Otsuka Pharmaceutical Co., Ltd v Generic Health Pty Ltd

• Jurisdiction: Australia Federal only
• Court: Federal Court
• Judge: YATES J
• Judgment Date: 27 February 2019
• Neutral Citation: [2019] FCA 230
• Date: 27 February 2019

FEDERAL COURT OF AUSTRALIA

Otsuka Pharmaceutical Co., Ltd v Generic Health Pty Ltd [2019] FCA 230

File numbers:	NSD 121 of 2012NSD 837 of 2015
Judge:	YATES J
Date of judgment:	27 February 2019
Catchwords:	PRACTICE AND PROCEDURE – proceedings to enforce undertakings as to damages given in patent infringement proceedings – where several enforcement proceedings commenced – where allegations in one set of enforcement proceedings admitted but corresponding allegations in another set of enforcement proceedings denied – whether inconsistent allegations can be pleaded – whether pleading of denials is an abuse of the Court’s process – whether pleading of denials should be struck out
Legislation:	Federal Court of Australia Act 1976 (Cth) s 4 Federal Court Rules 2011, rr 16.06, 16.21(1)(f), 22.07, 30.11 National Health Act 1953 (Cth)
Cases cited:	Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 Issitch v Worrell (2000) 172 ALR 586 J C Decaux Pty Ltd v Adhsel Street Furniture Pty Ltd [2000] FCA 1118; (2000) 178 ALR 339 Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 Stohl Aviation v Electrum Finance Pty Ltd (1984) 5 FCR 187 Surfing Hardware International Holdings Pty Ltd v McCausland [2008] FCA 1522; (2008) 171 FCR 533 UBS AG v Tyne [2018] HCA 45
Date of hearing:	10 December 2018
Registry:	New South Wales
Division:	General Division
National Practice Area:	Intellectual Property
Sub-area:	Patents and associated Statutes
Category:	Catchwords
Number of paragraphs:	41
Counsel for the Applicants/ Appellants:	Mr J Sheahan QC Mr J Hutton
Solicitor for the Applicants/ Appellants:	Allens
Counsel for the Respondent	The Respondent did not appear
Counsel for the Commonwealth of Australia:	Mr P J Brereton SC Mr P Knowles Ms F Roughley
Solicitor for the Commonwealth of Australia:	Corrs Chambers Westgarth

ORDERS

		NSD 121 of 2012 NSD 837 of 2015
BETWEEN:	OTSUKA PHARMACEUTICAL CO., LTD First Applicant / First Appellant ; BRISTOL-MYERS SQUIBB COMPANY Second Applicant / Second Appellant
AND:	GENERIC HEALTH PTY LTD (ACN 110 617 859) Respondent ; COMMONWEALTH OF AUSTRALIA Other

JUDGE:	YATES J
DATE OF ORDER:	27 FEBRUARY 2019

THE COURT ORDERS THAT:

1. The interlocutory application filed on 16 November 2018 by the Commonwealth of Australia (the Commonwealth) be dismissed.

2. The Commonwealth pay the costs of Otsuka Pharmaceutical Co., Ltd and Bristol-Myers Squibb Company of and incidental to the interlocutory application.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

YATES J:

Introduction

1. The Commonwealth of Australia (the Commonwealth) applies to strike out paragraphs 78, 79, 80 and 82 of the Points of Defence which have been filed by Otsuka Pharmaceutical Co., Ltd (Otsuka) and Bristol-Myers Squibb Company (BMS) (together, Otsuka/BMS) in response to Amended Points of Claim filed by the Commonwealth in proceedings commenced by the Commonwealth to enforce undertakings as to damages given by Otsuka/BMS.

2. The undertakings were given by Otsuka/BMS in patent infringement proceedings commenced in January 2012 by Otsuka/BMS against Generic Health Pty Ltd (Generic Health) (NSD 121/2012—the primary proceeding), and in a subsequent appeal filed by Otsuka/BMS (NSD 837/2015—the appeal proceeding). In the primary proceeding, Otsuka/BMS sought, and obtained on 22 March 2012, interlocutory relief against Generic Health, including an interim injunction restraining Generic Health from, in effect, importing, selling or supplying certain pharmaceutical products listed on the Australian Register of Therapeutic Goods (the GH products or, simply, the products). The interlocutory relief also required Generic Health to withdraw its application to list the GH products under the Pharmaceutical Benefits Scheme (PBS) maintained by the Commonwealth under the National Health Act 1953 (Cth) (the NHA). An application for leave to appeal from the making of those orders was refused on 6 March 2013.

3. After a contested hearing for final relief conducted in the period 24 March 2014 to 17 April 2014, orders were made on 16 July 2015 revoking certain claims of the patent in suit. The orders also vacated the order that had been made for the interim injunction that had been granted on 22 March 2012. These orders were stayed on an interim basis, but the stay was extended on 14 August 2015 pending the determination of the appeal which Otsuka/BMS had commenced. On the same day, an order was also made requiring Generic Health to withdraw any application it had made to obtain listing of the GH products under the PBS. Otsuka/BMS gave further undertakings as to damages as a condition of the making these orders.

4. Otsuka/BMS’s appeal was dismissed on 24 August 2016. However, the operation of the stay granted on 14 August 2015 was continued until 4.00 pm on 21 September 2016. As a condition of granting the further stay, Otsuka/BMS gave further undertakings as to damages. The further stay granted on 24 August 2016 expired by effluxion of time. The significance of this event was that the interim injunction was vacated.

The points of claim/points of defence

5. On 15 June 2017, Generic Health filed an interlocutory application in the primary proceeding seeking, amongst other things, a declaration that it was adversely affected by the operation of the orders made on 22 March 2012 that were extended on 14 August 2015 and 26 August 2016 (this date appears to be an error), and entitled to just compensation pursuant to the undertakings that had been given in respect of those orders. It also sought an inquiry to assess the amount of the compensation. On the same day, it filed its Statement of Particulars of Claim for Damages in the primary proceeding.

6. On 18 July 2017, Generic Health filed an interlocutory application in the appeal proceeding seeking, amongst other things, a declaration that it was adversely affected by the operation of the orders made on 14 August 2015 and 26 August 2016 (once again, this date appears to be an error), and entitled to just compensation pursuant to the undertakings that had been given in respect of those orders. It also sought an inquiry to assess the amount of compensation. On the same day, it filed its Statement of Particulars of Claim for Damages in that proceeding.

7. I will refer to the claims for compensation filed by Generic Health in the primary proceeding and the appeal proceeding as Generic Health’s enforcement proceedings.

8. On 31 May 2018, the Commonwealth filed an interlocutory application in the primary proceeding seeking, amongst other things, an assessment of the amount payable to the Commonwealth pursuant to the undertakings given on 22 March 2012, 14 August 2015 and 21 August 2016 (this date appears to be an error). On 21 June 2018, it filed its Points of Claim in that proceeding and, on 30 June 2018, filed its Amended Points of Claim.

9. On 15 June 2018, the Commonwealth filed an interlocutory application in the appeal proceeding seeking, amongst other things, an assessment of the amount payable to the Commonwealth pursuant to the undertakings given on 14 August 2015 and 21 August 2016 (once again, this date appears to be an error). On 21 June 2018, it filed its Points of Claim in that proceeding and, on 30 June 2018, it filed its Amended Points of...