Apotex

Servier best method & amendment

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Servier has lost what may be its last round[1] in the arginine perindopril litigation against Apotex. Servier began the litigation back in 2007. Ultimately, it lost with its patent being found invalid on the ground that Servier had failed to disclose the best method of performing the invention. After that ruling, Servier applied to amend its patent to include the best method. Its application failed on discretionary grounds. Now, we have the Full Court’s decision dismissing Servier’s appeal from that refusal.

Best method

Servier’s first argument was that, following the High Court’s Kimberley-Clark decision, all s 40(2)(a) required was a disclosure sufficient to enable a skilled person to produce something within each claim without new invention or additions or prolonged study of matters presenting initial difficulty. Servier argued that there was no separate and independent requirement to disclose the “best method”.

After an extensive review of the case law, the Full Court rejected that argument, ruling that disclosure of the best method was indeed a separate requirement. In this case, Servier had failed to comply with that requirement.

Claim 1 of the patent was for the arginine salt of perindopril. There had been an earlier patent for perindopril and sodium and maleate salt forms had been identified. According to the Specification, the arginine salt form had particular stability advantages in conditions of heat and humidity which resulted in longer shelf life and permitted the use of less expensive forms of packaging. The achievement of these advantages, however, could be affected by the method of production. The Specification described the claimed arginine perindopril only as being produced by “a classical method of salification”.

The experts agreed this description of how to prepare the salt was “pregnant with ambiguity” and following from this evidence the trial judge had found this description was “wholly inadequate” and did not:

allow the skilled addressee to follow a routine process of deduction from that description because it leaves open too many variables.

Servier itself had used two different methods before the filing date – the 1986 method and the 1991 method – and another method – the 2002 study – after the priority date. The evidence showed that the method of salification used and variables such as the solvent used and whether and when to stir significantly affected the properties of the resulting salt, including its stability.

Accordingly, the Full Court upheld the trial judge’s conclusion that Servier had not disclosed the best method known to it of performing the invention.

Amendment

Servier had applied after the trial to amend the Specification to add the best method.

The Full Court affirmed the Pfizer Full Court’s ruling that the best method requirement required disclosure of the best method of performing the invention known to the applicant at the filing date. However, it was possible to remedy a failure to disclose the best method by amendment of the Specification made after the filing date.

The Full Court agreed with the trial judge that the amendment power under s 105 could be invoked even after trial and judgment finding all claims invalid. While there was a proprietal interest in being allowed to amend, it was still necessary for the patentee to satisfy the Court that discretionary grounds did not warrant exclusion.

In this case, however, discretionary grounds warranted refusal. Back in 2004, the examiner had issued a report as a result of which Servier’s patent attorney had advised Servier to include a description of the method of manufacture of arginine perindopril, even if it was well known. The inhouse instructor replied “we will see later”.

Although there was no suggestion of bad faith on the part of the inhouse instructor, the Full Court upheld the trial judge’s conclusion that the inhouse instructor’s decision to ignore the advice of her Australian patent attorney was not reasonable.

The Full Court considered that there was no error of principle in the trial judge’s rejection of the length of the delay as otherwise warranting rejection of the application. However, they would appear themselves have felt the trial judge had been overly generous.

Finally, the Full Court allowed Apotex’ appeal from the trial judge’s order that Apotex pay 66% of Servier’s costs. Rather, Servier should pay 40% of Aptex’ costs of the revocation proceeding and 75% of Aptex’ costs of the amendment proceedings.

Les Laboratoires Servier v Apotex Pty Ltd [2016] FCAFC 27 (Bennett, Besanko and Beach JJ)

  1. Barring (potentially) a special leave application.  ?

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Commonwealth can sue on the undertaking as to damages

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The Full Court (Dowsett, Kenny and Nicholas JJ) has upheld the Commonwealth’s power to sue for damages on the undertaking as to damages given by Sanofi and Wyeth when obtaining interlocutory injunctions against generic suppliers.

Sanofi sued Apotex (then called GenRX) for patent infringement when the latter sought to registration in the Therapeutic Goods Register of drug containing clopidogrel. Sanofi obtained an interlocutory injunction preventing the listing and sale of Apotex’ product, on terms of the “usual undertaking as to damages”. Thus, as a condition of obtaining the interlocutory relief, Sanofi undertook to the court:

(a) to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by the operation of the interlocutory order or undertaking or any continuation (with or without variation) thereof; and

(b) to pay the compensation referred to in (a) to the person there referred to. (emphasis supplied)

After the trial judge found Sanofi’s patent valid and infringed, the Full Court on appeal held that the patent was invalid. Ultimately, the High Court refused special leave.[1]

The Commonwealth, which was not a party to either the Sanofi or Wyeth proceedings is now claiming compensation from Sanofi and Wyeth under the “undertaking as to damages”. In broad terms, it says it suffered losses because the price it paid under the Pharmaceutical Benefits Scheme was higher than it would have been if the generic parties had not been prevented from listing and selling their products by the interlocutory injunctions.

Sanofi and Wyeth argued that sections 26B, 26C, 26D of the Therapeutic Goods Act[2] precluded the Commonwealth from claiming under the usual undertaking as to damages. The Full Court held, however, that these provisions were ancillary or additional to the Court’s powers under the undertaking. They did not provide an exhaustive code which excluded the operation of the undertaking.

Dowsett J delivered a concurring judgment, suggesting at [20] that some restriction on the scope of the usual undertaking should have been sought and then questioning, if such a restriction had been sought, whether it would have been appropriate to grant the interlocutory injunction:

…. As the Commonwealth was not a party to the proceedings in which the undertakings were given, they were presumably not extracted at its request. I infer that the Court extracted the undertakings. It is not suggested that it lacked the power to do so in order to protect the interests of identified or unidentified third parties. In submitting that the Commonwealth may not recover other than pursuant to s 26C, the Sanofi and Wyeth parties effectively seek to resile from their undertakings. It may be simply too late for them to do so. Any limitations upon the undertakings ought to have been sought at the time at which they were given. The Court would then have had to consider whether such limited undertakings were sufficient to justify the grant of the interlocutory injunctions. The Commonwealth has not put its case in that way. However, in any event, I see no basis for limiting the Commonwealth’s right to seek to enforce the undertakings to the extent that it benefits under them.

If only the regime under sections 26B, 26C, 26D had been available, it looks like Sanofi’s and Wyeth’s exposure would have been limited to situations where they had given false or misleading certificates or did not have “reasonable prospects of success”.[3]

Commonwealth of Australia v Sanofi (formerly Sanofi-Aventis) [2015] FCAFC 172

  1. Similarly, in the Wyeth proceedings an interlocutory injunction was granted on the usual undertaking as to damages, but the patent was ultimately found to be invalid.  ?
  2. These provisions were introduced as part of the package implementing the Australia – United States Free Trade Agreement relating particularly to the 5 year data exclusivity for pharmaceutical test data.  ?
  3. Defined in s 26C(4) as “(4) For the purpose of paragraph (3)(b), proceedings have reasonable prospects of success if: (a) the second person had reasonable grounds in all the circumstances known to the second person, or which ought reasonably to have been known to the second person (in addition to the fact of grant of the patent), for believing that he or she would be entitled to be granted final relief by the court against the person referred to in paragraph (1)(a) for infringement by that person of the patent; and (b) the second person had reasonable grounds in all the circumstances known to the second person, or which ought reasonably to have been known to the second person (in addition to the fact of grant of the patent), for believing that each of the claims, in respect of which infringement is alleged, is valid; and
    (c) the proceedings are not otherwise vexatious or unreasonably pursued.”  ?

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Commonwealth seeks $60 million on the undertaking as to damages

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Sanofi sued Apotex (then known as GenRx) for infringement of its “clopidogrel patent”. It obtained interlocutory injunctions against Apotex against the sale of Apotex’ product and preventing Apotex from applying to list its product under the Pharmaceutical Benefits scheme (PBS). As a condition of the grant of those interlocutory injunctions, Sanofi gave the “usual undertaking as to damages”:

“(a)          submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person whether or not a party, adversely affected by the operation of the interlocutory injunction or any continuation (with or without variation); and

“(b)          pay the compensation referred to in subpara (a) to the person or persons there referred to.”

Sanofi won at trial, but lost on appeal with the Full Court ordering its patent be revoked. Sanofi’s application for special leave to appeal to the High Court was refused on 12 March 2010.

Apotex sought compensation under the undertaking by motion in May 2010. Sanofi and Apotex resolved that application by negotiation.

The Commonwealth also sought compensation under the undertaking as to damages by application made in April 2013. If we did not know before, we now know the Commonwealth is seeking $60 million. Essentially, the Commonwealth contends that is how much less it would have had to pay out under the PBS if the interlocutory injunctions had not prevented Apotex applying to list its product under the PBS:

 

“The Commonwealth has provided some particulars of its damages. It alleges it has suffered financial loss in excess of $60 million as a result of Apotex being prevented by the various interlocutory orders and undertakings from achieving a listing for its clopidogrel products under the PBS. Most of the Commonwealth’s loss is said to flow from statutory price reductions and price disclosure reductions that would have occurred had Apotex not been the subject of the relevant interlocutory restraints.”

 

The case is a long way off resolution. Nicholas J has allowed Sanofi to amend its points of defence to the Commonwealth’s claim to rely on the Commonwealth’s delay in making its application for compensation and to rely on infringement of copyright in Sanofi’s product information documents. Sanofi will be required to particularise the prejudice its claims it suffered as a result of the delay.

Nicholas J however refused leave to amend to plead that the Full Court’s decision invalidating Sanofi’s patent was wrong in light of the Full Bench’s subsequent decision in AstraZeneca (rosuvastatin). That would be inconsistent with res judicata and the principle of finality of litigation.

Commonwealth of Australia v Sanofi-Aventis [2015] FCA 384

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Rosuvastatin goes to the High Court

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The High Court has allowed special leave to appeal from the Full Federal Court’s decision in AstraZeneca v Apotex (“Rosuvastatin”).

From the special leave transcript, it looks like the main issue will be the operation of s 7(3) and the basis on which a reference ascertained for the purposes of s 7(3) may be combined with common general knowledge under s 7(2).

In Rosuvastatin, a Full Bench of 5 justices held that the “starting point” identified in the patent could be used as the “starting point” for testing whether the solution in the patent was obvious only when shown to be part of the prior art base. The Full Court nonetheless held the patent was invalid as a s 7(3) reference, the Watanabe paper, was added to the common general knowledge.

From the special leave transcript, it appears that all parties were in agreement that the person skilled in the art would undertake a literature search. The resulting search would have thrown up a number of documents. AstraZeneca argues that the Full Court erred in allowing the Watanabe paper to be used as a s 7(3) reference. Its main argument appears to be that the search would have thrown up at least 2 papers, Watanabe and Aoki. AstraZeneca argues that, before the Watanabe paper can be combined with common general knowledge under s 7(2), it needs to be shown that the person skilled in the art would have chosen the Watanabe paper over Aoki. According to AstraZeneca, however, the evidence did not establish that. Again according to Astrazeneca, there was evidence that the skilled person could choose either paper and, if Aoki was chosen, would fail:

If you had gone down the NK-104 path you fail – a relative fail. If you had gone down the other one, you win. The evidence of Professor O’Brien was – others can reasonably make one choice or another. Dr Reece did not even venture on the issue as to which one he would go down.

A second point that AstraZeneca argues is that to choose Watanabe the skilled person would have needed to refer first to Aoki. That is, it argues that it was necessary to engage in impermissible masoning.

If AstraZeneca succeeds, there will also be a dispute about entitlement issues and the operation of new s 22A and 138(4).

No doubt more will become clearer when the appeal documents are posted on the High Court’s website.

Astrazeneca AB & Anor v Apotex Pty Ltd; Astrazeneca AB & Anor v Watson Pharma Pty Ltd; Astrazeneca AB & Anor v Ascent Pharma Pty Ltd [2015] HCATrans 58

 

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Five Judges speak with one voice on Australian Patent Law Construction and Fair Basis*

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The Rosuvastatin case is that rare beast – a decision of a 5 member Full Bench of the Federal Court. It canvases many issues and, no doubt, we shall be picking over it for years to come. Susan Gatford, at the Victorian Bar, has kindly provided a guest post on the section 40 issues. Take it way Sue:

The judgment in AstraZeneca AB v Apotex Pty Ltd [2014] FCAFC 99 is an authoritative statement by a Full Court of the Federal Court of current patent law in Australia on novelty, obviousness, fair basis and indirect infringement. Further, neither the parties nor the Full Court at [37] demurred from the primary judge’s summary of the relevant authorities as to what constitutes common general knowledge and the attributes of the hypothetical skilled addressee. Likewise, neither the parties nor the Full Court at [90] disagreed with the primary judge’s exposition of the principles governing the construction of the claims and body of a specification of a patent.

The Full Court was principally constituted with five justices so as to address issues in regard to obviousness[1]. But the decisions at first instance and on appeal, taken together, also provide a “go to” exposition of most of the legal issues that commonly arise in Australian patent cases.

The Court’s views on the different validity grounds and on indirect infringement each warrant separate commentary and analysis. This article considers one of the construction issues, the decision as to fair basis and the interplay between construction and fair basis.

Background

Statins are a group of drugs that reduce the levels of cholesterol in the blood. Rosuvastatin (marketed in Australia as CRESTOR) is a very successful statin. No patent was ever filed in Australia for the rosuvastatin chemical compound. But AstraZeneca (Az) owns a number of secondary Australian patents relating to rosuvastatin. Two such patents are the subject of the appeal decision. One (the low dose patent) is for the administration of a particular dose or dosage range of rosuvastatin for the treatment of excess cholesterol in the blood stream. The other (the cation patent) is for a pharmaceutical composition (combination) of rosuvastatin mixed with certain inorganic salts.

The Full Federal Court’s decision affirms, although with some differences of reasoning and grounds, Apotex’s victory last year before Justice Jagot, in which it obtained orders revoking both patents.

The outcome of the appeal

The low dose patent was held:

  • to have named the wrong inventor (with a discussion of the current and former entitlement provisions of the Patents Act);
  • to be obvious (with a discussion of the starting point at which obviousness is to be considered and the impact of section 7 of the Patents Act); and
  • not to have been infringed (with a discussion of section 117 of the Patents Act)
  • 

However, reversing the decision of the primary judge, the Full Court held that the low dose patent was novel despite the existence of prior publications disclosing both rosuvastatin and a dosage range that covered the dosage range the subject of the claims.

The cation patent was held:

  • to have impermissibly claimed too early a priority date;
  • to have been anticipated (not novel);
  • to be obvious; and
  • not to be fairly based on the specification (despite the presence of claim 1 as a consistory clause within the body of the specification).

The five judges agreed with each other on all issues. Justices Besanko, Foster, Nicholas and Yates wrote a joint judgment which dealt with all issues except obviousness. Justice Jessup wrote a separate judgment on obviousness with which the rest of the Court agreed.

Patent construction and section 40 issues in relation to the cation patent.

The cation patent was for rosuvastatin mixed with certain multivalent cation inorganic salts. The salts were not therapeutic – their role was said to be simply to stabilize the rosuvastatin and prevent it from degrading. The patent specification described rosuvastatin and various salts being mixed together into a tablet which was then coated.
There was a disagreement between the parties as to the meaning of the words “pharmaceutical composition” in claim 1 of the cation patent. Apotex submitted that in the context of the cation patent “pharmaceutical composition” referred only to the rosuvastatin-salt mixture, and did not include the tablet coating. This was because the proposed Apotex product did not have a rosuvastatin-salt mixture – in its tablet the salt was placed into the coating, not mixed with the rosuvastatin.

Az, in order to maintain its infringement case, argued that the words “pharmaceutical composition” in claim 1 meant the whole tablet i.e. the means by which rosuvastatin is administered or delivered to the patient, whatever form that takes. The primary judge agreed with Az, as did the Full Court.

But, Apotex said, if this is what claim 1 means then it is not fairly based on the specification, as there is no real and reasonably clear disclosure in the specification of a pharmaceutical composition in which the relevant inorganic salt is contained solely within the coating of the pharmaceutical composition and not mixed with the active ingredient, being rosuvastatin. They noted that every disclosure in the cation patent of the use of a relevant salt, including in each of the examples, involved the salt being mixed or blended with rosuvastatin. They also noted that the only theory advanced in the specification to explain how the multivalent cation salt improved the stability of rosuvastatin was that it stabilised its chemical structure, which the experts’ evidence confirmed required “intimate mixing”.

Az did not dispute this evidence but submitted that the fact that claim 1 was repeated in the body of the specification as a consistory clause was itself sufficient for fair basis, relying on statements in Lockwood Security Products Pty Limited v Doric Products Pty Limited (2004) 217 CLR 274 (Doric No 1) at [38] and [91] to [93]. The primary judge had agreed with that submission.

The Full Court, however, disagreed. It said at [421]

“The question that must be addressed is whether there is a real and reasonably clear disclosure in the specification of an invention in which there might be no mixture of the active ingredient and inorganic salt. In our opinion, the specification, when read as a whole, does not make any such disclosure even in the most general sense.”

In other words, the claim was for a composition which contained three things – rosuvastatin, salt and a coating. The claim did not require the salt and the rosuvastatin to be mixed, so the salt could either be with the rosuvastatin or in the coating. In the invention disclosed in the specification, though, the salt and the rosuvastatin were always mixed. The possibility of the salt not being mixed with the rosuvastatin was not contemplated and not disclosed.

Section 40(3) of the Patents Act as applied to this patent (i.e. as it stood before the 2013 amendments to the Patents Act) requires that “the claim or claims must be … fairly based on the matter disclosed in the specification”.

The Court’s finding of lack of fair basis refocuses attention on the construction of claim 1 contended for by Apotex. But the Court was not prepared, in light of the authorities, to read claim 1 as requiring the salt and the rosuvastatin to be mixed, as it considered that to do so would be to draw an impermissible gloss from the specification.

The Court was, however, prepared to use section 40 to strike down what it evidently regarded as a claim that was too widely drawn. Whether the judgment will result in an increase in the number of successful challenges based on section 40 grounds remains to be seen.

AstraZeneca AB v Apotex Pty Ltd [2014] FCAFC 99

 

Thanks, Sue.

  1. As to which see Mark Summerfeild’s recent blog post  ?

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Sanofi v Apotex – infringement

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The previous post looked at the High Court’s ruling that Sanofi’s patent for a method of medical treatment was patentable subject matter as a manner of manufacture. This post looks at the infringement ruling.

You will recall that the patent for leflunomide itself has expired, but claim 1 of Sanofi’s relevant patent is for:

[a] method of preventing or treating a skin disorder, wherein the skin disorder is psoriasis, which comprises administering to a recipient an effective amount of [leflunomide].

Dermatologists do not prescribe leflunomide for the treatment of psoriasis, but rheumatologists do prescribe leflunomide for the treatment of rheumatoid arthritis (RA) and psoriatic arthritis (PsA). Apparently, almost every person who has PsA will have, or will also develop, psoriasis. When leflunomide is prescribed for the treatment of PsA, “it is usually expected to also prevent or treat the patient’s psoriasis, if that person has a concurrent case of psoriasis.”[1]

Apotex had received marketing approval from the TGA for the treatment of RA and PsA (but not psoriasis specifically). Its product information stated:

“INDICATIONS

Apo-Leflunomide is indicated for the treatment of:

. Active Rheumatoid Arthritis.

. Active Psoriatic Arthritis. Apo-Leflunomide is not indicated for the treatment of psoriasis that is not associated with manifestations of arthritic disease.”

The Federal Court – Jagot J at first instance and the Full Court had agreed with Sanofi that Apotex’ supply of leflunomide in these circumstances infringed s 117. While the reasoning was a bit different in each case, it essentially turned on 2 propositions:

First, s 117(2)(b): Apotex had reason to believe its leflunomide would be used to treat psoriasis because its administration to PsA sufferers would usually involve treatment of psoriasis too.

Secondly, s 117(2)(c): in any event, Apotex’ product information was an instruction to use leflunomide in the treatment of psoriasis when it was being prescribed to treat PsA.

Crennan and Kiefel JJ (with whom French CJ and Gaegeler J agreed) rejected both bases and held that Apotex did not infringe.

The patent gave Sanofi a very limited monopoly – use of leflunomide for a particular purpose. This appears to have led to an important point of policy at [302]:

…. It is difficult to understand how the supply of an unpatented product, the use of which by a supplier would not infringe a method patent, can give rise to indirect infringement of a method patent by a recipient of the unpatented product from the supplier. The difficulty reflects the prior art and Sanofi’s limited novelty in the hitherto unknown therapeutic use of the pharmaceutical substance, which is the claimed subject matter of the Patent.

Notwithstanding the interpretation of the product information reached by all four Federal Court judges below, there was no instruction or recommendation of the kind required by s 117(2)(c). Bearing in mind the regulatory regime imposed by the TGA at [303]:

…. In light of the provisions of the TGA, to which reference has been made, the expression “indication” in the product information document is an emphatic instruction to recipients of Apo?Leflunomide from Apotex to restrict use of the product to uses other than use in accordance with the patented method in claim 1. ….

It was simply an instruction to use leflunomide for the treatment of PsA or RA. Nor was s 117(2)(b) engaged. Rather than looking to the effect of the administration of Apotex’ leflunomide, it was necessary to look at the purpose it was being prescribed for: in the relevant cases, the treatment of PsA. At [304] therefore:

it was not shown, nor could it be inferred, that Apotex had reason to believe that the unpatented pharmaceutical substance, which it proposes to supply, would be used by recipients in accordance with the patented method, contrary to the indications in Apotex’s approved product information document.

This suggests that it will be very difficult to establish infringement of a claim to the use of a medicine for a patented purpose where the therapeutic compound itself is no longer patented and the the patented purpose is not one of the indications for which the supplier has obtained TGA approval. One might wonder about the situation where the supplier / respondent was aware of significant off-label use. In this case, however, the High Court seems to have characterised the infringing effect as purely incidental. That was no doubt supported by the different specialists who might prescribe leflunomide for the different purposes.

The High Court did not find it necessary to discuss the trial judge’s finding [2] that leflunomide was not a staple commercial product so that s 117(2)(b).

So, after all that, Apotex did not infringe the patent. We at least have a clear ruling (albeit obiter dicta in that special High Court way) about the patentability of methods of medical treatment so far as the courts (and the current High Court) are concerned. I wonder how much the pecuniary remedies for Apotex’ infringement of copyright in the product informtion is worth?

Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2013] HCA 50

  1. Crennan and Kiefel JJ at [182].  ?
  2. Sanofi v Apotex (No 2) at [270] – [273], on the footing that the relevant product for the purposes of s 117(2)(b) was the product as supplied by Apotex (and not leflunomide generally), which could be supplied and traded only for the 2 limited purposes indicated in the product information.  ?

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Apotex v Sanofi: manner of manufacture

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As briefly noted last week, the High Court handed down its ruling in Apotex’ appeal. Although the case will be mainly remembered because Apotex lost its challenge to the patentability of Sanofi’s method of medical treatment, Apotex actually won on the patent infringement point. (As there was no appeal on that point, however, it was still liable for infringing the copyright in Sanofi’s product information.)

Claim 1 of Sanofi’s relevant patent is for:

[a] method of preventing or treating a skin disorder, wherein the skin disorder is psoriasis, which comprises administering to a recipient an effective amount of [leflunomide].

The patent for leflunomide itself has expired.

Apotex had received marketing approval from the TGA for the treatment of rheumatoid arthritis (RA) and psoriatic arthritis (PsA).

By a majority of 4 – 1,[1] the High Court held that:

  1. a a method of medical treatment is indeed patentable subject matter – a manner of manufacture[2] – under Australian law;
  2. a second or subsequent use of a known substance could also be patentable subject matter; but
  3. Apotex did not infringe by selling or supplying its generic leflunomide according to its product information.

manner of manufacture

All 5 judges accepted the orthodoxy of the NRDC decision as defining the approach to whether a claim was to a manner of manufacture. And all 5 judges accepted it was a broad and widening concept.

Crennan and Kiefel JJ identified NRDC as essentially requiring 2 conditions to be satisfied. For example, at [235], their Honours quoted the Wellcome case:

This principle [in the NRDC Case] extends to a process which does not produce a new substance but results in ‘a new and useful effect’. If the new result is ‘an artificially created state of affairs’ providing economic utility, it may be considered a ‘manner of new manufacture’ within s 6 of the Statute of Monopolies. (Crennan and Kiefel JJ’s emphasis)

At [278] – [285], their Honours identified 7 reasons why a method of medical treatment could be patentable. Gaegler J agreed with these 7 reasons and proposed an eighth.[3] Given the broad scope of the concept, Crennan, Kiefel and Gaegler JJ considered the crucial consideration was that there was no economic or ethical basis for distinguishing between the patentability of a pharmaceutical (or other medical) product and a method.[4] French CJ’s reasoning was similar to this point; considering the historical exclusion from patentability to be an anomaly for which no clear and consistent foundation had been established.[5]

In contrast, Hayne J in dissent considered at [143] – [150] that it could well be possible to distinguish between patenting medical products and methods of treatment. Instead, his Honour considered that a process would only be patentable if the product (in the sense of the result, outcome or effect) of the process, and not just the process itself, had economic utility. Hayne J considered that a method of medical treatment did not satisfy that criterion because (at [163]):

The effect of using the process is personal to the individual. It is not an effect which the person who owns the right to use the process, or any person other than the individual who has been treated, can turn to economic account in any way, whether directly or indirectly. If the individual who has been treated can turn the effect to economic account, he or she can do so only indirectly: by taking advantage of better health to make a more valuable contribution to national production. The individual is not a subject of commerce. The product of the process in the individual (having better health than might otherwise have been the case) cannot be sold. ….

Perhaps reflecting Hayne J’s approach to some extent, Crennan and Kiefel JJ at [287] did consider that there was a distinction to be drawn between uses of therapeutic substances and the activities and procedures of doctors when treating patients on the basis that the latter are “non-economic”:

There is, however, a distinction which can be acknowledged between a method of medical treatment which involves a hitherto unknown therapeutic use of a pharmaceutical (having prior therapeutic uses) and the activities or procedures of doctors (and other medical staff) when physically treating patients. Although it is unnecessary to decide the point, or to seek to characterise such activities or procedures exhaustively, speaking generally they are, in the language of the NRDC Case, “essentially non?economic” and, in the language of the EPC and the Patents Act 1977 (UK), they are not “susceptible” or “capable” of industrial application. To the extent that such activities or procedures involve “a method or a process”, they are unlikely to be able to satisfy the NRDC Case test for the patentability of processes because they are not capable of being practically applied in commerce or industry, a necessary prerequisite of a “manner of manufacture”.[6]

French CJ, however, at [1] and [44] expressly included surgical procedures in his Honour’s finding in favour of patentability.

second use of a known substance

As Crrennan and Kiefel JJ pointed out, NRDC itself involved a second or subsequent use of a known substance, the hitherto unsuspected properties of which squarely satisfied the requirements for inventiveness. Apotex’ reliance on this basis, therefore, failed at [291] in succinct terms.

the infringement question

… will have to wait for another day.

Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2013] HCA 50

  1. French CJ, Crennan, Kiefel and Gaegler JJ; Hayne J dissenting.  ?
  2. Patents Act 1990 s 18(1)(a). The claim would, of course, also have to satisfy the other requirements including novelty, inventive step, utility etc.  ?
  3. Gaegler J appears to be alone in attributing weight to the potential disruption to business investments if the endorsement by Bristol-Myers v Squibb of the patentability of methods of medical treatment was overturned after 13 years.  ?
  4. See [282] for Crennan and Kiefel JJ; [314] for Gaegler J.  ?
  5. At [50]. See also [44] – [49].  ?
  6. Earlier, at [266] – [271], their Honours had noticed that Congress amended the US Patents Act to include §287(c)  ?

    “the effect of which is to permit the patenting of surgical methods to continue but to bar actions for patent infringement against medical practitioners (and ”related health care entit[ies]“) for ”the performance of a medical or surgical procedure on a body“.”

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Trying to sue an (alleged) overseas infringer

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Bennett J has refused Servier’s attempt to join several Apotex entities located outside Australia in its infringement action against the Apotex Australian arm.

Servier is the patentee of Australian patent No 2003200700 for the arginine salt of perindopril (perindopril arginine). Apotex Pty Ltd obtained listing with the Therapeutic Goods Administration (TGA) for a generic version of perindopril arginine. It commenced proceedings under s 138 of the Patents Act to revoke Servier’s patent.

Servier counter-claimed for infringement. Apotex Pty Ltd conceded the product it proposed to import would infringe Servier’s patent, if valid, and consented to an injunction prohibiting the importation and sale of its product pending the outcome of the revocation action.

Subsequently, Servier wished to join several related Apotex entities, all located and operating outside Australia, to its infringement allegations pursuant to Part 10.4 of the Rules. The infringements alleged were common design and authorisation. Bennett J had previously granted Servier leave to serve its infringement proceedings for another of its perindopil patents against at least 2 of the Apotex entities in question, Apotex Inc. and Apotex Pharmacem Inc.

As there can be no liability for authorisation or common design unless there is an act of primary infringement (i.e., someone must actually do something which is an act of infringement such as making or importing or selling or using the patented invention),  Servier sought relief on a quia timet basis; i.e., the risk that infringements would occur in the future.

 Servier relied principally the nature of the Apotex group as “a vertically integrated corporate group or a single worldwide organisation”, evidence from the earlier case that Apotex Inc. was the parent of Apotex Pty Ltd and directed its operations and information gleaned from Apotex Pty Ltd’s submissions to the TGA for marketing approval showing involvement by Apotex Pharmacen Inc. and several other entities whose names were redacted.
The central reasons for Bennett J’s refusal to permit service out were that:
60. The problem for Servier … is that there is no present actual or threatened primary infringement. If the Patent is valid, it is admitted by Apotex that the sale of Apotex P/L’s perindopril arginine is an infringing product. The only conduit for its sale, on the evidence, is Apotex P/L. Apotex P/L is subject to an interim injunction which will be made permanent if the Patent is valid. If the Patent is invalid, there is no question of infringement.
61. If Apotex P/L is not infringing and there is no present threat by Apotex P/L to infringe, there is no present basis for an injunction against the overseas cross-respondents to restrain any presently occurring act; there is no present infringement and no present threat to infringe.
62. Servier suggests that it could be the case that the overseas cross-respondents could produce a new product or enter into a common design with another Australian company to infringe the claims. Apart from a hypothetical suggestion made by Servier’s counsel, there is no factual basis for such a threat or such an apprehension.
63. In the present case, the threat is not imminent. There is no demonstrated real risk of wrongful conduct which would cause injury. ….
The evidence in this case, in contrast to the earlier case, showed that Apotex Inc. was not in fact the parent of Apotex Pty Ltd, they were different arms of the same corporate group.
In addition, both Apotex Inc. and Apotex Pharmacen Inc. were the subject of injunctions in Canada which precluded them from making perindopril arginine.
All of these facts distinguished the present application from the earlier case. Moreover, to date, only Apotex Pty Ltd had marketing approval from the TGA to import and offer for sale the Apotex version of perindopril arginine.

A second point is of general application.

The old rule in terms conferred a discretion on the Court whether or not to permit service out. Servier pointed out that Rule 10. , in contrast, is not expressed to be discretionary and, accordingly, it was entitled to an order for service out having satisfied the criteria specified. Bennett J was having none of that:

  • rule 10.43 set out matters an applicant for service out needed to satisfy, it did not constrain the Court;
  • after reference to s 37M, her Honour pointed that
    • Rule 1.31 empowered the Court to make any order in the proceeding having regard to the nature and complexity of the proceeding and taking into account proportionality
    • Rule 1.32 empowered the Court to make any order that the Court considers appropriate in the interests of justice (which included the power not to make an order) and
    • Rule 1.34 permitted the Court to dispense with compliance with the Rules

(Although it was unnecessary for her Honour to mention it, Rule 1.35 also permits the Court to make orders inconsistent with the rules.)

Apotex Pty Ltd v Les Laboratoires Servier (No 2) [2012] FCA 748

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Intellectual Property Laws Amendment Bill 2012 – exposure draft

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IP Australia has released for public comment an exposure draft of the proposed Intellectual Property Laws Amendment Bill 2012. The Bill has 2 purposes:

  1. to amend the Patents Act 1990 in light of the DOHA Declaration / TRIPS Protocol; and
  2. to confer original jurisdiction in matters arising under the Plant Breeder’s Rights Act 1994 on the Federal Magistrates Court in addition to the Federal Court’s existing jurisdiction.

DOHA Declaration[1] / TRIPS Protocol

Article 31 (scroll down) of the TRIPS Agreement permits members of the WTO to permit the use of patented inventions without the permission of the rightholder in the circumstances set out in the article.

The HIV/Aids crisis in Africa revealed a problem in this regime in that a number of countries which needed to rely on these provisions did not have the infrastructure, or were otherwise unable effectively, to take advantage of this regime. The basic idea underlying, first, the DOHA Declaration and, then, the TRIPS Protocol is to enable such countries to take advantage of the facilities and expertise in other countries by having the relevant drug made under compulsory licence in the foreign country.

So far, only Canada has notified the WTO pursuant to the DOHA Declaration that it has granted a compulsory licence to Apotex to export TriAvir[2] to Rwanda.[3]

Following on from consultations begun in 2010, the Government announced its intention to amend the Patents Act to implement the DOHA regime in March last year. The object of the proposed amendments is to introduce a regime for the grant of compulsory licences of pharmaceutical products on public health grounds for export to least-developed or developing countries (to be defined in the Bill as “eligible importing countries”).
As the TRIPS Protocol is not yet in force,[4] schedule 1 of the Bill is intended to implement the interim regime adopted under the DOHA Declaration. When the TRIPS Protocol does come into force, the regime in schedule 1 will be superseded by the regime to be enacted by schedule 2 of the Bill.

In either case, the regime will be separate from, and independent of, the existing compulsory licensing regime relating to domestic non-use which is currently the subject of a reference to the Productivity Commission.

As with the existing “non-use” regime, any compulsory licences would be granted only on application to the Federal Court, and not the Commissioner of Patents. If the patents in question are innovation patents, it would be necessary to apply for certification (where that has not occurred already).

Federal Magistrates Court

The extension of jurisdiction over PBR matters to the Federal Magistrates Court, which “is designed to deal with less complex matters more quickly and informally than the Federal Court”, follows several years experience with copyright matters and the extension of jurisdiction over patent, trade mark and registered design matters enacted by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012, which comes into effect on 15 April 2013.

Onus in trade mark oppositions

I wonder why the bill doesn’t fix up the onus for oppositions to the registration of trade marks to the “balance of probabilities” standard in line with the amendments – see Part 2 – that will apply in patent oppositions from 1 April 2013?

Submissions should be made by 1 October 2012.

Intellectual Property Laws Amendment Bill 2012 – exposure draft

Exposure draft Explanatory Memorandum

IP Australia’s Home Page for the exposure draft process.

  1. This is not strictly accurate terminology: I am using it as shorthand to refer to the WTO Council decision in December 2003 on paragraph 6 of the DOHA Declaration made in 2001. The WTO’s overview page is here.  ?
  2. A fixed-dose combination product of Zidovudine, Lamivudine and Nevirapine, according to Rwanda’s notification: see View Notifications.  ?
  3. The compulsory licence was issued by the Commissioner of Patents on 19 September 2007 for a period of 2 years: click on View notifications.  ?
  4. Australia has already accepted the TRIPS Protocol, but it does not come into force until two thirds of WTO’s 155 members accept it. If one counts the EU as “one” member – not sure on the politics of this as there are currently 27 members of the EU, as at May this year 44 members had accepted the TRIPS Protocol.  ?

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