FEDERAL COURT OF AUSTRALIA Apotex Pty Ltd v Pfizer Ireland Pharmaceuticals [2014] FCA 1150 Citation: Apotex Pty Ltd v Pfizer Ireland Pharmaceuticals [2014] FCA 1150 Parties: APOTEX PTY LTD (ACN 096 916 148) v PFIZER IRELAND PHARMACEUTICALS and PFIZER AUSTRALIA PTY LTD (ACN 008 422 348); PFIZER INC File number: NSD 1174 of 2012 Judge: BEACH J Date of judgment: 13 October 2014 Catchwords: PRACTICE AND PROCEDURE – application under r 2.32(4) of the Federal Court Rules 2011 (Cth) – inspection of documents in separate finalised proceeding – relevance of earlier filed material – principles of open justice – prejudice to opposing party – delay in making of application – application for leave to issue subpoena seeking production of similar documents – application and leave granted Legislation: Federal Court of Australia Act 1976 (Cth) s 37M Federal Court Rules 2011 (Cth) r 2.32(4) Patents Act 1990 (Cth) ss 40(2)-(3) Cases cited: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Brown v Health Services Union (No 4) [2012] FCA 1376 Eli Lilly v Pfizer (2005) 64 IPR 506 Hogan v Australian Crime Commission (2010) 240 CLR 651 Pfizer v Eli Lilly (2005) 68 IPR 1 Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 13) [2012] FCA 370 Date of hearing: 13 October 2014 Date of publication of reasons: 28 October 2014 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 23 Counsel for the Applicant/Cross Respondent: Mr N Murray Solicitors for the Applicant/Cross Respondent: Ashurst Australia Counsel for the Respondents/Cross Claimants: Mr T Bannon SC with Mr T Cordiner Solicitors for the Respondents/Cross Claimants: DLA Piper Australia IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION NSD 1174 of 2012 BETWEEN: APOTEX PTY LTD (ACN 096 916 148) Applicant PFIZER IRELAND PHARMACEUTICALS Respondent PFIZER IRELAND PHARMACEUTICALS and others named in the schedule Cross-Claimants APOTEX PTY LIMITED (ACN 096 916 148) Cross-Respondent JUDGE: BEACH J DATE OF ORDER: 13 OCTOBER 2014 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. Pursuant to Rule 2.32(4) of the Federal Court Rules 2011, the Applicant have leave to inspect and photocopy the documents referred to in the written request to the Court dated 11 August 2014 made by Kane Wishart of Ashurst Australia, being documents from the Court file in proceeding VID 604/2002 Eli Lilly and Company v Pfizer Overseas Pharmaceuticals & Anor (with the reference in the request to the affidavit of David Brown being treated as a reference to the affidavit of Lindsay Brown). 2. The Applicant have leave to issue a subpoena to produce documents to Mr John Denton, Managing Partner of Corrs Chambers Westgarth, in the form attached to the Affidavit of Kellech Nanette Smith sworn 6 October 2014, with leave to effect such short service of the subpoena as is required. 3. The Applicant no later than 12.00 noon on 23 October 2014 file and serve submissions identifying each affidavit and each document, which has been produced under the said subpoena or obtained from the said Court file, that it seeks to tender in evidence or otherwise deploy in whole or in part at trial. Such submissions are to identify precisely the whole or that part of the affidavit or document which is sought to be tendered or otherwise deployed and the purpose and the basis under the Evidence Act 1995 (Cth) for such tender or deployment. 4. Compliance by the Respondents with the Applicant's notice to produce dated 6 October 2014 be extended until 10.15 am on 30 October 2014 or further order. 5. Costs reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION NSD 1174 of 2012 BETWEEN: APOTEX PTY LTD (ACN 096 916 148) Applicant PFIZER IRELAND PHARMACEUTICALS Respondent PFIZER IRELAND PHARMACEUTICALS and others named in the schedule Cross-Claimants APOTEX PTY LIMITED (ACN 096 916 148) Cross-Respondent JUDGE: BEACH J DATE: 13 OCTOBER 2014 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 The applicant (Apotex) seeks a declaration that claims 1-8 of Australian Standard Patent No. 676571 (the patent) are invalid and should be revoked. The first respondent is the registered proprietor of the patent and the second respondent is the exclusive licensee of the patent (collectively, Pfizer). The grounds asserted for invalidity are that the claims fail to disclose the best method for performing the invention and lack sufficiency (s 40(2) of the Patents Act 1990 (Cth) (the Act)). Invalidity is also asserted for lack of fair basis (s 40(3) of the Act). 2 Claim 1 defines the invention as: "A method of treating a male animal requiring such treatment, including man, to cure or prevent erectile dysfunction which comprises treating said male animal with an effective amount of a compound formula (I)" 3 Formula (I) defines a broad class of pyrazolo [4,3-d] pyrimidin-7-one compounds, a pharmaceutically acceptable salt thereof, and a pharmaceutical composition containing both; Claims 2-5 refer to preferred, particularly preferred and especially preferred groups of compounds of formula (I). Claims 6, 7 and 8 claim the said method but in a single, different, compound of formula (I). So, claims 6, 7 and 8 are described in terms: 6. The method according to claim 5, wherein the compound of formula (I) is: 5-(2-ethoxy-5-morpholinoacetylphenyl)-1-methyl-3-n-propyl-1,6-dihydro-7H-pyrazolo-[4,3-d]pyrimidin-7-one. 7. The method according to claim 5, wherein the compound of formula (I) is: 5-[2-ethoxy-5-(4-methyl-1-piperazinylsulphonyl)-phenyl]-1-methyl-3-n-propyl-1,6-dihydro-7H-pyrazolo[4,3-d]pyrimidin-7-one. 8. The method according to claim 5, wherein the compound of formula (I) is the monocitrate salt of 5-(2-ethoxy-5-(4-methyl-1-piperazinylsulphonyl)-phenyl]-1-methyl-3-n-propyl-1,6-dihydro-7H-pyrazolo[4,3-d]pyrimidin-7-one. 4 The compound described in claim 7 and the subject of the method claimed is known as sildenafil. The compound described in claim 8 and the subject of the method claim is a monocitrate salt of sildenafil (sildenafil monocitrate); this is sold by Pfizer as Viagra. 5 Apotex asserts that the best method known to Pfizer at the relevant date(s) was the method using sildenafil monocitrate which is referred to in claim 8. Apotex asserts that sildenafil monocitrate is not referred to elsewhere in the specification. Further, Apotex asserts that claim 8 was inserted by amendment of the specification on 6 January 1997 and therefore was not disclosed or described in the specification at the required date(s), viz 13 May 1994 (the date the complete specification for the patent was filed). Pfizer disputes that it knew as at 13 May 1994 that a method using sildenafil monocitrate was the best method. It would seem that the identification of sildenafil monocitrate was because it was known to provide or facilitate an intravenous formulation for the treatment of angina. But Pfizer disputes that it was known at the relevant time that the best method for the treatment of impotence was to use this salt. Further or alternatively, Pfizer asserts that there was disclosure in any event because there was disclosure, in the unamended specification, of "pharmaceutically acceptable salts of the compounds of formula (I)" including non-toxic acid addition salts formed with, inter alia, organo-carboxylic acids (this includes, without expressly stating it, sildenafil monocitrate). 6 The patent expired on 13 May 2014, although this is no bar to revocation, which takes effect ab initio. Revocation is pursued in the following context. Pfizer has contended that prior to the expiry, Apotex threatened to infringe the patent. However, apparently there was no actual infringement. Apotex never went to market and was precluded from doing so by an interlocutory injunction granted against it on 27 September 2012; it had the benefit of a corresponding undertaking as to damages. If the patent is revoked, Apotex may be able to enforce that undertaking as to damages and claim compensation. If Apotex's challenge fails, Pfizer may be entitled, at most, to a declaration of threatened infringement of the patent by Apotex on Pfizer's cross-claim; pecuniary relief and injunctive relief do not arise. 7 The trial of this proceeding is to commence on 30 October 2014. 8 Apotex has sought access under r 2.32(4) of the Federal Court Rules 2011 (Cth) to material in the court file in proceeding VID 602 of 2002 (Eli Lilly v Pfizer proceedings). The Eli Lilly v Pfizer proceedings also concerned the validity of the patent. In particular, they principally concerned the validity of claim 10, which has now been revoked. Moreover, many of the asserted grounds of invalidity advanced in those proceedings do not directly relate to the issues in dispute in the matter before me. Further, many of the Pfizer entities that were parties in the Eli Lilly v Pfizer proceedings are not parties to the present proceedings. Apotex has sought access to various affidavits/witness statements (including annexures/exhibits) that were tendered and read in that proceeding (the earlier filed material). It asserts that the earlier filed material is relevant to one of the matters at issue in the present proceeding concerning Pfizer's alleged failure to disclose the best method for performing the invention. To be precise, it asserts that the specification did not describe the best method known to Pfizer of performing the invention as at 13 May 1994. The further amended particulars of invalidity refer to various findings of Heerey J in support of such allegations; see [1.1], [1.12], [1.13], [1.14] and [1.15] thereof referring to Eli Lilly v Pfizer (2005) 64 IPR 506; [2005] FCA 67 at [28], [32]-[33], [47], [206], [208]-[210] per Heerey J and on appeal, Pfizer v Eli Lilly (2005) 68 IPR 1; [2005] FCAFC 224 at [158]-[169], [171]-[174], [176]-[179], [349], [374]-[392]. Apotex has also sought leave to issue a subpoena directed to the former solicitor of Pfizer seeking the earlier filed material together with other material. Pfizer has opposed such applications. 9 On 13 October 2014 I ordered that such access be granted with reasons to be published later. I also granted leave to issue the requested subpoena. These are my reasons. 10 First, on any view, the earlier filed material is relevant to the issues concerning the alleged failure to disclose the best method raised by Apotex as a ground of invalidity. Such material is relevant to Pfizer's knowledge at the relevant date(s) and the objective question of the relevant best method. 11 Second, Pfizer has at all times, and continues, to put in issue the factual substratum underpinning this ground of invalidity. 12 Third, the applicant in the Eli Lilly v Pfizer proceedings does not oppose such access. 13 Fourth, Apotex has agreed that to the extent that the annexures/exhibits contained in the earlier filed material are confidential that it does not seek access to them. 14 Fifth, generally, where an affidavit/witness statement has been read in open court, it should be available for inspection unless the interests of justice require otherwise (Brown v Health Services Union (No 4) [2012] FCA 1376 at [44] per Flick J and Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 13) [2012] FCA 370 at [48] per Flick J). The interests of open justice are engaged if the filed material has been admitted into evidence (see Hogan v Australian Crime Commission (2010) 240 CLR 651 at [41]). 15 Pfizer has opposed the applications. Pfizer asserts that it will be significantly prejudiced by such leave. Its written submissions assert at [1.4] that: [T]he Pfizer Parties contend that they will be significantly prejudiced by leave being granted to Apotex in accordance with paragraph 1.1 above. Such leave will cause the Pfizer Parties significant distraction during the preparation for trial in this proceeding (which commences in three weeks). They will need to review the Eli Lilly Material in detail, locate and review other material from the Eli Lilly Proceeding in order to properly understand the Eli Lilly Material and put it into appropriate context, and take all necessary steps arising from that review, including the potential filing of further affidavit evidence from additional witnesses: see also and in particular paragraphs [12] and [13] of the Tyacke Affidavit. Mr Tyacke observes at [12] that he considers that attending to these tasks above would: "severely compromise, if not make impossible, the proper preparation of my clients' case for trial this year." 16 That prejudice is said to arise against the following background: The filing of all affidavit evidence in this proceeding was completed in December 2013; Pursuant to directions of the Court, the three experts who provided affidavits going to validity met and conferred during July 2014 and provided a detailed joint report in July 2014; Apotex has never applied for any order for discovery in this proceeding, including discovery of material in the nature of the earlier filed material; Apotex first contacted Pfizer regarding its request for access to the earlier filed material on 2 September 2014, and then only at the direction of the Registrar; The Pfizer parties (with the exception of Pfizer Australia Pty Ltd, then known as Pfizer Pty Ltd) were not parties to the Eli Lilly v Pfizer proceedings; The respondents to the Eli Lilly v Pfizer proceedings were represented by different solicitors and counsel to those representing the Pfizer parties in the current proceeding; The Eli Lilly v Pfizer proceedings were commenced more than twelve years ago and the trial in that proceeding took place almost 10 years ago; Extensive discovery was given by the respondents in the Eli Lilly v Pfizer proceedings, exceeding 64,000 pages; The attack on the patent in the Eli Lilly v Pfizer proceedings was different from that brought by Apotex in the current proceeding and involved a different claim of the patent, a far greater range of grounds and issues, and far more voluminous affidavit evidence from different witnesses; and It is plain from the Full Court's description of the evidence of witnesses in the Eli Lilly v Pfizer proceedings (Pfizer v Eli Lilly (supra) at [77]-[199]), that much of the earlier filed material will be relevant to grounds of invalidity not advanced in this proceeding, in particular that the claims of the patent in issue are not inventive and novel. 17 Pfizer accepts the exposition of legal principles that I have set out in [14] above but adds the rider that the principles of open justice relevant to the exercise of any power under r 2.32 should not prevail over s 37M of the Federal Court of Australia Act 1976 (Cth); it also seeks to gain comfort from the principles expounded in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [4]-[6], [96] and [100]-[113]. 18 I accept Pfizer's recitation of the background facts and principles. Nevertheless, in my view, the grounds for its opposition are unpersuasive. 19 Pfizer's resistance is principally based on asserted prejudice. It relied upon an affidavit of Nicholas Alexander Tyacke, solicitor for Pfizer, affirmed on 9 October 2014, which deposed to the proposition, essentially, that if Apotex obtains access to the earlier filed material, then numerous solicitors and counsel of Pfizer would likely need to: review the earlier filed material; locate (if possible) and review any documents referred to in the earlier filed material; consider if or how Apotex might seek to employ the earlier filed material in this proceeding; locate, if possible, the discovery and Court Book from the Eli Lilly v Pfizer proceedings; review that material to, inter alia, determine whether it assists in providing context to any potentially relevant matters raised in the earlier filed material or addressing how Apotex might seek to employ the earlier filed material in this proceeding; and advise Pfizer as to steps that might need to be taken arising from their review, consideration and determinations, including possibly interviewing witnesses that gave evidence in the Eli Lilly v Pfizer proceedings and others that did not. 20 But accepting all this to be so, I do not consider this to be a valid reason for denying the application of Apotex. The request for access is not unduly burdensome or oppressive in terms of the documents sought. Further, the request for access relates to relevant material. Pfizer has put the relevant factual matters squarely in issue. Further, whether Pfizer anticipated this request (and at this time) or not and its asserted likely response in my view is not a basis to refuse access. How Apotex subsequently deploys such earlier filed material, if it seeks to tender it, may have certain consequences, but at this stage the point is hypothetical. For all I know, Apotex might not seek to deploy any of it. But if they seek to tender it, then given the lateness and the absence of prior notice to Pfizer, that may provide a basis for Pfizer to seek tailored orders in relation to any prejudice caused, including an adjournment of the trial or aspects thereof. But at this stage, simply because Pfizer might react in the manner deposed to is not a sufficient basis for refusing access and notwithstanding that it is asserted that such a reaction is said to "severely compromise, if not make impossible, the proper preparation of [Pfizer's] case for trial this year". Further, it might be said that Pfizer could always have expected Apotex, at some stage, to obtain such material as was necessary for Apotex to prove its case, particularly as Pfizer has put the relevant matter in issue. Moreover, I very much doubt that the ambit of Pfizer's asserted response is quite as definitive as might be asserted in the Tyacke affidavit. No doubt Pfizer's response could be limited by first speaking with one or two relevant witnesses. Moreover, I must weigh Pfizer's assertions against Apotex's need for the material and prejudice to it if it was not able to access it. 21 Apotex has pointed out in the affidavit of Kellech Nanette Smith, solicitor, sworn 6 October 2014 in support of its application that it has partly sought at this late stage this access to the earlier filed material based upon notices of dispute filed by Pfizer to the notices to admit of Apotex. Notwithstanding, Apotex should have pursued access to this material at an earlier time. It seems to have waited until after the second notice of dispute was given on 5 August 2014. In my view, such access should have been pursued well before the date for filing of evidence (including expert evidence and a joint report). But having said that, at this stage I cannot shut Apotex out from obtaining such access. Equally, I cannot criticise Pfizer for not earlier taking the steps that it now envisages it might have to take. It may be correct to say that the relevant matters were always in issue, but Pfizer was entitled to take such steps which were a response to and proportionate to what Apotex put forward as its evidence. Apotex may now seek to supplement its proposed evidence. But if it does, Pfizer will be given a reasonable opportunity to address it. 22 Apotex has also sought leave to issue a subpoena to Pfizer's former solicitor seeking production of the same documents, together with some additions. In my view, similar issues arise. 23 I will grant Apotex the access sought and leave to issue the requested subpoena. Apotex has also filed and served a notice to produce covering similar territory. I will stand this over until trial. I will also direct Apotex to provide by 23 October 2014 identification and details of that part of the earlier filed material that it seeks to tender in evidence or otherwise deploy. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Beach. Associate: Dated: 28 October 2014 Schedule of Parties NSD 1174 of 2012 Federal Court of Australia District Registry: New South Wales Division: General Second Respondent: PFIZER AUSTRALIA PTY LTD (ACN 008 422 348) CROSS CLAIM Second Cross Claimant: PFIZER AUSTRALIA PTY LTD (ACN 008 422 348) Third Cross Claimant: PFIZER INC