From Enbrel to Xadago: Reasonable Belief Lights the Way in Preliminary Discovery

In 2017, our team successfully acted for Pfizer before the Full Court of the Federal Court of Australia in a significant decision on preliminary discovery under rule 7.23 of the Federal Court Rules 2011. The decision in Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd [2017] FCAFC 193 (Pfizer FC) clarified the requirements for successful preliminary discovery applications and has since been diligently followed.

 

What Pfizer FC Established

Pfizer FC confirmed that rule 7.23 is a summary process concerned with whether a prospective applicant reasonably believes they may have a right to relief – not whether that right actually exists. Perram J emphasised that the reasonableness inquiry asks whether a person aware of all relevant material could reasonably believe there may be a right to relief, and that minds can be “inclined” to the possibility of a case without proof of its existence, lowering thresholds some earlier decisions had effectively raised.

For prospective respondents, the scope to resist is narrow: they must show either that the prospective applicant’s subjective belief does not exist or that no reasonable basis supports the belief there may be a case. Merely disputing parts of the prospective applicant’s material or pointing to arguable errors will rarely suffice, and courts should avoid turning preliminary discovery into mini‑trials or “dress rehearsals,” keeping the analysis rooted in the rule’s text and summary purpose.

 

The Newron v Arrotex Case

As at this publication, the guiding principles in Pfizer FC have been repeatedly applied in the Federal Court. The most recent is Needham J’s decision in Newron Pharmaceuticals S.p.A v Arrotex Pharmaceuticals Pty Ltd (Application for Preliminary Discovery) [2025] FCA 1321 (Newron v Arrotex), where Newron Pharmaceuticals S.p.A and Zambon S.p.A (together, the Newron Parties) obtained preliminary discovery after generic versions of their Parkinson’s drug, Xadago^®, were registered on the Australian Register of Therapeutic Goods (the Arrotex Products).

The Newron Parties suspected that the Arrotex Products infringed two patents (with Newron as patentee) concerning high‑purity safinamide and impurity limits (the Patents) and sought process documents to decide whether to commence infringement proceedings. Their suspicions rested on the Arrotex Products having the same indications as Xadago^®; approval as generics; the same strengths; having product information referencing the same pharmacokinetics and clinical studies as Xadago^®; and patents describing impurities, noting prior‑art processes can yield impurity levels above 0.03% (w/w) raising safety concerns, and claiming processes for high‑purity safinamide.

From these matters, the Newron Parties inferred that registration of the Arrotex Products was based on bioequivalence and gave evidence that there was nothing in the material available to them which would lead them to believe that the Arrotex products differed from Xadago^® in terms of  efficacy and safety, but it remained unknown whether Arrotex’s processes produced high‑purity safinamide as claimed; they therefore applied for preliminary discovery of process documents to determine whether to bring infringement proceedings. The Newron Parties relied on affidavits from Zambon’s General Counsel and Newron’s CEO evidencing a reasonable belief of threatened infringement. Arrotex relied on a solicitor’s affidavit with scientific analysis of prior‑art processes and a report by Professor Michael Roberts with background on how the TGA regulates drugs in Australia and his opinion of the Patents.

 

Why the Court Granted Discovery

Applying Pfizer FC, Needham J held there was a reasonable basis to believe Arrotex’s products may infringe, emphasising that preliminary discovery turns on what may be the case, not proof of what is the case. The Newron Parties are not required to establish a prima facie case of patent infringement. Rather, they need only hold a reasonable belief that they may have a right to relief, and contested scientific evidence generally do not defeat such a belief at this interlocutory stage unless the belief lacks any rational foundation.

Some inference and reliance on circumstantial evidence is permissible under rule 7.23; the question is not whose science is more persuasive but whether the belief is unreasonable, untenable, irrational or baseless on the available material. Nothing in Arrotex’s materials affirmatively disproved the possibility that its products may contain high‑purity safinamide or that impurity levels within the patents’ parameters may be present, such that the Newron Parties’ belief would be irrational or baseless.

Evidence gaps were material and influenced Needham J's decision, including the absence of certain impurity testing data and redactions in key submission materials, so bioequivalence and shared information in product information documents did not exclude the claimed impurity levels. These lacunae reinforced that reasonable minds may differ and that the Newron Parties’ beliefs were not baseless.

 

What This Means for Patentees

Newron v Arrotex, and the authorities preceding it, underscore Pfizer FC’s enduring guidance that preliminary discovery turns on a reasonable belief about what may be so, not proof of what is so, particularly assisting patentees in pharmaceutical process cases where critical details are non‑public, and confirm that rule 7.23 facilitates proportionate, efficient testing of suspected infringement.