An interlocutory injunction is a temporary order that is granted during legal proceedings. These orders prevent a party from undertaking certain acts until the final determination of the proceedings. During proceedings, particularly those related to pharmaceutical patents, interlocutory injunctions typically include restraining a party from launching a product into the market.
In determining whether to grant an interlocutory injunction, two questions are considered:
- whether there is a prima facie case of infringement; and
- whether the balance of convenience favours the grant of injunctive relief (which includes whether the Applicant is likely to suffer injury where damages will not be an adequate remedy).
Prima Facie Case
In respect to this this question, the Applicant must show that there is a likelihood that a case of infringement can be proved during trial. The Applicant must be able to demonstrate that there is a probability that they will be found entitled to relief.
In order to satisfy this requirement, the Applicant will need to provide sufficient evidence to support an infringement claim. It may also be necessary to provide evidence to address any invalidity case or defense against infringement. Failure to satisfy these requirements will likely result in failure to obtain an interlocutory injunction.
Balance of Convenience
The next question considered after the prima facie case consideration is the balance of convenience. The Court considers inconvenience, hardship or injury that may be suffered by the Applicant if an interlocutory injunction is refused against the inconvenience, hardship or injury suffered by the respondent if an injunction were to be granted.
There are many factors involved in determining this convenience/inconvenience. Important aspects include whether the damages would be an adequate remedy and the strength of the Applicant’s prima facie case. In this regard, the Applicant must show that, if an interlocutory injunction is not granted, the harm they would suffer is significant and cannot be easily quantified or remedied by monetary compensation. Such harm may include loss of market share, reputational damage, or disclosure of confidential information.
Recent trends in Australia indicate that interlocutory injunctions are not granted unless there are significant compelling reasons. In this regard, the last interlocutory injunction granted in a pharmaceutical patent dispute was in 2018. Below are some summaries of a few injunction cases from recent years.
Biogen International GmbH v Pharmacor Pty Ltd — 2021 (2021 FCA 1591)
In this Federal Court decision, an interlocutory injunction was not granted against Pharmacor. For background, Biogen sought an interlocutory injunction to prevent Pharmacor from listing a generic dimethyl fumarate (DMF) product (Tecfidera) on the Pharmaceutical Benefits Scheme. Pharmacore, in response, cross-claimed that the patent was invalid and contended that the patent term extension was wrongly granted and should be revoked.
Without going into the specific details of the case, the patent term extension was based on Swiss-style claims which were found not to be directed to a pharmaceutical substance per se (required for a patent term extension) but rather directed towards a purpose limited product claim. Given that the patent would have expired (without a patent term extension), infringement would not be possible, and so the Federal Court found that Biogen had not established a prima facie case.
In relation to the balance of convenience, the Federal Court considered that the calculation of losses for either party was comparable because both calculations were complex. The Federal Court did note that Biogen intended to launch another product diroximel fumarate (Vumerity) which is marketed in the USA as being superior to Tecfidera. The Federal Court considered that Vumerity would have a significant effect on the DMF market in Australia and could significantly diminish the market in which Pharmacor could enter.
The Federal Court was not satisfied that there was a prima facie case of infringement because of a questionable patent tern extension.
Sanofi-Aventis Deutschland GmbH v Alphapharm Pty Ltd (No 3) [2018] FCA 2060
In this case, Sanofi was the Applicant for Australian Patent No. 2009304105 directed towards a drug delivery device (essentially a syringe containing a drug). Alphapharm was looking to list their product (Semglee) on the Pharmaceutical Benefit Scheme. Sanofi contended that the Semglee product would infringe claims 1-4 of the Patent. Alphapharm cross-claimed that the patent was invalid.
The same questions were required to be considered (prima facie case, and Balance of Convenience).
The Federal Court considered the strength of the infringement case and found that the lack of novelty case put forward by Alphapharm was strong. However, it was also found Sanofi had put forward a strong case that the Semglee product fell within the scope of claim 1. Overall, the Federal Court found that this did not override the possibility that the claims could be invalid (an invalid patent cannot be infringed).
In relation to the balance of convenience, Sanofi referred to the price reduction upon Semglee being listed on the Pharmaceutical Benefits Scheme, the impact on the pricing of products, loss of market share, price erosion and loss of profits as supporting an interlocutory injunction. In contrast, Alphapharm argued that it would be difficult to quantify the harm suffered if an interlocutory injunction was granted and then subsequently discharged after trial, and that it would lose its first generic mover advantage.
The Federal Court found that, in relation to the balance of convenience, Alphapharm was likely to suffer greater harm, and it would also be more difficult to calculate the damages and compensation associated with an interlocutory injunction being granted. As such, no interlocutory injunction was granted.
Sanofi sought leave to appeal this decision. However, the application for leave to appeal was refused (Sanofi-Aventis Deutschland GmbH v Alphapharm Pty Ltd [2019] FCAFC 28).
Abbey Laboratories Pty Ltd v Virbac (Australia) Pty Ltd [2024] FCA 1488
Although this Federal Court case did not involve a pharmaceutical, it does provide some useful guidance in relation to interlocutory injunctions. Virbac is the Applicant for Australian patent No. 2012227241 directed towards a veterinary topical formulation. Abbey Laboratories applied to register a generic version of the topical formulation. There were a number of exchanges between Abbey laboratories and Virbac regarding the launch of the generic product. Subsequently in late 2024 (December), Virbac applied for an interlocutory injunction with respect to the launch of the generic product. It should be noted that the initial exchanges between Abbey Laboratories and Virbac occurred in early 2024.
The main issue considered was the balance of convenience. In this field there is no equivalent to the Pharmaceutical Benefit Scheme (PBS), which is well known in the pharmaceutical world, and as such there is no automatic price drop when a generic product is registered. This can have a significant impact on the assessment of the balance of convenience.
The Federal Court considered the delay in seeking an interlocutory injunction. The Federal Court noted that Virbac had known that Abbey intended to launch their product at least 10 months before seeking the interlocutory injunction. It was considered that, even though the Virbac was aware of the launch of the generic product, there was no threat of applying for an interlocutory injunction or an application thereof. Considering these factors, it was found that Abbey was justified in assuming that no interlocutory injunction would be forthcoming and this could be considered justification for continuing its generic launch.
Ultimately, the Federal Court did not grant an interlocutory injunction. It was considered that the qualification of damages would be more readily quantifiable if the injunction was not granted rather than if it was granted. In this regard, it was found that Virbac’s potential loss was more readily quantifiable because it had an established track record of sales and market share. On the other hand, it was found that Abbey Laboratories would have more challenges in quantifying its losses if an interlocutory injunction was granted (e.g., loss of first generic advantage; reputational loss; and difficulty in predicting market share). The delay in applying for the interlocutory injunction also played a role in this decision.
Key Takeaways
Recent decisions appear to suggest that there are hurdles associated with obtaining an interlocutory injunction. However, in deciding whether to seek an interlocutory injunction, Applicants must consider the strength of their prima facie infringement case and the possibility of an invalidity cross-claim. These two aspects of a prima facie case go hand-in-hand, as a strong invalidity case will likely result in weak prima facie case regardless of whether the product falls within the scope of the claims.
Furthermore, Applicants must also consider multiple aspects in the balance of convenience. In this regard, Applicants will need to consider the difficulty in calculating damages when seeking an interlocutory injunction (for both parties), first generic mover advantage, the number of competing products (that might result in market changes), and reputational damage. Significant delays in applying for an interlocutory injunction will also likely support the denial thereof.
If you have further queries about interlocutory injunctions in Australia, please contact MBIP via email on mail@mbip.com.au. Our experienced team of attorneys would be glad to assist.
