Patent Litigation in Australia

A guide for life science companies

This guide explains how a patent dispute typically arises, the urgent relief available at the outset, the issues fought at trial, the course of the proceeding, and the remedies available at its end.

Patent disputes in Australia are heard in the Federal Court of Australia, which has principal jurisdiction over matters arising under the Patents Act 1990 (Cth) (s 154). Litigation is the mechanism by which patent rights are enforced: a patent confers a monopoly, but it is the ability to restrain infringement and recover compensation through the courts that gives the monopoly its commercial force.

How a patent dispute arises?

In the pharmaceutical sector, litigation is most commonly triggered by the intended launch of a generic or biosimilar product before the originator's patents have expired. Two features of the Australian regulatory system explain why these disputes arise suddenly and are fought urgently.

1) No patent linkage

The first is that Australia does not link marketing approval to patent status. The Therapeutic Goods Administration may register a competing product on the Australian Register of Therapeutic Goods whether or not patents cover it. A generic sponsor is required to certify its patent position when it applies (Therapeutic Goods Act 1989 (Cth) s 26B), but it may certify that it believes no valid patent will be infringed, and it is not required to notify the patent owner. The result is that an originator may learn of an impending launch only shortly before it occurs.

2) The PBS price cut

When the first competing brand of a medicine is listed on the Pharmaceutical Benefits Scheme, a statutory price reduction of twenty-five per cent applies automatically, with further reductions to follow.

The reduction is market-wide and, in practical terms, permanent. It is not reversed even if the generic is later found to have infringed. This is why the originator's objective is to restrain the launch before the PBS listing takes effect, and why a generic weighs the reward of early entry against its exposure to a damages claim should the patent be upheld.

Interlocutory Injunctions

An interlocutory injunction is an order restraining the alleged infringer from selling its product until the dispute can be finally determined. Because the order is sought before any finding of infringement has been made, the applicant must satisfy the court of two matters, settled by the High Court in Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57:

1. There is a serious question to be tried, and

2. The balance of convenience favours granting the restraint.

As a condition of the order, the applicant must also give what is known as the usual undertaking as to damages. This is a promise to the court to compensate any person adversely affected by the injunction, including persons who were never parties to the proceeding, if it later emerges that the injunction should not have been granted.

These injunctions are not granted as of course. In recent years the Federal Court has often refused interlocutory relief in pharmaceutical cases, reasoning that the originator's loss, including the PBS price reduction, can be calculated and is therefore compensable in damages.

Litigation can put the patent at risk

An Australian patent case is almost invariably fought on two fronts simultaneously. The patent owner alleges infringement, contending that the rival product or process falls within the claims of the patent. The alleged infringer, in addition to denying infringement, ordinarily cross-claims for revocation of the patent (s 138), on grounds that the invention was not novel, involved no inventive step, or fails some other requirement of validity. The significance of the cross-claim is that a patent revoked in the proceeding is revoked as against the world, not merely the parties.

Litigation proceedings

Patent litigation in the Federal Court is closely case-managed under the Court's Intellectual Property Practice Note, and a proceeding ordinarily passes through five stages:

1. Pleadings: the patent owner files its application and statement of claim; the respondent files a defence together with a cross-claim for revocation

2. Position statements: each party must state, early and with precision, why the product is said to infringe and why the patent is said to be invalid

3. Evidence: the issues are addressed principally through expert evidence from scientists and clinicians; at trial the experts commonly confer and give their evidence concurrently, a practice designed to expose the true points of disagreement

4. Trial and judgment: questions of liability are usually determined first, with the assessment of any monetary remedy deferred to a separate hearing

5. Appeal: an appeal lies to the Full Court of the Federal Court (s 158), and thereafter only by special leave to the High Court

Time and costs

A contested pharmaceutical case ordinarily takes between eighteen months and two years to reach a first-instance judgment. . Costs generally follow the event, meaning the unsuccessful party pays a substantial portion of the successful party's costs.

Remedies

Where infringement is established and the patent survives the cross-claim, the court grants an injunction restraining further infringement, and the patent owner elects between two monetary remedies: damages, which compensate the owner for its own loss, or an account of profits, which requires the infringer to surrender the gains derived from the infringement (s 122). Additional damages may be awarded where the infringement was flagrant (s 122(1A)).

Seeking further advice

For more on the topics raised in this guide, please review our further guides on what can be patented in Australia, extensions of term for pharmaceutical patents, and how generic and biosimilar medicines reach the Australian market, as they are published.

If you need specific advice, please contact Wayne Condon at Biopharmalex. Wayne is one of Australia's most experienced life sciences and intellectual property lawyers, and has acted in many of the leading pharmaceutical patent cases of the past three decades.

This guide states the law at July 2026 and is general information only, not legal advice.