What you need to know
- Alphapharm can proceed to launch its SEMGLEE Product after the Full Federal Court rejected Sanofi's application for leave to appeal from Justice Burley's decision to refuse an interlocutory injunction.
- A key factor in both decisions was that Alphapharm had a strong prima facie case of invalidity. Both Courts made clear that, even if there was a prima facie case of infringement, it was not possible to infringe an invalid patent.
- A weak prima facie case of infringement will also be an important consideration when weighing the balance of convenience.
- Both Courts also concluded that it would be more difficult to calculate Alphapharm's potential losses, than to calculate Sanofi's losses. This appears to be a major shift for the Court which has typically found that an originator's damages were more difficult to quantify. This may mean that more generic pharmaceutical products will be permitted to launch going forward.
First Instance Decision
In December 2018, Sanofi-Aventis Deutschland GmbH and Sanofi-Aventis Australia Ltd (collectively, Sanofi), commenced urgent interlocutory injunction proceedings seeking to restrain Alphapharm Pty Ltd (Alphapharm) from launching its SEMGLEE insulin glargine (rDNA) solution for injection injector pen (the Semglee Product).
Burley J concluded that Sanofi had established that the Semglee Product fell within the scope of claim 1 of the patent in issue. However, his Honour also found that Alphapharm's lack of novelty case was sufficiently strong to raise significant concerns regarding the validity of Sanofi's patent.
Holding that it was "axiomatic that an invalid patent cannot be infringed", Burley J expressed doubts as to whether Sanofi had established a prima facie case of infringement of the relevant claims. Burley J commented that these doubts were likely to be sufficient to conclude that injunctive relief should be refused.
Nonetheless, Burley J did go on to consider the balance of convenience. As part of that exercise and while noting that it was finely balanced, his Honour concluded that it would be more difficult to calculate Alphapharm's potential losses than Sanofi's.
Burley J ultimately refused to grant the interlocutory injunction.
The Appeal
Sanofi applied for leave to appeal to the Full Federal Court. The hearing took place on 8 February 2019 with the decision being handed down on 22 February 2019 (although it was not publically available until 25 February 2019). The Full Court refused the application for leave to appeal.
The Full Court made clear that it was essential in any interlocutory injunction application that the prima facie case be considered separately to, and before, the balance of convenience. Agreeing with Justice Burley, the Full Court held:
A case for invalidity which is merely arguable, of itself, does not undermine the existence of a prima facie case of infringement which has otherwise been found to exist. However, a sufficiently strong case of invalidity may well qualify the conclusion that there is a prima facie case of infringement at all.
Therefore, the Full Court made clear that a strong prima facie case of invalidity can defeat an interlocutory injunction application without there being any consideration of the balance of convenience.
Notwithstanding this, the Full Court did go on to consider Justice Burley's findings on balance of convenience. In doing so, the Full Court made clear that a weak prima facie case of infringement would be considered as part of the weighing process for balance of convenience.
Further, the Full Court reviewed Justice Burley's findings and held:
The market share of Sanofi Australia prior to the launch will be a known fact. The market consequences caused by the introduction of the Semglee product will be apparent from the figures…By contrast, in the event that Alphapharm is restrained the question of what would have happened in the market will be highly speculative.
On the basis of their findings, the Court concluded that "…Sanofi had not demonstrated a sufficient likelihood of success in all of the circumstances to justify the preserving of the status quo". As a result, the application for leave to appeal was denied.
Take Away Points/Conclusion
These decisions make it clear that it is possible to defeat an interlocutory injunction application if you have a sufficiently strong defence to the claim (whether it be an invalidity argument in the case of a patent case or another defence in the case of interlocutory injunctions generally). Therefore, if you are considering seeking an interlocutory injunction, it is imperative to consider the strength of the arguments which will be made against you. Equally, if you are opposing the grant of an interlocutory injunction, a strong case in defence could be sufficient to defeat the application without the need to consider the balance of convenience.
Perhaps more interestingly, this is the first decision on an interlocutory injunction to consider Justice Jagot's judgment in Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2018] FCA 1556 (Sigma v Wyeth). In Sigma v Wyeth, Justice Jagot was required to determine the damages of a number of generic companies which were prevented from launching pursuant to an interlocutory injunction which was ultimately found to be wrongly granted. Her Honour's 425 page judgment demonstrates the difficulty of calculating the losses suffered by a generic in this circumstance. Her Honour also stated at paragraph 1336 that:
…Knowing what has occurred, it could never have been concluded, for example, that insofar as relevant to the balance of convenience it would be easier for the generics to prove their loss if the interlocutory injunctions were wrongly granted than for Wyeth to prove its loss if the interlocutory injunctions were withheld and the method patent was valid.
Consistent with Justice Jagot's statement, Justice Burley, and now the Full Court, concluded that Alphapharm's losses were more difficult to quantify than the loss to Sanofi caused by the launch of the Semglee Product. This is appears to be a major shift in the position of the Court.
Until recently, Courts have consistently granted injunctions preventing launch of a generic pharmaceutical product on the basis that the balance of convenience favoured the originator. The Court typically concluded that it would be easier for a generic to prove their loss as a result of the injunction as compared with the losses suffered by the originator if the generic was permitted to launch. However, Justice Jagot challenged this position in her decision in Sigma v Wyeth. The Sanofi v Alphapharm first instance and appeal decisions follows Justice Jagot's reasoning to conclude, contrary to the prevailing practice, that the damages for the generic will be more difficult to calculate than the originator. This may be a sign that the tide is changing in the Federal Court and more generic companies could be allowed to launch pending final judgment going forward. So watch this space!
