3 min read

The Therapeutic Goods Administration (TGA) has commenced a timely public consultation into the repurposing of prescription medicines, which seeks to better understand the incentives and potential hurdles influencing sponsors’ decision-making on whether to extend the approved indication for an existing medicine. Of particular interest to the TGA is the viability of repurposing medicines for rare diseases or less commercially profitable indications, or in circumstances where the new indication is already accepted clinical practice, albeit ‘off-label’ in Australia or elsewhere.

As part of its consultation paper the TGA has proposed far-reaching changes that have the potential to significantly reduce the regulatory burden on sponsors when applying for the inclusion of a new indication, improve information sharing and access to related international regulatory and reimbursement approvals, and implement open access to Australian medicine usage data.

Repurposing and ‘off label’ use

Repurposing, also referred to as second medical use, is the use of a known drug for a new therapeutic purpose. Repurposing is a promising avenue in drug discovery and has been an active area of growth in the last decade for a variety of drug classes, particularly chemotherapeutic agents.

Among the most visible recent examples of potential repurposing have been the investigation of known medicines such as chloroquine and hydroxychloroquine (both anti-malarials), remdesivir (an antiviral developed to treat Ebola) and tocilizumab (a monoclonal antibody developed to treat rheumatic conditions) and numerous other existing medicines as potential COVID-19 treatments.

Repurposing has the important benefit of decreasing the overall cost of bringing a new treatment to market and broadening access to it by Australian prescribers and patients, as the safety and pharmacokinetic profiles of the repurposed candidate have already been tested and established in connection with its original indication(s). 

In recent years, the TGA has worked with innovator sponsors to enable them to make submissions based on peer-reviewed literature, rather than clinical data, for registration of new indications for existing medicines on the Australian Register of Therapeutic Goods (ARTG). This in turn has enabled reimbursement for the indication through listing on Australia’s Pharmaceutical Benefits Scheme (PBS). 

In one such example, the TGA worked with the sponsor of Tamoxifen, a well-known breast cancer hormonal treatment in clinical use since the 1970s, to submit a literature-based application for a new indication (the prevention of breast cancer in high-risk women), which is an off-label use supported by recommendations in both Australian and international clinical care guidelines.

However, the TGA cannot compel sponsors to seek ARTG registration for a new indication that does not meet the sponsor’s business objectives, even where widespread and clinically-supported off-label use exists. Commercial imperatives are therefore one of the main barriers to less profitable second medical use indications becoming registered and subsidised.

Proposed approaches to facilitating and encouraging repurposing of medicines

The TGA has outlined three broad approaches to encouraging ARTG regulatory and PBS reimbursement applications for repurposed medicines, summarised below.

Proposal 1 – Reduce regulatory burden

  • Develop and provide specific regulatory support and guidance for repurposing medicines, including clinical trial design and scientific advice.
  • Assist with the development of literature reviews to simplify literature based submissions.
  • Facilitate access to comparable overseas evaluation reports, where they exist.
  • Improve the coordination of multi-jurisdictional submissions with other regulators.
  • Provide fee relief (currently a TGA application and evaluation for an extension of indication is approximately $148,000), for submissions for medicines that have low commercial returns but high public health gains.
  • Streamline simultaneous submissions for regulatory and reimbursement evaluation.
  • Provide exclusivity periods for the first sponsor of new indications of repurposed off-patent medicines.

Proposal 2 – Enhanced information sharing and access

  • Facilitate open access to Australian medicine usage data.
  • Provide a simple mechanism to find related international regulatory and reimbursement approval assessment reports or decision summaries.

Proposal 3 – Actively pursue registration and review

  • Seek public expressions of interest for sponsorship of new indications of a medicine, potentially limited to non-commercial organisations.
  • Compelling sponsors to make an application for an additional indication.
  • Pharmaceutical Benefits Advisory Committee (PBAC) to have the ability to approve the inclusion of an additional indication without the need for an application by the sponsor.

The issues raised by this consultation paper have important and far-reaching implications for both innovator and generic sponsors, and it will be of interest to see the outcome of this first round of pubic consultation, which concludes on 30 March 2021.

Authored by Dr Roshan Evans and Duncan Longstaff

24 March 2021

2:00 PM (Los Angeles)

5:00 PM (New York)

25 March 2021

8:00 AM (London)

5:00 PM (Tokyo)

9:00 AM (Berlin)

7:00 PM (Sydney)

4:00 PM (Beijing)

9:00 PM (Auckland)

Abstract

Australia has long been regarded as a favourable jurisdiction for those seeking to enforce patent rights. However, there are important differences between patent law and litigation practice in Australia, compared to jurisdictions such as the US, Europe and Japan.  Those differences present both risks and opportunities for parties litigating patents in Australia. In this webinar, Principal Duncan Longstaff and Special Counsel Andrew Rankine, both specialist patent litigators, will identify aspects of Australian patent law and litigation practice that present potential traps for the unwary, and provide practical guidance on steps which can be taken before commencing litigation, or in its early stages, to maximise prospects of success. Topics addressed will include patent ownership and licensing, standing, pre-action discovery and preliminary injunctions, as well as post-grant patent amendments. Principal and ICT/EE patent attorney Tam Huynh will facilitate the discussion.

Authored by Duncan Longstaff and Andrew Rankine

Welcome to Shelston IP’s wrap-up of the most notable patent law decisions in Australia and New Zealand delivered during 2020 – a remarkable year indeed. The High Court delivered its first decision in a patent case since 2015, and there was an interesting spread of Full Federal Court, Federal Court, Australian Patent Office and Intellectual Property Office of New Zealand decisions relating to issues of patent validity, infringement and amendment as well as procedural issues.

Read our full report

  • The High Court of Australia has endorsed the doctrine of exhaustion in favour of the longstanding doctrine of implied licence with respect to patented products in Australia, but made clear the critical question remains whether the modifications made to a product in each case are properly characterised as permissible repair or impermissible re-making (Calidad v Seiko Epson).
  • An enlarged Full Federal Court has confirmed that a protocol for a clinical trial that is publicly available can be novelty-defeating, provided the information disclosed is sufficiently specific and complete to disclose the invention that is later claimed. The Full Court has also provided important guidance on the nature and scope of Swiss-style claims, and the circumstances under which such claims may be infringed (Mylan v Sun).
  • The Full Court of the Federal Court has found that a computer-implemented method that linked website users to online advertising was not a manner of manufacture and therefore not patentable subject matter (Commissioner of Patents v Rokt). In separate decisions, a computer-implemented method relating to “sandboxing” (Facebook) and an invention relating to the hardware and software components of an electronic gaming machine (Aristocrat v Commissioner of Patents) were held to be patent-eligible subject matter, while a modified roulette table was found not to be patent-eligible (Crown).
  • The Full Court of the Federal Court has confirmed that section 105(1A) of the Patents Act 1990 (Cth), introduced by the Raising the Bar reforms, confers on the Federal Court the power to direct amendments to patent applications during the course of an appeal hearing (Meat and Livestock Australia v Branhaven).
  • In the long-running patent dispute relating to Lundbeck’s antidepressant, Lexapro (escitalopram), the Full Court of the Federal Court overturned a decision that had found Sandoz liable for patent infringement during the extended term of a patent after it was restored, and awarded damages. Lundbeck has recently been granted special leave to appeal to the High Court of Australia, which for the third time will hear an appeal regarding an aspect of this long-running litigation (Sandoz v Lundbeck).
  • The Federal Court provided its first detailed analysis of the Raising the Bar reforms to Australian patent law concerning sufficiency and support. A subsequent judgment on final relief, delivered in November 2020, highlights the challenges facing a defendant who seeks to resist final injunctive relief on public interest grounds (Merck Sharp & Dohme v Wyeth). Those sufficiency and support requirements, as well as best method, were also considered in detail by the Australian Patent Office (University of British Columbia, Gliknik v CSL).
  • In an unprecedented decision, the Federal Court of Australia has considered and dismissed a claim by the Commonwealth Government for compensation from sponsors of innovator pharmaceutical products, pursuant to undertakings as to damages given in exchange for an interlocutory (preliminary) injunction restraining the launch of the first generic product (Commonwealth v Sanofi).
  • A party which gave undertakings not to launch an allegedly infringing biosimilar without first giving notice successfully resisted an application for preliminary discovery (Pfizer v Sandoz). Conversely preliminary discovery was granted against a former employee, but limited in scope due to the prevailing financial circumstances (Sovereign v Steynberg).
  • Extension of term applications were refused for pharmaceutical patents (Pharma Mar, Ono).
  • An opposition to an Australian patent application based solely on a challenge to entitlement was successful (Liquid Time v Smartpak).
  • The Federal Court considered the applicability of the Crown use defence to infringement, and the effect of prior disclosures by the Crown on validity (Axent v Compusign).
  • The nature and detail of disclosures in prior art and the common general knowledge proved determinative of the validity in decisions concerning a combination pharmaceutical product (Boehringer v Intervet) and a parking management system (Vehicle Monitoring Systems v SARB).
  • The construction of claims in the context of the entire specification proved determinative of issues of infringement and validity in several decisions (Caffitaly v One Collective, Nufarm v Dow, CQMS v ESCO).
  • The Intellectual Property Office of New Zealand has delivered decisions demonstrating the difficulty of opposing an application under the “old” 1953 Act (Lonza v Koppers), the high burden for computer-implemented methods (Thomson Reuters) and the more onerous support requirements under the “new” 2013 Act (Taiho Pharmaceutical).

As we continue into 2021 (and away from 2020), we hope this review provides a practical and comprehensive resource. Please do not hesitate to take the opportunity to contact our authors, all subject-matter experts in their respective fields, for advice on the issues raised by these important decisions.

Authored by Duncan Longstaff and Dr Roshan Evans

7 min read

Sandoz Pty Ltd v H Lundbeck A/S [2020] FCAFC 133 (4 August 2020)

In the long-running patent dispute relating to Lundbeck’s blockbuster antidepressant, Lexapro® (escitalopram), the Full Court of Australia’s Federal Court overturned a decision of Jagot J, who had found Sandoz liable for infringement of the Lexapro patent and awarded Lundbeck more than AU$16 million in damages. Lundbeck has recently been granted special leave to appeal to the High Court of Australia, which for the third time will hear an appeal regarding an aspect of this litigation.

Background

The original 20-year term of the Lexapro patent (AU 623144) was due to expire in June 2009. In April 2004, the Commissioner of Patents granted a 5-year extension of the patent term, calculated by reference to the first regulatory approval date for Lexapro. The active ingredient of Lexapro is escitalopram, the S-enantiomer of citalopram. A racemic form of citalopram (a mixture of the S- and R-enantiomers) was earlier marketed in Australia by Lundbeck under the trade name Cipramil.

In subsequent Federal Court proceedings, that extension of term was held invalid (Alphapharm Pty Ltd v H Lundbeck A/S (2008) 76 IPR 618; upheld on appeal: H Lundbeck A/S v Alphapharm Pty Ltd (2009) 177 FCR 151). The Court found that any extension of term application needed to be made by reference to Cipramil, being the first approved therapeutic goods that “contain” the S-enantiomer of citalopram within the meaning of the Patents Act 1990 (Cth) (the Act). It followed that such application was required to be made within six months of the first regulatory approval date for Cipramil. Lundbeck’s application was therefore submitted out of time.

In consequence, the Lexapro patent expired on 13 June 2009, at the end of its original term. Three days later, Sandoz and other generics launched generic escitalopram products. In doing so, they appeared to be taking a risk. On 12 June 2009, Lundbeck had sought an extension of time to submit a new extension of term application, based on the first regulatory approval date for Cipramil.

Given that the time limit for submitting such an application expired in mid-1998, Lundbeck required a 10-year extension of time. Nevertheless, that extension was granted, on the basis that the applicable time limit had been unclear until determined by the Federal Court in June 2009 (Alphapharm Pty Ltd v H Lundbeck A/S (2011) 92 IPR 628; upheld on appeal: Aspen Pharma Pty Ltd v Commissioner of Patents (2012) 132 ALD 648; Aspen Pharma Pty Ltd v H Lundbeck A/S (2013) 216 FCR 508; Alphapharm Pty Ltd v H Lundbeck A/S (2014) 254 CLR 247).

Armed with this extension of time, Lundbeck submitted a new application to extend the term of its Lexapro patent. In June 2014, some 5 years after the patent had expired, that extension was granted (Alphapharm Pty Ltd v H Lundbeck A/S (2014) 109 IPR 323; upheld on appeal: Alphapharm Pty Ltd v H Lundbeck A/S (2014) 110 IPR 59; Alphapharm Pty Ltd v H Lundbeck A/S (2015) 234 FCR 306; Alphapharm Pty Ltd v H Lundbeck A/S [2016] HCATrans 52).

The newly extended term of the Lexapro patent expired in December 2012. By that time, Sandoz and other generics had been marketing escitalopram products in Australia for over three years. Lundbeck sought damages for infringement of the Lexapro patent during that period.

In defence of such damages claim, Sandoz relied on a settlement agreement it had reached with Lundbeck in February 2007 (Settlement Agreement). In return for Sandoz discontinuing its revocation case against the Lexapro patent, Lundbeck agreed to grant Sandoz an irrevocable licence to the patent, effective from a date two-weeks prior to its expiry (the Early-entry licence).   

At the time that agreement was reached, the expiry date of the Lexapro patent remained uncertain – litigation concerning the validity of the original extension of term was ongoing. The agreement recorded several alternative dates on which the Early-entry licence might commence. However, it did not address the possibility that the term of the Lexapro patent might expire and, sometime later, be extended. That is, of course, what transpired.

In defence of Lundbeck’s damages claim, Sandoz submitted that, on a correct construction of the Settlement Agreement, the Early-entry licence commenced in May 2009, two-weeks before expiry of the Lexapro patent, and remained in force thereafter. By contrast, Lundbeck submitted that, because the term of the patent was extended to December 2012, the early-entry licence did not commence until November 2012, leaving Sandoz liable for infringement in the intervening period.

First instance decision

Lundbeck was successful before the primary judge (H Lundbeck A/S v Sandoz [2018] FCA 1797). However, Jagot J did not accept either party’s construction of the Settlement Agreement.

Her Honour found that, under the terms of the Settlement Agreement, the Early-entry licence commenced in May 2009, two weeks before the Lexapro patent expired. In reaching that conclusion, Jagot J held that the operation of the agreement ought not be tested by reference to the fact that, 5 years later, a new extension of term was granted, because this could not have been predicted by the parties in February 2007, when they entered into the Settlement Agreement.

However, in Jagot J’s view, this was not the end of the matter. Noting that Sandoz would not require a licence after the Lexapro patent had expired, her Honour found that the effect of the Settlement Agreement was to confer on Sandoz a licence which commenced in May 2009 and ceased to operate two weeks later, upon the expiry of the patent’s original term.

It followed, in Jagot J’s view, that Sandoz did not have the benefit of a licence when the term of the Lexapro patent was subsequently extended. Based on these findings, Jagot J held Sandoz liable for infringing the patent between June 2009 and December 2012, awarding Lundbeck in excess of AU$16 million in damages.

Decision

An appeal by Sandoz to the Full Court was successful. The critical issue on appeal concerned the construction of the Settlement Agreement, in particular, whether the Early-entry licence ceased to operate on expiry of the original term of the Lexapro patent in June 2009, or continued thereafter.

In approaching that question, the Full Federal Court reiterated well-established principles of contract construction. The terms of a contract are to be construed objectively. The question is what the language used would convey to a reasonable business person, in light of the surrounding circumstances known to both parties at the date of their agreement, including the objects of the contract, and assuming that the parties intended to achieve a commercial result. A court will be slow to adopt a construction that would give a contract an effect that is commercially nonsensical.

On the other hand, the Full Court emphasised that commercial common sense and surrounding circumstances may not be invoked to discount the language in which a contract is expressed. The fact that a contractual provision may operate to disadvantage one party to an agreement is not a reason to depart from the ordinary meaning of the language in which that provision is expressed.

In the view of the Full Court, the language of the Settlement Agreement was sufficiently clear. It granted Sandoz an irrevocable licence that commenced in May 2009, two weeks before expiry of the Lexapro patent, and remained in force thereafter. The Full Court held that, objectively ascertained, it was the parties’ intention to stipulate a start date for the licence, but not an end-date.

Notably, the Full Court agreed with Jagot J that it appeared neither party had, at the time of concluding the Settlement Agreement in February 2007, turned their mind to the possibility that the Lexapro patent might expire and only subsequently have its term extended. That is unsurprising, given unprecedented course of the Lexapro proceedings. As the Full Court observed, had the parties been able to foresee the course those proceedings would take, it is likely that express provision would have been made for such eventualities in the Settlement Agreement.

Significance

The Full Federal Court’s decision highlights the complexity of the extension of time and extension of term provisions under Australia’s patent legislation which, together or separately, can significantly affect the course of the litigation and the negotiation of commercial settlement terms.

The decision of the Full Federal Court does not yet bring to a close one of the most complex patent disputes in Australian legal history, as Lundbeck was recently granted special leave to appeal to the High Court of Australia (H. Lundbeck A-S & Anor v Sandoz Pty Ltd; CNS Pharma Pty Ltd v Sandoz Pty Ltd [2021] HCATrans 13 (11 February 2021). That will be the third time this litigation has reached the High Court for a substantive appeal, with Lundbeck previously succeeding in obtaining both its application for an extension of time to apply for an extension of term and then the extension of term application itself. Over its long course, the Lexapro litigation has made a number of significant contributions to Australian patent law, including in relation to the validity of enantiomer claims and the operation of the provisions of the Act which govern extensions of term and extensions of time, and now it appears set to contribute to Australia’s contract law as well.

Authored by Andrew Rankine and Duncan Longstaff

7 min read

Merck Sharp & Dohme Corp v Wyeth LLC (No 4) [2020] FCA 1719

In a previous article, we discussed Justice Stephen Burley’s finding that a Wyeth patent covering certain vaccines against Streptococcus pneumoniae was valid and would be infringed by a 15-valent vaccine that Merck Sharp & Dohme (MSD) planned to launch in Australia.  By a subsequent judgment, Burley J has now granted final relief consequential on those findings, including an injunction restraining launch of MSD’s 15-valent vaccine.  The judgment is notable for his Honour’s rejection of a request, made by MSD, for a separate hearing on the question of whether injunctive relief ought to be refused on public interest grounds, given the significant medical benefits offered by MSD’s 15-valent vaccine. 

Key takeaways

  • Under existing Australian law, the starting position is that a patent owner successful in infringement proceedings will ordinarily be entitled to a final injunction restraining supply of an infringing product.  Nevertheless, in deciding whether to grant an injunction in each case, the court will have regard to all relevant considerations, including the public interest.
  • A defendant seeking to avoid final injunctive relief on public interest grounds faces both substantive and procedural hurdles.  The defendant may need to apply, at an early stage of the proceeding, to have the public interest question heard and determined separately, after the main trial on patent infringement and validity.

Background

The technology at issue in these proceedings was reviewed in our previous article.  Very briefly, more than 90 different serotypes of the bacterium Streptococcus pneumoniae (or “pneumococcus”) have been identified.  A limited number of especially virulent serotypes cause around 1 to 2 million childhood deaths globally, each year.  Wyeth’s Prevnar 13® vaccine, which is currently listed on Australia’s National Immunisation Program, targets 13 of those serotypes.  The 15-valent vaccine developed by MSD targets two additional serotypes, offering broader protection against pneumococcal disease.

In his previous judgment,  Burley J found that marketing of MSD’s 15-valent vaccine in Australia would involve infringement of one of three patents asserted by Wyeth in this proceeding (his Honour found the asserted claims of the other two asserted patents to be invalid).

Under Australia’s existing law on remedies for patent infringement, the starting position for analysis is that a patent owner successful in infringement proceedings will ordinarily be entitled to a final injunction, assuming there is a threat of ongoing infringement.  On the other hand, an injunction is an equitable, and therefore discretionary, remedy and a court will have regard to all relevant considerations in assessing whether injunctive relief is appropriate in each particular case, including considerations of proportionality.

A relatively recent decision of Australia’s Full Federal Court has confirmed that a final injunction for patent infringement will ordinarily be granted in terms which, in addition to restraining the specific conduct that was held to infringe at trial, restrains generally any further infringing conduct by the defendant (Calidad Pty Ltd v Seiko Epson Corporation (No 2) [2019] FCAFC 168, as we reported in our Best Patent Cases 2019 publication available here).  An injunction granted in that form places on the defendant the risk of being held in contempt of court if it chooses to “sail close to the wind” by engaging in further conduct that, although modified from the conduct that was found to infringe at trial, could nevertheless still be found to fall within the scope of the patentee’s claims.

In the Prevnar vaccine case, MSD did not challenge the particular form of injunctive relief sought by Wyeth.  Rather, MSD argued that no final injunction should be granted at all, or alternatively that the question of injunctive relief should be deferred until after the determination of any appeal.  MSD based those arguments on the public interest in accessing its 15-valent vaccine, given the health advantages that vaccine would confer over the currently-available Prevnar 13® product.

Public interest

The need to take account of public interest considerations in assessing injunctive relief for patent infringement has been recognised in recent case law across a number of jurisdictions. 

Recent US case law has built upon the foundation laid by the landmark decision of the US Supreme Court in eBay Inc v MercExchange LLC, 547 US 388 (2006).  The eBay case established that a patent owner seeking final injunctive relief for infringement must establish that (1) it has suffered irreparable injury; (2) damages would not be an adequate remedy; (3) the balance of hardships between patent owner and defendant favours equitable relief; and (4) the public interest would not be disserved by a final injunction – the so-called “eBay factors”.

The role of public interest considerations in the grant or refusal of final injunctive relief for patent infringement was also considered in the recent UK case of Evalve Inc v Edwards Lifesciences Limited [2020] EWHC 513.  The defendant in that case opposed the grant of a final injunction, based on evidence that some medical practitioners believe, on reasonable grounds, that the infringing medical device (used to repair leaky heart valves) performs better in certain patients than the patent owner’s device.  As a fallback position, the defendant argued that use of the infringing device in those patients should be carved out of the scope of any final injunction.

In a detailed review of the issue, UK High Court Justice Colin Birss identified the following matters as relevant to the role of public interest considerations in the grant or refusal of injunctive relief for patent infringement.

First, the UK Patents Act 1977 (in common with patents legislation in Australia and several other jurisdictions) includes a number of provisions that reflect the legislature’s assessment on public interest issues.  These include, for example, statutory exclusions from patent infringement (e.g., for experimental use), compulsory licensing provisions and the Crown use scheme.  By the latter provisions, a government may authorise use of a patented invention without the patent owner’s consent where this is deemed to be in the public interest. 

Secondly, a patent infringer who invokes the public interest as a reason to withhold a final injunction is, in effect, seeking a compulsory licence without having established the statutory grounds on which such licences are ordinarily made available.

Thirdly, to assess whether it would be just in all of the circumstances to withhold a final injunction on public interest grounds, a court must be provided with evidence concerning the adequacy of damages to compensate the patent owner in lieu of an injunction.  Speaking hypothetically, Birss J observed that, if the level of compensation required to adequately compensate the patent owner would strip the infringer of their entire profits, then refusing an injunction may be to no avail, since the infringing product is unlikely to be made available in such circumstances.

In light of these considerations, Birss J concluded that, in patent infringement proceedings, the bar for refusing a final injunction on public interest grounds is high.  His Honour expressed the view that, generally speaking, it will be necessary to establish by objective evidence that the defendant’s product is needed to protect the lives of patients for whom it is the only suitable treatment (at [87]).

MSD submitted that those conditions would be satisfied in the Australian Prevnar vaccine case.  It invited Burley J to convene a separate hearing on whether it was against the public interest to grant a final injunction, at which hearing MSD proposed to adduce additional evidence, including evidence concerning the prevalence of pneumococcal serotypes covered by its 15-valent vaccine that are not covered by Wyeth’s Prevnar 13® product.

Justice Burley refused MSD’s request for a separate hearing and determined that it was appropriate that Wyeth be granted a final injunction restraining supply of MSD’s 15-valent vaccine.  His Honour’s reasons for that decision highlight the challenges facing a defendant seeking to resist final injunctive relief on public interest grounds in a patent infringement case.

On the one hand, Burley J pointed to a number of factors suggesting it was premature to determine the public interest question.  MSD has not yet obtained regulatory approval to market its 15-valent vaccine in Australia and its intended launch date remains unclear.  Wyeth’s counsel indicated that Pfizer (the parent company of Wyeth) intends launching a 20-valent pneumococcal vaccine in Australia, which may come to market before the MSD product is approved.  Justice Burley observed that the timeline of these events would be expected to have a significant bearing on the assessment of the public interest arguments raised by MSD.

On the other hand, Burley J found that the question of whether a final injunction should be refused on public interest grounds had been raised on the pleadings for the infringement case and his Honour was not persuaded that MSD should be permitted to, in effect, re-open its case on this issue, after judgment.

It is possible that MSD may seek to test those conclusions before the Full Federal Court.  A notice of appeal against Burley J’s judgment on issues of validity and infringement was filed by MSD in late January.

Significance

Justice Burley’s decision highlights the substantive and procedural challenges faced by a defendant in patent infringement proceedings seeking to argue that final injunctive relief should be refused on public interest grounds. 

In light of this decision, defendants who wish to preserve the ability to oppose final injunctive relief on public interest grounds may need to apply, at an early stage in the proceeding, to have that question deferred for separate determination, after the main trial on infringement and validity, with the parties granted leave to file fresh evidence on the public interest considerations which apply at that time.

Authored by Andrew Rankine and Duncan Longstaff

12 min read

Merck Sharp & Dohme Corporation v Wyeth LLC (No 3) [2020] FCA 1477

Summary

Australia’s Federal Court has delivered judgment in a dispute concerning patents covering improvements in vaccines against Streptococcus pneumoniae, a leading cause of serious infections, particularly in children.  The judgment provides the first detailed analysis by a Federal Court judge of the Raising the Bar reforms to Australian patent law concerning sufficiency and support.  The decision demonstrates the profound implications of those reforms for permissible claim breadth in Australian patents.

Key takeaways

  • Australian patent law concerning sufficiency of description and support for claims underwent significant changes in 2012 as a result of the Raising the Bar amendments to the Patents Act 1990 (Cth) (Patents Act).
  • Due to generous transitional provisions, the amended law is only now coming before Australia’s Federal Court for interpretation and application.
  • European and UK authorities provide guidance on how the amended provisions of Australia’s Patents Act are likely to be interpreted and applied. In some cases, the amendments will result in a reduction in permissible claim breadth for Australian patents.
  • As a result of the transitional arrangements, many Australian patent disputes between now and least 2033 are likely to involve both patents subject to the pre-Raising the Bar law and patents subject the post-Raising the Bar Amendments may be required to avoid the latter patents being held invalid under the new, more stringent standards of sufficiency and support.

On 14 October 2020, Justice Stephen Burley delivered the judgment of the Federal Court of Australia in Merck Sharp & Dohme Corporation v Wyeth LLC (No 3) [2020] FCA 1477.  The case concerned three patents owned by Wyeth LLC (Wyeth) relating to improvements in immunisation against infection by Streptococcus pneumoniae, a bacterium responsible for meningitis, pneumonia and other serious illnesses, especially in children.

Justice Burley’s decision provides the first detailed analysis by the Federal Court of Australia concerning amendments made in 2012 to Australian patent law on the topics of sufficiency of description and support for claims.  The decision highlights the significant implications of those amendments for patent validity and claim scope.

The technology

Streptococcus pneumoniae (also referred to as “pneumococcus”) has an outer capsule that incorporates complex sugars known as polysaccharides.  Differences in capsular polysaccharides distinguish variants of pneumococcus, called “serotypes”.  More than 90 distinct serotypes have been described.  A more limited group of virulent serotypes are responsible for most serious pneumococcal infections.

The antibody response to capsular polysaccharides is generally poor in young children.  As a result, they are particularly susceptible to pneumococcal infections, which globally account for around 1 to 2 million childhood deaths each year.

To address this problem, “polysaccharide-protein conjugate vaccines” were developed with the aim of stimulating immunity against serotypes of pneumococcus known to be responsible for a high proportion of human infections.  In such vaccines, capsular polysaccharides are joined (“conjugated”) to a carrier protein, leading to a stronger antibody response than is achievable with vaccines based on capsular polysaccharides alone.

A polysaccharide-protein conjugate vaccine against pneumococcus developed by Wyeth, known as Prevnar 7®, was in clinical use before the priority date of the Composition Patents.  That product is a “7-valent” vaccine.  It comprises capsular polysaccharides from 7 different pneumococcus serotypes, in each case conjugated to a single protein (known as “CRM197”).  Evidence led in the case indicated that, before the priority date, steps had been taken to develop 9-valent and 11-valent polysaccharide-protein conjugate vaccines against pneumococcus, but no such products had yet been licensed or launched.

The patents

Three patents were at issue in this proceeding.  Two of them, referred to by Burley J as the “Composition Patents”, were related members of the same patent family.  The more senior family member (referred to here as the “Parent Composition Patent”) was subject to the provisions of Australia’s Patents Act as they stood prior to the Raising the Bar amendments.  The more junior family member (referred to here as the “Child Composition Patent”) was subject to the post-Raising the Bar Patents Act.  The body of the specification was substantially the same in the parent and child patents.  It described multivalent immunogenic compositions (that is, vaccines) comprising 13 distinct polysaccharide-protein conjugates, thereby providing increased coverage of pneumococcal serotypes compared to the existing Prevnar 7® vaccine.

A third patent asserted by Wyeth in the proceeding, referred to by Burley J as the “Container Patent”, disclosed siliconized container means for the stabilization of polysaccharide conjugates.  The issues raised in the proceeding in relation to the Container Patent are not discussed here.

The proceedings

Merck Sharp & Dohme (MSD) sought revocation of Wyeth’s Composition Patents on a variety of grounds, including lack of novelty, lack of inventive step (i.e., obviousness), false suggestion, lack of clarity, lack of fair basis (in relation to the pre-Raising the Bar Parent patent) and lack of support (in relation to the post-Raising the Bar Child patent).

By a cross-claim, Wyeth alleged that a 15-valent pneumococcal vaccine which MSD proposed to launch and market in Australia would infringe selected claims of all three of the asserted patents.

Wyeth’s allegation that the Composition Patents would be infringed by marketing of MSD’s 15-valent vaccine in Australia gave rise to a critical issue of claim construction in the proceeding, namely, whether the claims of those patents were limited to 13-valent vaccines (as MSD contended) or extended to vaccines covering 13 or more serotypes (as Wyeth submitted).

The construction issue

Claim 1 of the Parent Composition Patent was in the following terms:

A multivalent immunogenic composition, comprising: 13 distinct polysaccharide-protein conjugates, together with a physiologically acceptable vehicle, wherein each of the conjugates comprises a capsular polysaccharide from a different serotype of Streptococcus pneumoniae conjugated to a carrier protein, and the capsular polysaccharides are prepared from serotypes 1, 3, 4, 5, 6A, 6B, 7F, 9V, 14, 18C, 19A, 19F and 23F and wherein said carrier protein is CRM197.

Insofar as is presently relevant, claim 1 of the Child Composition Patent was in similar (although not identical) terms.

The specification of each of the Composition Patents included text (standard in Australian patents) indicating that “comprising” is used in an inclusive sense (“including”) rather than an exhaustive sense (“consisting of”).  That text provided the basis for Wyeth’s submission that, because MSD’s 15-valent vaccine included the 13 serotypes identified in the claims of the Composition Patents, it fell within those claims.  On Wyeth’s construction, the presence of two additional serotypes in MSD’s 15-valent vaccine was irrelevant to infringement.

Arguing to the contrary, MSD submitted that its construction (limiting the claims to 13-valent vaccines) was the only construction consistent with the description of Wyeth’s invention in the specification taken as a whole.  A corresponding submission, based on similar (but not identical) claim language, had been accepted in related UK proceedings between MSD and Wyeth (see Merck Sharp & Dohme Limited v Wyeth LLC [2020] EWHC 2636 (Pat) at [251]-[270]).

However, on this key issue, Burley J preferred Wyeth’s construction.  In his Honour’s analysis, the inclusive definition of “comprising” was decisive.  Provided that a vaccine included each integer of Wyeth’s claims (including, relevantly, the 13 specified serotypes), it would infringe – a conclusion not altered by the presence in the infringing product of additional serotypes.

What is notable for present purposes is the very substantial breadth given to Wyeth’s claims on the construction adopted by Burley J.  On that construction, the range of valences covered by Wyeth’s claim would appear to have no upper bound.

Unsurprisingly, in view of this broad construction, a question arose as to whether the claims were fairly based on, or supported by, the disclosure contained in the body of the Composition Patent specification.  On that legal issue, the Raising the Bar amendments have brought about a profound shift in Australian law, as Burley J’s judgment demonstrates.

Raising the Bar reforms

The Raising the Bar reforms were introduced to address concerns that Australia’s patent standards were lower than those of its major trading partners, causing Australia’s innovation landscape to become cluttered with unduly broad patents.  The amendments were expressly directed at aligning key aspects of Australian patent law, including on sufficiency of disclosure and support for claims, with the standards applied by UK courts and the European Patent Office (EPO) Boards of Appeal.

Although the Raising the Bar amendments were enacted in April 2012, lengthy transitional provisions mean that many of the key reforms, including those concerning sufficiency and support, are only now coming before the courts for interpretation and application.

The law pre-Raising the Bar

Prior to the Raising the Bar reforms, the relationship between the disclosure in the body of a patent specification and the breadth of the claims was governed by the legal requirement for “fair basis”.  The leading authority on that requirement (Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2004) 217 CLR 274) established that fair basis does not turn on any inquiry into the patentee’s “technical contribution to the art”, but rather on whether each claim corresponds textually with what the patentee has described as their invention in the body of the patent specification.

The practical effect of Lockwood’s permissive interpretation of the fair basis requirement was amplified by the equally permissive interpretation of the sufficiency requirement given in the leading authority pre-Raising the Bar (Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1).  That case stands as authority for the proposition that a patent specification will have adequately described the invention if it would enable a person skilled in the relevant art to produce “something” falling within each claim (referred to colloquially as the “one way rule”).

That body of law is of continuing relevance for Australian standard and innovation patents for which examination was requested before 15 April 2013.  In the present case, that “old” body of law applied to the Parent Composition Patent.

Applying those authorities, Burley J found little difficulty in concluding that, notwithstanding his Honour’s broad interpretation of the claims of the Parent Composition Patent, those claims were fairly based.  Reflecting the essentially textual nature of the pre-Raising the Bar test for fair basis, that conclusion followed from the fact that the description of the invention in the body of the Parent Composition Patent employed the same inclusive language (“comprising”) as appeared in the claims.

The law post-Raising the Bar

Following the Raising the Bar amendments, the provisions of Australia’s Patents Act dealing with sufficiency and support are in substantially the same terms as the corresponding provisions of the European Patent Convention and the United Kingdom’s Patents Act 1977.  Parliamentary records make clear that those provisions were intended to have substantially the same effect as their European and UK counterparts, and that Australia courts are expected to have regard to decisions of the EPO Boards of Appeal and of UK courts in interpreting those provisions.

Burley J reviewed a number of EPO and UK authorities, including the recent decision of the UK Supreme Court in Regeneron Pharmaceuticals Inc v Kymab Ltd [2020] UKSC 27, to interpret the post-Raising the Bar requirement that the claims be “supported by matter disclosed in the specification”.

Referring to the landmark decision of the House of Lords in Biogen Inc v Medeva Plc [1997] RPC 1, Burley J observed that the claim support obligation has come to be understood as falling “under the umbrella of the requirement that the patent specification contain an enabling disclosure”.  His Honour noted that, although the requirement for sufficient description is directed to the specification as a whole, while the requirement for support is directed specifically to the claims, both requirements serve to ensure that a person skilled in the relevant art, armed with the patentee’s specification, is enabled to perform the invention over the whole area claimed without undue burden.

Referring to the decision of the EPO Board of Appeal in Exxon/Fuel Oils (T 409/91) [1994] EPOR 149, Burley J noted that the requirement for enablement across the full claim scope has been recognised as reflecting the general legal principle that the scope of a patent monopoly, as defined by the claims, should correspond to the patentee’s technical contribution to the art, as disclosed in their specification.

Applying those authorities, Burley J concluded that the claims of the Child Composition Patent were not supported by the matter disclosed in the specification.  On the construction advanced by Wyeth and accepted by His Honour, those claims encompassed any polysaccharide-protein conjugate pneumococcal vaccine comprising 13 or more serotypes (provided the other claim integers were satisfied).  While there was no dispute that the specification of the Composition Patents would enable a skilled person to make and use a 13-valent vaccine, uncontested evidence established that the disclosure of the specification could not be extrapolated to vaccines containing other, additional serotypes.  Manufacture of polysaccharide-protein conjugate vaccines comprising more than 13 serotypes was not enabled.

In the result, the asserted claims of the Parent Composition Patent were held to be valid and infringed, while the asserted claims of the Child Composition Patent were held invalid for lack of support.

Significance of the judgment

The disparate conclusions reached in this case concerning the Parent and Child Composition Patents serve to illustrate the profound changes to Australian law brought about by the Raising the Bar reforms.

Observers in other jurisdictions may find it curious that such starkly different findings could be made on the basis of very closely similar patent specifications.  The principle upon which the Child Composition Patent was held invalid (i.e., the requirement that claim breadth correspond to the patentee’s technical contribution to the art) is said to reflect the “essential patent bargain” whereby the patent holder is granted a time-limited monopoly in return for disclosing their invention in terms sufficiently clear and complete for it to be performed by those skilled in the art.  The fact that this requirement did not apply to the Parent Composition Patent serves to illustrate the extent to which, in the pre-Raising the Bar era, Australian patent law had diverged from the law applied by its major trading partners.

Such disparate outcomes are likely to remain a feature of Australian patent disputes for some years to come.  Australian patents subject to the pre-Raising the Bar law are expected to remain in force until at least 2033.

This decision also demonstrates that the post-Raising the Bar incarnations of Australia’s written disclosure requirements in s 40 of the Patents Act 1990 (Cth) can be a much more powerful weapon in the arsenal of a party seeking to revoke an Australian patent.  Historically, the low thresholds for fair basis and sufficiency have provided relatively wide scope for Australian patentees in advancing positions on claim construction to capture alleged infringements.  This main constraint for patentees in advancing claim construction under the pre-Raising the Bar body of law has been (and will remain) potential novelty and inventive step consequences arising from constructions being so broad as to capture prior art or common general knowledge.  The onerous post-Raising the Bar support and sufficiency requirements will add an extra dimension to these construction “squeezes” and another powerful validity ground which must be fended off.

Furthermore, notwithstanding parliament’s intention that the post-Raising the Bar provisions concerning sufficiency of description and claim support be interpreted so as to have substantially the same effect as the corresponding provisions of European and UK law, lingering disparities between the law of those jurisdictions and the terms of Australia’s Patents Act mean that some independent development of Australian law on sufficiency and support appears inevitable.  Two examples may be noted.

First, under the UK’s Patents Act 1977, although both sufficiency and support are requirements for a valid patent application, only lack of sufficiency is available as a ground of revocation for granted patents.  UK courts have remedied that “logical gap” by recognising both requirements as aspects of a single unifying requirement for an enabling disclosure.  No such logical gap exists in Australia’s Patents Act, where both lack of sufficiency and lack of support are available as grounds for revocation.  Whether this difference will lead Australian courts to seek to disentangle the threads of sufficiency and support in the UK authorities remains to be seen.

Secondly, by contrast to the requirements of European and UK law, Australia’s post-Raising the Bar Patents Act continues to impose a requirement to disclose the “best method”.  European and UK authorities provide no guidance on how that requirement is to be accommodated with the law regarding sufficiency and support.  For such guidance, it may be necessary for Australian courts to look to United States authorities.  Whether they will choose to do so remains to be seen.

Given the significant commercial interests at stake, and the complexity of the legal and factual issues raised by the Prevnar® case, the likelihood of an appeal appears reasonably high.  Whether any appeal judgment casts further light on Australian patent law post-Raising the Bar is likely to depend upon whether the appeal court upholds the broad construction of Wyeth’s Composition Patent claims that was accepted by Burley J.

Authored by Andrew Rankine, Charles Tansey, PhD, Duncan Longstaff

Shelston IP assisted Legal 500 in their recent launch of The Legal 500: Patent Litigation Country Comparative Guide.

Our highly experienced litigation team have provided their expertise for the Australian Patent Litigation Chapter.

The aim of this guide is to provide its readers with a pragmatic overview of the law and practice of patent litigation law in Australia.

Each chapter of this guide provides information about the current issues affecting patent litigation in Australia and addresses topics such as direct and indirect patent infringement, patent invalidity, post-grant opposition proceedings and injunctions, and future patent litigation growth areas.

Authored by Duncan Longstaff, Katrina Crooks, Mark Vincent and Stuart Hughes

5 min read

Sovereign Hydroseal Pty Ltd v Steynberg [2020] FCA 1084

An application for preliminary discovery of documents relating to the constituents of a ‘sealing composition’ and methods of using it to seal passages was granted in circumstances where an exclusive licensee of the asserted patent suspected infringement by a third party based on past employment, access to confidential information, information from a private investigator, and the similarities of the processes being carried out by both parties. The scope of the discovery order was limited due to the financial circumstances of the respondent.

Background

Sovereign Hydroseal Pty Ltd (Sovereign) is the exclusive licensee of Australian Patent No. 2012216392 (392 Patent) which relates to a method and composition for sealing passages such as cracks, joints and voids in concrete structures and geological formations using a sealing composition. The sealing composition, which includes a mix of latex and additional components, is delivered into a passage under pressure in order to seal the structure from water ingress.

Together with the joint patentees, Relborgn Pty Ltd and Triomviri Pty Ltd, Sovereign sought an order for preliminary discovery of documents to be produced by Mr Johannes Steynberg (Steynberg), a former employee of Sovereign operating a business called ‘H2O Seal’, pursuant to which a process was being used for sealing cracks and joints involving a ‘liquid rubbery substance’ injected by pumps. Sovereign contended that it required production of these documents on the basis that it did not have sufficient information to decide whether to start a proceeding against Steynberg in respect of causes of action for patent infringement, breach of confidence, breach of contract, and contempt.

During the period July 2008 to June 2009, when Steynberg was employed by Sovereign, he had received training on how to seal a passage in a body such as a geological formation with a seal composition, including insight into types of equipment as well as details of the materials and compositions used. For the purposes of his work, Steynberg had access to Sovereign’s confidential information including details of product specifications and formulations, processes involving those products, customer records and customer information.

Since cessation of his employment by Sovereign in 2009, Steynberg had held multiple business interests in Queensland in relation to waterproofing and water sealing. On two separate occasions in 2009 and 2011, Steynberg established businesses which were subsequently deregistered after settlements with Sovereign. On both occasions, Steynberg was alleged to have infringed on the intellectual property of Sovereign, which he denied. Justice McKerracher declined to take into account material from these previous disputes, other than in a general sense by way of common background. However, his Honour noted that it was relevant to showing that Steynberg had some opportunity to acquire relevant information.

In September 2019, Sovereign became aware of Steynberg’s involvement in H2O Seal by way of a ‘flyer’ on the H2O Seal business, internet-based searches, and enquiries made by a private investigator. The investigator obtained information that indicated Steynberg was using a product called ‘N-LICS’, and that H2O Seal used ‘a natural nano-technology rubber grout injected under pressure into the voids sealing cracks and joints’. Concerned that Steynberg was using at least one method of sealing cracks and joints that infringes the method claimed in the 392 Patent, Sovereign applied for preliminary discovery under Rule 7.23 of the Federal Court Rules 2011 (Cth). Other related issues included Steynberg’s alleged contraventions of contractual obligations and injunctive orders entered, as part of earlier proceedings in 2011.

Arguments

Steynberg did not contest that Sovereign subjectively believed that it may have a right to obtain relief, but argued that the belief was not reasonably held. Steynberg argued against Sovereign’s allegations as follows.

  1. The photos on the flyer did not ‘reveal any confidential information of Sovereign’ and ‘it would be difficult to conclude that [Sovereign] has a reasonable belief’ based on them.
  2. The material filed by Sovereign included evidence of Steynberg employing a blend of rubber emulsions injected under pressure into a passage, which convert from liquid to solid via coagulation, but did not reveal whether Steynberg was using the same formula as Sovereign. Accordingly, Steynberg argued, the evidence and Sovereign’s contentions were insufficient to ground a reasonable belief as defined in subrules 7.23(1)(c) that he may be using the same method, process or composition as Sovereign such that a potential patent infringement claim may arise.
  3. Steynberg further alleged that Sovereign had engaged in misleading or deceptive conduct by accusing him of using ‘very similar chemicals and methods’ previously used in his H2O Control Systems business, but that the present proceedings had not revealed he had been doing so.
  4. Finally, Steynberg pressed the point that Sovereign’s right to discovery under Rule 7.23 needs to be weighed against Steynberg’s interest in protecting his own intellectual property rights with respect to the methods he had developed and was using from disclosure to Sovereign (his competitor).

Decision

In considering subrule 7.23(1)(a) and (c), the Court found that the evidence established the following.

  1. Even though none of the information provided by Sovereign proved that Steynberg was employing the same method or chemical compositions, the processes being carried out by both parties appeared on their face to be very similar.
  2. It was not clear how more detailed information regarding the precise constituent element of Steynberg’s sealing composition could be obtained outside of the preliminary discovery orders sought, and therefore Sovereign was entitled to test that composition.
  3. Neither a lack of awareness of the 392 Patent, nor the fact that others were apparently using the same process in the market, provided an adequate response to Sovereign’s patent infringement allegation or an answer to Sovereign’s discovery orders.
  4. Steynberg held documents regarding the methods and chemical compositions he used to seal passages which were directly relevant and could help Sovereign in deciding whether to seek relief.

Justice McKerracher concluded that Sovereign had established an adequate foundation for a ‘reasonable belief’ that it may have had the right to obtain relief from Steynberg, and that Steynberg may have had documents directly relevant to that question. In relation to subrule 7.23(b), the Court ruled that in combination with prior enquiries including web-based searches and an investigation, the contested discovery notice served by Sovereign to Steynberg constituted a sufficiently reasonable enquiry.

Considering the requirements for an order to be fulfilled, McKerracher J allowed Sovereign’s application for preliminary discovery subject to the provision of security for the costs of compliance. The order to provide security for costs was made in response to the expansive terms of discovery sought by Sovereign, taking into account concerns regarding Steynberg’s financial capacity to comply.

Significance

This case highlights how preliminary discovery applications can be used by a patentee or exclusive licensee to inform its decision-making in relation to whether to commence a proceeding in respect of potential patent infringement.

The case also confirms the observations made by the Full Court in Pfizer Ireland Pharmaceuticals v Samsung Bioepis Au Pty Ltd (2017) 257 FCR 62 (which we previously analysed here). In terms of subrule 7.23(1)(a), the main point of consideration when granting preliminary discovery orders is not whether the belief in the applicant’s rights to relief is based on speculation, but rather whether the belief resulting from that speculation is a reasonable one. Potential applicants should bear in mind, however, that the scope of discovery sought can be restricted as a result of factors such as the financial capacity of the third party to comply with the order.

This decision is another illustration of the relatively low thresholds for obtaining preliminary discovery in connection with suspected infringement of an Australian patent, particularly for patents that claims compositions or manufacturing processes that cannot otherwise be readily discerned from public information or inspection of product samples (even if such samples can be obtained).

Authored by Chris Byrnes and Duncan Longstaff

9 min read

Australia’s Full Federal Court recently delivered judgment in an appeal in a significant patent case: Mylan Health Pty Ltd v Sun Pharma ANZ Pty Ltd [2020] FCAFC 116.  The case concerned three patents relevant to Mylan’s oral lipid-lowering agent, Lipidil® (fenofibrate).

An enlarged Full Court bench comprising 5 judges (Middleton, Jagot, Yates, Beach and Moshinsky JJ) was appointed to hear and decide Mylan’s appeal.  This was because Mylan sought to clarify the Full Court’s previous statement in Merck & Co Inc v Arrow Pharmaceuticals Ltd [2006] FCAFC 91; 154 FCR 31 that the characterisation of an alleged anticipation as a “suggestion” in relation to the invention, is “not necessarily fatal to a novelty argument”.  Mylan submitted this statement by the Full Court did not countenance “mere speculation” or “the presentation of no more than a reasoned hypothesis” as an anticipatory disclosure.  On this basis, Mylan submitted to the Full Court (unsuccessfully, as explained below) that the trial judge (Nicholas J) had erred in finding that a hypothesis stated in a prior art document relating to a clinical study deprived methods of treatment claims of novelty.

The Full Court’s decision also provided important guidance in relation to the approach taken by Australian courts in considering obviousness, the construction and infringement of ‘Swiss-style’ claims under Australian patent law and the extent to which consistory clauses alone can provide fair basis for a claim.

Method of treatment and Swiss-Style claims lack novelty in light of clinical trial protocol

The Full Court considered whether method of treatment and Swiss-style claims could be anticipated by prior art comprising a protocol for a clinical trial of the claimed method.

Mylan argued that such a protocol could not be novelty-defeating, because at most it identified a hypothesis that required testing, and could not be understood as teaching or recommending that the claimed method be put to clinical use.  The Full Court rejected that analysis and upheld the trial judge’s finding that Mylan’s method of treatment and Swiss-style claims lacked novelty.

The Full Court held that, in assessing novelty, the key question is whether the information disclosed in the prior art is sufficiently specific and complete to be equal to the invention that is later claimed.  If so, then even a protocol for a trial to test the claimed method could be novelty-defeating.  The Full Court acknowledged that, in this respect, Australia’s law on novelty differs from the law applied by UK courts in cases such as Regeneron Pharmaceuticals Inc v Genentech Inc [2012] EWHC 657 (Pat) and Hospira UK Limited v Genentech Inc [2015] EWHC 1796 (Pat), which hold that the prior art must disclose actual achievement of the relevant therapeutic effect to be novelty-defeating.

This aspect of the Full Court’s decision arguably fails to give due consideration to the proper meaning and importance of words such as “treat” and “prevent” in method of treatment and Swiss-style claims.  As Mylan contended, at the stage of disclosing the protocol for a clinical trial, it is not known whether the product or method under consideration does in fact “treat” or “prevent” the particular condition or illness of interest, and there is a significant prospect that it will later prove ineffective or unsafe.  The approach of the Full Court and the primary judge makes clear that the nature and extent of the prior-published clinical trial protocol or other document will be critical in each case.  Those case-specific factual issues will be especially important in future cases, as it would seem a harsh outcome for patentees for statements of unproven hypotheses, theories, ideas or suggestions to anticipate and invalidate (for lack of novelty, putting aside considerations of obviousness which depend on the common general knowledge and availability of prior art) claims to a method that the patentee has subsequently proven effective and safe in “treating” or “preventing” the particular condition or illness.

Obviousness of formulation and method of treatment claims

Australian Courts generally assess obviousness by asking whether, before the priority date, a skilled person presented with the same problem as the patent owner would have been “directly led to try the claimed subject matter with a reasonable expectation of success” (referred to as the “modified Cripps question”).  Historically, that test has been applied in a strict manner by Australian courts, leading a number of patents to be upheld in Australia that have been invalidated on obviousness grounds in other jurisdictions.

Recently, however, Australian courts have adopted a more flexible interpretation of the Cripps test.  This Mylan case continues that trend.  The trial judge held two of Mylan’s patents (one relating to nanoparticulate formulations of fenofibrate, the other relating to methods of preventing or treating retinal damage associated with diabetes by administering fenofibrate) invalid on obviousness grounds, and the Full Court upheld those findings.

The following aspects of the Court’s obviousness analysis are notable:

  • Mylan’s patent for a nanoparticle formulation of fenofibrate included claims which required the use of specified surface stablizers.  The trial judge did not find that the skilled person would have been directly led to select those specific stabilizers with an expectation that they would be effective. Rather, he found that the claimed stabilizers were logical to try and that routine, trial-and-error testing would have demonstrated their suitability.  The Full Court agreed this was sufficient to support an obviousness finding.
  • In relation to Mylan’s method of treatment patent, an expert gave evidence that, before the priority date, his expectation of success with the claimed method would have been less than 50%.  The trial judge held that evidence was not inconsistent with a finding of obviousness, because the Cripps test does not require a numerical assessment.  Again, the Full Court agreed with that analysis.

The test for obviousness applied by Australian courts remains more demanding upon the party seeking revocation than the approach taken by (for example) the European Patent Office or the UK courts.  However, the Mylan decision continues a trend in Australian patent cases towards a more flexible application of the obviousness test that is somewhat closer to the approach taken by the European Patent Office and UK courts.  This serves to emphasise the importance of careful preparation of the obviousness defence in close collaboration with inventors and key expert witnesses.

Defining the scope of Swiss-style claims

The claims asserted by Mylan included Swiss-style claims.  Swiss-style claims are typically drafted in the form “Use of [active ingredient] in the manufacture of a medicament for the treatment of [disease or disorder]”.  They came about from the need to satisfy particular requirements for patentability which formerly applied under the European Patent Convention.  Although these requirements do not exist in Australia, Swiss-style claims are routinely included in Australian patents as their scope is different from that of method of treatment claims, which are also permitted under Australian law.

The Full Court in this Mylan case examined the interpretation of Mylan’s Swiss-style claims, having regard to the decision of the UK Supreme Court in Generics (UK) v Warner-Lambert [2018] RPC 2, and provided guidance on determining the scope of such claims under Australian law.

One of the Swiss-style claims asserted by Mylan recites:

 “Use of fenofibrate or a derivative thereof for the manufacture of a medicament for the prevention and/or treatment of retinopathy, in particular diabetic retinopathy”.

The Full Court confirmed that the claim, if valid, conferred a monopoly in respect of the method or process of making the medicament, and that the method or process is complete upon manufacture.  The monopoly did not extend to a method of treatment – that being the province of method of treatment claims.  The Full Court also confirmed that Swiss-style claims are purpose-limited in the sense that the medicament resulting from the method or process is characterised by the therapeutic purpose for which it is manufactured, as specified in the claim.  The Full Court rejected the “outward presentation” test that was favoured by Lords Sumption and Reed in the UK Warner-Lambert case.

In the first instance decision, the primary judge said that the the crucial question concerning the infringement of a Swiss-style claim was whether the manufacturer had made or will make the medicament with the intention that it be used in the treatment of the designated condition.  On this basis, to prove infringement of a Swiss-style claim, it would not be enough to show that it was “reasonably foreseeable” that a generic product would be put to the use referred to in those claims (although foreseeability could be relevant in the overall analysis).  The trial judge held that, to prove infringement of Swiss-type claims, it would be necessary to show that the generic intended that its product be put to the use referred to in the Swiss-style claims.

The Full Court disagreed with this approach, instead finding that infringement of a Swiss-style claim is concerned with what the allegedly infringing manufacturer has done, not what it intended to do.  That is, not what a generic manufacturer intended, but what the generic product is for.  According to the Full Court, a single factual question arises when considering infringement:  as the product of the claimed method or process, is the medicament for the specified therapeutic purpose?  The question, the Full Court said, is answered having regard to “all the circumstances of the case”.

The Full Court pointed to several such “circumstances” that will be relevant in determining the therapeutic purpose of the medicament as defined by a Swiss-style claim.  First, the court noted that the physical characteristics of the medicament as it emerges as a product of the manufacturing process, including its formulation and dosage, packaging and labelling, and its patient information, will be an important consideration.  So too will evidence of the manufacturer’s actual intention in making the medicament, where such evidence is available.  Both factors are relevant considerations, but neither is determinative.

On the facts of this case (which included “skinny labelling” confining the approved indications of the generic product to indications outside the conditions within Mylan’s method of treatment claims), the Full Court held that Mylan had not proved that Sun’s fenofibrate products were “for” the second medical use covered by Mylan’s Swiss-type claims.

The Full Court also gave consideration to the reasonably foreseeable use or uses to which the medicament would be put after manufacture.  But while a reasonably foreseeable use may be relevant in deciding the therapeutic purpose of a medicament, it is also not determinative:  it might be reasonably foreseeable that a product might be put to a particular use, but it does not necessarily follow that the product, as manufactured, is for that use.

The Full Court agreed with the primary judge that mere suitability of a medicament for a claimed purpose cannot be determinative of the question of infringement of a Swiss-style claim.  The fact that the patent has been granted on the basis of a second medical use means that there are multiple uses to which the medicament could be put.  Evidence of suitability for use was therefore considered ambiguous and could not alone answer the question whether the medicament, as manufactured, is one for the specified therapeutic purpose.

Ultimately, the Full Court found that the Swiss-style claims, if valid, would not have been infringed by the manufacture of Sun’s competing product.  Of particular relevance to the Full Court’s decision was the fact that the competing product could be used in a large number of diseases other than retinopathy.

The decision validates the importance of including both Swiss-style claims and method of treatment claims when protecting a therapeutic use in Australia.  Both types of claim are permitted in Australia, and although their scope is limited to the specified therapeutic use, each will directly capture a different infringer.  In particular, Swiss-style claims provide a more direct avenue than method of treatment claims for pursuing manufacturers of competitive pharmaceutical products, rather than the medical practitioners who perform the treatment.

Consistory clauses may not provide fair basis if too broad 

Mylan’s third patent, relating to an immediate-release micronized formulation of fenofibrate, was found by both the primary judge and the Full Court to be invalid for lack of fair basis.  The Full Court endorsed the primary judge’s reasoning that the disclosure elsewhere in Mylan’s patent specification made clear that the invention was to the immediate release fenofibrate composition and a method for preparing it, whereas Mylan had advanced a construction of a consistory clause and corresponding claims to the effect that the invention extended to any composition of fenofibrate which satisfies the specified dissolution profile.  The Full Court affirmed that, as Sun Pharma had submitted, this is “a paradigm example of claims which travel beyond the matter disclosed in the specification”, amounting to invalidity for lack of fair basis.

The fair basis test considered in this case still applies to Australian patents for which examination was requested prior to 15 April 2013, when the “Raising the Bar” amendments came into effect.  The ‘fair basis’ requirement is generally considered to be a lower standard for patentees than the ‘support’ requirement that replaced it from 15 April 2013, which Australian Parliament expressly intended to align more closely with requirements under European law.  Therefore, if a consistory clause alone will not necessarily provide fair basis, that risk is likely to be even more significant for more recent patents and pending future patent applications required to meet the higher standard of support (such as an “enabling disclosure”).

Authored by Duncan Longstaff and Michael Christie, PhD

1 min read

Shelston IP has been named as a finalist in the Australian Law Awards for Intellectual Property Team of the Year.  

Now in its 20th year, the Australian Law Awards, run in partnership with Principal Partner UNSW Law, bestows the industry’s most prestigious accolades recognising excellence across the entire legal industry.

The awards showcase professional development and innovation, celebrating both the individuals and firms that are leading the way in the industry.

Award recipients represent a true cross section of the legal industry, recognising the contributions of the profession’s most senior ranks through to its rising stars.

“It is our pleasure to mark the 20th year anniversary of the Australian Law Awards,” said Lawyers Weekly editor Emma Ryan.

“This annual event represents the premier benchmark for those operating in the business of law, covering vast practice areas, level of experience and contribution to the profession.

“I would like to congratulate all of the finalists for this year’s event. We look forward to celebrating with you soon.”

This recognition reinforces the strength of our service and dedication to our clients.

Authored by Duncan Longstaff