Case: Genrx Pty Ltd v Sanofi-Aventis [2007] FCA 1485 ; (2007) 73 IPR 502
Outcome: referred to
practice to which their Honours referred is no longer the practice of the courts. This much appears from the authorities to which counsel for the applicants referred me, including AB Hassle v Pharmacia (Australia) Pty Ltd (1995) 33 IPR 63 , Genrx Pty Ltd v Sanofi-Aventis [2007] FCA 1485 ; (2007) 73 IPR 502 , and Interpharma Pty Ltd v Commissioner of Patents [2008] FCA 1498 ; (2008) 79 IPR 261. The reason for the change in practice is that the legislative requirements for grant of a patent are more exacting than they once were and include provision for opposition proceedings before the grant. In Genrx (73 IPR at 503-504 [2]-[6]), Gyles J again considered the ongoing significance of Beecham for the grant of interlocutory injunctions in cases of alleged patent infringement. As his Honour observed, after American-Cyanamid Co v Ethicon Ltd [1975] UKHL 1 ; [1975] AC 396 , there was a good deal of discussion about the importance of apparent differences between American-Cyanamid and Beecham . His Honour continued (at 503 [4]): The most influential consideration of the issue in relation to patents was that by Gummow J in Martin Engineering Co v Trison Holdings Pty Ltd (1988) 81 ALR 543 ; 11 IPR 611. In the course of that judgment his Honour pointed out that the authorities referred to by the High Court in Beecham Group for not attributing great significance to the grant of a patent were old cases from England based upon a different system for grant than that which had developed in Australia by that time. The system of examination of patents prior to grant in Australia was more stringent than had been the case in England the century before. The practical effect of this decision was to give greater weight to the grant of a patent thereafter than might have been deduced from Beecham Group . Further, Mr Reynolds' evidence is that, if the respondent is permitted to sell the syringes in issue, there will be what Gyles J called "interference with ... trade patterns": see Genrx at 506 [15] and Interpharma at 280 [71]. That is: If the respondent is permitted to continue supplying its syringes at a price that is approximately 20% less than Imaxeon's price, then Imaxeon would probably be compelled to lower the price for its equivalent syringes or lose its customer base. There is a real risk that if it held to its higher price, this would damage its reputation and have ramifications when a customer came to purchase or upgrade their injector system. If Imaxeon is compelled to lower the price for its syringes, the price reduction would probably be permanent (even if Imaxeon succeeded at trial) and result in a significant overall loss of revenue which would be very difficult to quantify. Any price increase would compromise Imaxeon's reputation and goodwill and the chances of securing new customers in a market where prices are either stable or declining. By regularly supplying their customers with replacement syringes, Imaxeon retains regular contact with the applicants' customers. This confers various advantages, including that Imaxeon is foremost in the customer's mind when the time arrives to replace an injector system. Imaxeon would likely suffer a loss of reputation if there were defects in the respondent's syringes because the defects would affect the operation of the injector system. (I note that, in argument, the applicants did not invite the court to give this consideration a great deal of weight since there was no evidence of defects in the respondent's syringes.) The respondent noted that the applicants had presented little detailed evidence on pricing and the effects of competition. The respondent noted that Mr Reynolds' affidavit established that, in any event, the major suppliers of injector systems compete against one another on the cost of the injector systems and consumables and that the prices for the applicants' syringes broadly reflect the pricing for other CT contrast injector systems. It followed, so the respondent said, that price competition was a feature of the market and that the applicants were already competing with the respondent, which was supplying syringes to competing systems. The respondent noted that the applicants had not yet lowered their prices as a result of the respondent's entry into the market. Further, the respondent challenged Mr Reynolds' evidence that any price reduction would be permanent and, in this regard, referred to Ms Evans' evidence that this had not been her experience in the business of Jacobs Medical Australia Pty Ltd. The respondent observed that, in elaborating on the harm likely to befall their business, the applicants had engaged in a degree of speculation. I accept that evidence about the nature of the competition in the medical injector systems and associated consumables market and the effect of new entrants might well be complex. Obtaining complete evidence of this kind would be expensive and probably unjustified for this application. It is undisputed that the applicants occupy a large proportion of the present market, and derive a large proportion of their revenue from the sales of consumables for the contrast injector systems, particularly KLIKFIT syringes and STELLANT&#8482; syringes for the VISIMAX&reg; CT and the STELLANT&#8482; CT contrast injector systems respectively.