating seizures (the Seizure Patent) and neuropathic pain (the Pain Patent).
Apotex Pty Ltd (Apotex) obtained regulatory approval to supply pregabalin products in September 2012. The Apotex products were initially registered on the Australian Register of Therapeutic Goods (ARTG) with indications for the treatment of both neuropathic pain and seizures.
In May 2013, Apotex commenced a proceeding in the Federal Court seeking revocation of the Seizure Patent and the Pain Patent. The part of the proceeding seeking revocation of the Seizure Patent was discontinued by consent shortly after, with the revocation proceeding continuing in respect of the Pain Patent. In October 2013, Apotex applied to have the ARTG registration for their pregabalin products amended to include only the seizure indication.
Following notice of Apotex’s intention to launch their pregabalin products for the treatment of seizures, Pfizer made an application for an interlocutory injunction restraining the supply of Apotex products containing pregabalin for both indications. Apotex voluntarily submitted to an interlocutory injunction in relation to the neuropathic pain indication, but opposed an injunction in relation to the seizure indication. Only the Pain Patent was asserted by Pfizer against Apotex. The matter went before Justice Griffiths the day before Apotex’s threatened launch.
Although Apotex sought to launch its pregabalin products for the sole indication of seizures, Pfizer argued that this would constitute indirect infringement of their Pain Patent under s117 of the Patents Act 1990 (Cth), as the products supplied for the treatment of seizures would ultimately be used for the treatment of neuropathic pain.
Pfizer submitted that Apotex would have the requisite reason to believe that in practice, Apotex products would infringe the Pain Patent because pharmacists would be aware that the Apotex products were initially also indicated for the neuropathic pain indication and allow substitution regardless of the prescribed indication. Pfizer also led evidence that there is effectively no market for the use of pregabalin in the treatment of seizures, and claimed that Apotex must believe that their products will be used for the treatment of neuropathic pain.
In determining whether or not Apotex indirectly infringed the Pain Patent, Justice Griffiths considered the recent High Court of Australia decision of Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd  HCA 50. In Sanofi it was held that supply of a drug for arthritis indications (that were note the subject of a patent claim) did not constitute indirect infringement of a patented method of treatment for a skin condition (for which the drug was not registered on the ARTG). Pfizer submitted that Sanofi was distinguishable from the present case because the evidence indicated that in practice pregabalin was rarely prescribed to treat seizures, however this was not accepted by his Honour.
Justice Griffiths found that the measures taken by Apotex to deter use of the Apotex products for treatment of neuropathic pain were inconsistent with Apotex having reason to believe their products would indirectly infringe the Pain Patent. These measures included Apotex narrowing their ARTG registered indications and sending letters to doctors and pharmacists advising them that the Apotex products are not indicated for the treatment of neuropathic pain. Justice Griffiths held that Pfizer had not established a prima facie case of infringement. Apotex did not challenge the validity of the Pain Patent for the purposes of the interlocutory application.
Both parties led evidence on the complexity of assessing damages payable by Apotex to Pfizer if an interlocutory injunction was not awarded but Pfizer was ultimately successful at trial. However, Justice Griffiths accepted the evidence of Apotex established that this would be more straightforward than assessing the damages payable by Pfizer to Apotex if Apotex was restrained and succeeded at trial and made a claim under the cross-undertaking as to damages.
A forensic accounting expert, Mr Samuel, gave evidence on behalf of Apotex of the difficulty in calculating damages payable by Pfizer to Apotex due to the complexities of a hypothetical market, including the uncertain price, market share and period of loss for which Apotex may be entitled to claim. Mr Samuel compared this to the relatively less complex scenario of estimating damages payable by Apotex to Pfizer, which would predominantly rely on actual volume of infringing sales by Apotex and current price trends. The Court preferred the evidence of Mr Samuel to that of Mr Dimopoulos, an employee of Pfizer, who gave evidence of the irreparable harm to Pfizer if Apotex was not restrained.
A solicitor also gave evidence on behalf of Apotex which detailed her experience in Apotex’s ongoing claim against Sanofi-Aventis for damages under a cross-undertaking in another proceeding where Apotex had been restrained by an interlocutory injunction but ultimately succeeded in its revocation application. This evidence included the extensive costs and time of the Court that has been spent assessing the damages payable to Apotex.
In considering the balance of convenience, Justice Griffiths gave weight to the fact that Apotex had taken steps to ‘clear the way’ by commencing a proceeding in 2013 to revoke both patents before commencing supply. His Honour did not accept Pfizer’s submission that there had been relevant delay on the part of Apotex in notifying Pfizer of their threatened supply.
His Honour found that public interest considerations favoured Apotex being able to enter the market, as if Apotex were restrained, seizure patients would be deprived of a choice of products and a possible lower price. By contrast, Pfizer’s evidence did not establish that Pfizer would be forced to discontinue education and patient support programs if Apotex entered the market.
Justice Griffiths considered that that an interlocutory injunction should not be granted because of the relative weakness of Pfizer’s case for indirect infringement of the Pain Patent under s117, and the fact that the balance of convenience lay in favour of Apotex.
This case is significant because it shows the Court considering the relatively complexities of assessing the parties’ potential losses and taking that into account on the balance of convenience. Evidence of the actual time and cost associated with Apotex seeking to recover damages under a cross-undertaking in another proceeding appears to have had a material bearing on the outcome.
In considering the precedent value of this decision, it is worth noting that the outcome may have been different had:
a) Pfizer had been in a position to assert the Seizure Patent against Apotex on infringement; or
b) the product been supplied under the PBS for the treatment of seizures, such that mandatory price decreases would have resulted from the PBS listing of the Apotex products.
Update: Leave to appeal to the Full Court of the Federal Court against the orders of Justice Griffiths has been granted. The appeal will be heard in May 2014.
1 A copy of the Federal Court’s decision (Warner-Lambert Company LLC v Apotex Pty Ltd  FCA 241) is available here
This article was written by Shaun McVicar, Partner, Patrick Sands, Special Counsel and Mark McLennan, Solicitor, Melbourne.
The article was first published on the Herbert Smith Freehills Website.