Preliminary discovery not justified by fear of a future product launch
In Pfizer Ireland Pharmaceuticals v Sandoz Pty Ltd  FCA 1648, the Federal Court of Australia declined to order preliminary discovery against Sandoz, the holder of an ARTG registration for biosimilar etanercept, that had no present intention to launch its ERELZI® product in Australia. The Court was unwilling to make such an order based on the hypothesis that Sandoz would threaten to infringe Pfizer’s etanercept patents in the future.
Sandoz sought ARTG approval for its ERELZI etanercept products, which are biosimilars of Pfizer’s ENBREL®. Sandoz sought the approval irrespective of any intention to launch ERELZI in Australia, as is its usual practice. The TGA approved the products.
Sandoz also sought a recommendation from the PBAC that ERELZI be listed on the PBS and the PBAC obliged. However, to obtain PBS listing, Sandoz was also required to provide pricing information, which it did not do. Instead, Sandoz stated that it had decided not to proceed with PBS listing at that time.
Pfizer has three process patents in Australia relating to aspects of the manufacture of etanercept. Following Sandoz’s TGA approval of ERELZI, Pfizer requested that Sandoz produce to Pfizer documents concerning relevant aspects of the manufacture of the ERELZI products. Sandoz declined, but offered undertakings not to launch the products without giving Pfizer 60 days’, and later 150 days’, notice of Sandoz’s intention to do so. Pfizer rejected these undertakings.
Pfizer did not push the issue again until sometime later, and notwithstanding Sandoz’s offer of a further (confidential) undertaking, Pfizer sought preliminary discovery of documents relevant to the manufacture of ERELZI pursuant to Federal Court Rule 7.2.3.
To obtain preliminary discovery under FCR 7.2.3(1), Pfizer was required to:
(a) reasonably believe that it might have the right to obtain relief against Sandoz for threatened patent infringement;
(b) have insufficient information to decide whether to seek that relief, having made reasonable enquiries; and
(c) reasonably believe that Sandoz had (or was likely to have) in its control documents directly relevant to whether Pfizer had the right to obtain relief from threatened patent infringement, where inspecting the documents would assist Pfizer in deciding whether to seek that relief.
But even if Pfizer was able to meet those requirements, under FCR 7.2.3(2), the Court had discretion as to whether to order preliminary discovery in the circumstances.
Issues in dispute
The dispute between the parties centred on whether Pfizer reasonably believed that it might have the right to obtain relief against Sandoz for threatened patent infringement (FCR 7.2.3(1)(a)), and if so, whether the Court should exercise its discretion to order preliminary discovery (FCR 7.2.3(2)).
Pfizer did not challenge Sandoz’s evidence that it had not decided whether to launch ERELZI in Australia and that, consequently, there was no proposed launch date for ERELZI, or product, in Australia. Pfizer’s position was that, in applying FCR 7.2.3, Sandoz’s intentions were subject to change and should be given little weight, and that the undertakings offered by Sandoz afforded Pfizer insufficient time in which to seek preliminary discovery to support an application for an interlocutory injunction to prevent Sandoz from launching. Pfizer also submitted that the Court could make the order for preliminary discovery but not require Sandoz to produce responsive documents until Sandoz notified Pfizer of an intention to launch. This would give Pfizer sufficient time to inspect the documents and seek an interlocutory injunction against Sandoz.
Justice Burley considered Pfizer’s application for preliminary discovery to be misconceived because FCR 7.2.3(1)(a) required Pfizer to believe that it might have the right to obtain relief from threatened patent infringement at the date the application was assessed by the Court. Pfizer did not have that belief. Rather, Pfizer’s belief was contingent on Sandoz deciding to launch ERELZI in Australia sometime in the future. In those circumstances, Pfizer was asking the Court to rule based on hypothetical facts, which it was reluctant to do. Instead, if Sandoz’s notice of its intention to launch did not give Pfizer sufficient time to seek preliminary discovery and an interlocutory injunction against Sandoz, Pfizer could approach the Court to make urgent orders to protect its position.
The Judge would have declined to order preliminary discovery under FCR 7.2.3(2) for substantially the same reasons.
To succeed in an application for preliminary discovery in Australia, a patentee must reasonably believe that it may have the right to obtain relief from threatened patent infringement when the application is assessed by the Court. A patentee’s belief that it may have a right to relief from threatened patent infringement at some point in the future is insufficient for the Court to order preliminary discovery.