Abbey Laboratories Pty Ltd v Virbac (Australia) Pty Ltd (No 4)

Abbey Laboratories Pty Ltd v Virbac (Australia) Pty Ltd (No 4) [2025] FCA 1352 is a post-judgment stay decision in a patent dispute. It is not the main judgment on validity or infringement. The Court was deciding whether certain orders made after Virbac’s success at first instance should be put on hold while Abbey pursued an application for leave to appeal, and any appeal that followed.

The result was mixed but narrow. Abbey obtained a stay of the destruction or delivery up order and a stay of the injunction only to the extent necessary to let it keep existing Levamox Duo stock. The Court refused to stay the broader restraint on infringement and refused to stay the inquiry into damages or an account of profits. Abbey was ordered to pay Virbac’s costs of the interlocutory application.

The stay reasons give a focused picture of the dispute rather than a full retelling of the patent trial. What they show clearly is that Virbac had already succeeded in the principal judgment delivered on 24 September 2025. Abbey then filed an application for leave to appeal on 7 October 2025, confined to novelty. Before that leave application had been heard, Abbey sought to pause three orders made in the principal judgment.

Those orders mattered commercially. Order 4 restrained Abbey from infringing certain claims of the patent. Order 5 required destruction or delivery up of all Levamox Duo and related material. Order 7 directed an inquiry as to damages or an account of profits. By consent, those orders had been temporarily stayed until the hearing of the stay application on 31 October 2025.

The product at the centre of the dispute was Levamox Duo, described as a generic levamisole/moxidectin pour-on product. Abbey said that if the orders took effect immediately, it would lose sales, damage customer relationships, and lose the advantage of being the first generic entrant. Virbac said it had already established its rights and should receive the practical benefit of that success, including the ability to restrain infringement rather than being left only with a claim for money.

The Court also paid close attention to the way Abbey had entered the market. Abbey had launched Levamox Duo some months after it had already commenced proceedings seeking revocation of the patent. The judge treated that as a deliberate commercial choice. Abbey launched before the Court had ruled on whether the patent would be revoked, knowing that if revocation failed the product infringed the patent. That point shaped the Court’s view of Abbey’s later complaints about disruption and reputational harm.

The legal question was not whether the patent was valid or whether Levamox Duo infringed. Those issues had already been decided in the principal judgment. The question here was whether the Court should stay particular orders until the determination of Abbey’s application for leave to appeal and any appeal.

The judge adopted the established principles for stay applications, including that a successful party is presumed to be entitled to the benefits of the judgment obtained, the applicant for a stay bears the burden of persuasion, and the Court may grant a stay where refusal would create practical difficulties in restoring a successful appellant to its former position. The Court also considered whether the proposed appeal was genuine and reasonably arguable, and whether undertakings as to damages had been offered.

Importantly, the judge said he would proceed on the assumption that Abbey had a reasonably arguable basis for the proposed appeal, without deciding whether that was actually so. That meant Abbey still had to show, for each order it wanted paused, why the ordinary position should be displaced.

Virbac offered two undertakings that had real practical significance. First, it undertook to submit to any order the Court considered just for compensation to Abbey if Abbey later succeeded on appeal and was adversely affected by the operation of Orders 4, 5 and 7. Second, if Virbac became aware of another person exploiting or threatening to exploit in Australia a generic levamisole/moxidectin pour-on product that Virbac believed would infringe the patent, it undertook to notify Abbey within 5 business days and to take reasonable steps to enforce its patent rights, including seeking interlocutory injunctive relief if necessary.

Those undertakings reduced the force of Abbey’s prejudice arguments. If Abbey later won on appeal, there was at least a mechanism for compensation. And if Abbey was concerned that its claimed first mover advantage would be lost because other generic entrants would rush into the market while it was restrained, Virbac’s undertaking to take reasonable enforcement steps against third parties made that scenario less persuasive.

The undertakings did not automatically defeat the stay application. But they changed the practical balance. The Court repeatedly referred to them when explaining why a broader stay was not necessary, especially in relation to alleged lost sales, bundled product losses, and the continuation of the inquiry into pecuniary relief.

Abbey argued that if the injunction was not stayed, its lost sales would be difficult to quantify. The Court was not persuaded that this justified a broad stay. The judge noted that Abbey now had about ten months of sales evidence, unlike the earlier stage when Virbac had sought interlocutory relief. On that footing, any difficulties of proof did not appear insurmountable.

Abbey also argued that it would suffer reputational damage as an unreliable supplier and that the damage would extend beyond Levamox Duo to future veterinary product launches. The Court gave this little weight. Because Abbey had launched Levamox Duo after commencing revocation proceedings, and before obtaining a ruling on validity, the judge said Abbey was the author of its own misfortune in relation to reputational damage. In other words, the Court treated the harm as a foreseeable consequence of a launch made at risk.

Abbey further argued that lost sales would extend to other products in its range that it bundled or packaged on an incentive basis with Levamox Duo. Again, the Court pointed to Virbac’s undertaking to compensate Abbey if Abbey later succeeded. To the extent any such loss might be difficult to quantify, the Court said that difficulty flowed from Abbey’s own decision to launch in the face of Virbac’s existing patent.

The first mover argument received detailed attention. Abbey said that if a stay was refused and the appeal later succeeded, it would have cleared the way for other generics to enter the market at the same time as its relaunch, reducing its projected market share from 7 to 10 per cent to about 2 per cent. The Court described that submission as heavily exaggerated. The evidence showed there were no other generic versions of Virbac’s product available for purchase in Australia and no third-party APVMA registrations for a combination levamisole/moxidectin product other than Abbey’s. The evidence also showed that it had taken Abbey almost a year to achieve registration and that Abbey then faced months of delay in sourcing one of the active ingredients.

Against that background, the Court considered it inherently unlikely that third parties would actively attempt to enter the market before the outcome of the appeal was known, especially given the significant costs involved in seeking registration. Even if they did, they would face Virbac’s reasonable enforcement steps. The Court therefore did not think refusal of a stay was likely to affect Abbey’s first mover advantage, assuming such an advantage existed.

Virbac said Abbey’s presence in the market had already caused commercial harm. It submitted that sales of Cydectin Platinum had increased substantially before Abbey launched Levamox Duo but had subsequently decreased. Virbac also said it had been forced to adjust its proposed pricing structure to remain competitive and to increase marketing expenditure, and that some pricing changes might be irreversible. It further said Levamox Duo affected sales of other products in the Virbac range.

There was a dispute between the parties’ witnesses about the extent to which Abbey and Virbac competed, given their different sales channels. The judge said he could not resolve that dispute on the material before him. He accepted that some aspects of Virbac’s quantification of damages might be difficult to assess, but not impossible. He also noted that Virbac might be able to rely on favourable inferences if exact proof was difficult because of the nature of Abbey’s wrongful conduct.

Even so, the decisive point was broader than quantification. Virbac had already succeeded and was entitled to the benefit of the full scope of its rights as patentee, rather than being confined to pecuniary remedies. That principle weighed strongly against a broad stay of the injunction.

This is the most important practical nuance in the decision. The Court refused to stay the injunction in Order 4 except in one limited respect. It stayed Order 4 only to the extent that it applied to Abbey keeping the Levamox Duo product. At the same time, it stayed Order 5, which required destruction or delivery up of all Levamox Duo and related material.

That distinction matters. The Court was not giving Abbey a general licence to continue the conduct restrained by the injunction. It was preserving the stock on hand so that, if Abbey later succeeded on appeal, unnecessary loss might be avoided. The Court accepted that immediate destruction or delivery up could cause loss of stock value, disposal costs for hazardous substances, and further manufacturing costs if replacement stock later had to be produced.

Virbac argued that the stock would expire in early 2027 and therefore might be difficult to sell after any successful appeal because of its short remaining shelf-life. The Court said the force of that argument depended on timing. It was conceivable that an appeal and judgment on appeal might occur expeditiously. If that happened and Abbey succeeded, Abbey might still be able to sell at least some of its existing stock. The Court also noted that selling that stock could assist Abbey in maintaining what it claimed to be its first mover advantage.

The Court also addressed whether Order 4 already allowed Abbey to retain stock. Abbey had argued that the injunction did not in terms prevent retention of stock on hand. The judge disagreed with that reading, saying Order 4 was expressed in general terms, even though the examples referred to in it did not specifically mention keeping stock. That is why the Court expressly stayed Order 4 to the extent it applied to keeping Levamox Duo.

For businesses, the lesson is that stock preservation and active market conduct are separate questions. A court may be willing to preserve inventory pending appeal without allowing the broader conduct that would continue the infringement found at first instance.

Abbey also sought to stay Order 7, which required an inquiry as to damages or an account of profits. It argued that significant time and expense would be required to prepare for a hearing on pecuniary remedies and that this work might be wasted if Abbey later succeeded on appeal.

The Court rejected that argument. The judge said any wasted costs from preparing for and conducting a hearing on pecuniary remedies could be addressed by a costs order or under Virbac’s undertaking to compensate Abbey if Abbey later succeeded. He also emphasised a strong imperative to conduct litigation as expeditiously as possible, especially where Virbac was prepared to take the risk of compensating Abbey for wasted costs.

This part of the decision is important for businesses involved in appeals. Even if an appeal is on foot, the court may still require the case to move forward on monetary issues. An appeal does not necessarily freeze the whole proceeding.

The Court ordered that Order 4 be stayed only to the extent that it applied to Abbey keeping the Levamox Duo product, and that Order 5 be stayed until the determination of Abbey’s application for leave to appeal and any appeal. Abbey’s interlocutory application was otherwise dismissed. That meant there was no broader stay of the injunction and no stay of the inquiry into damages or account of profits.

The Court also made procedural orders requiring Abbey to file and serve an affidavit by 21 November 2025 in the form outlined by senior counsel in court, and stood the matter over to 10 December 2025 for case management.

On costs, Abbey was ordered to pay Virbac’s costs of the interlocutory application. The judge said the costs were almost entirely attributable to the dispute about whether the injunction in Order 4 should be stayed. Although Abbey had some success in relation to Order 5, that had not substantially added to the costs. The judge also observed that, because Virbac had expressly disclaimed any contention that there was a risk of Abbey infringing the injunction otherwise than by keeping Levamox Duo, the matter might probably have been resolved by consent if Abbey had only sought a stay of Order 5 together with the keeping aspect of Order 4.

This case is a practical guide to post-judgment risk in patent litigation. If your business launches a product while validity is still being contested, the court may later treat many claimed losses as risks you knowingly accepted. That can make it harder to obtain a broad stay after an adverse judgment.

It also shows the importance of precision. The Court was prepared to preserve stock because destruction or delivery up could create unnecessary loss if the appeal succeeded. But it was not prepared to let Abbey continue broader conduct that would deny Virbac the benefit of its success as patentee. Businesses should therefore separate out the different forms of relief they seek. A targeted application focused on preserving stock or avoiding irreversible steps may be more realistic than asking to suspend all consequences of the judgment.

The decision also underlines the value of evidence. Shelf-life, disposal costs, replacement manufacturing costs, registration timelines, supply chain delays and actual sales data all mattered to the Court’s analysis. If your business may need urgent relief after judgment, those operational facts should be assembled early and presented clearly.

This page is based on the Federal Court’s reasons and orders in Abbey Laboratories Pty Ltd v Virbac (Australia) Pty Ltd (No 4) [2025] FCA 1352, delivered by Jackman J on 31 October 2025. The decision concerns a stay application after the principal judgment in Abbey Laboratories Pty Ltd v Virbac (Australia) Pty Ltd (No 3) [2025] FCA 1179.

Because this is a stay decision, it should be read as explaining the Court’s interim approach to enforcement, stock preservation and the continuation of monetary relief steps pending appeal. It does not set out the full patent findings from the principal judgment.