Apotex Pty Ltd v Les Laboratoires Servier
[2013] FCA 1426
FEDERAL COURT OF AUSTRALIA
Apotex Pty Ltd v Les Laboratoires Servier
[2013] FCA 1426
Citation: Apotex Pty Ltd v Les Laboratoires Servier [2013] FCA 1426 Parties: APOTEX PTY LTD ACN 096 916 148 v LES LABORATOIRES SERVIER and SERVIER LABORATORIES (AUST) PTY LTD File number: NSD 51 of 2012 Judge: RARES J Date of judgment: 24 December 2013 Corrigendum: 6 March 2014 Catchwords: INTELLECTUAL PROPERTY – patents – patent claimed particular new pharmaceutical salt of substance – whether invention of new salt novel within meaning ss 7(1) and 18 of Patents Act 1990 (Cth) when two earlier patents in prior art made general claims for the substance “and its pharmaceutically acceptable salts” – whether earlier patents’ claims disclosed the invention to skilled addressee or lacked sufficient content – common general knowledge
INTELLECTUAL PROPERTY – patents – whether claimed invention obvious and involved inventive step within meaning of ss 7(2) and 10(1) of Patents Act 1990 (Cth) – whether problem/solution approach apposite – perspective of person skilled in the art as to whether selection of counter-ion to try in salt screen obvious
INTELLECTUAL PROPERTY – patents – whether claim in patent for pharmaceutical salt “and its hydrates” fairly based within meaning of s 40(3) of Patents Act 1990 (Cth) – where complete specification did not indicate how hydrates were part of invention or how made – construction of patent – whether construction approached from position of skilled addressee
INTELLECTUAL PROPERTY – patents – whether complete specification described best method known to the patentee of performing the invention within meaning of s 40(2)(a) of Patents Act 1990 (Cth) – where complete specification gave very general description of method leaving open many alternatives that left to chance whether a pharmaceutically acceptable salt would be produced – whether person seeking revocation must prove that the particular method that patentee failed to disclose is in fact a better method than the generalised method described in the specification
INTELLECTUAL PROPERTY – patents – statutory construction – whether expression “fraud, false suggestion or misrepresentation” in s 138(3)(d) of Patents Act 1990 (Cth) identifies three alternatives – meaning of “fraud”, “false suggestion” and “misrepresentation” in s 138(3)(d) – basis upon which patent construed as understood by Commissioner of Patents for purpose of revocation proceedings under s 138(3)(d) – onus of proof of falsity in the sense in which skilled addressee would understand the patent read as a whole
STATUTORY CONSTRUCTION – whether Court’s power to revoke a patent under s 138(3) of Patents Act 1990 (Cth) discretionary
Legislation: Patents Act 1952 (Cth) ss 100(1), 102, 105
Patents Act 1990 (Cth) ss 7, 7(1), 7(2), 18(1)(b), 40(2)(a), 40(3), 49(1), 59, 138, 138(1), 138(3)(b), 138(3)(d), 138(3)(f), Sch 1
Statute of Monopolies 1623 (UK)Cases cited: Aktiebolaget Hässle v Alphapharm Pty Ltd (2002) 212 CLR 411 applied
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 17 applied
Apotex Pty Ltd v Sanofi-Aventis (2008) 78 IPR 485 applied
Apotex Pty Ltd v Sanofi-Aventis (2009) 82 IPR 416 applied
Arthur Legat’s Case (1612) 10 Co Rep 448; 77 ER 1093 applied
Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345 applied
Baltic Shipping Co v Dillon (1993) 176 CLR 344 applied
Bovill v Finch (1870) LR 5 CP 523 referred to
Brunton v Hawkes (1821) 4 B & Ald 54; 106 ER 1034 applied
Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 referred to
Colgate-Palmolive Co v Cussons Pty Ltd (1993) 26 IPR 311 applied
Cutter v Powell (1795) 6 Term Rep 320; 101 ER 573 applied
Dare v Pulham (1982) 148 CLR 658 applied
Enka BV v E I Du Pont de Nemours & Company 1987 BP 13 applied
Expo-Net Danmark A/S v Buono-Net Australia Pty Ltd (No 2) [2011] FCA 710 applied
Firebelt Pty Ltd v Brambles Australia Ltd (t/as Cleanaway) (2002) 188 ALR 280 applied
Firebelt Pty Ltd v Brambles Australia Ltd (2000) 51 IPR 53 applied
General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457 applied
H Lundbeck A/S v Alphapharm Pty Ltd (2009) 177 FCR 15 applied
Hatmakers v Joseph Nathan & Co Ltd (1919) 36 RPC 231 applied
ICI Chemicals & Polymers Ltd v The Lubrizol Corporation Inc (2000) 106 FCR 17 applied
Illinois Tool Works Inc v Autobarn Co [1974] RPC 337; [1972] FSR 67 applied
In re IG Farbenindustrie AG’s Patents (1930) 47 RPC 289 applied
Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 applied
Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2004) 235 CLR 173 applied
Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2004) 217 CLR 274 applied
Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd (1980) 144 CLR 25 applied
Mirror Newspapers Ltd v Harrison (1982) 149 CLR 293 applied
Morgan v Seaward (1837) 2 M & W 544 applied
No-Fume Ltd v Frank Pitchford & Co Ltd (1935) 52 RPC 231 referred to
Norton and Gregory Ltd v Jacobs (1937) 54 RPC 271 applied; 54 RPC 58 applied
Olin Corporation v Super Cartridge Co Pty Ltd (1977) 180 CLR 236 applied
Owners of the Ship “Shin Kobe Maru” v Empire Shipping Company Inc (1994) 181 CLR 404 applied
PAC Mining Pty Ltd v Esco Corp (2009) 80 IPR 1 applied
Pfizer Overseas Pharmaceuticals v Eli Lilly & Co (2005) 68 IPR 1 applied
Prestige Group (Australia) Pty Ltd v Dart Industries Inc (1990) 26 FCR 197 appliedProject Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 applied
Re Alsop’s Patent (1907) 24 RPC 733 applied
Reader’s Digest Services Pty Ltd v Lamb (1982) 150 CLR 500 applied
Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45 referred to
Sharp & Dohme Inc v Boots Pure Drug Company (1928) 45 RPC 153
Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2011] FCAFC 132 app
Smith v Chadwick (1884) 9 App Cas 187 applied
The Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 referred toTA Blanco White, Patents for Inventions (4th ed: 1974), (5th ed: 1983) Stevens & Sons: London
Date of hearing: 8-11, 14-18, 21- 25 October 2013 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 297 Counsel for the Applicant: Mr DK Catterns QC with Mr N Murray and Mr C Smith Solicitor for the Applicant: Herbert Smith Freehills Counsel for the Respondents: Mr AJL Bannon SC with Ms CL Cochrane Solicitor for the Respondents: Allens Linklaters
FEDERAL COURT OF AUSTRALIA
Apotex Pty Ltd v Les Laboratoires Servier
[2013] FCA 1426CORRIGENDUM
1.The original medium neutral citation “Apotex Pty Ltd v Servier Laboratories (Aust) Pty Ltd [2013] FCA 1426” on the cover page was incorrect and has been replaced with “Apotex Pty Ltd v Les Laboratoires Servier [2013] FCA 1426”.
2.In paragraph [50] “Prof Evans is” has been replaced with “Until he was recently appointed Provost, Prof Evans was”.
3.In paragraphs [49], [60], [75], [107], [183], and [213] “Bryn” has been replaced with “Byrn” wherever occurring.
4.In paragraph [87] “bytylamine” has been replaced with “butylamine”.
5.In paragraph [109] “burylamine” has been replaced with “butylamine”.
6.“Aequous” has been replaced with “aqueous” wherever occurring.
7.In paragraph [146] “which had a molecular weight of 44.15 mmol” has been replaced with “(44.15 mmol)” and “which had a molecular weight of 41.94 mmol” has been replaced with “(41.94 mmol)”.
8.In paragraph [148] “paramaters” has been replaced with “parameters”.
9.In paragraph [150] “The salt break” in the third sentence has been replaced with “The method”.
10.In paragraph [151] “with a molecular weight of 32.56 mmol” has been replaced with “(32.56 mmol)” and “with the same molecular weight” has been replaced with “(32.56 mmol)”.
11.In paragraphs [181] and [182] “Illonois” has been replaced with “Illinois”.
12.In paragraph [181] “Fireball” has been replaced with “Firebelt”.
13.In paragraph [186] “vaguaries” has been replaced with “vagaries”.
14.In paragraph [240] “hygroscopity” has been replaced with “hygroscopicity”.
15.In paragraph [250] “germaine” has been replaced with “germane”.
16.In paragraph [268] “dessicant” has been replaced with “desiccant”.
17.In paragraph [289] “Coverysl” has been replaced with “Coversyl”.
I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Corrigendum to the Reasons for Judgment herein of the Honourable Justice Rares. Associate:
Dated: 10 April 2014
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 51 of 2012
BETWEEN: APOTEX PTY LTD ACN 096 916 148
ApplicantAND: LES LABORATOIRES SERVIER
First RespondentSERVIER LABORATORIES (AUST) PTY LTD
Second Respondent
JUDGE:
RARES J
DATE OF ORDER:
24 DECEMBER 2013
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The parties confer and prepare draft orders, including as to costs, to give effect to the reasons for judgment published today and in the event that the parties are unable to agree on such orders:
(a)on or before 31 January 2014, the applicant file and serve its draft orders, any further evidence and written submissions limited to 10 pages;
(b)on or before 10 February 2014, the respondents file and serve their draft orders, any further evidence and written submissions limited to 10 pages.
2.The proceedings stand over to 14 February 2014 for directions or the making of orders.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 51 of 2012
BETWEEN: APOTEX PTY LTD ACN 096 916 148
ApplicantAND: LES LABORATOIRES SERVIER
First RespondentSERVIER LABORATORIES (AUST) PTY LTD
Second Respondent
JUDGE:
RARES J
DATE:
24 DECEMBER 2013
PLACE:
SYDNEY
REASONS FOR JUDGMENT
INTRODUCTION
These proceedings concern the validity of Australian patent AU 2003200700 (the patent) which has the priority date of 18 April 2002. The patent makes claims for an invention of a new salt of the compound perindopril, called perindopril arginine. Perindopril, itself, had been patented much earlier. Perindopril is used to lower blood pressure in patients with high blood pressure (or hypertension).
Les Laboratoires Servier is the registered proprietor of the patent and its wholly owned subsidiary, Servier Laboratoires (Aust) Pty Ltd, is the exclusive licensee (collectively Servier). There is no relevant need to distinguish between those two companies in these reasons.
Servier had an earlier patent for the salt known as perindopril erbumine (an abbreviation for perindopril tert-butylamine). Between 1992 and 2006 Servier marketed that compound in Australia and internationally in a tablet form known under the brand name Coversyl. Commercially, Coversyl has been a very successful drug product for Servier. When the earlier patent expired, Servier began to market its new tablets containing perindopril arginine under the Coversyl brand name. At the same time Apotex Pty Ltd began marketing a generic version of perindopril erbumine.
Apotex brought these proceedings to challenge the validity of the patent because it wishes to enter the market with a generic version of perindopril arginine. It claimed that the patent should be revoked on six grounds. Broadly, those grounds are that, based on s 138 of the Patents Act 1990 (Cth) (the Act) (as in force at 18 April 2002):
·the invention was not a patentable invention on the bases that :
(1)it was not novel when compared to the prior art base, because one or both of two earlier patents had claimed the invention of a method for synthesis of perindopril and its pharmaceutically acceptable salts (s 7(1), 138(3)(b)) (the novelty issue); or
(2)it lacked an inventive step because it would have been obvious to a person skilled in the art, in light of the existing common general knowledge to try making a salt of perindopril with arginine (ss 7(2), 138(3)(b)) (the inventive step issue);
·the claims in the patent were not fairly based on the matter described in the specification (ss 40(3), 138(3)(f)) (the fair basis issue);
·the patent did not describe the best method known to Servier of performing the invention (ss 40(2)(a), 138(3)(f)) (the best method issue);
·the patent had been obtained by false suggestions or misrepresentations (s 138(3)(d)) (the false suggestion issues).
I will describe first, some of the relevant pharmaceutical concepts, secondly, the legislative scheme, thirdly, the patent, and fourthly, each issue in turn together with its factual matrix and the parties’ arguments on that issue. I think that this will aid understanding of the separate factual and legal questions pertinent to each issue.
THE PHARMACEUTICAL CONCEPTS
Perindopril is an amino acid that is commonly prescribed to lower a patient’s blood pressure. It acts as an angiotensin converting enzyme (ACE) inhibitor. It is usually administered in small dosage tablets taken once each day. The tablets comprise of a compound consisting of a salt form of perindopril, which is its active pharmaceutical ingredient (API), and excipients. The salt may dissociate into its ionic components when it is added to an aqueous medium. Such a reaction can occur in the human stomach. The salt is converted in the patient’s body by hydrolysis into the biologically active compound, perindoprilat. The hydrolysis results from the perindopril molecule reacting with water to produce the perindoprilat and ethanol.
A salt is a compound that contains ionic components, one of which, called a cation, is positively charged, and another, called an anion, which is negatively charged. The cation lacks one or more electrons while the anion has one or more extra electrons. The cation is attracted to the anion and an electrostatic interaction occurs between them so that they form an ionic bond in which the charges are in equilibrium. A salt of an organic molecule consists of the ion of the organic molecule and a counter-ion from the reagent, relevantly here, an acid or base with which it reacts. Typically, the acid is defined as a proton donor (being positively charged) and the base as a proton acceptor (being negatively charged).
When a pharmaceutical salt is formed, a proton, being a hydrogen ion, transfers from the acid to the base. This results in an ionic pair consisting of both a cation and an anion. The general salt forming equilibrium reaction can be summarised as follows, where B is the base, HA is the acid or proton donor, BH+ is the cation, A– is the anion and the salt is comprised of both the cation and anion:
B + HA ⇌ BH+ + A–
Perindopril is known as a zwitterion because it can form a salt with a counter-ion that is either an acid or a base. That is because perindopril contains both an acidic (carboxylic acid) group that can lose a proton to form a salt with a base and a basic (amine) group that can gain a proton to form salts with an acid. Perindopril may also be crystallised in a non-salt form if both its acidic and basic groups interact with each other. The acidic and basic groups of perindopril are shown on the figure below:
The effectiveness of a drug can be affected by its physicochemical properties. Those physicochemical properties can be altered and, possibly, optimised by the creation of one or more salt forms of the drug substance. Typically, the solid state properties of salts of a drug substance will differ from those of the substance itself: i.e. when it is in its free acid or free base form. Those properties can ultimately affect the biological and pharmacokinetic profile of the drug substance.
Salts can be used to improve the properties of a drug substance in a number of ways, including improving solubility, tailoring and adapting the drug to the therapeutic use and pharmaceutical dosage form, modifying, if need be, the drug’s pharmacokinetic properties (i.e. the body’s absorption, distribution, metabolisation and excretion of the drugs), improving or preserving the drug’s chemical and/or physical stability, and facilitating or enhancing its industrial processing.
An API is formulated with excipients into a tablet or composition. The excipients are inactive compounds that usually contribute to the drug delivery profile, or way and time in which the drug substance will arrive at the place in the patient’s body where it is effective. Thus, excipients can cause the drug substance to be released immediately, gradually at or during a particular time period after the patient takes the tablet. In addition, the formulation of the tablet and the process by which it is made can affect the shelf-life of the drug product.
Tablets are made by mixing their ingredients as intimately and evenly as possible and then compressing these in a die in a tablet press. The evenness of the mixture of the API with the excipients is a critical part of the process to produce tablets. The three main methods of tablet production are:
·wet granulation: the ingredients are mixed with water or another solvent, granulated, dried and compressed into tables;
·dry granulation: the granulation occurs without addition of water or another solvent;
·direct compression: the ingredients are mixed and directly compressed into tablets without a granulation step.
Thus the creation of a salt of a drug substance can be an important means to bring it to market as a medically and commercially useful product.
The Therapeutic Goods Administration (TGA) is the Australian regulator with the responsibility for medicines and the administration of the Therapeutic Goods Act 1989 (Cth). The TGA publishes and applies regulatory guidelines for drugs or prescription medicines that are based, to a large extent, on international standards. The International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH) is the international body responsible for establishing a unified global regulatory régime. It recommends harmonised guidelines that can be adopted by local regulators. The European Medicines Agency (EMEA) is the European regulator and the Food and Drug Administration (FDA) is the regulator in the United States of America. In general, the TGA does not directly adopt ICH guidelines. Rather, the TGA commonly adopts the guidelines published by the EMEA that, in turn, adopt those of the ICH.
The TGA, or other regulator, assesses a shelf-life and appropriate storage conditions for a pharmaceutical substance when it has been developed to the point that it is ready for commercial sale. This is necessary because the API or the tablet or other composition in which the API is administered to the patient may be susceptible to degradation or deterioration over time or in particular temperatures or other storage conditions. That is, the pharmaceutical product, in the form it is to be sold, may or may not be stable.
There are two aspects of the stability of both drug substance and a drug product that the regulator, and no doubt a manufacturer, must address, namely its chemical and physical stability. Chemical stability concerns whether the chemical content of the drug substance itself remains constant or degrades. Physical stability concerns changes to the physical form of the product (e.g. whether the form is, or varies to, polymorphic, solvate or hydrate) or its appearance and to its handling or storage. Ideally, the drug substance and product should remain chemically and physically unchanged for many years under typical ambient storage conditions.
Tests to evaluate which of the number of counter-ions are appropriate for further testing as a suitable salification (salt making) agent are called salt-screens. One element considered in salt-screening is the stability of the salt produced. Stability of a salt is important in considering its effect on the shelf-life of any developed product utilising the salt. This consideration is important in assessing the commercial viability of any product that utilises the salt. In general, the longer the shelf-life of a drug product the greater the manufacturer’s flexibility to deal with unused or unsold but older or dated stock. The ICH Stability Guideline defines shelf-life of a pharmaceutical product as:
“The time period during which a drug product is expected to remain within the approved shelf-life specification, provided that it is stored under the conditions defined on the container label.”
An expiry, or use-by date, is the usual means of stating the shelf-life of a commercial pharmaceutical product. However, a retest date, as opposed to an expiry date, is sometimes given for an API. That is because the API will usually remain under the control of the drug manufacturer which will need to retest the API at, or after, the given date in order to see if it remains well within specifications and so is suitable to use in manufacturing a drug product. The ICH Stability Guideline defines “retest period” as:
“The period of time during which the drug substance [API] is expected to remain within its specification and, therefore, can be used in the manufacture of a given drug product, provided that the drug substance has been stored under the defined conditions.”
Drug manufacturers must undertake extensive stability testing of each of an API and a drug product to satisfy a regulator of the appropriateness of its particular given shelf-life. Ordinarily, the regulator will only approve a shelf-life for a drug product on the basis of extensive testing of the stability performance of its dosage form, as packaged, in particular controlled conditions, including conditions of identified temperature and humidity. This is replicated in Australia in the TGA Stability Guideline that requires testing of the exact formulation and final packaging intended for the marketing of the drug product in this country.
From 1996 until October 2005, the ICH recognised the following four climatic zones in the table below for its requirements for pharmaceutical products:
Australia is in zones III and IV while Europe is in zones I and II. Therapeutic goods Order No 69: General requirements for labels for medicines provides for the standard permitted storage temperatures for pharmaceutical products as:
“(a) Store below -18°C (Deep freeze);
(b) Store below -5°C (Freeze);
(c) Store below 8°C (Refrigerate);
(d) Store at 2°C to 8°C (Refrigerate. Do not freeze.);
(e) Store below 25°C; and
(f) Store below 30°C.”While the TGA can approve a different storage temperature for a pharmaceutical product, in general 30°C was, relevantly, the maximum storage temperature for pharmaceutical products marketed in Australia.
Packaging can play a significant role in the approval of a shelf-life for a pharmaceutical product. Packaging has two principal purposes in the pharmaceutical industry, namely presentational and functional. Packaging enables, first, the product to be presented to and identifiable by users (such as pharmacists, doctors and patients) and to convey product information, including as to storage and shelf-life, evidence of no prior tampering or use and features to make the product visually or tactilely attractive. Secondly, packaging can serve a number of functions, some of which can overlap. These functions include providing a convenient and reliable way of dispensing a consistent dose, child proofing, a means of maximising shelf-life by protecting the product from humidity and or air, as well as protecting it during transport, warehousing or other storage.
The sponsor (or proponent) of a pharmaceutical product, such as each of the parties to these proceedings, must provide the regulator, as part of the marketing approval process, with details of the packaging in which the product is proposed to be marketed. Such products are typically marketed in bottles or blister packs. Since before 2002, bottles used for pharmaceutical products have been made of glass or a plastic, such as high density polyethylene (HDPE). A desiccant will often be placed in a bottle if the drug product can absorb water from the atmosphere or the air in the bottle.
Blister packs can consist of (1) a sheet of polymer formed into a series of wells into which individual tablets are placed and (2) a sheet of aluminium foil, the edges of the abutting side of which has a coating of heat-seal lacquer, placed over the open wells containing the tablets. Then, usually for less than a second, the two sheets are pressed together and heated to between 140°C and 160°C to enable the lacquer to bond. This type of packaging is known as aluminium/PVC or PVC/Alu. However, if the application of heat may affect the drug product, it is possible to use lacquer that can adhere at a lower temperature or a more expensive pressure sensitive adhesive.
A second form of blister packaging, known as Alu/Alu can be made using aluminium laminate as the welled base and aluminium lidding foil. These are sealed using a heat seal lacquer in the same way as aluminium/PVC blisters are.
A third form of blister packing, known as tropicalised packaging, consists of a aluminium/PVC blister overwrapped with an aluminium foil bag that contains a desiccant. Servier used tropicalised packaging for its perindopril erbumine Coversyl products that it sold in Australia at all relevant times.
THE LEGISLATIVE SCHEME
The parties agreed that the relevant provisions of the Patents Act were those as in force when Servier filed the provisional specification for the patent in France on 18 April 2002 (which did not mention hydrates at all) and when the complete specification was filed here on 27 February 2003. The Act remained unamended between 1 April 2002 and 4 July 2003. I have used that version of the Act in these reasons.
Any person could apply for an order revoking the patent (s 138(1)). Critically, s 138(3) provided:
“(3)After hearing the application, the court may, by order, revoke the patent, either wholly or so far as it relates to a claim, on one or more of the following grounds, but on no other ground:
…
(b) that the invention is not a patentable invention;
(d)that the patent was obtained by fraud, false suggestion or misrepresentation;
…
(f) that the specification does not comply with subsection 40(2) or (3).”
Apotex raised two issues under s 18(1)(b) in support of the ground in s 138(3)(b), namely novelty and inventive step. Those issues were governed by ss 18(1)(b) and 7(2), which for present purposes provided:
“18 Patentable inventions
Patentable inventions for the purposes of a standard patent
(1)Subject to subsection (2), an invention is a patentable invention for the purposes of a standard patent if the invention, so far as claimed in any claim:
…
(b)when compared with the prior art base as it existed before the priority date of that claim:
(i)is novel; and
(ii)involves an inventive step;
7 Novelty and inventive step
Novelty
(1)For the purposes of this Act, an invention is to be taken to be novel when compared with the prior art base unless it is not novel in the light of any one of the following kinds of information, each of which must be considered separately:
(a)prior art information … made publicly available in a single document or through doing a single act;
…
Inventive step
(2)For the purposes of this Act, an invention is to be taken to involve an inventive step when compared with the prior art base unless the invention would have been obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed in the patent area before the priority date of the relevant claim …”
The Dictionary in Sch 1 of the Act relevantly provided:
“prior art base means:
(a)in relation to deciding whether an invention does or does not involve an inventive step or an innovative step:
(i)information in a document that is publicly available, whether in or out of the patent area; and
(ii)information made publicly available through doing an act, whether in or out of the patent area.”
Apotex also raised two issues under s 40(2)(a) and (3), namely whether the specification described any, or the best, method known to the patentee of performing the invention and whether the claims in relation to hydrates of perindopril arginine were fairly based on the matter described in the specification. Relevantly, s 40 provided:
“40 Specifications
(1)A provisional specification must describe the invention.
(2)A complete specification must:
(a)describe the invention fully, including the best method known to the applicant of performing the invention;
…
(3)The claim or claims must be clear and succinct and fairly based on the matter described in the specification.”
The Commissioner of Patents had to accept a patent request and a complete specification relating to an application for a standard patent (such as the patent in issue) if she were satisfied that the invention, so far as claimed, satisfied the criteria in s 18(1)(b) and she considered that there was no other lawful, unresolved ground of objection to the request and specification (s 49(1)). Any person could oppose the grant, relevantly, on the grounds that the invention was not a patentable invention or the specification filed in respect of the complete application did not comply with s 40(2) or (3) (s 59).
THE PATENT
The specification in the patent began by stating that the invention related to a new salt of perindopril and pharmaceutical compositions containing it. The specification stated that perindopril had previously been described in a European patent (EP 0 049 658) that had mentioned, as was usual, that compounds of the invention might be presented in the form of addition salts with a pharmaceutically acceptable, mineral or organic, base or acid. It stated that the compounds described in the European patent were in a non-salt form and “primarily, when addition salts with a pharmaceutically acceptable base or acid are mentioned by way of example, the sodium salt or the maleate are given” (p 1 lines 12-14). The specification continued:
“In the development of that product, however, it has proved very difficult to find a pharmaceutically acceptable salt having not only good bioavailability but also adequate stability to be suitable for the preparation and storage of pharmaceutical compositions.” (p 1 lines 15-17)
The specification noted that the non-salt form had been studied, as well as the maleate and the sodium salt, and that in the course of temperature and humidity stability studies these had been found not to be suitable because the sodium salt was immediately converted into an oil on contact with the atmosphere and the non-salt form and maleate degraded rapidly under higher temperature conditions. The specification continued:
“The tert-butylamine salt was thus alone in exhibiting the best stability compared to the other forms studied. However, in view of the intrinsic fragility of perindopril, the tert-butylamine salt has not been capable of providing a complete solution to the problems of the product’s stability to heat and humidity. Indeed, for marketing, tablets of perindopril tert-butylamine salt must, in certain countries, be protected with additional packaging measures. Moreover, even for temperate-climate countries, that instability has made it impossible to obtain a shelf-life of more than 2 years for the tablets. Finally, for marketing of the tablets, they have to be marked “to be stored at a temperature less than or equal to 30 degrees”.
These constraints are, of course, onerous especially in terms of organisation and cost, and it has appeared especially useful to try to develop a new perindopril salt in order to reduce the constraints due to the tert-butylamine salt.” (p 1 line 23-p 2 line 9)
The specification then said that numerous salts had been studied and that those customarily used in the pharmaceutical sector had proved to be unusable and continued:
“On the other hand, and in surprising manner, it has been found that the arginine salt of perindopril, besides being new, has entirely unexpected advantages over all the other salts studied and, more especially, over the tert-butylamine salt of perindopril.” (p 2 lines 12-14)
The specification then said that the present invention related to the arginine salt, its hydrates and also to the pharmaceutical compositions comprising it. It identified the preferential form of the salt as being natural arginine (L-arginine) and said that the pharmaceutical compositions according to the invention comprised the arginine salt together with one or more, non-toxic, pharmaceutically acceptable and appropriate excipients. The specification then identified a variety of possible pharmaceutical compositions and various administration and dosage methods. It stated that the pharmaceutical compositions according to the invention would preferably be immediate release tablets and that the useful dosage varied according to the age and weight of the patient, the nature and severity of the disorder and to the administration route (p 2 line 15, p 3 line 5).
The specification identified the amount of arginine salt contained in the compositions according to the invention, including the preferred quantities between 1 to 10 mg and that those compositions were of use in the treatment of hypertension and heart failure. It continued:
“The basic characteristics of this salt are very great stability to heat and to humidity compared to the tert-butylamine salt.
Long-term stability studies carried out under very precise temperature and humidity conditions have yielded the results indicated in the Table hereinbelow.
In that study, perindopril was assayed by inverse-phase high-pressure liquid chromatography using, as eluant, an aqueous phase (comprising sodium heptane-sulphonate, and the pH of which is 2) and acetonitrile (67/33). Detection of the product was carried out by UV (215 nm).
The study was carried out using immediate-release tablets containing either 2.4 mg of the arginine salt of perindopril or 2.0 mg of the tert-butylamine salt of perindopril (each of the two tablets containing 1.7 mg of perindopril). The tablets were assayed 6 months after the start of storage of the tablets at different temperatures and different relative humidities (% R.H.).
The arginine salt used in this study is the L-arginine salt. It has been prepared according to a classical method of salification of organic chemistry.
Conditions 6 months tert-Butylamine salt of perindopril
Percentage remaining(%)Arginine salt of perindopril
Percentage remaining (%)
25°C
60% R.H.101.0
99.5
30 °C
60% R.H.94.4
98.1
40°C
75% R.H.67.2
98.6
The results presented in the Table above show extremely clearly the very great stability of the arginine salt compared to the tert-butylamine salt. Indeed, after 6 months, practically no degradation of the arginine salt has taken place whereas the tert-butylamine salt exhibits a degradation rate of approximately 33%.” (p 3 line 9-p 4 line 5)
The specification then asserted that the results were entirely unexpected and could not have been deduced from or suggested by the teaching of the literature on the product and concluded by stating:
“The results allow us to consider less onerous constraints with respect to the packaging of the pharmaceutical compositions and also to obtain a shelf-life of at least three years for our pharmaceutical compositions.” (p 4 lines 8-10)
The patent asserted 11 claims defining the invention but, as noted above, only the following five are relevant:
“1. The arginine salt of perindopril and its hydrates.
2.Pharmaceutical composition comprising, as active ingredient, the arginine salt of perindopril and its hydrates, in combination with one or more pharmaceutically acceptable excipients.
3.Pharmaceutical composition according to claim 2, characterised in that it is presented in the form of an immediate-release tablet.
4.Pharmaceutical composition according to either claim 2 or claim 3, characterised in that it contains from 0.2 to 10 mg of the arginine salt of perindopril.
…
6.A method of treatment or prophylaxis of hypertension and heart failure comprising administering to a patient in need of such treatment or prophylaxis an efficacious amount of the arginine salt of perindopril and its hydrates of claim 1, or a pharmaceutical composition as claimed in any one of claims 2 to 4.”
Claims 8-11 referred to descriptions of the invention in “the Examples”, but there were no examples set out in the patent and so those claims could not be sustainable.
SOME GENERAL BACKGROUND
In late 2006 Servier ceased to supply perindopril erbumine tablets under the Coversyl brand name and began selling perindopril arginine tablets under it instead. The perindopril arginine tablets are made by wet granulation and then packaged in HDPE bottles with a desiccant. They have a TGA approved shelf-life of three years when marked “store below 30°C”.
Also in late 2006, Apotex began selling its perindopril erbumine tablets. Those are made by direct compression, marketed in Alu/Alu (or cold form foil) packaging and initially had a TGA approved shelf-life of two years when marked “store below 25°C”. Pharmacists can substitute Apotex’ perindopril erbumine tablets for patients who present prescriptions for Servier’s perindopril arginine tablets under the National Health Act 1953 (Cth). In 2007, the TGA approved a longer shelf-life of three years for Apotex’ perindopril erbumine tablets when marked “store below 25°C”.
In January 2012, Apotex informed Servier that it had applied to the TGA for registration of generic perindopril arginine products on the Pharmaceutical Benefits Scheme once they were approved by the TGA. Apotex commenced these proceedings on 16 January 2012. Servier obtained an interlocutory injunction in March 2012 restraining Apotex from selling perindopril arginine effectively until final judgment. Apotex did not oppose that course. Apotex accepts that if claims 1, 2, 3, 4 and 6 of the patent are valid, it would infringe them. Servier does not seek relief on the basis of any apprehended infringement of claims 5 and 7 on the basis that Apotex does not allege that those two claims are independently invalid. The parties did not present argument about the detail of how the individual claims may be infringed, no doubt because of Apotex’ concession that if its invalidity arguments fail, unless further restrained, it will infringe the patent by going to market with its new generic.
The parties called six experts in chemistry with expertise in pharmaceutical matters. There was no issue that each of these experts was appropriately qualified. I found their evidence of considerable assistance. I will very briefly summarise their qualifications which, however, are much more extensive and impressive than is necessary to record in these reasons.
Apotex relied on Dr Peter Spargo, Dr Desmond Williams and Associate Professor Michael Perkins. Dr Spargo is currently a consultant. He had worked in the field of chemistry research and development in the pharmaceutical industry seeking to develop new chemical entity therapeutic agents since he began his career working for Pfizer Ltd in the United Kingdom in 1988. He had particular experience and expertise in solid form (including salt and polymorph) selection.
Dr Williams is currently the program director, pharmaceutical science in the School of Pharmacy and Medical Sciences and supported researcher in the Sansom Institute for Health Research at the University of South Australia. He is also a registered pharmacist and chartered chemist. His experience included pharmaceutics (i.e. the formulation of drug substances, such as APIs, into drug products suitable for, and adapted to, effective delivery to the intended site within the human body). He had worked for a number of large pharmaceutical companies and had considerable experience in dealing with regulators, including the TGA, and has been a member of the pharmaceutical subcommittee of the TGA’s Advisory Committee on Prescription Medicines since 2005.
Prof Perkins is currently an Associate Professor in the School of Chemical and Physical Sciences at Flinders University, South Australia. His experience is broadly in organic chemistry and natural product chemistry, with particular expertise in synthetic organic chemistry, including the discovery, action and metabolism of drugs.
Servier relied on Professor Stephen Byrn, Professor Alan Evans and Dr Angelo Morella. Prof Byrn has had an academic career at Purdue University, Indiana in the United States of America since 1972, becoming a Professor of Medicinal Chemistry in 1981 and being head of the Department of Industrial and Physical Pharmacy, School of Pharmacy and Pharmacal Sciences there between 1994 and 2009. He is an accomplished scientific author, having written a text book and many peer-reviewed journal articles. He co-founded a teaching program for sustainable medicines in Africa that seeks to address the lack of accessibility to high quality medicines there. In 1991, he co-founded SSCI Inc (an acronym for “Solid State Chemical Information”) and was its study director till 2006 when it was taken over by Aptuit Inc. He has since then been a consultant to SSCI. From 1993, SSCI has been both a professional development provider of educational services in the pharmaceutical industry and a commercial provider of contract research including formulation development, salt and polymorph screening on potential drug candidates and existing drugs. By 2006, SSCI employed over 100 persons. Prof Byrn had conducted, supervised or controlled over 100 salt-screens and over 200 polymorph screens as at April 2002.
Until he was recently appointed Provost, Prof Evans was Professor of Pharmaceutics at the University of South Australia and currently its Pro-Vice Chancellor and Vice President, Division of Health Sciences. He was head of that university’s School of Pharmacy and Medical Sciences from 2004 to 2009. His primary research specialty is pharmacokinetics and biopharmaceutics. He also worked as a retail pharmacist for seven years to 1989. He has been involved in consulting for the pharmaceutical industry, in particular in comparative bioavailability studies between different salts in the development of pharmaceutical compounds.
Dr Morella is currently a drug delivery and pharmaceutical consultant. He had worked from 1985 to 2012 with FH Faulding and Company Limited and with Mayne Pharma International, following its takeover of Faulding, in various roles relating to drug development, his final position there being General Manager R & D. He is a named inventor on over 100 patents. He had responsibilities at Faulding and Mayne that required him to be aware, in general terms, of formulation and packaging requirements for countries, including those in ICH climate zones III and IV, to which his employers exported drug products.
The experts prepared two joint reports and gave their oral evidence concurrently. The joint reports were very helpful in distilling a number of matters that were either agreed by all relevant experts or on which they disagreed. The concurrent evidence lasted for four and a half days and allowed each expert to articulate the substantive points on which he was in agreement or at issue with any of his colleagues. This greatly assisted in identifying the real issues.
(1) The novelty issue
(a) Factual background
At the trial Apotex relied on the disclosure of perindopril and its pharmaceutically acceptable salts in two Australian patents published before 18 April 2002, that being the agreed priority date of the claims under s 43(2)(a). Those were:
·Australian patent 200124847 entitled “Method for synthesis of perindopril and its pharmaceutically acceptable salts” that had a journal publication date of 1 November 2001 (the synthesis patent);
·Australian patent 2001276418 entitled “A crystalline form of perindopril tert-butylamine salt” that had a journal publication date of 14 February 2002 (the crystalline form patent).
The synthesis patent claimed a process for the industrial synthesis of formulae of “perindopril and pharmaceutically acceptable salts thereof”. Its specification noted that perindopril and its pharmaceutically acceptable salts “and more especially the tert-butylamine salt thereof, have valuable pharmacological properties”. That specification also referred the capacity for one formula to be “converted, if desired, into a pharmaceutically acceptable salt, such as the tert-butylamine salt”.
The crystalline form patent claimed a new α crystalline form of the compound formula for the tert-butylamine salt and also a process for its preparation as well as compositions containing it. The specification again recited that “Perindopril and its pharmaceutically acceptable salts, and more especially its tert-butylamine salt, have valuable pharmacological properties”. It went on to say that perindopril, “its preparation and its use in therapeutics have been described in European Patent specification EP 0 049 658”.
Critically, neither the synthesis nor the crystalline form patents mentioned any specific salt of perindopril other than the tert-butylamine salt, except in the generalised unspecific references to “pharmaceutically acceptable salts”. That is, nothing in those two patents taught the skilled addressee, or the lay reader, what salts of perindopril, other than perindopril erbumine, were pharmaceutically acceptable or anything about them. They did not suggest that any such salt had been made, far less identify what it might be. Nothing in either of those patents referred to arginine at all, let alone, its potential to create a pharmaceutically acceptable salt of perindopril. On the other hand, both patents left open and unconfined their disclosures that perindopril’s pharmaceutically acceptable salts (whatever they might be in addition to the tert-butylamine salt) had pharmacological uses.
The parties agreed that the common general knowledge in Australia prior to 18 April 2002, included the existence of perindopril erbumine and Coversyl, and that perindopril erbumine was the API in Coversyl, each of perindopril (and Coversyl containing it) was used as an ACE inhibitor, being an active ingredient in pharmaceuticals for the treatment of heart failure and hypertension.
In addition, Apotex contended that a skilled addressee would have been aware, as part of the common general knowledge, of a reference source for counter-ions that could be used to create a pharmaceutically acceptable salt. That source was a paper by Stephen M Berge, Lyle D Bighley and Donald C Monkhouse entitled “Pharmaceutical Salts” published in the January 1977 edition of the Journal of Pharmaceutical Sciences (the Berge paper).
The Berge paper surveyed literature over the preceding 25 years and identified from that exercise potentially useful counter-ions with which to make pharmaceutical salts. It then divided the results into three tables which were subdivided into anions (acids) and cations (bases) and listed the percentage of the instances of use of each substance. Tables I and II of the Berge paper listed all counter-ions used to make salts of organic compounds that were commercially marketed up to 1974. Table I comprised all counter-ions that had been used in products approved by the FDA, while Table II comprised counter-ions that had been used in products marketed in other countries, but had not been approved by the FDA. The paper explained that its authors had considered only salts of organic compounds in Tables I and II because most drugs were organic substances. Table III comprised other counter-ions that had been “reported to be potentially useful [scil: to form] pharmaceutical salts”. Arginine was listed, with lysine, in Table III. Both of those substances were amino acids that occur naturally in the human DNA. The Berge paper listed well over 100 counter-ions that could provide a relatively discrete source of reference for persons skilled in the art of creating salts if they were aware of that publication.
Both Dr Spargo, an Englishman, and Prof Byrn, an American, were aware of the Berge paper. Of the Australian witnesses, Dr Evans was aware of the information concerning FDA approved commercially marketed salts in Table I of the Berge paper, but not its source. His awareness came from his familiarity with the pharmacy textbook: Remington: The Science and Practice of Pharmacy (19th ed). Dr Morella was also aware of the Berge paper but, like Prof Byrn, both in their work, did not use counter-ions that were not on Table I because those substances had not created salts that the FDA had approved. Prof Perkins did not recall being aware of the Berge paper prior to 2002 and I am not satisfied that he was aware of it. Dr Williams was aware of the Berge paper from his doctoral studies in Kansas in 1979. The experts agreed in their first joint report that it is not possible to predict whether a salt-screen would make a crystalline salt and what properties any such solid would have.
(b) Apotex’s submissions
Apotex argued that the prior art before the priority date of the patent in suit consisted of, first, the disclosures in the synthesis and crystalline form patents, that there were other, albeit unidentified pharmaceutically acceptable salts of perindopril in addition to the tert-butylamine salt and, secondly, the common general knowledge that arginine was a counter-ion listed in the Berge paper as a substance that could be used to make a pharmaceutically acceptable salt form. Apotex submitted that the Berge paper disclosed a finite range of candidate counter-ions that the person skilled in the art would be aware of as part of common general knowledge in Australia before the priority date. Thus, it contended, such a person having read either or both of the disclosures about perindopril and its pharmaceutically acceptable salts in the synthesis and or crystalline form patents, would understand that matter to refer to the limited number of counter-ions that can be used to form salts listed in the Berge paper as including arginine. For that reason, so the argument ran, the two earlier patents anticipated all pharmaceutically acceptable salts including the arginine salt in the patent in suit.
Apotex contended that if the skilled addressee initially did not read either of the two prior art patents as revealing the arginine salt as a pharmaceutically acceptable salt of perindopril, he or she would have arrived at that conclusion using the Berge paper as part of the addressee’s common general knowledge. That paper was the only item of common general knowledge on which Apotex relied in aid of its challenge based on the patent’s lack of novelty. In essence, Apotex’ argument was that the skilled addressee on reading either or both of the synthesis or crystalline form patents, and using common general knowledge derived from the Berge paper’s list of potential counter-ions, would understand that patent to contain a direction to make, at least, the arginine salt and so infringe a claim or claims in that patent.
(c) Who is the skilled addressee?
In my opinion, for the purposes of these proceedings, the hypothetical person skilled in the art or, the skilled addressee, was a non-inventive chemist with scientific qualifications working in a drug development context whose routine work involved the formulation and making of salts for use in pharmaceutical products.
It is likely that such a person would have worked in a team. Such a person would be conversant with the principles and general practicalities of salt making and salt selection as well as the methods of pharmaceutical tablet formulation and composition. The perspective of “a person skilled in the relevant art” was that of a hypothetical non-inventive worker in the field who was equipped with the common general knowledge in Australia (being the patent area) before the priority date of 18 April 2002: Lockwood Security Products Ltd v Doric Products Pty Ltd [No 2] (2004) 235 CLR at 197 [56]. Relevantly, the evidence did not demonstrate that the common general knowledge at that date differed from the position at 27 February 2003.
(d) Consideration
An invention is presumed to be novel unless, relevantly here, when compared separately to each piece of prior art information made publicly available in a single document (here each of the synthesis and crystalline form patents), the comparison would demonstrate to a skilled addressee that the invention had been disclosed in that earlier information (s 7(1)(a)).
The skilled addressee’s consideration of the prior art for the purposes of s 7(1) can be at two levels, the first that simply takes account of what information the prior art conveyed to him or her; the second, that is aided by his or her use of what was “common general knowledge” in Australia at the relevant time (here 27 February 2003), in the sense of that expression as explained by Aickin J, with whom Barwick CJ, Stephen, Mason and Wilson JJ agreed in Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd (1980) 144 CLR 253 at 292 and 295, namely (see at 292):
“The notion of common general knowledge itself involves the use of that which is known or used by those in the relevant trade. It forms the background knowledge and experience which is available to all in the trade in considering the making of new products, or the making of improvements in old, and it must be treated as being used by an individual as a general body of knowledge.” (emphasis added)
There is nothing in either of the synthesis or crystalline form patents beyond the words “pharmaceutically acceptable salts” that deals with the creation or use of any possible salt of perindopril, other than the tert-butylamine salt, in connection with the claims. In the first joint experts report, Prof Perkins and Drs Spargo and Williams said:
“One would have an expectation to form one or more crystalline salts, which could be subjected to further testing with regard to their suitability as pharmaceutical salts.”
Profs Byrn, Evans and Perkins, and Drs Morella, Spargo and Williams agreed that there was no certainty that any counter-ion would produce a salt, or, if it did, what its properties and suitability would be. They accepted, as the Berge paper itself noted, that “choosing the appropriate salt, however, can be a very difficult task, since each salt imparts unique properties to the parent compound” (emphasis added). And they all agreed that one would need to do one or more salt-screens and undertake a process of trial and error in order to ascertain what particular counter-ion or counter-ions would yield, first, a salt and secondly, one that was pharmaceutically acceptable. The experts all accepted the correctness of the Berge paper’s statement that:
“Furthermore, even after many salts of the same basic agent have been prepared, no efficient screening techniques exist to facilitate selection of the salt most likely to exhibit the desired pharmacokinetic, solubility, and formulation profiles.”
Each of the parties’ arguments on novelty had a logical tension. Servier contended that the two patents that Apotex asserted were anticipations of perindopril arginine did not give any instruction as to that substance’s formulation and so it was outside their claims. Apotex argued that Servier would have sued, for infringement of those two patents, anyone who created any new pharmaceutically acceptable salt, such as the arginine salt, because such a salt was within the claims in each of those patents.
It is necessary that the prior art (here one or both earlier patents) disclose an invention that, if performed, would necessarily infringe the patent in suit: H Lundbeck A/S v Alphapharm Pty Ltd (2009) 177 FCR 151 at 194 [189] per Bennett J, with whom Middleton J agreed. Her Honour added (at 194 [189]-[190]):
“Once the very subject matter of the invention has been disclosed, the person skilled in the art is assumed to be willing to make trial and error experiments to get it to work ... where the prior publication is of the subsequently claimed invention, that is sufficient. Where the prior disclosure falls short of a complete disclosure, the question of the sufficiency of that disclosure arises. It is there that consideration must be given to the quality of a disclosure to the skilled addressee armed with common general knowledge … the Court, armed with the evidence of the skilled addressee as to terms of art and the nature and extent of the disclosure in the prior art document, must determine whether the prior disclosure is sufficient to enable the skilled addressee to perceive, understand and, where appropriate, apply the prior disclosure necessarily to obtain the invention.” (emphasis added)
The invention will be disclosed to a skilled addressee by the prior art provided that any trial and error experimentation needed is a standard or ordinary procedure or something that is part of common general knowledge as a practical means of performing the invention: Lundbeck 177 FCR at 190 [173]. However, if all the prior art does is to describe the earlier invention without disclosing the effective means by which it could be produced, it will not anticipate a subsequent invention: Olin Corporation v Super Cartridge Co Pty Ltd (1977) 180 CLR 236 at 261 per Stephen and Mason JJ, Barwick CJ agreeing on this point at 239. For an anticipation of a subsequent discovery, the prior art, coupled if need be with common general knowledge, must disclose to the skilled addressee “a practicable mode of producing the result which is the effect of the subsequent discovery”: Olin Corporation 180 CLR at 261. And as Bennett J observed in Lundbeck 177 FCR at 192 [181]:
“If the prior art discloses some but not all integers of a claimed patent to a product, such as a combination, there is anticipation if the skilled addressee would add the missing information as a matter of course and without the application of inventive ingenuity or undue experimentation (Nicaro [Holdings Pty Ltd v Martin Engineering Co (1990)] 91 ALR [513] at 530-531).”
In ICI Chemicals & Polymers Ltd v The Lubrizol Corporation Inc (2000) 106 FCR 173 at 230 [51] Lee, Heerey and Lehane JJ applied the “flag metaphor” used by Sachs, Buckley and Orr LJJ in General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457 at 485-486 to illustrate the concept of anticipation. Their Lordships said:
“To anticipate the patentee's claim the prior publication must contain clear and unmistakable directions to do what the patentee claims to have invented: Flour Oxidizing Co Ltd v Carr & Co. Ltd. (1908) 25 RPC 428 at 457, line 34, approved in BTH Co Ltd v Metropolitan Vickers Electrical Co Ltd (1928) 45 RPC 1 at 24, line 1). A signpost, however clear, upon the road to the patentee's invention will not suffice. The prior inventor must be clearly shown to have planted his flag at the precise destination before the patentee.”
The Full Court in Lubrizol 106 FCR at 230 [51] added that anticipation was not proved if the skilled addressee had to rummage through the prior inventor’s flag locker to find a flag there that could have been (but was not) planted.
I am of opinion that the synthesis and crystalline patents, when read by a skilled addressee and using common general knowledge, that included the Berge paper, did not anticipate the invention of the arginine salt claimed by the patent in suit. Those patents contained no directions whatever as to the production of any salt, other than the tert-butylamine one, in the catch-all words “pharmaceutically acceptable salts”. The Berge paper told the skilled addressee that the FDA had approved salts made from the counter-ions listed in Table I. That paper said that counter-ions listed in Table III, such as arginine, had been reported to be “potentially useful” in creating pharmaceutical salt forms. At best, if the Berge paper were common general knowledge of a skilled addressee, it gave arginine as an ambiguous signpost, obscured by its status in Table III, upon the road to the invention of the arginine salt.
Ordinary trial and error experimentation would have involved using counter-ions in Table I of the Berge paper for the reasons that Prof Byrn and Drs Evans and Morella gave in the first joint experts report for not trying arginine. Indeed, Dr Williams said that as “there are no obvious precedents, then arginine would not have been high on the list of options to try”. Ordinary trial and error experimentation does not extend to prolonged research, inquiry or experiment: cf TA Blanco White, Patents for Inventions (4th ed: 1974) Stevens & Sons: London) at [4-504]; see too (5th ed: 1983) at [4-504]. All the experts agreed that they would not try arginine in a first salt-screen to make a new perindopril salt. The unpredictability of successfully making a salt with any counter-ion, let alone one that is pharmaceutically acceptable, requires a person skilled in the art to engage in a selection process. Inventions are born of insights that make actual things that, beforehand, were potentially possible, albeit sometimes highly unlikely. As Prof Byrn, whose business had involved salt making, explained, if the first salt-screen or screens using counter-ions in Table I failed, and if the skilled addressee had additional time and money, he or she might go to Tables II or III in the Berge paper but would not be likely to try arginine.
The necessity to choose the appropriate counter-ion or ions to make a pharmaceutically acceptable salt and the absence of either any, let alone a clear, description of the arginine salt or any instructions on how to make it, satisfy me that there was no disclosure in the anodine wording of the synthesis or crystalline form patents (even if read in light of the Berge paper): Apotex Pty Ltd v Sanofi-Aventis (2009) 82 IPR 416 at 439-440 [136]-[139] per Bennett and Middleton JJ. Here, the skilled reader of either of those patents could not predict that any particular acid or base, and especially arginine, used as a counter-ion for perindopril, would result in a pharmaceutically acceptable salt. Gyles J, as the trial judge, expressed the test graphically in Apotex Pty Ltd v Sanofi-Aventis (2008) 78 IPR 485 at 525 [91]:
“Anticipation is deadly but requires the accuracy of a sniper, not the firing of a 12 gauge shotgun.”
The expression “pharmaceutically acceptable salts” used in the two prior art patents lacked any substantive precision. The first joint expert report explained that it is not possible to predict with certainty what both the outcome of any salt-screen process and the properties of any particular salt produced will be. The two prior art patents did not give any hint of what, if any, pharmaceutically acceptable salts existed other than perindopril erbumine.
Leaving aside the tert-butylamine salt, those patents did not describe how to make any other salt that would have the characteristic of pharmaceutical acceptability or provide any examples of such a salt. They “taught” the reader nothing about any pharmaceutically acceptable salt of perindopril other than perindopril erbumine.
Apotex correctly argued that the prior art merely needed to disclose, not teach, the invention: Lundbeck 177 FCR at 192 [178]. However, the prior art (in light of common general knowledge) must really disclose the invention. Here, the “disclosure” was of unspecified “pharmaceutically acceptable salts of perindopril”, and the prior art gave no direction how to perform that invention. In a real sense that phrase was devoid of content in that context, even with knowledge of the Berge paper. Table III of the Berge paper merely identified arginine as “potentially useful”, as opposed to a substance that ordinary trial and error experiments would involve in salt-screens. I am not satisfied that a skilled addressee would be able to perceive, understand and apply the disclosure relied on by Apotex in either of the two earlier patents, in light of common general knowledge including the Berge paper necessarily to obtain the invention: Lundbeck 177 FCR at 194 [190]. The quality of the “disclosure” relied on by Apotex was insufficient to amount to a disclosure of the invention of perindopril arginine. The skilled addressee would have had to engage in much more than ordinary trial and error experimentation to think of, or produce, the arginine salt. He or she would not have seen any flag to try arginine as a counter-ion in the two earlier patents that Apotex relied on as anticipations and the common general knowledge.
In any event, I am not satisfied that the Berge paper was common general knowledge of the ordinary skilled addressee or had been generally accepted and assimilated by the class of skilled addressees in Australia as at 27 February 2003: Lockwood [No 2] 235 CLR at 197 [55]-[56] per Gummow, Hayne, Callinan, Heydon and Crennan JJ; Minnesota Mining 144 CLR at 292; Alphapharm 217 CLR at 426-427 [31]. In Lubrizol 106 FCR at 232 [57] the Full Court acted on the findings of the trial judge, Emmett J, that common general knowledge was the technical background to the hypothetical skilled worker in the relevant art. Emmett J said that it was not limited to material that might be memorised and retained in the front of that worker’s mind but included material in the field in which he or she worked that the worker “knows exists and to which he [or she] would refer as a matter of course”. Here two of the four Australian experts, Dr Evans and Prof Perkins, were unaware of the Berge paper while Dr Williams knew of it adventitiously because, while studying in Kansas, his thesis supervisor drew it to his attention. As a result of his lack of awareness, Prof Perkins could not have taught his university students about the Berge paper before he knew of its existence as a result of his involvement in these proceedings.
Dr Spargo and Prof Byrn were the most experienced salt-makers of the expert witnesses. However, because each of them did not live or work in Australia prior to 27 February 2003 their knowledge of the Berge paper does not establish any state of relevant common general knowledge in this country, as was required by ss 7(1)(a) and 18(1)(b)(i): Minnesota Mining 144 CLR at 292, 295.
Accordingly, I am not satisfied that Apotex has established that the invention of perindopril arginine was not novel in light of either of the two prior art patents for the purposes of s 7(1)(a) of the Act. Apotex did not prove that, even when read with common general knowledge of the Berge paper, that either the synthesis or the crystalline form patents disclosed the arginine salt at all or as a pharmaceutically acceptable salt of perindopril. Nor did it prove that the Berge paper was common general knowledge in Australia at 27 February 2003.
(2) The inventive step issue
(a) Principles
The word “obvious” in s 7(2) of the Act means “very plain”. It is a question of fact whether an invention is “obvious”. However, that assessment involves a question of degree and this often will be by no means easy: Lockwood [No 2] 235 CLR at 195 [51]. The parties agreed that no question arises under s 7(3) in these proceedings. In Aktiebolaget Hässle v Alphapharm Pty Ltd (2002) 212 CLR 411 at 427-433 [33]-[53] Gleeson CJ, Gaudron, Gummow and Hayne JJ discussed the law in respect of obviousness and the requirement of an inventive step as it had developed up to the Patents Act 1952 (Cth) (the 1952 Act). Subsequently, the Court said that that discussion was relevant and applicable to the current Act: Lockwood [No 2] 235 CLR at 193 [46]. The Court observed that (at 195 [52]):
“obviousness and inventiveness are antitheses and the question is always “is the step taken over the prior art an ‘obvious step’ or ‘an inventive step’?” ... A “scintilla of invention” remains sufficient in Australian law to support the validity of a patent.” (citations omitted, emphasis added)
There is no unique approach to ascertaining whether any invention claimed involves “an inventive step” for the purposes of s 18(1)(b)(ii). Sometimes, the question of whether an invention is obvious when compared to the prior art base, in light of common general knowledge, can be approached by a “problem and solution” analysis. But, this has its limitations, as the Court explained in Lockwood [No 2] 235 CLR at 200-201 [65]-[66]. They held that such an approach could be unfair to an inventor of a simple solution adding (at [65]):
“… especially as a small amount of ingenuity can sustain a patent in Australia. Ingenuity may lie in an idea for overcoming a practical difficulty in circumstances where a difficulty with a product consisting of a known set of integers is common general knowledge. This is a narrow but critical point if, as here, the circumstances are that no skilled person in the art called to give evidence had thought of a general idea or general method of solving a known difficulty with respect to a known product, as at the priority date.” (citations omitted, emphasis added)
The Court cautioned against treating a specification that described a problem and solution as a conclusive admission by the patentee. That was because the patentee makes such statements from the vantage point of knowing the solution. Their Honours said that statements of this type must be weighed with any evidence given by persons skilled in the art of their perception, before the priority date, of any problem: i.e. before those witnesses had been exposed to the solution contained in, or provided by, the invention (235 CLR at 211 [105]). The concept of whether a step is inventive (235 CLR at 213-214 [111]):
“… will turn on what a person skilled in the relevant art, possessed with that person's knowledge, would have regarded, at the time, as technically possible in terms of mechanics, and also as practical. That is the sense in which an idea can involve an inventive insight about a known product. A court cannot substitute its own deduction or proposition for that objective touchstone, except in the rarest of circumstances, such as where an expressly admitted matter of common general knowledge is the precise matter in respect of which a monopoly is claimed. Even if an idea of combining integers, which individually may be considered mere design choices, is simple, its simplicity does not necessarily make it obvious. Older cases concerning simple mechanical combinations illustrate this point. Common general knowledge has negative as well as positive aspects. Practical and technical issues can affect the means by which a concept may be implemented in respect of an already known vendible product, and scepticism can inhibit recognition of the utility of applying a concept or idea to a known set of integers. These are matters within the knowledge of relevant witnesses.” (citations omitted, emphasis added)
Thus, the practical considerations that a person skilled in the art would take into account in seeking to address a problem may affect the characterisation of a step as inventive or not. In Alphapharm 212 CLR at 432-433 [50]-[53] Gleeson CJ, Gaudron, Gummow and Hayne JJ discussed the difference between what a person skilled in the relevant art, in light of common general knowledge, might do to lead to the alleged invention by way of a series of steps or experiments that were routine as opposed to doing something that amounted to an inventive step. They drew on what Aickin J had said, with the agreement of Gibbs ACJ, Stephen, Mason and Wilson JJ, in The Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 at 280-281 and 286. Aickin J referred to evidence of what the inventor did, for example by way of experiment, as one means of establishing or negating the involvement of an inventive step. He said (212 CLR at 432-433 [51]):
“It might show that the experiments devised for the purpose were part of an inventive step. Alternatively it might show that the experiments were of a routine character which the uninventive worker in the field would try as a matter of course. The latter could be relevant though not decisive in every case. It may be that the perception of the true nature of the problem was the inventive step which, once taken, revealed that straightforward experiments will provide the solution. It will always be necessary to distinguish between experiments leading to an invention and subsequent experiments for checking and testing the product or process the subject of the invention. The latter would not be material to obviousness but might be material to the question of utility.” (original emphasis)
Aickin J also said (148 CLR at 286):
“It is still correct to say that a valid patent may be obtained for something stumbled upon by accident, remembered from a dream or imported from abroad, if it otherwise satisfies the requirements of the legislation. What is important is that the patent itself should involve an inventive step, whether or not it was consciously taken by the patentee and whether or not it appeared obvious to the patentee himself. The test is whether the hypothetical addressee faced with the same problem would have taken as a matter of routine whatever steps might have led from the prior art to the invention, whether they be the steps of the inventor or not.” (emphasis added)
Thus, steps that lead to the alleged invention that a hypothetical non-inventive worker in the field would have taken as a matter of routine negate the involvement of an inventive step. That is because steps of a routine character that the worker would try as a matter of course would demonstrate obviousness: Alphapharm 212 CLR at 433 [52]. In the modern context of large pharmaceutical companies, the correct approach is to ask a question along the lines of that described as the reformulated “Cripps question” (which was in an early example of the use of a written submission by Stafford Cripps KC of counsel, as Sargant LJ explained in Sharp & Dohme Inc v Boots Pure Drug Company (1928) 45 RPC 153 at 176 and see at 173 per Lord Hanworth MR; cf Blanco White, op cit at [4-211]): (I have adapted and added emphasis to this question below.)
“Would the notional research group at the relevant date, in all the circumstances, (including a knowledge of all relevant prior art and of the facts of the nature and success of the existing drug or formulation [here, the tert-butylamine salt of perindopril] be led directly, as a matter of course, to try the new or substituted drug or formulation [here, the arginine salt] in substitution in the expectation that it might well produce a useful alternative to or a better drug than [perindopril erbumine] or a body useful for any other purpose?”
If a hypothetical formulator or skilled addressee must pursue a complex, detailed and laborious course of action, involving a good deal of trial and error, dead ends and retracing of steps, he or she will not have taken routine steps leading to an invention as a matter of course: Alphapharm 212 CLR at 436 [58]. There Gleeson CJ, Gaudron, Gummow and Hayne JJ accepted what Maugham J had said in In re IG Farbenindustrie AG’s Patents (1930) 47 RPC 289 at 322 that mere verification was not invention. They approved his analogy advertising to the capture of the citadel in the passage below. The latter case concerned a selection patent i.e. one where, like here, a putative inventor selects, from one or more candidate substances or compounds, something to use as a substitute or derivative for an earlier component or ingredient of an original compound. There can be many possible candidates for such combinations (47 RPC at 321). His Lordship propounded a corollary to the Cripps’ question, namely, that if for practical purposes it is not obvious to skilled chemists, in the state of chemical knowledge existing at the (priority) date, that the selected components possess a special property then there is, or may be, a sufficient “inventive step” to support the patent. He said that in this respect the workings of the inventor’s mind were not usually material. Rather, the Court was “concerned, so far as subject-matter is concerned, only with the results. The invention must, of course, add something of a substantial character to existing knowledge; but the Courts do not inquire into the way in which the conquest achieved. If the language of metaphor may be used, the citadel may be captured either by a brilliant coup-de-main or by a slow and laborious approach by sap and mine according to the rules of the art; the reward is the same.
It is not appropriate to analyse whether a claimed invention, at least in the cases of selection or combination patents, involves an inventive step on the basis that it will not if the selected answer was “worth a try” or “obvious to try” or resulted from an exercise in trying out various known possibilities until a correct solution emerged: Alphapharm 212 CLR at 441-443 [72]-[76], [78]. Secondary evidence such as commercial success, the satisfaction of a long felt but unsolved want or need and the failure of others to find a solution to the problem is also relevant, but not necessarily determinative, of the question whether the invention is obvious: Lockwood [No 2] 235 CLR at 215-216 [115]-[116], [119].
The purpose of considering the prior art base, in assessing whether the invention involves an inventive step, is to look forward to see from it what a skilled addressee “is likely to have done when faced with a similar problem which the patentee claims to have solved with the invention” (235 CLR at 218 [127]). Each claim in a patent must be examined independently of the others in assessing whether an alleged invention involves an inventive step. Also in addressing the “jury” question of whether the claimed invention involves an inventive step, a judge must be very careful to avoid the wisdom of hindsight: Alphapharm 212 CLR at 443 [78].
(b) Factual background
The specification in the arginine patent described perindopril as being intrinsically fragile (p 1 line 24). It noted that perindopril and its non-salt compounds had previously been described in European patent EPO 049 658 (the compound patent) and that this had given examples of addition salts, with a pharmaceutically acceptable salt, that had both good bioavailability and adequate stability to be suitable for the preparation and storage of pharmaceutical compositions. The specification identified the earlier conclusion that perindopril erbumine had adequate qualities for the development of the product and was currently being marketed (p 1 lines 12-17). Then the specification explained that the tert-butylamine salt had not been capable of providing a complete solution to the problems of the product’s stability to heat and humidity. That was because of the constraints that required perindopril erbumine to use additional and more costly packaging, and that limited its shelf-life (p 1 line 24-p 2 line 7).
A substance is hygroscopic if it physically absorbs water. It may do so without changing its chemical structure. In that case, the substance will gain weight, being a reflection of the amount of water absorbed, thus affecting its physical stability. On the other hand, if the substance is hygroscopic and reacts with water so that its chemical structure changes, it also will gain weight but will not be chemically stable.
Apotex argued that the data presented in the patent did not support its general assertion that the arginine salt had better stability than the tert-butylamine salt. It contended that the study results only supported such a conclusion on the limited basis in respect of tablets of a particular formulation of each salt if stored at 40°C at 75% RH, when Servier knew that the conditions used in the study would be a problem for perindopril erbumine.
(j) The study representations – consideration
I reject Apotex’ argument that any of the implied representations that it pleaded in [28] of its further amended particulars of invalidity set out at [226] above was made in the patent. For the reasons I have given above ([216]-[219]), a skilled addressee would understand that the discussion of the study in the specification concerned the two APIs in tablets and not their respective results when they were not in tablet or pharmaceutical compositions. Indeed, the specification said as much at p 3 line 17. The results in the table were clearly explained as results derived from a study of immediate release tablets. The only sensible reading of the table, the specification’s discussion of it and the study in the patent is that the results reflect assays of the API present in the tablets after storage over the periods and in the conditions specified. There is no suggestion, and a skilled addressee would not understand, that the study compared the APIs standing alone.
Apotex correctly contended that the specification represented that there was one study, when there were, in fact, two separate studies that were undertaken about two years apart and were not intended to be comparative. However, the patentee’s presentation in the patent of the results obtained in those studies accurately reflected the substantively comparable performance of tablets containing the two APIs in the same conditions and the same packaging. No doubt the patent could have presented the circumstances better. But, Apotex did not establish that any material inaccuracy existed in what the patent said were the comparative results. The second joint expert report stated the agreement of Profs Byrn and Evans, and Drs Morella, Spargo and Williams that the results in the table were “essentially consistent” with the underlying data in the two studies. They said: “the stability trends are similar and the results can be considered consistent.”
The data from the study presented in the patent did not purport to be exhaustive or non-exhaustive. It was presented to reflect the stability of the APIs when used in tablet compositions in the same particular conditions and packaging. The hygroscopicity of the APIs standing alone was not germane to the greater stability that perindopril arginine showed over perindopril erbumine when the salts were in the tablets or pharmaceutical compositions in the comparable conditions and packaging. Apotex argued that the hygroscopicity of perindopril arginine was evident from Servier’s data for the 2000 study that showed an increase of about 50% in water content in the pure API used in testing the assay content of the tablets.
It is important to understand for the purposes of the present issue how the assay is measured. The assay is ascertained using a chromatograph. That machine measures the amount (or assay) of various substances in a solution by recognising what each substance is against what it knows as a standard consisting of a pure form of each substance. The standard is placed in a solution and measured first. The technician must measure the standard accurately, identifying in the result any known impurity or extraneous matter, such as water. Thus, the technician who obtained the data for the 2000 study measured the amount of water in the perindopril arginine samples before putting these in solution and having the chromatograph measure the pure API without (or adjusting for) the water it had absorbed when weighed. This measurement of what the pure undegraded form of API looks like provides the chromatograph with a standard. The machine uses that result to measure the remaining API and degradation by-products present in the tablets that have been taken out of storage in the various controlled conditions and placed in a solution for the chromatograph to measure.
However, as Dr Morella pointed out there was no evidence of the storage conditions of the API used as the standard. It did not matter that it had absorbed water over time because, first, the water does not cause any degradation to occur in perindopril arginine and, secondly, the purpose of measuring the water content was only for the chromatograph.
The parties agreed the fact that by 9 August 2013 Servier had provided to Apotex all its relevant data concerning the water contents of the API samples and other analyses in the two studies that Dr Williams had referred to in his first affidavit. Apotex did not file any evidence in relation to those documents, including about the significance, if any, of the differences in the sample API’s water content used in the two studies. Apotex had the onus of proving that any differences in the 1998 and 2000 studies, not disclosed in the patent, had any, or any material, impact on the patent’s inaccurate references to their having been a single study. Apotex failed to prove that this inaccuracy (about a single study) affected in any material way the presentation of the results from the studies in the patent.
Importantly, Apotex pleaded the ways in which it alleged that the study representations were false as I have summarised at [227] above. I am not satisfied that any of those matters of falsity has been proved for the following reasons.
As to [227] (1): The skilled addressee would understand that the results in the table represented the position in respect of tablets and not the APIs alone. The first joint experts report stated that the patent “shows that perindopril erbumine tablets are unstable at 30°C/60% RH and 40°C/75% RH after storage for 6 months”. The experts confirmed this in their second joint report after considering full versions of data in the 1998 and 2000 studies by Servier. The only statement that there was a degradation of approximately 33% in the tert-butylamine salt after six months appeared in the results for conditions of 40°C at 75% RH. There was no evidence that this reporting of that particular result was other than accurate.
As to [227] (2): The two joint experts reports, as noted immediately above, confirmed the substantial accuracy of the results for perindopril erbumine stated in the table in the patent. The first report stated that the perindopril erbumine tablets were stable at 25°C at 60% RH. As Apotex alleged, the results in the table for perindopril arginine tablets in the same conditions and packaging did not show a clear difference in stability of the two salts in the tablets in those circumstances. However, the assertions in the patent concerning the comparatively very great stability of the arginine salt compared to that of the tert-butylamine one in tablets had to be read in the context of what the patent presented in the table as their justification. The skilled addressee would not read one line in the table in isolation from the rest.
There was no suggestion in the patent of a problem with the stability of perindopril erbumine tablets in conditions of 25°C at 60% RH. It was obvious from the table that the results for 25°C at 60% RH were similar for tablets with both salts, but in two succeeding conditions the results showed that perindopril erbumine was, as the experts agreed, significantly unstable. The experts agreed, in their first joint report, that the results in the table suggested an advantage for perindopril arginine tablets in terms of stability. In the second joint report, they said that the stability of perindopril erbumine tablets was poorer at 30°C/60% RH and markedly poorer at 40°C/75% RH when stored under the same conditions as the perindopril arginine tablets.
As to [227] (3): Drs Spargo and Morella said that, first, the skilled addressee would infer that the percentage of API present in the tablet at the commencement of the six month study was 100% and, secondly, the study documentation confirmed that it was. Indeed, the conclusions as to stability of the tablets in the joint expert reports as to what the study showed in the table in the patent must have proceeded on their common understanding that the percentage remaining columns began at 100%. The table only reported the results after six months. Apotex did not demonstrate how the accurate reporting of those six months results gave rise to any false suggestion or misrepresentation in or by the patent. As noted above, in their first joint report the experts agreed that the results in the table suggested an advantage in stability.
That brings me to Apotex’ argument that the patent did not indicate whether the differences in assay results for the two tablets were statistically significant and that while the table suggested the reported results were accurate to +/- 0.05%, Mr Damien had said that they were only accurate to about +/- 2%.
I reject that argument. First, as Servier contended, no expert or other evidence suggested that the accuracy of the table was +/- 0.05%. Secondly, the degree of accuracy of the results did not cause the experts to qualify their conclusions as to the relative stabilities I have discussed above. Thirdly, the degree of accuracy of the apparent degradation results reported in the table can be assessed, as Mr Damien explained, by comparing them to the other results, showing degradation by-products, produced by the chromatograph. Thus, while it was correct for Apotex to say that Mr Damien acknowledged a prima facie accuracy for such HPLC being a form of (chromatographic) data of better than +/- 2%, he said that the rate of APIs degradation for a particular result is derived by considering the amount of degradation by-products present. That is because the API present in any particular tablet tested may not have started at 100%, but could be within the tolerances allowed, such as those for the release of commercial products with API components. If the initial amount of API present was more or less than 100%, the amount of degradation, if any after six months (or some other time) is the difference between, not an assumed 100%, but rather the starting figure and the subsequent result. Mr Damien, who gave his evidence through a French interpreter, said when shown the chromatograph results for 30°C at 60% RH:
“What I can see clearly in the chromatogram is that the arginine is a lot less degraded than the tert-butylamine salt. I need to make calculations, but visually you can already see the difference and confirm the difference.
MR BANNON: And I think you said yesterday that you checked – you were asked to check the figures in the patent before it was filed.
THE INTERPRETER: Yes.
MR BANNON: And did you check the figures?
THE INTERPRETER: Yes.
MR BANNON: And did you think they were accurate?
THE INTERPRETER: Yes. If I recall correctly, there was a very small error, maybe 0.1 per cent, but generally speaking that is correct.
MR BANNON: And at the time that you checked the figures, did you have all the information in relation to degradation products as well as … all the chromatograms including the chromatograms for the degradation products in relation to the relevant tests.
THE INTERPRETER: Yes. Of course, because as I said yesterday, in a stability study, to ensure that there is consistency, you need the degradation by-product as well as the amount of remaining product.”
I accept that evidence. Apotex did not file any expert evidence to demonstrate that the results in the table were not substantially accurate. The comparison between the API and degradation products assays could easily have been done by Apotex, if its argument had any real basis. In the absence of any degradation assay analysis, I am not satisfied that the results in the table were in any substantive way inaccurate to the degree of +/- 2%. The chromatography for the reported results in the table appear to support Mr Damien’s opinion that the degradation by-products in the tests for the arginine were minimal and those for the erbumine API were in the order of 4.5% to 5%.
As to [227] (4): For the reasons I have given, the skilled addressee would understand that the study related to tablets containing the two perindopril salts and their relative performance in the stated conditions. During their concurrent evidence, Profs Byrn and Evans and Drs Morella, Spargo and, more reluctantly, Williams all acknowledged that they and, I find, a skilled addressee, would have read the patent with the understanding that it was making a comparison between tablets in packaging and conditions with identical or sufficiently similar formulations except for the API to warrant the comparison to be meaningful. As Dr Morella put it, without any dissent from the other experts:
“I would agree with Dr Spargo; that one would assume that the compositions that were being tested were similar. It wouldn’t be essential that they were exactly the same. It’s a comparison test. You have two different salts in a container, in a tablet form, and you’re wanting to assess whether or not they’re the same or different. So in that sense you only need bottles and the compositions that are similar to perform that comparison, and I assume that they were similar.
HIS HONOUR: So that the excipients used in the formulation you would assume would be similar and that whatever form of packaging is being studied would be similar; is that what you’re saying?
DR MORELLA: That’s right, yes.”
In fact, Mr Damien used identical formulations, including the quantitive compositions of excipients in the 1998 and 2000 studies.
As to [227] (5): The mere fact that the 1998 and 2000 studies were separate had no effect on the substantive validity of the comparison of their results as presented in the patent. Apotex led no evidence to the contrary and, indeed, in his first affidavit, one of its experts, Dr Williams said as much. Moreover, the second joint experts report stated, without any qualification, that the results tabulated in the patent were essentially consistent with Servier’s data for the two studies. As I have noted above, although Apotex had access to all that data, it led no evidence to suggest that the results presented in the patent were in any way relevantly incomplete, misleading or otherwise unfairly selective. And, for the reasons I gave relating to the solution representation, Apotex has not established that the hygroscopicity of perindopril arginine created any false suggestion or misrepresentation in the patent.
As indicated at [245] above Servier complained that Apotex had sought to expand its pleaded case on the study representations in its final submissions. I am of opinion that to the extent I have not dealt with those matters in relation to the study representations above, Apotex cannot be permitted to go outside its pleaded case. Apotex had at least three opportunities, resulting in its further amended particulars of invalidity, to identify how it would make out its case. It did not apply to amend to add any new particulars to reflect these new matters on which it had led no evidence in chief. It gave no explanation why this extrapolation was being put forward only in closing address. It would be quite unfair to Servier to allow Apotex to rely on these new matters in the circumstances: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at 214-215 [102]-[103], 217-218 [112], [114] per Gummow, Hayne, Crennan, Kiefel and Bell JJ; Dare v Pulham (1982) 148 CLR 658 at 664 per Murphy, Wilson, Brennan, Deane and Dawson JJ.
For example, Apotex’ attempt to extrapolate from the degradation of perindopril arginine over six months how it might further degrade over 12 or more months was not foreshadowed in its pleading. When Dr Morella was asked about this he observed that: “This data here is not designed to show stability other than at six months”. It was no part of Apotex’ pleaded case or the voluminous and detailed prepared expert evidence it led, that this extrapolation should be made or that it created a false suggestion or misrepresentation in the patent. This was not a case that Servier knew it had to meet.
Similarly, Apotex’ attempt to rely on the lack of relevance of results in conditions of 40°C was new and unpleaded. While Dr Williams briefly referred to some purposes of using 40°C testing in his first affidavit, that evidence did not suggest that testing stability at temperatures over 30°C was or was not important. He touched on this topic during the concurrent evidence, again without suggesting that testing stability above 30°C was not capable of being important. And Dr Byrn commented at the same time that the data in the table (in relation to perindopril erbumine) “suggests to me that there’s stability problems at 40° and also, for example, in Africa you probably couldn’t use this product. It’s just too unstable”. Once again, this was not an issue raised by Apotex before trial in its pleaded case far less as a false suggestion or misrepresentation. For the reasons above I do not consider that Apotex can be permitted to rely on it.
Last, Apotex contended that the failure to disclose the type of packaging, HDPE with a desiccant, used in the testing for the study would have misled the Commissioner. Once again this was not part of Apotex’ pleaded case and I am not persuaded that it can now rely on it. In any event, the Commissioner, as a skilled addressee, would have appreciated that the packaging used was different from that in the commercially marketed perindopril erbumine, was also cheaper, less constraining to use for commercial purposes and had the other promises foreshadowed in the specification. In that context, if Apotex had wanted to contend that the Commissioner had been misled in the new way it sought to raise in final address, it should have pleaded that.
(k) The shelf-life representation
Apotex pleaded that:
“the [patent] was obtained by the following false suggestion or misrepresentation: at page 2, lines 3 to 4 the [patent] states that “… even for temperate-climate countries, that instability [of perindopril erbumine] has made it impossible to obtain a shelf-life of more than 2 years for the tablets”;”
Apotex pleaded that the shelf-life representation was false because:
·Servier applied to the TGA in May 1992 for a three year shelf-life for its 2 mg and 4 mg perindopril erbumine tablets (i.e. Coversyl) when stored at 30°C and, the TGA approved that application on 30 June 1992.
·Accordingly, Servier knew, or reasonably ought to have known, that it was possible to apply for and obtain a shelf-life of more than two years for perindopril erbumine.
Relevantly, the patent discussed shelf-life in the following context, which includes the passage complained of:
“The tert-butylamine salt was thus alone in exhibiting the best stability compared to the other forms studied. However, in view of the intrinsic fragility of perindopril, the tert-butylamine salt has not been capable of providing a complete solution to the problems of the product’s stability to heat and humidity. Indeed, for marketing, tablets of perindopril tert-butylamine salt must, in certain countries, be protected with additional packaging measures. Moreover, even for temperate-climate countries, that instability has made it impossible to obtain a shelf-life of more than 2 years for the tablets. Finally, for marketing of the tablets, they have to be marked “to be stored at a temperature less than or equal to 30 degrees”. (p1 line 23-p2 line 6)
…
The results allow us to consider less onerous constraints with respect to the packaging of the pharmaceutical compositions and also to obtain a shelf-life of at least three years for our pharmaceutical compositions.” (p 4 lines 8-10)(l) The shelf-life representation – Apotex’ submissions
Apotex argued that the views of expert witnesses could not provide any meaningful assistance as to how the Commissioner is likely to have understood the passages in the specification relevant to shelf-life. It submitted that this was a question solely for the Court and prayed in aid what the Full Court had said in PAC Mining Pty Ltd v Esco Corp (2009) 80 IPR 1 at 14-15 [29]. It pointed to the absence of any qualification for the assertion that the instability of the erbumine salt had “made it impossible to obtain a shelf-life of more than 2 years”, even in temperate climate countries, coupled with the unqualified assertion that the new results allowed the obtaining of a shelf-life of at least three years.
Apotex argued that those assertions would have conveyed to the Commissioner that, regardless of packaging, a shelf-life for perindopril erbumine of more than two years even for temperate climate countries was “impossible” and that the invention of perindopril arginine had removed this limitation and opined the possibility of a three year shelf-life. Apotex contended that the 1992 approval for Coversyl rendered those matters, and the representation in the patent, false to Servier’s knowledge. It submitted that there was no basis for Servier’s contention that the Commissioner would understand the patent to be discussing the impossibility of shelf-life of more than two years in a sense qualified by words to the effect “if additional packaging measures are not used”. That was because, Apotex submitted, the bold and unqualified language in the patent left no room for such a reading.
(m) Consideration of the shelf-life representation
The patent must be read from the perspective of the skilled addressee. After all, that is the hypothetical person to whom it is addressed. A lay person may understand the patent to make a false suggestion or misrepresentation that would never occur to a skilled addressee. It would be inappropriate to adopt Apotex’ argument that the views of experts are not relevant. That was, in fact, not supported by what Sundberg, Jessup and Middleton JJ said in PAC Mining 80 IPR at 14-15 [29]. One purpose of expert evidence in a case like the present is to place the Court in the position of a skilled addressee so that the Court can draw on a proper understanding of what the patent is saying.
While the construction of the patent is a matter solely for the Court, expert evidence enables the Court to be placed in the appropriate matrix of facts, with relevant knowledge of how a person skilled in the art will understand the patent. This is no different, in principle, to any other situation in which a court must construe a document or words. In order properly to understand what meaning words convey to a reader or listener, a court ordinarily must assess the objective characteristics of the person or class of persons to whom they are addressed. Thus, in a contractual situation such an approach to construction is clear, as Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ explained in Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45 at 52-53 [10].
The same is so for the purposes of assessing whether a person has engaged in misleading or deceptive conduct or conduct that is likely to mislead or deceive: Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 at 84-85 [99]-[103] per Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ. It is also so in cases of defamation where the matter complained may have a special or particular meaning to people with knowledge of a particular fact that is not conveyed to the ordinary reasonable reader, listener or viewer. In Reader’s Digest Services Pty Ltd v Lamb (1982) 150 CLR 500 at 504-506 where Brennan J, with whom Gibbs CJ, Stephen, Murphy and Wilson JJ agreed, explained the differences in establishing the natural and ordinary meaning, and an innuendo meaning (i.e. one conveyed to persons with particular knowledge that causes words to be understood in a special sense) of the same words: and see Mirror Newspapers Ltd v Harrison (1982) 149 CLR 293 at 300-301 per Mason J with whom Gibbs CJ, Wilson and Brennan JJ agreed.
We all understand words based on our knowledge and experience of human affairs. But, where words are used in a special way or in, for example, a technical or scientific document, the Court must be put in the position, by evidence, where it can read and construe those words in the sense in which persons to whom they are addressed will understand them. That is an objective exercise and is not aided by an expert explaining his or her understanding. Rather, the role of expert evidence in this context is to provide the Court with the knowledge or information that the addressee would use when reading the words so that by using that knowledge or information the Court can construe the document in context, objectively and accurately. Patents are no different to any other form of communication in this respect.
Here, the expert evidence provided the background knowledge and experience that can be employed in assessing how a skilled addressee in the position of the Commissioner would understand what the patent was conveying.
The first joint experts report said that the cost of manufacture of packaged product increased from the lowest, PVC blisters and bottles, to tropicalized packaging to Alu/Alu cold form blisters, with the last being at least twice as expensive as the first. They said that PVC blisters and bottles or containers (such as HDPE, PP and glass) are regarded as ordinary packaging and would be used by pharmaceutical manufacturers across the world. They also said that specialised packaging, such as tropicalized packaging and Alu/Alu cold form blisters, requires additional equipment and results in increased costs. The skilled addressee would know that it was likely that a longer shelf-life could be obtained by the use of either or both additional packaging or different temperature storage conditions, as Dr Morella said in his first affidavit.
I am of opinion that a skilled addressee (including the Commissioner) would understand the specification to be discussing the impossibility of obtaining a shelf-life greater than two years if only ordinary packaging were used for perindopril erbumine tablets. Apotex’ construction is a possible way that the patent could be read by the skilled addressee. However, it is much more likely that the skilled addressee would recognise that the patent’s promise of “less onerous constraints” in respect of packaging and the potential to obtain a shelf-life of at least three years (at p 4 lines 8-10), would transform the previously discussed impossibility of obtaining a shelf-life of more than two years: i.e. a shelf-life that could not be exceeded if ordinary packaging was used.
The skilled addressee would have understood that the additional packaging that had to be used for certain countries (referred to at p 2 lines 2-3) was not the packaging used in temperate-climate countries when the patentee sought to obtain a shelf-life greater than two years. Indeed, if it were relevant, I think that this is also the way in which an ordinary reasonable reader would understand the patent. Such a person would read it carefully as an important document and would understand that “additional packaging” was something beyond simple PVC blisters and perhaps more expensive bottles.
In addition, Servier knew that it had obtained an approved three year shelf-life in tropicalized packaging for the valuable product, Coversyl, that it was marketing at the time it applied for the grant of the patent. There is no reason to think that, in those circumstances, Servier would include an obviously false misrepresentation in the patent it was seeking, particularly when an important underlying commercial objective of that application was a further period of monopoly in which to sell its new perindopril arginine tablet product. It would have been obvious to Servier that any false statement of the nature alleged by Apotex, would have been exposed easily by a competitor who wished to challenge the patent. Accordingly, even if the construction at which I have arrived be wrong, I am satisfied that Servier did not understand the patent to have made the shelf-life representation.
(n) The temperature representation
Apotex pleaded that:
“The [patent] was obtained by the following false suggestion or misrepresentations: at page 2, lines 4 to 6 the [patent] states that “… for marketing of the tablets, they [perindopril erbumine tablets] have to be marked ‘to be stored at a temperature less than or equal to 30 degrees”.”
Apotex pleaded that the temperature representation was false because:
·both the perindopril erbumine and perindopril arginine tablets sponsored by Servier have to marked “Store below 30 degrees Celsius”;
·it followed that perindopril arginine did not provide a benefit or improvement over perindopril erbumine in relation to the temperature at which it can be stored.
Apotex pleaded the terms of Therapeutic Goods Orders Nos 48 and 69, the common general knowledge of persons involved in preparing pharmaceutical regulatory submissions in Australia that the maximum storage condition allowed by the TGA was at all relevant times “Store below 30°C”, and Servier’s awareness, as such a person, that it was not generally possible to obtain approval from the TGA for storage conditions above 30°C.
The specification continued with the following passage at p 2 lines 7-9 immediately after the temperature representation:
“These constraints are, of course, onerous, especially in terms of organisation and cost, and it has appeared especially useful to try to develop a new perindopril salt in order to reduce the constraints due to the tert-butylamine salt.”
(o) The temperature representation – Apotex’ submissions
Apotex argued that, in essence, the TGA requirement for tablets composed with perindopril erbumine to be marked with a condition they be stored at no more than 30°C was not a substantive or real constraint. It contended that no examples of a higher temperature storage specification were in evidence and that subsequently Servier had obtained only an approval from the TGA that its perindopril arginine products be stored below 30°C. Accordingly, it argued that that storage condition was not a problem or constraint at all.
(p) Consideration of the temperature representation
I reject Apotex’ argument. First, Australia has climates that fall within zones III and IV of the ICH designations and the TGA could approve a storage temperature greater than 30°C (see [22]-[24] above). Secondly, unlike tablets composed with perindopril arginine, those composed with perindopril erbumine were susceptible to degradation of their API at temperatures of 30°C and above (see [255] above). Thirdly, as Profs Byrn and Evans and Drs Morella, Spargo and Williams agreed in their first joint report, an exporter must show products intended for export to countries in climate zones III or IV to have long term stability at 30°C/65% RH and also provide accelerated data for them in conditions at 40°C/75% RH. Fourthly, the experience of Servier in obtaining regulatory approval for its perindopril arginine products, sometime after the filing of the complete specification in the patent, cannot be used show that earlier, in 2002 or 2003, the specification conveyed a false suggestion or misrepresentation. Fifthly, the potential for export was open to be relied on by the patentee. Dr Morella gave evidence that one Australian manufacturer, Faulding, exported products to countries with climates in zones III and IV.
The Australian regulator and market may offer only limited opportunities to sell products with storage conditions of no greater than 30°C. However, a product that, can be stored at higher temperatures is substantively less constrained than one that, because of its inherent characteristics, cannot be so stored. Regulatory requirements can change over the 20 year life of a patent. Moreover, as here, the potential for export of a new and more stable salt of a compound, perindopril, that had been commercially successful when sold as part of an API, namely, the erbumine salt, is self-evident. Blood pressure problems occur in humans throughout the world. Coversyl had been a highly successful brand for Servier at the time that the complete specification was filed and the arginine salt, if patentable, offered the potential for an extended monopoly for the new product. If it could be stored at higher temperatures in cheaper packaging, it offered commercial benefits to a manufacturer as compared to the constraints imposed by the fragility of the erbumine salt and comprising it.
(q) The cost-saving representations
Apotex pleaded:
“… the [patent] was obtained by the following false suggestions or misrepresentations:
(a)at page 2, lines 1 to 3 the [patent] states that “Indeed, for marketing, tablets of perindopril tert-butylamine salt must, in certain countries, be protected with additional packaging measures”;
(b)at page 2, lines 7 to 9 the [patent] states that “These constraints [being, among others, the constraint referred to in paragraph (a) above] are, of course, onerous, especially in terms of organisation and cost, and it has appeared especially useful to try to develop a new perindopril salt in order to reduce the constraints due to the tert-butylamine salt”; and
(c)at page 4, lines 8 to 10 the [patent] states that “The results allow us to consider less onerous constraints with respect to the packaging of the pharmaceutical compositions …”
Apotex pleaded that the cost-saving representations were false because Servier knew that it was possible and practicable “to use less onerous constraints” with respect to packaging of perindopril erbumine tablets without the need to change the salt form. Apotex’ particulars, that were pressed in its closing submissions, asserted that Servier had used tropicalised packaging for its erbumine salt Coverysl products in Australia up to 2006 and that it was common general knowledge, and Servier knew or should have known, that Alu/Alu blisters could have been used, were less expensive and onerous, and were the most protective and cost effective manner of packaging for a product that was sensitive to heat and humidity.
(r) The cost-saving representations – Apotex’ submissions
Apotex argued that Servier had used tropicalised packaging for its perindopril because it suited it to do so. That was because, Apotex argued, Servier could supply perindopril erbumine in blister packs in temperate countries and could over-wrap the blisters to achieve tropicalized packaging for supply to countries in climate zones III and IV, including Australia. Apotex submitted that the extra expense that Servier incurred in organising its packaging could not be used to establish that it was commercially reasonable for it to use the tropicalized packaging it did. It contended that stability data for Apotex’ generic erbumine salt product was sufficient to support TGA registration of a three year shelf-life at 25°C. Accordingly, Apotex contended, the cost-saving representations were not reflective of any real problem and were likely to have contributed materially to the Commissioner’s decision to grant the patent.
(s) Consideration of the cost-saving representations
I reject Apotex’ argument. The first joint experts report, in a section in which Mr Pienaar joined, explained that Alu/Alu cold form blister packaging was first, more expensive than tropicalized packaging and, secondly, about twice as expensive as PVC blister packaging. Accordingly, the premise for Apotex’ assertion of falsity of the cost-saving representations had no basis. Moreover, it did not call any evidence to contradict the joint experts report’s conclusions. Such evidence is likely, as Servier submitted, to have been readily available to Apotex based on its own experience as a manufacturer of pharmaceutical products.
In the second joint experts report, Profs Byrn and Evans, and Drs Morella, Spargo and Williams agreed that:
·the TGA suggested that it would give Servier’s perindopril erbumine tablets packed in PVC/Alu blisters a shelf-life of 18 months if stored at 25°C but only if, among other changes, Servier tightened its release specifications to a minimum assay level of 97.5%;
·the shelf-life of perindopril erbumine tablets can be extended by using more protective packaging, whereas the limited data for perindopril arginine tablets suggested that an equivalent shelf-life may be possible in less protective packaging and this would result in cost-savings;
·the stability of perindopril erbumine tablets is worst in the least protective packaging HDPE bottles, better in PVC/Alu blisters, better still in Alu/Alu cold form blisters, and best in tropicalized packaging and that in the latter they achieved shelf-life of 3 years at 30°C/65% RH;
·perindopril arginine tablets do not need protective packaging to achieve adequate shelf-life and stability at 30°C/65% RH (and can be supplied in less expensive HDPE bottles with a desiccant).
The parties spent considerable time debating whether Apotex’ generic erbumine salt tablets were entitled to their current shelf-life and the experts did not come to a joint position on this. However, it is not necessary to resolve this further dispute in an already over complex case.
CONCLUSION
Apotex has succeeded only in establishing that the specification in the patent did not describe the best method known to the applicant of performing the invention and so did not comply with s 40(2)(a). Accordingly, that raises the question of what relief should be granted under s 138(3) of the Act. Apotex’ many other challenges to the validity of the patent have all failed and those took up the bulk of the evidence and hearing. That failure should be reflected in costs. In addition, the parties should identify any errors or oversights in these reasons that may readily be corrected, including any argument or issue of substance that may not have been addressed so as to avert any unnecessary issue in any appeal.
I will hear the parties on the question of relief and on costs.
I certify that the preceding two hundred and ninety-seven (297) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. Associate:
Dated: 24 December 2013
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