An injunction is a Court order directing a person or entity to do a specific thing or refrain from doing something. Whilst an injunction in itself can amount to final relief in litigious matters, it can also be sought on an interlocutory or temporary basis (Interlocutory Injunction). This applies where a temporary remedy is sought to maintain the status quo until the larger legal issues can be heard at trial.
In matters relating to the infringement of a patent, an injunction may be sought by the patent owner (Applicant) to stop a defendant (Respondent) from doing the acts the patent owner alleges infringe the patent, until the Court has had the opportunity to determine whether or not the patent has been infringed. In this article we consider Interlocutory Injunctions in patent matters and how the tests differ from non-patent matters.
Interlocutory Injunctions in non-patent matters
Interlocutory Injunctions may be granted in matters relating to all kinds of legal proceedings, but the general principles which the Court will follow remain the same. In the decision of Australian Broadcasting Corporation v O’Neill [2006] HCA 46(ABC), the High Court cited and affirmed the principles of interlocutory injunctive relief from an earlier decision of the High Court in Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1, stating at [19] of the ABC judgment that:
‘…in all applications for an interlocutory injunction, a court will ask whether the plaintiff has shown that there is a serious question to be tried as to the plaintiff’s entitlement to relief, has shown that the plaintiff is likely to suffer injury for which damages will not be an adequate remedy, and has shown that the balance of convenience favours the granting of an injunction.’
Using this passage as a basis for establishing the threshold questions, the following must be established by an Applicant who seeks an Interlocutory Injunction:
- there is a serious question to be tried;
- there is a matter of urgency;
- damages will not adequately repair the harm; and
- the balance of convenience favours granting an injunction.
Interlocutory Injunctions in patent matters
The principles applicable to Interlocutory Injunctions in patent matters were discussed by the Full Court of the Federal Court in Samsung Electronics Company Ltd v Apple Inc [2011] FCAFC 156 (Samsung). The matter involved the appeal by Samsung to the award of an Interlocutory Injunction by the judge at first instance. When considering the appeal, the Full Court outlined the elements required for the Applicant to be successful in an application for an Interlocutory Injunction in a patent matter.
The Full Court noted that:
- the power to grant injunctive relief in a patent matter is founded in section 122 of the Patents Act 1990 (Cth)(Patents Act);
- the power to grant interlocutory relief is founded in section 23 of the Federal Court of Australia Act 1976 (Cth);
- regard must be had to the existence of a legal or equitable right which the injunction protects against invasion or threatened invasion; and
- the key elements the Court is required to consider are:
- whether the Applicant has demonstrated a prima facie case of infringement of the patent; and
- that the balance of convenience favours the grant of an injunction up to the date of the trial.
Following these observations, it is clear that in order for a party to be granted an Interlocutory Injunction in a patent matter, the party must prove to the Court that (as summarised by Kenny J in InterPharma Pty Ltd v Hospira, Inc (No 3) [2017] FCA 1536 (InterPharma) at [20]):
- there is a prima facie case such that, if the evidence remains the same, there is a probability that the Applicant will succeed at trial; and
- the balance of convenience favours the grant of an Interlocutory Injunction.
The two elements are to not considered in isolation
As the Full Court in Samsung stated at [67], when considering whether to grant an Interlocutory Injunction, the issue of whether the Applicant has made out a prima facie case and whether the balance of convenience and justice favours the grant of an injunction are related inquiries. The question of whether there is a serious question of a prima facie case should not be considered in isolation from the balance of convenience test.
A basis for this reasoning is founded at paragraph [51] of the judgment in Samsung, which provided:
‘It is true that an applicant for interlocutory relief need not necessarily show that its case is, on balance, likely to succeed. However, the exercise described in O’Neill may lead to the conclusion that in order sufficiently to recognise the serious consequences for the respondent of the grant of interlocutory relief, the applicant should reasonably be expected to demonstrate such likelihood. Where the merits and the question of convenience are fairly evenly balanced, there will be no injustice in requiring that the party seeking relief demonstrate good prospects of success before imposing almost certain prejudice on the other side.’
As Beach J in Apotex Pty Ltd v Cipla Limited [2017] FCA 1627(Apotex) observed at [41], the stronger the prima facie case, the less the need to satisfy the Court of the balance of convenience, and vice versa. The relationship between the two (2) elements is therefore something parties should bear in mind when considering their respective positions.
Element 1: Prima facie case
In this element the Court will consider the strength of the overall case, being the strength of the Applicant’s case that its patent has been infringed, but also the strength of any defence such as non-infringement and any potential cross-claim for revocation of the patent on the grounds of lack of novelty or lack of inventive/innovative step for example.
Element 2: Balance of convenience
This element allows the Court to apply its discretion in light of the circumstances of the case. As Kenny J stated in InterPharma at [25], the considerations affecting the balance of convenience will depend on the circumstances of the particular case. These considerations include:
- the likely harm to the Applicant if the Interlocutory Injunction is refused;
- the likely harm to the Respondent if the Interlocutory Injunction is granted;
- whether damages will be an adequate remedy; and
- the status quo.
In Apotex, a matter regarding a patent for therapeutic goods, Beach J, when considering the balance of convenience in the matter, made the following observations at [131]-[135] (as they related to that case):
‘131 First, the status quo is that Apotex is presently not in the market.
132 Second, this is not a case where granting an interlocutory injunction will practically put an end to this litigation.
133 Third, the Patent is longstanding. Apotex has known of the Patent for some time, and that its products may infringe if the Patent is valid. But they have not, as the cross-claimants describe it, sought to “clear the way” by bringing revocation proceedings at an earlier time. I accept, as Apotex contends, that this does not necessarily need to have happened, but by not doing so Apotex took the risk.
134 Fourth, I accept that the strength of the prima facie case limb, in this case the strength of both the infringement case and the strength of the asserted grounds of invalidity, may inter-relate with and weigh with the balance of convenience question. But on this aspect, any such relative strengths weigh more to the advantage of the cross-claimants. They have a strong prima facie case on infringement, assuming validity. And as to the invalidity questions, Apotex only has a reasonably arguable position on lack of manner of manufacture and lack of inventive step, and a weaker argument on lack of novelty.
135 Fifth, no case has been put that Cipla would suffer damage if the injunction were to be refused.’
While Beach J then elaborated in these issues, they are an example of some of the factors a Court will consider in a patent matter where an Interlocutory Injunction is sought.
What ground validity of the patent is questioned
Generally, the Applicant in a patent proceeding will be the patent owner, who is seeking to enforce their patent rights against a Respondent who they allege has infringed their patent. As the Applicant can only enforce a patent if the patent is valid, where there are questions as to the validity of the patent (often raised in circumstances where the Respondent claims the patent is invalid), this is a consideration for the Court. As Beach J stated in Apotex at [43], the question of validity of a patent is an important factor to take into consideration.
While it is not clear which element the consideration of validity falls under (see the comments of Kenny J in InterPharma at [21] where her Honour said that “At some point in the relevant two-stage enquiry, the Court must make some assessment of the strength of the case on validity.”), we are of the view that it is likely that any questions of the validity of a patent are to be considered under Element 1.
On numerous occasions the Court has refused Interlocutory Injunctions after taking into account the validity of a patent, and the arguments surrounding its invalidity (see for example: Hexal Australia Pty Ltd v Roche Therapeutics Inc [2005] FCA 1218 and the decision of the Full Court in Smith & Nephew Pty Ltd v Wake Forest University Health Sciences [2009] FCAFC 142 to overturn a decision granting an Interlocutory Injunction on the basis that the claim of the patent in question was invalid).
Take aways
Interlocutory Injunctions can serve an important role in protecting the rights of patent owners. They have the power to restrain a party for doing any act that may infringe a patent, even where such infringement has not yet been proven. This, therefore, is a powerful tool for Applicants, and something that should be taken very seriously be Respondents. Given the often technical nature of the considerations in an application for an Interlocutory Injunction, carefully considering the evidence available and how quickly it can be gathered can be critical.
Further references
Cases
Apotex Pty Ltd v Cipla Limited [2017] FCA 1627
Australian Broadcasting Corporation v O’Neill [2006] HCA 46
Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1
Hexal Australia Pty Ltd v Roche Therapeutics Inc [2005] FCA 1218
InterPharma Pty Ltd v Hospira, Inc (No 3) [2017] FCA 1536
Samsung Electronics Company Ltd v Apple Inc [2011] FCAFC 156
Smith & Nephew Pty Ltd v Wake Forest University Health Sciences [2009] FCAFC 142
Legislation
Federal Court of Australia Act 1976 (Cth)
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Further information
If you need advice on a patent infringement matter, please telephone me for an obligation free and confidential discussion.
Malcolm Burrows B.Bus.,MBA.,LL.B.,LL.M.,MQLS.
Legal Practice Director
Telephone: (07) 3221 0013 (preferred)| Mobile: 0419 726 535
e: mburrows@dundaslawyers.com.au
Disclaimer
This article contains general commentary only. You should not rely on the commentary as legal advice. Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances
