Author
Julian Grover  
Senior Associate

---

Kim O'Connell  
Partner
T +61 2 9296 2188

---

Sydney
Kim O'Connell  
 

Melbourne
Robert Cooper  
  Wayne McMaster  
 

Brisbane
John Swinson  
 

---

The Federal Court handed down an important judgment¹ this week in patent proceedings between Merck & Co, Inc and GenRx Pty Ltd². Merck commenced proceedings alleging infringement by GenRx of its Australian patent (No. 625704), whose claims relate to certain compounds, and processes for preparing them, for the treatment of bone diseases.

Interim injunction granted

On Merck’s application, Justice Moore granted an interim injunction restraining GenRx from importing into Australia and supplying certain products containing the active ingredient AMT (alendronate monosodium trihydrate) – which is the subject of several claims of Merck’s patent. The injunction will remain in place until Merck’s infringement claims against GenRx, and GenRx’s cross claim seeking revocation of certain claims of that patent, has been determined at trial.

What does this mean for you?

The case is significant for suppliers of products who plan to enter the Australian market in the face of a patent which they are aware covers their product, but which they nevertheless believe to be invalid. The court suggests that allowing a would-be infringer to enter the market in these circumstances would undermine the scheme intended by Parliament to protect the rights of patent-holders. Instead the court considers that the appropriate course for a supplier is to use the mechanism provided by statute to revoke any patents “blocking the way”.

The result is a cogent warning to suppliers of likely-infringing products that the court is not afraid to grant interlocutory injunctions in patent cases where the infringer has gone in with “eyes wide open”, and it seems that unless that party can demonstrate the manifest and undeniable invalidity of the relevant claims at the interlocutory level, they are likely to be restrained until the dispute has been fully determined at trial. As his Honour noted, “Courts are now considerably less reticent about granting interlocutory injunctive relief in infringement proceedings, than may have been the case historically.” The decision means that it is imperative for suppliers to consider revocation strategies in circumstances where they intend to supply a product that is likely to infringe a patent.

The court’s reasoning

In applying the conventional principles for determining whether to grant an interlocutory injunction, and, in particular, determining where the so-called “balance of convenience” lay, his Honour gave much weight to the inference that GenRx had set about making commercial arrangements to supply a product fully aware of Merck’s patent claims and with little doubt that its products would infringe unless the patent’s validity could be impeached. In those circumstances, where it would have been open to GenRx to apply to the court to have the relevant claims revoked but it chose not to do so, the judge was not prepared to allow GenRx to proceed with its supply of the products – despite its belief that the claims were invalid.

Moore J determined, as a precondition to granting the injunction on established principles, that Merck would suffer irreparable harm for which damages would not be an adequate remedy if GenRx was not enjoined. However, he gave little weight to GenRx’s arguments that the damages it would be likely to suffer as a result of being enjoined would be even more difficult to quantify and compensate. In the court’s view, GenRx placed itself in this position with “eyes wide open”.

GenRx’s argument that the relevant claims of the patent were clearly invalid for lack of novelty over a single item of prior art was also dismissed as having limited prospects of success, although the judge accepted that there was a serious question to be tried on that issue.

Footnotes

¹ Merck & Co, Inc. and Anor v GenRx Pty Ltd [2006] FCA 1407.

² GenRx is an Australian subsidiary of Canadian generic pharmaceutical company Apotex.