FEDERAL COURT OF AUSTRALIA SmithKline Beecham plc v Alphapharm Pty Ltd [2001] FCA 1898 PRACTICE AND PROCEDURE – pre-action discovery – restriction on use of information – foreign proceeding – whether variation to orders should be made to assist foreign proceeding SMITHKLINE BEECHAM PLC, BEECHAM GROUP PLC, and SMITHKLINE BEECHAM (AUSTRALIA) PTY LIMITED v ALPHAPHARM PTY LTD and UNIVERSITY OF QUEENSLAND V 935 of 2000 FINKELSTEIN J 21 DECEMBER 2001 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 935 of 2000 BETWEEN: SMITHKLINE BEECHAM PLC, BEECHAM GROUP PLC, and SMITHKLINE BEECHAM (AUSTRALIA) PTY LIMITED Applicants AND: ALPHAPHARM PTY LTD and UNIVERSITY OF QUEENSLAND Respondents JUDGE: FINKELSTEIN J DATE OF ORDER: 21 DECEMBER 2001 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The motion be dismissed. 2. The respondents (applicants in this motion) pay the applicants' costs of the motion. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 935 of 2000 BETWEEN: SMITHKLINE BEECHAM PLC, BEECHAM GROUP PLC, and SMITHKLINE BEECHAM (AUSTRALIA) PTY LIMITED Applicants AND: ALPHAPHARM PTY LTD and UNIVERSITY OF QUEENSLAND Respondents JUDGE: FINKELSTEIN J DATE: 21 DECEMBER 2001 WHERE MADE: MELBOURNE REASONS FOR JUDGMENT 1 The rules of the Federal Court permit a person who, on reasonable grounds, believes he (or she) has a cause of action, but does not have sufficient information to decide whether to commence a proceeding, to obtain discovery of documents or an order for experiments to be carried out, to assist in the making of the decision. 2 A number of companies in the pharmaceutical group, known as the GlaxoSmithKline group, are proprietors of Australian patents for the compound paroxetine hydrochloride anhydrate, processes for preparing tablets containing the compound, and tablets produced by those processes. The tablet is the well-known antidepressant AROPAX. Believing that Alphapharm Pty Ltd, a generic pharmaceutical manufacturer, was proposing to manufacture an antidepressant drug (also in the form of a tablet) which might infringe its Australian patents, but not being certain that there would be an infringement, the GlaxoSmithKline companies made application for preliminary or pre-action discovery. They asked for the production of certain documents, including specifications of the materials used in the manufacture of Alphapharm's tablets, specifications for the finished dosage form of those tablets, the results of tests conducted on the tablets, and other documents. They also sought an order that they be provided with samples of the tablets, or the raw material from which those tablets were manufactured, so that they could carry out certain experiments. 3 In response to the application, Alphapharm offered to provide the applicants with certain documents, provided appropriate orders were made to maintain the confidentiality of the information contained in those documents. In addition, and over its objection, I ordered Alphapharm to provide 50 g of the raw material that was used to make its tablets so that experiments could be conducted. 4 To protect Alphapharm's commercial interests I imposed strict secrecy requirements. The requirements included the following: that the documents, the information obtained from the documents, and the results of the experiments, would only be disclosed to one director of the applicant companies, to the Australian solicitors and counsel for the applicant companies, to their Australian patent attorneys, and to independent experts provided they signed an appropriate form of undertaking. I also ordered that the information derived from the documents, and from the experiments, could only be used for the purposes of bringing a proceeding for infringement of the Australian patents. Of necessity such a proceeding would be commenced in Australia. 5 In accordance with the orders, Alphapharm provided the sample material in April 2001 to Dr White, an independent expert retained by the applicant companies to carry out certain experiments. Thereafter proceedings were commenced against Alphapharm for patent infringement. There is a cross proceeding seeking revocation of the patents on the usual grounds. The action will be heard next year. 6 In addition to the proceeding in Australia, on 21 September 2001 SmithKline Beecham plc (one of the applicants for pre-action discovery) commenced a patent infringement action in the Patents Court in the Chancery Division of the High Court in England. The defendant is Generics (UK) Limited, a company related to Alphapharm. In that action SmithKline Beecham alleges that the tablets manufactured by Alphapharm and distributed by Generics (UK) Limited infringe its English patents, which are similar to, but not precisely the same as, the Australian patents. The matter has been listed for trial to commence on 14 March 2002. The parties to that action have already made discovery, and witness statements of fact and expert reports are due to be exchanged in February 2002. 7 The existence of the English proceeding has provoked the present application. Alphapharm asks that the pre-action discovery orders be varied or modified so that the Patents Court in England may have access to the confidential information of Alphapharm that is presently in the possession of SmithKline Beecham. In reality, Alphapharm may have other objectives in mind, although I accept that providing assistance to the Patents Court is one of its general objectives. I will return to this in a moment. 8 In the first place I should mention the status of the confidential information, as regards the English litigation. As to the documents that Alphapharm has provided to the GlaxoSmithKline group in Australia, there is no difficulty. Those documents, and the information that is contained in them, is the "property" of Alphapharm (in the sense that confidential information is "property") and Alphapharm can make that information available to the defendant in the English proceeding on whatever terms it thinks appropriate. It does not need any variation of the existing orders to achieve that result. 9 What about the other information, namely the results of the tests on Alphapharm's raw material? I think it is tolerably clear that the purpose of this application is to enable Alphapharm to obtain the results of the tests conducted by Dr White. It says that the results of those tests are relevant to the English proceeding. I will assume they are, although this is a matter of some dispute. Alphapharm anticipates that if it succeeds in having the order modified, this will put in train a series of events that might result in it obtaining possession of the results of the tests. The events are: (1) if the order is amended to allow the tests to be used in the English proceeding, those tests might be discoverable in that proceeding, and (2) an order might then be made for their production. 10 There is a real difficulty with this approach. The results of the tests are covered by legal professional privilege. They are protected by privilege according to the common law of both Australia and England. Accordingly, even if the results of the tests are relevant to the English proceeding, Alphapharm will only be able to access them if the privilege is waived. Even if SmithKline Beecham were free to use the tests in the English proceeding, it is unlikely that it would waive its privilege. As far as the conduct of the English proceeding is concerned, SmithKline Beecham does not intend to use Dr White's experiments. In any event, the processes that must be undertaken when a party wishes to establish any fact by experiment pursuant to the UK Civil Procedure Rules and the Patents Court Guide, mean that it may not be practicable for the experiments conducted by Dr White to be used in the English proceeding, so there will be no waiver by tendering Dr White as a witness. If the results of his experiments would support Generics (UK) Limited's case, it could hardly be supposed that the privilege would be waived voluntarily. 11 In the result I do not believe that anything will be achieved by acceding to Alphapharm's request. That in itself is a sufficient reason to decline to make the orders sought. 12 There are two additional reasons for rejecting the application. Pre-action or preliminary discovery is an extraordinary remedy. Its only purpose is to afford a person the opportunity to make an informed decision whether he (or she) should embark upon litigation. The orders that I made restricting the use of information derived from the pre-action discovery process for that purpose, are orders that are commonly made. They reflect the principle that a party who successfully obtains pre-action discovery should only make use of the information for the purpose for which it was obtained. Thus, as a general rule, it would be wrong to allow a person to use information obtained under such an order for an extraneous purpose. I am loath to make an order that would undermine this general rule. While I accept the force of Alphapharm's submission that it is the beneficiary of the confidentiality orders, and should be free to waive the benefit of those orders, I think the matter is a little more complex. It is not just the protection of Alphapharm that is the object of the court's concern. It is also necessary to have regard to the consequences of a pre-action discovery order. 13 The second matter also concerns the position of the person who obtains a pre-action discovery order. Such a person may make different use of the information or material obtained, depending upon whether that information is or is not to remain confidential. I have in mind, for example, the types of experiments that might be undertaken. They may be less extensive if it was clear that the results might, in the future, be disclosed in some other proceeding. 14 Although I intend to dismiss the application to vary the orders, there is one aspect that I have found troubling. It goes without saying that an order of a court should not become a vehicle for injustice. Accordingly, if it were clear that the continued existence of the confidentiality orders would cause injustice to any party in the English proceeding, I would vary the orders to the extent necessary to avoid that happening. That is not, however, the position which confronts me. As far as I can tell, there will be no prejudice to any party by my refusal to make the orders sought. In fact, if the orders were made, they would have no effect on the English litigation. If this position should change, Alphapharm can renew its application. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. Associate: Dated: 14 January 2002 Counsel for the Applicants: Mr A Archibald QC Mr B Caine Solicitor for the Applicants: Allens Arthur Robinson Counsel for the Respondents: Mr D Shavin QC Ms M Barker Solicitor for the Respondents: Mallesons Stephen Jaques Date of Hearing: 20 December 2001 Date of Judgment: 21 December 2001