The Balance of Convenience in Interlocutory Injunctions: Sanofi-Aventis Deutschland GmbH v Alphapharm Pty Ltd (No 3) [2018] FCA 2060

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On 19 December 2018, the Federal Court handed down a decision to refuse an application for an interlocutory injunction against Alphapharm Pty Ltd. The refusal was based on balance of convenience factors where the Court viewed that the balance of convenience and justice did not lie in favour of the grant of the interim relief sought by Sanofi-Aventis Deutschland Gmbh.

Background of the proceedings

The matter relates to two applicants, Sanofi-Aventis Deutschland GmbH and Sanofi-Aventis Australia Ltd (the applicants hereinafter referred to as Sanofi) seeking relief under the Patents Act 1990 (Cth) (Act) and the Competition and Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL)), to restrain the respondent, Alphapharm Pty Ltd (Alphapharm) from launching and selling its Semglee product.

Alphapharm had obtained a listing for the Semglee product on the Australian Register of Therapeutic Goods (ARTG) and was seeking for the product to be listed on the Schedule of Pharmaceutical Benefits (PBS Schedule). The Semglee product is biosimilar to one of Sanofi’s product, the Lantus SoloStar, which means that the Semglee product can be dispensed to patients in place of the Lantus SoloStar.  Both products are new generation insulin products that can be dispensed from syringes in which a cartridge containing the insulin solution can be dispensed. The Semglee product was intended to be sold with the syringe. Sanofi’s patent protects the syringe containing a drug.

Sanofi asserted that if an interlocutory application was not granted, Alphapharm would launch the Semglee product. In Sanofi’s view, the Semglee product would infringe claims 1 to 4 of its patent Australian Patent No. 2009304105. Sanofi further asserted that by offering the Semglee product, Alphapharm would contravene the ACL by falsely representing to others that it is able to supply the product without infringing the patent.

Alphapharm contested the infringement claims and argued that the patent was invalid due to a lack of novelty over the prior art documents.

Factors considered in interlocutory injunctions

When considering an application for an interlocutory injunction, the Court must address two inquiries:

  1. Whether the applicant for relief has established a prima facie case; and
  2. Whether the balance of convenience and justice favours the grant of an injunction or the refusal of that relief.

The issues of this dispute came down to the strength of the patent infringement case and whether the balance of convenience and justice warrants the grant of the interlocutory relief sought.

Prima facie case

In assessing the strength of the patent infringement case, Burley J concluded that the lack of novelty case advanced by Alphapharm was strong. His Honour commented that whilst Sanofi had made out a clear prima facie case that the Semglee products fell within the scope of claim 1 of the patent, this did not mean that it had established a prima facie case of infringement of those claims. After all, an invalid patent cannot be infringed.

Balance of convenience

His Honour then proceeded to consider the balance of convenience issue. In considering the balance of convenience, it is necessary to assess the harm to the applicant if there is no injunction, and the prejudice or harm to the respondent if an injunction is imposed. As part of the consideration, the Court must also consider whether damages are likely to be an adequate remedy for the applicant if its rights are upheld in the final hearing but if no injunction is granted. Conversely, a counter consideration is whether damages are likely to give adequate compensation to the respondent, and any affected third party, if the interlocutory injunction is subsequently found to be wrongly granted and whether the respondent is likely to suffer irreparable harm.

Both parties submitted arguments to contend why an interlocutory application should or should not be granted.

Sanofi contended that the launch of the Semglee product would cause (i) a mandatory statutory reduction of the price under the Pharmaceutical Benefits Scheme (PBS) affecting its products; (ii) an ongoing impact on the price of the products; (iii) a loss of substantial market share and price erosion; and (iv) a loss of profits.

On the other hand, Alphapharm contended that Sanofi had not established a prima facie case of infringement. Alphapharm submitted that the fact that Sanofi had applied to amend the patent under section 105 of the Act further supported Sanofi’s lack of a prima facie case on the infringement issue. It also contended that the harm that it would suffer if an injunction was granted but subsequently discharged after trial would be significant and difficult to quantify. If an interlocutory injunction was granted, Alphapharm would also lose its “first mover advantage” in the market.

Burley J considered each of the above issues presented by both parties. In His Honour’s view, Alphapharm was likely to suffer significant harm that would not be easily compensated if an interlocutory injunction was granted. His Honour also considered that the calculation of loss likely suffered by Alphapharm was more difficult to compensate than the calculation of loss for Sanofi.

In view of the balance of convenience, His Honour dismissed the interlocutory application.

Conclusion

The balance of convenience helps to preserve the status quo pending a trial. If a respondent can show that the cost and inconvenience caused by granting an interlocutory injunction outweigh the benefits and justice for the applicant, it is unlikely that an interlocutory injunction will be granted.

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