Actavis Pty Ltd v Orion Corporation

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FEDERAL COURT OF AUSTRALIA

Actavis Pty Ltd v Orion Corporation [2016] FCAFC 121

Appeal from:

Orion Corporation v Actavis Pty Ltd [2015] FCA 909 Orion Corporation v Actavis Pty Ltd(No 2)
[2015] FCA 1026

Orion Corporation v Actavis Pty Ltd (No 3)
(2015) 116 IPR 102; [2015] FCA 1373
File number: NSD 1207 of 2015
Judges: ALLSOP CJ, NICHOLAS AND YATES JJ
Date of judgment: 9 September 2016
Catchwords:

PATENTS –  validity of claims – whether relevant claims fairly based on the matter described in the specification – whether relevant claims clear

PATENTS – infringement – method claims

PATENTS – standing to sue – whether second respondent an exclusive licensee – whether third respondent has standing to sue for infringement – whether third respondent a proper party to the cross-claim for revocation
Legislation:

Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth)

Patents Act 1990 (Cth) ss 40, 120, 139, 187, Sch 1

Patents Regulations 1991 (Cth) reg 19.1

Cases cited:

Bristol-Myers Squibb Co v Apotex Pty Ltd (No 5)
(2013) 104 IPR 23; [2013] FCA 1114

Bristol-Myers Squibb Company v Apotex Pty Ltd
(2015) 228 FCR 1; [2015] FCAFC 2

CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260; [1994] FCA 396

Emory University v Biochem Pharma Inc
(1998) 42 IPR 35; [1998] FCA 915

Lockwood Security Products Pty Limited v Doric Products Pty Limited (2004) 217 CLR 274; [2004] HCA 58

Norman v Federal Commissioner of Taxation
(1963) 109 CLR 9; [1963] HCA 21

Sharrment Pty Ltd v Official Trustee in Bankruptcy
(1988) 18 FCR 449; [1988] FCA 266

Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth
[2011] AIPC 92-428; [2011] FCAFC 132

Date of hearing: 15, 16 February 2016
Registry: New South Wales
Division: General Division
National Practice Area: Intellectual Property
Sub-area: Patents and associated Statutes
Category: Catchwords
Number of paragraphs: 258
Counsel for the Appellants: Mr SCG Burley SC with Mr JS Cooke
Solicitor for the Appellants: Ashurst Australia
Counsel for the Respondents: Mr C Dimitriadis SC with Mr C Burgess
Solicitor for the Respondents: Clayton Utz

ORDERS

NSD 1207 of 2015
BETWEEN:

ACTAVIS PTY LTD (ACN 003 854 626) (and another named in the Schedule)

First Appellant
AND:

ORION CORPORATION (and others named in the Schedule)

First Respondent

JUDGES:

ALLSOP CJ, NICHOLAS AND YATES JJ

DATE OF ORDER:

9 SEPTEMBER 2016

THE COURT ORDERS THAT:

1.By 4.00 pm on 23 September 2016, the parties are to bring in agreed orders giving effect to these reasons, including on the question of costs. 

2.In the event that they are unable to agree, the parties are to provide drafts of the orders they propose, supported by written submissions not exceeding three pages in length, by 4.00 pm on 30 September 2016. 

3.Until further order, and except as provided in Order 4, publication or other disclosure of paragraphs [94] and [95] of the reasons for judgment published today as Actavis Pty Ltd v Orion Corporation [2016] FCAFC 121…

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Details
Case
[2016] FCAFC 121
Decision Date

CaseChat Overview and Summary

In Actavis Pty Ltd v Orion Corporation, the Federal Court of Australia considered appeals concerning patent validity, infringement, and standing. The primary dispute involved the validity of certain claims in a patent related to a pharmaceutical composition and method. The appeals also addressed the standing of various parties to sue for infringement and the revocation of the patent. The court was required to determine whether the relevant claims were fairly based on the matter described in the specification and whether they were clear. Additionally, the court had to decide on the standing of the parties involved, including whether the second respondent was an exclusive licensee and whether the third respondent had standing to sue for infringement and was a proper party to the cross-claim for revocation.

The court found that the primary judge's conclusion that the impugned claims were fairly based on the matter described in the specification was correct. The court emphasized that the invention described in the specification was a new, oral solid fixed dose composition comprising specific pharmacologically effective amounts of entacapone, levodopa, and carbidopa with at least one pharmaceutically effective excipient. The court noted that the description of preferable stability and bioavailability characteristics and ease of swallowing were best understood as referring to embodiments of the invention rather than essential features. The court also held that the respondents had standing to sue for infringement and that the third respondent was a proper party to the cross-claim for revocation. The court allowed certain grounds of appeal and dismissed the rest, leading to variations in the orders concerning the standing of the parties to sue for infringement and the revocation of the patent.

The court ordered that the parties attempt to agree on the orders that would give effect to the reasons for judgment, including the question of costs. If the parties could not agree, they were to provide drafts of the orders they proposed, supported by written submissions. The court also ordered that certain paragraphs of the reasons for judgment be kept confidential to prevent prejudice to the proper administration of justice. The court noted that the confidentiality orders were necessary to ensure fair proceedings.

Orders

Orders of the court

1. By 4.00 pm on 23 September 2016, the parties are to bring in agreed orders giving effect to these reasons, including on the question of costs.

2. In the event that they are unable to agree, the parties are to provide drafts of the orders they propose, supported by written submissions not exceeding three pages in length, by 4.00 pm on 30 September 2016.

3. Until further order, and except as provided in Order 4, publication or other disclosure of paragraphs [94] and [95] of the reasons for judgment published today as Actavis Pty Ltd v Orion Corporation [2016] FCAFC 121 (the reasons) be prohibited.

4. Publication or other disclosure of paragraphs [94] and [95] of the reasons may be made to:

(a) persons authorised by the appellants; and

(b) the external legal representatives, internal legal representatives, external patent attorneys and internal patent attorneys of the respondents who have signed a confidentiality undertaking in respect of documents designated by the appellants as confidential which were provided to Clayton Utz on 6 November 2013.

THE COURT NOTES THAT:

5. Orders 3 and 4 are necessary to prevent prejudice to the proper administration of justice.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

It follows that Ground 16 of the appeal should be allowed.CONCLUSION AND DISPOSITION We have concluded that Grounds 3 and 6, and Ground 16, of the appeal should be allowed. Otherwise the appeal should be dismissed. At the hearing of the appeal, the respondents handed up a draft of the orders they propose. The draft proposes variations to Orders 1 to 3 made by the primary judge on 4 December 2015 concerning the standing of Novartis and Novartis Australia to sue for infringement. The draft also includes orders for costs. The draft costs orders proceed, in part, on the assumption that, other than on the question of Novartis’ and Novartis Australia’s standing to sue for infringement, the respondents would be completely successful on the appeal. The form of the proposed orders was addressed only very briefly by the appellants in submissions in reply. They submitted that Novartis Australia’s claim for infringement should be dismissed. We accept that this should be the case. The appellants also submitted that the respondents should pay their (the appellants’) costs of the appeal insofar as those costs concern the question of Novartis Australia’s standing to sue for infringement. The appellants can be seen as having success on that issue, but, having regard to the overall compass of the appeal, it does not following necessarily that costs should be apportioned or apportioned in this way. In any event, our conclusion concerning Grounds 3 and 6 also means that the appellants’ success has been greater that that contemplated by the respondents’ draft orders. The parties have not addressed us on how the burden of costs should fall in these circumstances. Further, it is apparent that other orders made by the primary judge will require variation in light of the conclusions we have reached. Accordingly, the parties should attempt to agree on the orders that will give effect to these reasons. They should also attempt to agree on the question of costs. To this end, we will order that the parties bring in agreed orders by 4.00 pm on 23 September 2016. If the parties are unable to agree, they should provide drafts of the orders they propose, supported by written submissions not exceeding three pages in length, by 4.00 pm on 30 September 2016. Finally, [94] and [95] of these reasons contain information that is confidential. We shall make orders preserving the confidentiality of that information in terms similar to the orders of the primary judge made on 16 September 2015.

Ratio Decidendi

Legal Principle Established

With respect to claim 21, the appellants say that the primary judge found at [182] (see [112] above) that the claim is fairly based because of its limitation of comparable therapeutic efficacy. The appellants submit that this finding does not address the substance of their fair basis case. The appellants also submit that, once again, the primary judge impermissibly imported the substance of the claim into the matter described in the specification, for the purpose of undertaking the comparison required by s 40(3) of the Act.Consideration We are not persuaded that the primary judge erred in his conclusion that each of the impugned claims is fairly based on the matter described in the specification, although we would not agree with all aspects of his Honour’s reasoning in coming to that conclusion. In their submissions, the respondents emphasise a number of other passages in the specification that describe the invention. When these passages are considered with the passages on which the appellants place particular reliance, we are led to conclude, as the primary judge did at [71], that the invention described is a new, oral solid fixed dose composition comprising pharmacologically effective amounts of entacapone, levodopa and carbidopa with at least one pharmaceutically effective excipient. The invention includes methods of preparing such a composition and a method of using such a composition, namely in the treatment of Parkinson’s disease. The identification of the invention, in these terms, can be seen from the opening statements of the specification that describe the field of the invention: see [14] above. It can also be seen from the passage we have quoted at [19] above, particularly in the first paragraph thereof. The second paragraph of that passage explicitly refers to the three-in-one composition as “a composition according to the invention”. We do not accept the appellants’ submission that the “preferable” stability and bioavailability characteristics and ease of swallowing, to which reference is also made in the second paragraph of the passage, are essential features of the invention that is described. This part of the description is best understood as referring to embodiments of the invention that can exhibit these preferable attributes. The embodiments are described in later passages of the specification and can be seen as exemplifications of what the specification says are the “particularly interesting properties” of the three-in-one composition. Although the appellants urge a contrary view based on the distinction between the invention having “preferable” characteristics, as stated in the specification, and the invention “preferably” having these characteristics, we accept the respondents’ submission that this argument is really an “overly meticulous verbal analysis” of the kind eschewed in Lockwood at [68]; see the discussion in CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260; [1994] FCA 396 at 275-282, especially at 281B-D.