ABBOTT GMBH & CO KG AND ANOTHER v. PHARMAREG CONSULTING CO LTD AND OTHERS

   HCA166/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 166 OF 2009

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REASONS  FOR  DECISION

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1. This is an application by the plaintiffs by Summons dated 11 November 2009 for extension of an interlocutory injunction against the 1^st and 2^nd defendants granted by Sakhrani J on 27 March 2009 for a further period of nine months after the expiry of the plaintiffs’ patent on 21 November 2009.

2. After hearing arguments from both parties, I granted the plaintiffs’ application and indicated that I will give my reasons in writing at a later date, which I now do.

Background

3. The 1^st plaintiff is the registered owner of Hong Kong Standard Patent No. 1006002 (“the Hong Kong Patent”) which claims the use of a chemical compound commonly known as Sibutramine in the manufacture of medicaments for the treatment of obesity.

4. The 2^nd plaintiff has been granted an exclusive licence by the 1^st plaintiff for the use in Hong Kong of the Hong Kong Patent.

5. The 2^nd plaintiff has spent extensive effort in promoting the anti-obesity drug “Reductil”, the active ingredient of which is Sibutramine, in Hong Kong to healthcare and medical professionals including doctors and hospitals as well as in the retail market including pharmacies and consumers.

6. There is no dispute that the 2^nd plaintiff has spent from about US$234,000 in 2002 to US$1,507,000 in 2008 for promoting Reductil in Hong Kong.  This has resulted in substantial growth in sales from US$2,706,000 in 2002 to US$6,433,000 in 2008.

7. Reductil sales account for some 40% of the 2^nd plaintiff’s total sales revenue in Hong Kong and is the 2^nd plaintiff’s best selling drug in Hong Kong.

8. The plaintiffs’ case is that the defendants have infringed the Hong Kong Patent by, without the consent or authorization of the plaintiffs and pursuant to a common design with Micro Labs Limited (“Micro Labs”) of India, the manufacturer of the pharmaceutical products OBIRAX-10 Cap 10 mg and OBIRAX-15 Cap 15 mg (collectively referred to as “OBIRAX”), the 1^st and 2^nd defendants having imported, put on the market and stocked OBIRAX which are products obtained by the process referred to in claims 1 and/or 2 of the Hong Kong Patent.

Interlocutory Injunction granted by Sakhrani J

9. As already indicated above, this matter came before Sakhrani J in March of this year when he was asked to deal with the plaintiffs’ application for interlocutory injunction against the 1^st and 2^nd defendants.

10. In dealing with that matter, Sakhrani J granted the interlocutory injunction sought by the plaintiffs and gave his Reasons for Judgment in writing on 17 April 2009. 

11. I am in full agreement with all that was said by Sakhrani J in his Reasons for Judgment.  What has been stated by Sakhrani J there also applies to this present application before me.  I therefore gratefully adopt the entirety of Sakhrani J’s Reasons for Judgment for present purposes.

12. The interlocutory injunction granted by Sakhrani J was ordered to be up to 21 November 2009 (being the expiry date of the Hong Kong Patent) or until further order.

13. There was no appeal by the defendants from the decision and the order made by Sakhrani J referred to above.

The present application for extension

14. The basis for this application by the plaintiffs for extension of the injunction order granted by Sakhrani J is that the 1^st defendant had by its alleged wrongful acts in infringement of the Hong Kong Patent, attempted to steal a headstart by importing or causing to be imported into Hong Kong OBIRAX thus allowing it to register same with the Department of Health even before the Hong Kong Patent had expired.

15. It is not disputed that such registration by the 1^st defendant with the Department of Health took some nine months before it was completed.

16. Accordingly, the plaintiffs now ask for the extension for nine months beyond the expiry of the Hong Kong Patent. 

17. The plaintiffs have also issued Order 14 proceedings against all defendants for summary judgment, but dates are yet to be fixed for the hearing of the Order 14 application.

18. In bringing this application, the plaintiffs rely on the decision in Simth Kline & French Laboratories Ltd & another v Douglas Pharmaceuticals Ltd [1991] FSR 522 for the proposition that importing and using a patented drug for the purpose of applying for government approval or registration constitute acts of infringement of the patent.

19. The plaintiffs also rely on the decisions in Dyson Appliances Ltd v Hoover Ltd (No. 2) [2001] RPC 544 at 558-568 and in Generics BV v Smith Kline & French Laboratories Ltd [1997] RPC 801 for the proposition that the court will grant an injunction extending beyond the date of expiration of a patent in order to prevent an infringer from unfairly benefiting from any advantage sought to be obtained by an infringer from acts of infringement committed during the term of the patent.

20. Applying those principles to the present case, the plaintiffs submit that since the defendants have imported and used the infringing Obirax capsules to apply for registration of OBIRAX-10 Cap 10 MG and OBIRAX-15 Cap 15 MG, and the application process took nine months, such acts constituted infringement of the Hong Kong Patent.

21. Through such acts of infringement the 1^st defendant has armed itself with registration of the aforesaid products which would enable the defendants to start marketing and selling the products immediately after the expiration of the Hong Kong Patent on 21 November 2009, unless restrained by the court by extending the injunction beyond the time of expiration of the Hong Kong Patent.

22. The plaintiffs have applied in their application for summary judgment for the “springboard” injunctive relief against the defendants to stop them from benefiting from their acts of infringement committed during the term of the Hong Kong Patent.  But since dates have yet to be fixed for the hearing of the summary judgment application, it is just and reasonable for the injunction to be extended until after hearing of the summary judgment application, but not longer than for nine months.

23. The plaintiffs further submit that such extension of the injunction would only prohibit the defendants from marketing and selling OBIRAX-10 and OBIRAX-15 during the extension and any loss to the defendants, if the injunction was wrongly granted, can be compensated in damages by the plaintiffs upon their undertaking.  But on the other hand, the damage caused to the plaintiffs by the acts of infringement, even in respect of the post-expiry period, if the injunction was not granted, would be difficult to quantify.

Preliminary points taken by defendants to plaintiff’s application

24. Before dealing with the merits, the defendants took a number of preliminary points in respect of the application by the plaintiffs.

25. I shall deal with each of the preliminary points taken by the defendants in turn.

26. Firstly, it was submitted that the plaintiffs did not come to court with clean hands, the relief sought, namely injunction, being an equitable relief.  The basis for so saying was that the plaintiffs’ product, Reductil, contained Sibutramine which is a poison contained in the Poisons List in Cap. 138, yet nothing in the advertising or promotional material mentions that fact.

27. Secondly, it was submitted that wording of the plaintiffs’ application effectively seeks a continuation of the injunction for an indefinite period.

28. Thirdly, it was submitted that because of the delay by the plaintiffs in seeking the present application, well knowing that the Hong Kong Patent of the plaintiffs will expire on 21 November 2009, that has caused prejudice and difficulties to the defendants, and the principles stated by Rogers VP in King Fung Vaccum Ltd v Toto Toys Ltd [2006] 2 HKLRD 785 as to delay should be applied.

29. Fourthly, it was submitted that the plaintiffs had abused the process since the consent order made by Master Levy on 16 October 2009 whereby it was agreed between the parties that the defendants will have 28 days to file an Amended Defence and Counterclaim (expiring on 17 November 2009) was short circuited by the Order 14 Summons taken out by the plaintiffs on 28 October 2009 which had effectively prevented the defendants from filing such Amended Defence and Counterclaim.

30. Fifthly, it was submitted that this application, which effectively asks for the extension of the Hong Kong Patent for an indefinite period (beyond its expiry) is usurping the function of the Patent Office.

Decision on preliminary points taken by the defendants

31. The first point taken by the defendants that the advertising or promotional material for Reductil makes no mention that its ingredient, Sibutramine, is a poison listed in the Poisons List under Cap. 138 ignores the fact that in the advertising or promotional literature of Reductil do not offer Reductil for sale, but rather, the promotional literature advise that a doctor should be consulted as Reductil can only be prescribed by a doctor.

32. I regard this first point taken by the defendants as wholly misconceived.

33. As for the second preliminary point taken by the defendants, while the plaintiffs’ Summons dated 11 November 2009 could have been better worded, it must have been clear to the defendants from the affidavits filed by the plaintiffs as well as from counsel’s skeleton argument that the plaintiffs were seeking for an extension of the interlocutory injunction granted by Sakhrani J only for nine months beyond the expiry of the Hong Kong Patent due to the fact that the defendant had wrongfully obtained a headstart by infringing upon the Hong Kong Patent during its currency.

34. In any event, there can be no question that by the order given by me after hearing arguments, the extension of the interlocutory injunction was only for a further nine months from the expiration of the Hong Kong Patent of the plaintiffs on 21 November 2009.

35. As for the third point taken by the defendants that the delay by the plaintiffs in taking out this application, the defendants have been prejudiced, albeit a tight time schedule was given by Sakhrani J to the defendants for the filing of affidavit evidence in opposition, however, I am unable to see any prejudice caused since the application was for an extension of the interlocutory injunction already given in March and the basis for it was due to the infringement by the defendants which infringement had already been canvassed in the earlier application for interlocutory injunction.  The only difference was that the time asked for the extension was the nine months beyond the expiry of the Hong Kong Patent.  This aspect will be covered when I come to deal with the merits of the defendants’ case in the latter part of this Reasons for Decision. 

36. Turning now to deal with the fourth preliminary point raised by the defendants as to abuse of process on the basis that the Order 14 application had deprived them of filing an Amended Defence and Counterclaim as per the Consent Order made by Master Levy, the short answer to that is that the defendants were not precluded or prevented from raising any defence which they had wished to by way of affidavit even if they were not able to file an Amended Defence and Counterclaim because of the Order 14 application.  In this sense I cannot see how the defendants could have been prejudiced or disadvantaged.

37. As for the fifth point of the defendants that this application usurped the function of the Patent Office, in my view, that point is a non-starter since it is upon good authorities that the court is given the jurisdiction to make the order sought by the plaintiffs in this application.  Whether the court will exercise that power to make the order sought depends on other consideration which I will come to when dealing with the issue of merits, but that is a far cry to say that this application usurps the function of the Patent Office.

38. For the above reasons, none of the preliminary points assist the defendants in their opposition to this application.

39. I turn now to consider the case on merits.

Case on merits

40. In so far as the merits of the defendants’ case is concerned, the argument runs along the following lines :

(1) the Hong Kong Patent is of a process claim and the plaintiffs’ process is to use Sibutramine in the manufacture of a medicament for treatment of obesity;

(2) the defendants’ OBIRAX is made by the process of the use of Sibutramine in the manufacture of a medicament for weight management if other risk factors such as diabetus mellitus or hyperlipidaemias are present;

(3) the letter from the Department of Health dated 15 December 2008 makes it quite clear that there are two distinct indications of Sibutramine, namely for treatment of obesity and also for the management of body weight if the other risk factors such as diabetus mellitus or hyperlipidaemias are present;

(4) therefore the process used by Micro Labs in the manufacture of OBIRAX is not an invention disclosed in the Hong Kong Patent, but rather it should be regarded as a subsequent second medical use of Sibutramine which is permissible in the “Swiss type” claim, which this is;

(5) the plaintiffs cannot extend the Hong Kong Patent to the use of Sibutramine in the manufacture of medicament for all kinds of weight management, but can only cover its own invention disclosed in 1989 when the Hong Kong Patent was published; and

(6) there is no other patent existing in Hong Kong for the process of using Sibutramine in the manufacture of a medicament for weight management if other risk factors such as diabetus mellitus or hyperlipidaemias are present.

41. As to the argument put forward by the defendants on merits, the plaintiffs’ response is that it is clear that those contentions are recent fabrications, unsupported by any evidence.

42. Firstly, the plaintiffs submit that until the 4^th Affirmation of Lin Kim Fung, that has never been the case of the 1^st defendant, but that prior to that 4^th Affirmation of Lin Kim Fung, the defendants’ case had always been that OBIRAX had been registered for the indication “weight management” only, and that was how the matter was argued before Sakhrani J previously.

43. Secondly, apart from the bare assertion contained in the 4^th Affirmation of Lin Kim Fung, the only other piece of evidence in which the words “management of body weight if other risk factors such as diabetes mellitus or hyperlipidaemias are present” can be found is the letter from the Department of Health dated 15 December 2008 (Exhibit “LKF18”).

44. However, it does not state that the OBIRAX products are “registered” for the indication of ‘management of body weight if other risk factors such as diabetes mellitus or hyperlipidaemias are present’.  In that letter from the Department of Health, it merely states that Sibutramine is used for the treatment of obesity and management of body weight if other risk factors such as diabetes mellitus or hyperlipidaemias are present.

45. Thirdly, the plaintiffs say that in any event, the critical issue is not what indication the 1^st defendant has registered the OBIRAX for but whether the process claimed in the Hong Kong Patent was used in the manufacture of OBIRAX.  In so far as what was stated in Exhibit “LKF 18” goes, that has been explained by Professor Philip James, the expert witness of the plaintiffs, to the effect that the phrase used in the that letter from the Department of Health was circumventing the problem that obesity as a generic term was being used to signify a BMI (body mass index) of 30 units or over, but that there was a category of patients who would more accurately be described as “overweight” and who are too heavy and also at the same time at substantial additional risk because they also have high blood pressure or an elevated blood cholesterol.  Therefore the Department of Health was simply specifying, so that there was no doubt, that the agreement for sibutramine included some patients with BMI’s between 27 and 30.

46. Professor James goes on to state that in so doing, the Department of Health was simply following international regulatory convention when they gave permission for sibutramine to be used in obesity treatment but also specified that patients with BMI’s not only above 30 but also in those with BMI’s from 27 to 30 if they had an additional risk factor were eligible for treatment.  The additional term of “weight management” therefore applied to this second group of patients who were not obese and this simply complied with the international convention to allow patients with BMI’s of 27 or more to be considered for treatment.

47. Finally, it was submitted by the plaintiffs that in the defendants’ case, it had been completely silent as to what indication Micro Labs had manufactured OBIRAX for.  This further supports the submission that the contention put forward now by the defendants is clearly a recent fabrication. 

Decision on the application

48. Albeit that the parties have gone into quite a bit of detail in their arguments on the merits of the case, I am of the view that it would not be proper for the court at this interlocutory stage to make any decision as the merits or otherwise of the case.  That would usually be decided at trial after hearing the evidence and cross examination, unless the plaintiffs succeed in showing that they are entitled to summary judgment without the necessity of there being a trial.

49. In either case, that would be matters for determination by the court at a later stage.

50. Before that ultimate question of rights can be determined as between the parties, and as with any application for interlocutory injunction, what the court has to decide in coming to a decision whether or not to grant the interlocutory injunction, is to balance the injustice that may result to the plaintiffs if the injunction was wrongly refused as against the injustice which may be caused to the defendants if the injunction was wrongly granted.  This is usually referred to as the balance of convenience.

51. In the present case, the fact that the interlocutory injunction sought in this application relates to nine months after the expiry of the Hong Kong Patent should not make the slightest difference to the criteria that has to be adopted in deciding on whether the interlocutory injunction sought should or should not be granted.

52. In this respect it should firstly be noted that Sakhrani J dealt with the balance of convenience between the parties in his Reasons for Judgment handed down on 17 April 2009 in this matter when he dealt with the interlocutory injunction.

53. I can do no better than to repeat and adopt all he had said in paragraphs 66 to 77 inclusive thereat in relation to the damages to the plaintiffs being incapable of assessment and which would not be an adequate remedy.  Therefore if the injunction sought was not granted there is likely to be irreparable damage caused to the plaintiffs. 

54. On the other hand, the present application being to injunct the defendants for nine months after expiry of the Hong Kong Patent from selling OBIRAX-10 and OBIRAX-15, any damage which may be caused to the defendants if this injunction was wrongly granted, ought to be clearly quantifiable and capable of assessment.

55. Moreover, the plaintiffs are in a position to pay any damages which may be assessed to the defendants for those nine months should that be the case.

56. Accordingly therefore, the balance of convenience is in favour of the injunction sought being granted in the interim.

57. It was for the above reasons, that I decided the application in the way it was decided.