Life Sciences Insights

01 December 2006

The challenges of interlocutory injunctions: CSL Ltd v GlaxoSmithKline Australia

By Colin Loveday and Madeleine Selwyn.

Key Points:
There are three requirements for an interlocutory injunction.

A recent Federal Court decision, CSL Ltd v GlaxoSmithKline Australia [2006] FCA 1301, provides a timely reminder of the complications that can arise when comparative advertising is deployed and neatly illustrates the challenges of obtaining interlocutory injunctive relief.

What needs to be established in order to obtain an interlocutory injunction is well settled and recently reaffirmed by the High Court.[1] A court will consider whether an applicant has established that:

  • there is a serious question to be tried;
  • without an injunction, he or she will suffer injury for which damages will not be an adequate compensation; and
  • the balance of convenience favours the grant of such relief ("the balance of convenience requirement").

While these requirements are readily stated, it is not always easy to apply them or to know what will satisfy a court to exercise its discretion and grant the interlocutory injunction. This is particularly so with the balance of convenience requirement.

Background

GARDASIL is the world's first cervical cancer vaccine and the only vaccine currently approved in Australia. Although GSKA has applied to the Therapeutic Goods Administration ("TGA") for approval to market its own cervical cancer vaccine, CERVARIX, approval has not yet been granted.

Earlier this year in preparation for the launch of CERVARIX, GSKA engaged in a market research project, which involved providing at least 300 general practitioners with an Information Sheet (the "GSKA Information Sheet") containing amongst other things, comparative information on GARDASIL and CERVARIX.

Concerned by GSKA's marketing tactics, CSL sought an interlocutory injunction to prevent GSKA from providing allegedly inaccurate information about its vaccine, GARDASIL.

CSL brought an action against GSKA for misleading and deceptive conduct under the Trade Practices Act 1974 (Cth) and alleged that GSKA had breached section 52 of the Act by making representations in trade or commerce that were untrue, in the GSKA Information Sheet and/or in the subsequent telephone interviews conducted with the General Practitioners.

CSL claimed that the GSKA Information Sheet presented an inaccurate, incomplete and unfair profile of its product, in an attempt to reduce market confidence and create "fear, uncertainty and doubt" in GARDASIL. CSL argued that the representations were designed to convey the message to general practitioners and other health professionals that CERVARIX is a superior vaccine to GARDASIL.

Balance of convenience - weighing the evidence

As is often the case in applications of this kind, the crucial question was where the balance of convenience lies. Sometimes there is a risk of overstating one's case in an attempt to tilt the balance in your favour. Justice Weinberg found this to be the case here.

GSKA relied on evidence of the harm it would suffer if it were temporarily restrained from repeating the representations made in its information sheet. It argued that if it were prevented until trial from discussing the characteristics and attributes of CERVARIX, GSKA would be unable to communicate effectively with the TGA, the Pharmaceutical Benefits Advisory Committee or State tender bodies or participate in meaningful scientific debate.

On the other hand, CSL argued that if GSKA's conduct was not restrained, its marketing launch of GARDASIL would continue to be substantially disrupted. It further submitted that tender co-ordinators, who would be responsible for large orders if a public immunisation program were implemented, would be unfairly prejudiced against GARDASIL on the basis of inaccurate or incomplete information.

Justice Weinberg was critical of both parties' submissions and held the view that both parties had overstated their cases.

Commenting on GSKA's claims, Justice Weinberg was quick to observe that GSKA was free to legitimately "market" CERVARIX in Australia and that CSL sought only to restrain GSKA from unfairly and inaccurately comparing CERVARIX to GARDASIL.

As for CSL's claims, His Honour stated:

"If CSL's claim is accepted, GSKA will be enjoined from making representations of the kind impugned well before the TGA has completed its review of CERVARIX. That means that neither the PBAC, nor the State tender bodies are likely to be influenced by those representations. Any other harm that CSL might suffer between now and the trial is speculative, and not of sufficient gravity to warrant imposing restrictions upon GSKA's own marketing endeavours."

Justice Weinberg accepted that the submissions were finely balanced but after weighing the evidence, concluded that he was not persuaded that the balance of convenience favoured the grant of interlocutory relief. The fact that there would be a speedy trial and early resolution of CSL's claim for final relief was a determinative factor which tilted the balance in favour of GSKA. Yet had it not been for this fact, Justice Weinberg stated that he may have been inclined to grant, at least some of, the orders sought by CSL.

Implications

In some cases it will be difficult to predict which way a judge will turn on the question of balance of convenience. It seems that a combination of factors led Justice Weinberg to reach the decision he did. In his view, the harm CSL allegedly suffered was not sufficient to justify the granting of an injunction. This, coupled with a swift final hearing, was the determinative factor in this case.

                        

 

[1] Australian Broadcasting Corporation v O'Neill [2006] HCA 46

 

 

For further information, please contact Colin Loveday.

Disclaimer
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 or territories.