Apotex Pty Ltd v ICOS Corporation - [2017] FCA 466

FEDERAL COURT OF AUSTRALIA
Apotex Pty Ltd v ICOS Corporation [2017] FCA 466

File number: VID 280 of 2016

Judge: BESANKO J

Date of judgment: 9 May 2017

Catchwords:
PATENTS – Consideration of application seeking amendment of complete specification pursuant to s 105(1) of the Patents Act 1990 (Cth) – whether grounds support the exercise of discretion in favour of allowing amendment – where patentee has made full disclosure of all relevant matters bearing on the discretion – where no unreasonable delay by patentee – where no evidence that party in opposition to amendment will suffer any prejudice if amendment is allowed – whether public policy grounds weigh against exercise of discretion in favour of amendment – whether obligation to make promises that were met or could be met – where patentee was not required to make statements as to the utility of the invention – where statement sought to be deleted from specification is the main promise in the patent – where patentee has enjoyed a monopoly for over 17 years out of the 20 year patent term.

PRACTICE AND PROCEDURE – Whether statements made to the Commissioner of Patents before grant are material on the evidence – where amendments sought to save time at trial – where amendments sought for avoidance of the risk of a plea of a lack of utility being upheld – where no current plea of false suggestion.

Legislation: Patents Act 1990 (Cth) ss 18, 40, 102, 104, 105, 138

Cases cited:
Actavis Group PTC EHF v ICOS Corporation [2016] EWHC 1955

Artcraft Urban Group Pty Ltd v Streetworx Pty Ltd [2016] FCAFC 29; (2016) 117 IPR 210

Bayer Pharma Aktiengesellschaft v Generic Health Pty Ltd [2012] FCA 1510; (2012) 99 IPR 59

Eli Lilly Canada Inc v Mylan Pharmaceuticals ULC & Anor 2015 FC 125

Flour Oxidising Company Ltd v Hutchinson (1909) 26 RPC 597

In the Matter of Alsop’s Patent (1907) 24 RPC 733

In the Matter of I.G. Farbenindustrie AG’s Patents (1930) RPC 289

Les Laboratoires Servier v Apotex Pty Limited [2010] FCAFC 131; (2010) 89 IPR 219

Les Laboratoires Servier v Apotex Pty Ltd [2016] FCAFC 27; (2016) 117 IPR 415

Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [No 2] (2007) 235 CLR 173

Pracdes Pty Ltd v Stanilite Electronics Pty Ltd (1995) 35 IPR 259

Pracdes Pty Ltd v Stanilite Electronics Pty Ltd (1995) 35 IPR 277

Prestige Group (Australia) Pty Ltd v Dart Industries Inc (1990) 26 FCR 197

Ronneby Road Pty Ltd v ESCO Corporation [2016] FCA 588

Smith Kline & French Laboratories Limited v Evans Medical Limited [1989] 1 FSR 561

Streetworx Pty Ltd v Artcraft Urban Group Pty Ltd [2014] FCA 1366; (2014) 110 IPR 82

Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Limited [1997] FCA 1063; (1997) AIPC 91-366

Date of hearing: 28 March 2017

Registry: Victoria

Division: General Division

National Practice Area: Intellectual Property

Sub-area: Patents and associated Statutes

Category: Catchwords

Number…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] FCA 466
Decision Date: 9 May 2017

CaseChat Overview and Summary

Apotex Pty Ltd was the plaintiff in a dispute with ICOS Corporation, concerning the validity and infringement of certain pharmaceutical patents. The case was heard in the Federal Court of Australia. The primary issue before the court was whether the patentee, ICOS, was entitled to amend the specification of the patents in question under section 105(1) of the Patents Act 1990 (Cth). The proposed amendments sought to alter certain claims within the patent specifications to avoid potential issues of invalidity arising from a lack of utility. The court needed to determine whether the grounds provided by ICOS supported the exercise of the court’s discretion in favour of allowing the amendments. Additionally, the court had to consider whether any public policy grounds weighed against the exercise of this discretion.

The court examined the circumstances surrounding the application for amendment, including whether ICOS had made full disclosure of all relevant matters bearing on the discretion. It was noted that there was no evidence of unreasonable delay by ICOS in making the application, nor was there any evidence that the party opposing the amendment would suffer prejudice if the amendment was allowed. The court also considered the implications of the amendments on public policy and the obligations of the patentee to make promises that were met or could be met. Furthermore, the court acknowledged that ICOS had enjoyed a monopoly for over 17 years out of the 20-year patent term. The court concluded that the application for amendment should be granted, as there was no evidence of any intention to mislead and the amendment would not result in prejudice to the opposing party. The court also considered the importance of the statement sought to be deleted from the specification, which was the main promise in the patent.

The Federal Court of Australia ruled in favour of ICOS, granting the application for amendment of the patent specifications. The court determined that there had been full disclosure in relation to the proposed amendments, and there was no unreasonable delay in making the application. The court also found that the amendments would not result in any prejudice to Apotex, the party opposing the amendment. Therefore, the court exercised its discretion under section 105(1) of the Patents Act 1990 (Cth) to allow the amendments. The court ordered that the complete specification of Australian Patent No. 769946 be amended in accordance with the proposed amendments set out in Annexure 1 to the respondent’s interlocutory application dated 11 November 2016. Additionally, the court ordered that the complete specification of Australian Patent No. 773666 be amended in accordance with the proposed amendments set out in Annexure 2 to the interlocutory application. The parties were to be heard regarding the terms of the order for costs.

Orders

Orders of the court

1. Pursuant to s 105(1) of the Patents Act 1990 (Cth) the complete specification of Australian Patent No. 769946 be amended in accordance with the proposed amendments set out at Annexure 1 to the respondent’s interlocutory application dated 11 November 2016 (interlocutory application).

2. Pursuant to s 105(1) of the Patents Act 1990 (Cth) the complete specification of Australian Patent No. 773666 be amended in accordance with the proposed amendments set out at Annexure 2 to the interlocutory application.

3. The parties be heard as to the terms of the order as to costs.

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

After Pracdes v Stanilite Electronics (No 1), the holder of the patent sought to amend the specification to replace the phrase “and thereby largely avoid the above disadvantages” with the phrase “and thereby largely avoid most, if not all, of the above disadvantages”. Windeyer J allowed the amendment (Pracdes Pty Ltd v Stanilite Electronics Pty Ltd (1995) 35 IPR 277 (Pracdes v Stanilite Electronics (No 2)). His Honour said that it was significant that there was no intention to mislead and, although the application for amendment was late, there was no evidence that the defendant relied on the wording in infringing the patent as it then stood. His Honour said that a finding of false suggestion, which his Honour had made in that case, was a serious matter to be taken into account in exercising the discretion to amend, but it did not mean that an amendment should not be allowed.The Evidence ICOS relied on three affidavits sworn by Mr Gary Baxter Cox, lawyer and patent attorney, an affidavit sworn by Dr Mark Jordan Stewart, patent attorney, an affidavit sworn by Mr Danny L Wood, patent attorney, and an affidavit sworn by Dr Malcolm Ian Mitchell, formerly Medical Director at Lilly. None of these witnesses were required for cross-examination. Mr Cox is and has been a principal of Wrays Patent & Trademark Attorneys for about 20 years and Wrays Lawyers for about four years. He is the chairman of Wrays, Patent Attorneys and Wrays Lawyers (Wrays). He has practised in the area of intellectual property and, in particular, patent litigation for approximately 20 years. He has conducted numerous complex trials before the Court concerning the infringement and validity of pharmaceutical patents. On 15 January 2016, Ms Arleen Palmberg, Lilly’s assistant general counsel, engaged Wrays to advise Lilly in respect of a potential dispute with Apotex concerning Lilly’s sale of Cialis. On 12 February 2016, Ms Palmberg sent a copy of the NOC decision to Mr Cox by email. Mr Cox outlines the details of that proceeding in his affidavits. Mr Todd Shand is a registered patent attorney and a principal of Wrays Patent Attorneys. Between 12 February 2016 and 24 February 2016, he raised with Mr Cox the possibility of amending the 946 Patent in light of the findings in the NOC decision and the benefits to ICOS of doing so. On 24 February 2016, Mr Cox and other members of the Wrays team discussed a number of matters with Ms Palmberg, including the NOC decision. During the course of the telephone conversation, Mr Cox raised for the first time with Ms Palmberg the possibility of amending the 946 Patent in light of the findings in respect of utility in the NOC decision. Thereafter, Mr Cox’s attention was directed towards considering infringement and invalidity issues with respect to the 666 Patent, the 946 Patent and the 722 Patent. As I have said, Apotex commenced its proceeding on 4 April 2016. On the following day, ICOS retained Wrays Lawyers to act as its legal representative.

Decision

Reasons for decision

There has been full disclosure in relation to these amendments. The application to amend was prompted by the decision in Actavis Group v ICOS and there has been no unreasonable delay since the handing down of that decision. The amendments will be allowed.Conclusions I will make orders as follows:1.Pursuant to s 105(1) of the Patents Act 1990 (Cth) the complete specification of Australian Patent. No 769946 be amended in accordance with the proposed amendments set out at Annexure 1 to the respondent’s interlocutory application dated 11 November 2016 (interlocutory application).2.Pursuant to s 105(1) of the Patents Act 1990 (Cth) the complete specification of Australian Patent No. 773666 be amended in accordance with the proposed amendments set out at Annexure 2 to the interlocutory application. It was agreed, as I understand it, that ICOS would pay Apotex’s costs. I will hear the parties as to the precise terms of the order for costs.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

File number:	VID 280 of 2016
Judge:	BESANKO J
Date of judgment:	9 May 2017
Catchwords:	PATENTS – Consideration of application seeking amendment of complete specification pursuant to s 105(1) of the Patents Act 1990 (Cth) – whether grounds support the exercise of discretion in favour of allowing amendment – where patentee has made full disclosure of all relevant matters bearing on the discretion – where no unreasonable delay by patentee – where no evidence that party in opposition to amendment will suffer any prejudice if amendment is allowed – whether public policy grounds weigh against exercise of discretion in favour of amendment – whether obligation to make promises that were met or could be met – where patentee was not required to make statements as to the utility of the invention – where statement sought to be deleted from specification is the main promise in the patent – where patentee has enjoyed a monopoly for over 17 years out of the 20 year patent term. PRACTICE AND PROCEDURE – Whether statements made to the Commissioner of Patents before grant are material on the evidence – where amendments sought to save time at trial – where amendments sought for avoidance of the risk of a plea of a lack of utility being upheld – where no current plea of false suggestion.
Legislation:	Patents Act 1990 (Cth) ss 18, 40, 102, 104, 105, 138
Cases cited:	Actavis Group PTC EHF v ICOS Corporation [2016] EWHC 1955 Artcraft Urban Group Pty Ltd v Streetworx Pty Ltd [2016] FCAFC 29; (2016) 117 IPR 210 Bayer Pharma Aktiengesellschaft v Generic Health Pty Ltd [2012] FCA 1510; (2012) 99 IPR 59 Eli Lilly Canada Inc v Mylan Pharmaceuticals ULC & Anor 2015 FC 125 Flour Oxidising Company Ltd v Hutchinson (1909) 26 RPC 597 In the Matter of Alsop’s Patent (1907) 24 RPC 733 In the Matter of I.G. Farbenindustrie AG’s Patents (1930) RPC 289 Les Laboratoires Servier v Apotex Pty Limited [2010] FCAFC 131; (2010) 89 IPR 219 Les Laboratoires Servier v Apotex Pty Ltd [2016] FCAFC 27; (2016) 117 IPR 415 Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [No 2] (2007) 235 CLR 173 Pracdes Pty Ltd v Stanilite Electronics Pty Ltd (1995) 35 IPR 259 Pracdes Pty Ltd v Stanilite Electronics Pty Ltd (1995) 35 IPR 277 Prestige Group (Australia) Pty Ltd v Dart Industries Inc (1990) 26 FCR 197 Ronneby Road Pty Ltd v ESCO Corporation [2016] FCA 588 Smith Kline & French Laboratories Limited v Evans Medical Limited [1989] 1 FSR 561 Streetworx Pty Ltd v Artcraft Urban Group Pty Ltd [2014] FCA 1366; (2014) 110 IPR 82 Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Limited [1997] FCA 1063; (1997) AIPC 91-366
Date of hearing:	28 March 2017
Registry:	Victoria
Division:	General Division
National Practice Area:	Intellectual Property
Sub-area:	Patents and associated Statutes
Category:	Catchwords
Number…