Federal Court of Australia confirms that offers made during patent term to supply after patent expiry constitute infringement

This week the Federal Court of Australia (Nicholas J) delivered a significant judgment in Apotex Pty Ltd v Warner-Lambert Company LLC (No 3) [2017] FCA 94, confirming that an Australian patent will be infringed by offers made during the term of the patent, without the patentee’s consent, to supply infringing products after the patent has expired.  The reasons of Nicholas J observe that the exclusive rights of a patentee under section 13 of the Patents Act 1990 (Cth) include the right to offer the invention for sale, and confirm that the mere making of such an offer constitutes exploitation and therefore infringement of an invention.  This outcome is likely to restrict the marketing activities of potential infringers (such as generic pharmaceutical companies) in seeking to secure customers for their products in the lead-up to patent expiry.

 

Importantly, Nicholas J found that applying to list a generic (infringing) product on the Pharmaceutical Benefits Scheme (PBS) from a date after patent expiry “would fall short of offering to sell or otherwise dispose of the products”.  This is consistent with previous decisions that the act of applying for PBS listing of a generic pharmaceutical product does not itself constitute patent infringement, but that obtaining a PBS listing which starts before the patent expires arguably constitutes patent infringement because the generic party must guarantee supply of the product from the first day of PBS listing under the provisions of the National Health Act 1953 (Cth).

The patentee (Pfizer) succeeded in establishing infringement and validity and obtained a permanent injunction restraining the infringing products (pregabalin) of the generic party (Apotex) until the expiry of the asserted patent.  It is notable that Pfizer sought to be released from the “usual undertaking as to damages” it had given as a condition of obtaining an interlocutory injunction in March 2014, but that Nicholas J refused to make such orders and left the usual undertaking in place because of the possibility of a successful appeal by Apotex (in which case the interlocutory injunction would ultimately be found to have been improperly imposed).