Australia: Commonwealth of Australia v Sanofi: The Full Federal Court decision: patent dispute

Key Points:

The Full Federal Court held that the Therapeutic Goods Act does not curtail the right of any person (including the Commonwealth) to recover on the usual undertakings.

Sanofi and Wyeth's battle to prevent generics from listing generic clopidogrel and generic venlafaxine on the Schedule of Pharmaceutical Benefits and, following their loss in respective proceedings, the Commonwealth from claiming on the usual undertaking, has taken another turn. The High Court has refused them special leave to appeal the Full Federal Court's decision allowing the Commonwealth the ability to seek compensation from them pursuant to the usual undertaking as to damages (Commonwealth of Australia v Sanofi (formerly Sanofi-Aventis) [2015] FCAFC 172). As a result, any patentee will have to factor in compensating the Commonwealth as a possible risk of a similar challenge in the future.

Stated case referred to the Full Federal Court

In a number of separate proceedings, Sanofi and Wyeth applied for and successfully obtained injunctive relief against a number of generics which prevented the generics from listing generic clopidogrel and generic venlafaxine on the Schedule of Pharmaceutical Benefits. Sanofi and Wyeth were ultimately unsuccessful in the proceedings. Sanofi's patent was revoked and the relevant claims of Wyeth's patent were held to be invalid and were revoked.

Undertakings were given by Sanofi and Wyeth as one of the requirements for the grant of injunctive relief and any extension of that relief until resolution of the patent disputes. The undertakings given to the Court were in the form set out in Federal Court of Australia Practice Note CM 14:

  1. " to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by the operation of the interlocutory order or undertaking or any continuation (with or without variation) thereof; and
  2. to pay the compensation referred to in (a) to the person there referred to."

As a result of the revocation of the relevant claims in the patents, the Commonwealth has made a claim against each of Sanofi and Wyeth on the usual undertakings given by the patentees, as a person adversely affected by the operation of the interlocutory order or undertaking (and its continuation until the final determination of the proceedings). The compensation being sought is broadly the cost savings the Commonwealth could have made under the pricing rules if the generics had not been prevented from listing their generic clopidogrel and venlafaxine products on the Schedule of Pharmaceutical Benefits by reason of the preliminary injunctions granted to Sanofi and Wyeth.

On May 2015 the following question was referred to the Full Federal Court for determination in each proceeding:

"Is the Commonwealth of Australia precluded, as a matter of law, from recovering compensation pursuant to any of the Undertakings as to Damages by reason of Chapter 3, Part 3-2, Division 2 of the Therapeutic Goods Act 1989 (Cth)?"

Division 2, Part 3-2, Chapter 3 of the Therapeutic Goods Act 1989 is not an "exhaustive code"?

Sanofi and Wyeth contended that the Commonwealth was precluded from making a claim on the usual undertakings given by Sanofi and Wyeth because:

  1. sections 26B to 26D of the Therapeutic Goods Act 1989 (Cth) establish a legislative regime for the recovery of compensation by the Commonwealth for the loss suffered by reason of the grant of preliminary injunctive relief to a patentee;
  2. sections 26B to 26D of the Act must be understood as being the source of the Commonwealth's right to seek compensation and operate as a complete statement of the Commonwealth's right to recover compensation of this kind (ie. compensation is only available to the Commonwealth in the specific circumstances outlined in sections 26C(8) and 26D(5) where a certificate has been given by a generic pursuant to section 26B(1) of the Act. A certificate will be given under this section in all cases where the generic relies on safety and efficacy data from the innovator's dossier); and
  3. accordingly, the Commonwealth is precluded from making a claim on the undertakings by operation of this "exhaustive code" unless the requirements of section 26D(4) are satisfied. The creation of the statutory right (sections 26B to 26D) excludes the remedy on the undertakings which otherwise might have arisen.

The Court rejected Sanofi and Wyeth's contentions. It was unable to find any legislative intention that the relevant sections of the Act were intended to curtail the right of any person (including the Commonwealth) to recover on the usual undertakings. It was not in dispute that the relevant sections of the Act did not include any express restriction preventing the Commonwealth from recovering under the usual undertakings.

These findings were supported by the following reasoning in the joint reasons of Justices Kenny and Nicholas:

  • if Parliament intended by the enactment of sections 26B, 26C and 26D to curtail the Court's power to make an award under the usual undertaking as to damages then it would have done so by express words or necessary intendment. Parliament has not done so;
  • section 26D was implemented by Parliament with the intention that it would enhance the power of the Court to grant relief ordinarily available pursuant to the usual undertaking as to damages when the circumstances prescribed in the section apply;
  • if the Commonwealth was precluded by operation of an "exhaustive code" from claiming on the usual undertakings, then it would be difficult to see why the claim of a generic who had given notice under section 26B(1)(b)(iii) would not also be precluded. This would not reflect a rational legislative choice; and
  • there is no inconsistency in the present case or incompatibility that arises by holding that a prescribed Court can make an award of compensation under the usual undertakings in circumstances where a section 26B(1)(b)(iii) notice has been given. Nor is there anything inconsistent or incompatible with permitting recovery by the Commonwealth (or any other person) pursuant to section 26D(5) and not excluding recovery under the undertakings. Nor is there any reason to suggest that sections 26B to 26D were intended to supersede or displace a person's right to recover on the usual undertakings in the ordinary way.

Novel form of undertaking as to damages?

Interestingly, Justice Dowsett made some observations regarding the form of the undertaking as to damages given by patentees as part of being granted injunctive relief. These observations suggest that it may be possible for patentees to propose to the Court undertakings that are different to the usual undertaking as to damages. In particular, His Honour noted that:

  • individual judges are not generally obliged to use the standard forms adopted by their respective courts;
  • nothing in the legislation suggests that the Court cannot tailor its own form of undertaking to meet the needs of the case; and
  • any limitations upon the undertakings should be sought at the time at which they are given. The Court would then be required to consider whether the limited undertakings were sufficient to justify the grant of an interlocutory injunction.

Justice Dowsett's comments suggest that undertakings in a different form to the usual undertakings may be acceptable to the Court as the price for a preliminary injunction. It will be interesting to see whether novel forms of undertaking are proposed by patentees based on his comments and if any of these are acceptable to the Court.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.