Lessons from recent interlocutory injunctions in pharmaceutical patent cases

Is it becoming easier to obtain interlocutory injunctions in Australian pharmaceutical patent cases? We provide an overview of recent decisions in Australia's Federal Court that shine a light on some key lessons for patent owners.

Overview

In the decade to 2018, pharmaceutical patent owners were successful more often than not when seeking an interlocutory injunction to restrain Australian market entry by generic competitors pending the outcome of patent litigation. A seven-year period then followed in which no interlocutory injunctions were obtained.

However, two recent decisions of Australia's Federal Court suggest that interlocutory injunctions might, once again, be more readily available.

Key takeaways

• The Federal Court has acknowledged that quantifying a generic's losses (if an injunction is granted) may be more difficult than quantifying the originator's losses (if an injunction is refused) – and that this factor generally weighs in favour of refusing an interlocutory injunction.
• The Court also made clear that a decision to grant or refuse injunctive relief depends on the weighing of numerous factors, some of which are likely to be case-specific.
• It remains crucial for the parties to interlocutory injunction proceedings to adduce detailed evidence concerning the strength of their substantive case on both infringement and validity.
• Evidence should also be adduced to explain, in detail, the financial consequences of granting or refusing injunctive relief, addressing the possibility that multiple generics will enter the market and the financial impacts of such competition over the long term.

Background

For pharmaceutical originators, an interlocutory injunction is a key defensive tool. Once a generic has entered the market, it typically offers substantial discounts and quickly gains market share. Where the medicine in question is listed on Australia's Pharmaceutical Benefits Scheme (PBS), generic market entry has additional pricing implications.

The first generic to enter the market ordinarily triggers automatic cuts to the medicine's PBS price, as well as price disclosure mechanisms that serve to progressively reduce the price received by all suppliers of the medicine, including the originator.

These features of Australia's pharmaceuticals market mean that, once a generic enters, the market often changes in a permanent way.

For these reasons, if a patentee can demonstrate

1. that there is a prima facie case of patent infringement of sufficient strength, and
2. that the balance of convenience favours maintaining the status quo,

then a court will be likely to grant an interlocutory injunction, restraining the generic from entering the Australian market pending the outcome of patent litigation.

Importantly, as a condition for obtaining an interlocutory injunction, the patent owner must give what is known as the "usual undertaking as to damages".

Based on this undertaking, a patentee who obtains an interlocutory injunction but is ultimately unsuccessful in patent litigation may be required to compensate not only restrained generics, but also third parties adversely affected by grant of the injunction, such as Australia's Commonwealth Government (which pays higher prices for PBS-subsidised medicines while an injunction is in force).

Broadly, three phases may be discerned in the attitude of Australia's Federal Court to the grant of interlocutory injunctions in pharmaceutical patent disputes.

Phase 1: Before July 2018

During the decade from 2008 to 2018, applications for interlocutory injunctions had a high success rate in Australian pharmaceutical patent cases.

Two factors assumed importance during this phase:

• First, courts demonstrated some reluctance to weigh the relative strength of infringement and invalidity arguments at the interlocutory stage, being more inclined to find that there was a "serious question to be tried"
• Secondly, when assessing the balance of convenience, courts gave considerable weight to the fact that generic market entry would trigger (apparently irreversible) reductions in the medicine's PBS price (including for the originator product).

Phase 2: July 2018 to November 2025

From mid-2018, interlocutory injunctions were less frequently obtained in pharmaceutical patent cases. Two shifts help explain this.

Shifting perspective on the balance of convenience

One of the factors taken into account when assessing the balance of convenience is:

• the relative difficulty of quantifying the originator's losses – if an injunction is refused and the infringement case ultimately succeeds, versus
• quantifying the generic's losses – if an injunction is granted, but the patent is ultimately found to be invalid or not infringed).

In Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2018] FCA 1556, Justice Jagot suggested that it may be more difficult to evaluate a generic's losses (if an injunction is granted) than to evaluate the originator's losses (if an injunction is refused).

In a similar vein, in Sanofi-Aventis Deutschland GmbH v Alphapharm Pty Ltd (No 3) [2018] FCA 2060, Justice Burley observed that the originator's starting position (e.g., market share) is a known fact, whereas the position a generic would have achieved but for grant of an interlocutory injunction is largely speculative.

His Honour considered the generic's losses may be harder to quantify and refused an interlocutory injunction. These concerns were echoed in subsequent cases.

Commonwealth claims for compensation

A second change involved claims by the Commonwealth for compensation, under the usual undertaking, where grant of an interlocutory injunction sustained high PBS prices and the patent was later found to be invalid.

The first such claim involved the Commonwealth's pursuit of more than $300 million in damages from Sanofi in proceedings relating to Plavix^® (clopidogrel). Although the first hearing took place in 2017, the Commonwealth's claim was not finally resolved until 2024 (by a decision of the High Court, in Sanofi's favour).

During the intervening period, these proceedings had a chilling effect on the number of originators prepared to seek interlocutory injunctions (requiring them to give the usual undertaking).

In the seven years from 2018, the number of applications for interlocutory injunctions halved, compared to the seven years prior.

Phase 3: December 2025 onwards

In two recent decisions of Australia's Federal Court, originators were successful in obtaining interlocutory injunctions to restrain generic launch pending final judgment.

In Janssen Pharmaceutica NV v Juno Pharmaceuticals Pty Ltd [2025] FCA 1538, Justice Burley granted an interlocutory injunction restraining launch of Juno's generic long-acting paliperidone products, and preserving market exclusivity for Janssen's Invega Sustenna^®, pending the outcome of patent infringement and validity proceedings.

Justice Burley maintained his view (noted above) that quantifying a generic's losses (if an injunction is granted) may prove more difficult than quantifying the originator's losses (if an injunction is refused), given the entirely hypothetical nature of the former inquiry.

However, his Honour made clear that this is merely one of the factors to be taken into account when weighing the balance of convenience.

Factors favouring the grant of an interlocutory injunction in this case included the strength of Janssen's infringement case (by contrast, Juno's invalidity case was merely "arguable"), and the fact that two additional generics had obtained marketing approval for long-acting paliperidone products.

This indicated that multiple generics could enter the market prior to final judgment, eliminating any "first mover" advantage for Juno – leading to substantial, irreversible discounting. Janssen had also undertaken not to launch an authorised generic while the injunction remained in force.

In AstraZeneca AB v Pharmacor Pty Ltd [2026] FCA 88, Justice Downes granted an interlocutory injunction restraining launch of Pharmacor's generic dapagliflozin products, and preserving market exclusivity for AstraZeneca's Forxiga^®, pending the outcome of infringement and invalidity proceedings.

As in the Janssen case, there was a strong prima facie case of patent infringement, while Pharmacor's invalidity arguments were considered merely arguable.

In common with Burley J, Justice Downes accepted that, if an interlocutory injunction was granted, depriving Pharmacor of any "first mover advantage", and the patent was ultimately found to be invalid, difficulties would arise in seeking to quantify the losses suffered by Pharmacor and third parties, including the Commonwealth.

However, once again, this factor was not decisive.

Factors favouring grant of an injunction included evidence that Forxiga® was "critically important" to AstraZeneca, being its largest brand by revenue and "number one revenue growth driver", as well as evidence of "a very real possibility of rapid, multiple generic entry prompted ... which would intensify pricing competition".

Responding to a submission that third parties (including the Commonwealth) would benefit from refusal of injunctive relief, Justice Downes noted countervailing considerations:

While lower prices for FORXIGA would benefit the Commonwealth and the public, the patent system grants a temporary monopoly to encourage and reward invention, which benefits all. It is therefore in the public interest that such invention occurs and continues.

On balance, the Janssen and AstraZeneca decisions do not suggest there has been any substantive change in the attitude of the Federal Court towards the granting of interlocutory injunctions in pharmaceutical patent cases.

In both cases, the difficulty of quantifying generic losses where an injunction is granted, but the patent is ultimately found to be invalid, was acknowledged. However, both cases demonstrate that the fate of interlocutory injunction applications turns upon a careful weighing of numerous factors, at least some of which are likely to be case-specific.

The Janssen and AstraZeneca decisions demonstrate the importance of establishing the strength of their substantive cases on infringement and validity (for both originators and generics). It also highlights the importance of adducing detailed evidence concerning the financial impacts of generic launch, including the prospect of market entry by other generics and the long-term consequences of the resulting price competition.

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