Case Details
- Citation: [2019] SGCA 31
- Case Title: Millennium Pharmaceuticals, Inc v Drug Houses of Australia Pte Ltd and another appeal
- Court: Court of Appeal of the Republic of Singapore
- Date of Decision: 30 April 2019
- Coram: Andrew Phang Boon Leong JA; Tay Yong Kwang JA; Woo Bih Li J
- Procedural History: Appeal from the High Court decision in [2018] SGHC 149
- Civil Appeal Numbers: Civil Appeals Nos 79 and 84 of 2018
- Judgment Type: Ex tempore judgment delivered by Tay Yong Kwang JA
- Plaintiff/Applicant (Appellant): Millennium Pharmaceuticals, Inc
- Defendant/Respondent: Drug Houses of Australia Pte Ltd and another
- Legal Areas: Civil Procedure — Injunctions; Civil Procedure — Pleadings — Striking Out; Patents and Inventions — Infringement
- Counsel for Appellant: Suhaimi bin Lazim, Chow Jian Hong and Yan Chongshuo (Mirandah Law LLP)
- Counsel for Respondent: Kang Choon Hwee Alban, Tan Lijun and Mok Ho Fai (Bird & Bird ATMD LLP)
- Key Statutory/Regulatory Framework: Health Products (Therapeutic Products) Regulations 2016 (TPR), including regs 23 and 24; Patents Act (Cap 221, 2005 Rev Ed), including s 66
Summary
This Court of Appeal decision concerns a patent proprietor’s attempt to challenge a competitor’s registration and market entry for a therapeutic product in Singapore, and to obtain interim injunctive relief. The appeal arose from the High Court’s striking out of parts of the patent proprietor’s statement of claim, and the High Court’s approach to whether an injunction should be granted pending trial.
The Court of Appeal held that the statement of claim was not “obviously unsustainable” and should not have been struck out. In particular, the Court accepted that the regulatory scheme under the Health Products (Therapeutic Products) Regulations 2016 (TPR) could support the declarations sought by the patent proprietor under reg 24(1)(a), even where the competitor had not complied with the patent declaration and notice process under reg 23. The Court also addressed how reg 24(1)(a)(i) should be interpreted, emphasising that it is not necessarily confined to proof of actual infringement that has already occurred.
On the injunction appeal, the Court of Appeal dismissed the patent proprietor’s appeal. While it agreed that there was a serious question to be tried, it found that the proprietor had not shown credible evidence that damages would be inadequate. The Court further scrutinised the evidence relating to royalty arrangements and concluded that the case did not justify an injunction at that stage.
What Were the Facts of This Case?
The dispute sits at the intersection of Singapore’s therapeutic product registration regime and patent enforcement. The appellant, Millennium Pharmaceuticals, Inc, is the proprietor of two patents relating to a therapeutic product. The respondent, Drug Houses of Australia Pte Ltd (and another), sought to register and enter the Singapore market with its own product. The appellant’s central complaint was that the respondent did not declare the existence of the appellant’s two patents to the Health Sciences Authority (HSA), despite the clear requirements in the TPR for patent declaration when a patent is in force in respect of the therapeutic product.
Under the TPR, when a therapeutic product is being registered, the regulatory process includes a patent declaration mechanism. The scheme is designed to manage the interface between patent rights and the approval/registration of therapeutic products, including by providing moratorium periods that can delay registration or market entry while patent issues are addressed. The appellant alleged that the respondent bypassed these protections by failing to comply with the patent declaration requirements under reg 23, thereby avoiding the moratoriums that would otherwise have applied.
The respondent’s position was that its product did not infringe the processes protected by the appellant’s patents, and therefore the patents had no relevance to the product and did not need to be declared. The respondent effectively sought to treat the patent declaration requirement as contingent on whether infringement would occur. The appellant, by contrast, maintained that the regulatory obligation to declare patents is triggered by the existence of patents in force, and that the respondent’s non-compliance deprived the appellant of the procedural route and timing protections built into the TPR.
In response to the respondent’s registration and market-facing steps, the appellant commenced proceedings seeking declarations under reg 24(1)(a) of the TPR. The appellant also sought an injunction to restrain the respondent from entering the Singapore market pending determination of the patent-related issues. The High Court, however, struck out parts of the statement of claim on the basis that they disclosed no reasonable cause of action, and it also took a restrictive view of the injunction application. The appellant appealed to the Court of Appeal.
What Were the Key Legal Issues?
The first key issue was whether the statement of claim should have been struck out for disclosing no reasonable cause of action. In striking out applications, the established threshold is that the pleading must be “obviously unsustainable” on the law or the facts (or both). The Court of Appeal therefore had to assess whether the appellant’s pleaded case under the TPR and patent law was hopeless or clearly untenable.
The second issue concerned the proper interpretation of reg 24(1)(a) of the TPR, particularly reg 24(1)(a)(i). The question was whether the declaration sought under that provision required the appellant to prove actual or past infringement, or whether the provision could encompass a determination of whether an act authorised by the therapeutic product registration would amount to infringement in the circumstances—regardless of whether the act had already occurred.
The third issue related to the injunction. Even if there was a serious question to be tried, the appellant still had to show that damages would not be an adequate remedy. The Court of Appeal had to evaluate the evidence on quantification and adequacy of damages, including the practical realities of how the therapeutic product was purchased by hospitals and how any royalty arrangements might be affected.
How Did the Court Analyse the Issues?
The Court of Appeal began by restating the governing standard for striking out pleadings. In an application to strike out a statement of claim on the ground of no reasonable cause of action, it is established law that the statement must be “obviously unsustainable” on the law or the facts or both. This framing is important: it means that the court should not conduct a mini-trial at the pleading stage, and should not strike out merely because the claim may ultimately fail. Instead, the pleading must be clearly untenable.
Applying that standard, the Court of Appeal inferred that the respondent did not declare the appellant’s two patents to HSA despite the clear requirements in reg 23 of the TPR. The Court reasoned that if the respondent had declared the patents, it would have been in a position to make explicit its position when asked by the appellant. The Court also noted that there was no allegation that the respondent was unaware of the patents. Indeed, the Court considered it likely the respondent knew because its affiliate, Teva, had been involved in patent actions with the appellant in Canada since 2012.
Crucially, the Court rejected the respondent’s attempt to treat the declaration requirement as optional based on its own view of infringement. The Court held that the respondent could not choose to avoid declaring patents by asserting that its product would not infringe. The regulatory scheme requires declaration of patents and then allows the respondent to state, among several possibilities, that the patents are invalid or will not be infringed by the act for which registration is sought. It is then for HSA to decide whether to invoke reg 23(5) to require notice to the patent proprietor. This structure reflects a deliberate legislative design: patent issues are to be channelled through the regulatory process rather than bypassed.
The Court further explained the consequences of non-compliance. If the notice route were invoked, there would be a 44-day moratorium under reg 23(8) followed by a 30-month moratorium under reg 23(9). By failing to comply with the regulations, the respondent bypassed these moratoriums. The Court held that it was therefore not open to the respondent to argue that the appellant could only proceed by the reg 23 route when the respondent’s non-compliance deprived the appellant of that route. This reasoning is both procedural and equitable: it prevents a party from benefiting from its own failure to comply with the regulatory scheme.
On the interpretation of reg 24(1)(a)(i), the Court of Appeal addressed the High Court’s approach and clarified how the provision should be understood. The Court held that reg 24(1)(a)(i) is not necessarily about proving actual or past infringement. Instead, it envisages a situation where the court (or the Registrar of Patents) considers an act authorised by the registration of the therapeutic product and determines whether that act amounts to infringement of a patent in the particular circumstances. The Court illustrated this with the example of importation: even if importation had not yet occurred, the court could determine whether importing the registered product would infringe.
The Court emphasised that the acts pleaded by the appellant included supply, manufacture, import and wholesale. The act may or may not have taken place. The legal question for the court is whether the authorised act infringes the patent, irrespective of whether it has already occurred. The Court also noted that, at minimum, the appellant’s interpretation was arguable and not “hopelessly untenable.”
In addition, the Court considered an alternative route to infringement at the pleading stage. It observed that even if actual infringement needed to be shown, it could be arguable that infringement took place when the respondent participated in hospitals’ public tender by offering to dispose of the product. The appellant would then need to particularise the evidence, including whether the product was obtained directly by means of the patented process within the meaning of s 66 of the Patents Act. This reinforced the Court’s view that the claim was not obviously unsustainable and could be developed through discovery and interrogatories.
As for reg 24(1)(a)(ii), the Court agreed with the High Court that the declaration sought should not be struck out. The appellant’s case under that provision was that the declaration made to HSA was false or misleading in a material particular or omitted to disclose a material matter. The Court held that it was for the appellant to prove these matters at trial. Based on the Court’s earlier discussion of the registration scheme under reg 23, the appellant’s case could not be said to be hopeless or obviously unsustainable.
Turning to the injunction, the Court of Appeal accepted that the appellant had a reasonable cause of action and that there was a serious question to be tried. However, it focused on the adequacy of damages. The Court agreed with the High Court’s general view that damages would be easily quantifiable because hospitals are the customers of the therapeutic product and would maintain proper records of purchases. It also noted that tenders occur year to year, which supports the view that losses could be measured in a structured manner.
The Court also criticised the appellant’s evidence on royalty impacts. The appellant had not disclosed the terms of its licence agreement with Johnson & Johnson, nor had it provided evidence on how royalties are computed. Without such material, the Court was not persuaded that royalties would be affected adversely in an “uncertain and unquantifiable manner,” as the appellant had submitted. The Court therefore concluded that the appellant had not met the evidential burden required to justify injunctive relief.
Finally, the Court addressed the appellant’s argument that refusing an injunction would cause loss of its monopoly. The Court acknowledged the appellant’s concern but reasoned that this was a specialised anti-cancer drug used by a specialised clientele. If the appellant succeeded at trial, its monopoly in Singapore would be restored. Any lower price offered by competitors would likely provide hospitals with a basis to negotiate with the appellant or its licensee, but the appellant still held the monopoly and hospitals would probably need the product. This analysis supported the conclusion that an injunction was not warranted at that stage.
What Was the Outcome?
The Court of Appeal allowed Civil Appeal No 79 of 2018 and restored all the averments that the High Court had struck out. In practical terms, this meant the appellant’s pleaded claims under the TPR and patent-related declarations could proceed to trial rather than being eliminated at the pleadings stage.
However, the Court dismissed Civil Appeal No 84 of 2018. The appellant therefore did not obtain an injunction. The Court also made consequential costs orders: costs were awarded to the appellant at $25,000 for the appeals, and the High Court’s costs orders were varied so that the appellant ultimately received costs for the striking out application and had the injunction-related costs reduced.
Why Does This Case Matter?
This decision is significant for practitioners dealing with therapeutic product registration and patent enforcement in Singapore. It clarifies that the TPR’s patent declaration scheme under reg 23 is mandatory in the relevant circumstances and cannot be circumvented by a competitor’s unilateral assessment of infringement. The Court’s reasoning underscores that compliance with the regulatory process is central to preserving the patent proprietor’s procedural protections, including the moratorium structure.
From a pleading and litigation strategy perspective, the case also provides guidance on how courts approach striking out applications in complex regulatory-patent disputes. The Court of Appeal’s insistence on the “obviously unsustainable” threshold reinforces that courts should be cautious about dismissing claims at an early stage where the legal interpretation is arguable and the factual matrix can be developed through discovery and interrogatories.
Substantively, the Court’s interpretation of reg 24(1)(a)(i) is particularly useful. By holding that the provision is not necessarily limited to proof of actual or past infringement, the Court supports a more functional approach: the court may determine whether acts authorised by registration would infringe, even if those acts have not yet occurred. This can affect how patent proprietors frame their pleadings and what forms of declarations they seek when challenging competitor registrations.
Legislation Referenced
- Health Products (Therapeutic Products) Regulations 2016 (S 329/2016) — regulations 23 and 24 (including moratorium provisions in regs 23(8) and 23(9))
- Patents Act (Cap 221, 2005 Rev Ed) — section 66
Cases Cited
- [2018] SGHC 149
- [2019] SGCA 31
Source Documents
This article analyses [2019] SGCA 31 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.