Trying to sue an (alleged) overseas infringer

Bennett J has refused Servier’s attempt to join several Apotex entities located outside Australia in its infringement action against the Apotex Australian arm.

Servier is the patentee of Australian patent No 2003200700 for the arginine salt of perindopril (perindopril arginine). Apotex Pty Ltd obtained listing with the Therapeutic Goods Administration (TGA) for a generic version of perindopril arginine. It commenced proceedings under s 138 of the Patents Act to revoke Servier’s patent.

Servier counter-claimed for infringement. Apotex Pty Ltd conceded the product it proposed to import would infringe Servier’s patent, if valid, and consented to an injunction prohibiting the importation and sale of its product pending the outcome of the revocation action.

Subsequently, Servier wished to join several related Apotex entities, all located and operating outside Australia, to its infringement allegations pursuant to Part 10.4 of the Rules. The infringements alleged were common design and authorisation. Bennett J had previously granted Servier leave to serve its infringement proceedings for another of its perindopil patents against at least 2 of the Apotex entities in question, Apotex Inc. and Apotex Pharmacem Inc.

As there can be no liability for authorisation or common design unless there is an act of primary infringement (i.e., someone must actually do something which is an act of infringement such as making or importing or selling or using the patented invention),  Servier sought relief on a quia timet basis; i.e., the risk that infringements would occur in the future.

 Servier relied principally the nature of the Apotex group as “a vertically integrated corporate group or a single worldwide organisation”, evidence from the earlier case that Apotex Inc. was the parent of Apotex Pty Ltd and directed its operations and information gleaned from Apotex Pty Ltd’s submissions to the TGA for marketing approval showing involvement by Apotex Pharmacen Inc. and several other entities whose names were redacted.
The central reasons for Bennett J’s refusal to permit service out were that:
60. The problem for Servier … is that there is no present actual or threatened primary infringement. If the Patent is valid, it is admitted by Apotex that the sale of Apotex P/L’s perindopril arginine is an infringing product. The only conduit for its sale, on the evidence, is Apotex P/L. Apotex P/L is subject to an interim injunction which will be made permanent if the Patent is valid. If the Patent is invalid, there is no question of infringement.
61. If Apotex P/L is not infringing and there is no present threat by Apotex P/L to infringe, there is no present basis for an injunction against the overseas cross-respondents to restrain any presently occurring act; there is no present infringement and no present threat to infringe.
62. Servier suggests that it could be the case that the overseas cross-respondents could produce a new product or enter into a common design with another Australian company to infringe the claims. Apart from a hypothetical suggestion made by Servier’s counsel, there is no factual basis for such a threat or such an apprehension.
63. In the present case, the threat is not imminent. There is no demonstrated real risk of wrongful conduct which would cause injury. ….
The evidence in this case, in contrast to the earlier case, showed that Apotex Inc. was not in fact the parent of Apotex Pty Ltd, they were different arms of the same corporate group.
In addition, both Apotex Inc. and Apotex Pharmacen Inc. were the subject of injunctions in Canada which precluded them from making perindopril arginine.
All of these facts distinguished the present application from the earlier case. Moreover, to date, only Apotex Pty Ltd had marketing approval from the TGA to import and offer for sale the Apotex version of perindopril arginine.

A second point is of general application.

The old rule in terms conferred a discretion on the Court whether or not to permit service out. Servier pointed out that Rule 10. , in contrast, is not expressed to be discretionary and, accordingly, it was entitled to an order for service out having satisfied the criteria specified. Bennett J was having none of that:

  • rule 10.43 set out matters an applicant for service out needed to satisfy, it did not constrain the Court;
  • after reference to s 37M, her Honour pointed that
    • Rule 1.31 empowered the Court to make any order in the proceeding having regard to the nature and complexity of the proceeding and taking into account proportionality
    • Rule 1.32 empowered the Court to make any order that the Court considers appropriate in the interests of justice (which included the power not to make an order) and
    • Rule 1.34 permitted the Court to dispense with compliance with the Rules

(Although it was unnecessary for her Honour to mention it, Rule 1.35 also permits the Court to make orders inconsistent with the rules.)

Apotex Pty Ltd v Les Laboratoires Servier (No 2) [2012] FCA 748