Astrazeneca AB & Anor v Apotex Pty Ltd; Astrazeneca AB & Anor v Watson Pharma Pty Ltd; Astrazeneca AB & Anor v Ascent Pharma Pty Ltd

[2015] HCATrans 58

[2015] HCATrans 058

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S240 of 2014

B e t w e e n -

ASTRAZENECA AB

First Applicant

ASTRAZENECA PTY LIMITED

Second Applicant

and

APOTEX PTY LTD

Respondent

Office of the Registry
  Sydney  No S241 of 2014

B e t w e e n -

ASTRAZENECA AB

First Applicant

ASTRAZENECA PTY LIMITED

Second Applicant

and

WATSON PHARMA PTY LTD ACN 147 695 225

Respondent

Office of the Registry
  Sydney  No S242 of 2014

B e t w e e n -

ASTRAZENECA AB

First Applicant

ASTRAZENECA PTY LIMITED ACN 009 682 311

Second Applicant

and

ASCENT PHARMA PTY LTD ACN 118 734 75

Respondent

Applications for special leave to appeal

FRENCH CJ
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 13 MARCH 2015, AT 10.54 AM

Copyright in the High Court of Australia

____________________

MR A.J.L. BANNON, SC:  In each of those matters, if the Court pleases, I appear with my learned friend, MR C. DIMITRADIS, SC, for the applicants.  (instructed by Ashurst Australia)

MR D.K. CATTERNS, QC:  May it please the Court, I appear with my learned friend, MR A.J. MARYNIAK, QC, in the first matter.  (instructed by Herbert Smith Freehills)

MR A.J. RYAN, SC:  May it please the Court, I appear with my learned friend, MR I.P. HORAK, for the respondents in the second and third matters.  (instructed by Minter Ellison Lawyers)

FRENCH CJ:   Yes, Mr Bannon.  Mr Bannon, it might assist if you were to focus on the 22A question and the extent to which that, as it were, would stand in the way of a grant of special leave if, for the sake of argument, the question of prior art raises a point of principle.

MR BANNON:   Yes.  Could I start on that issue with the assignment itself, which appears in 531 of the application book ‑ sorry, 530 I should say, behind tab 23DB?  The points I wanted to emphasise are – well, it conveniently sets out the terms of section 22A but, importantly, paragraph 5 confirms AstraZeneca’s contention that the finding that at that time Shionogi was entitled was in dispute.  In other words, my clients maintained at all times, including on the Full Court appeal, that we were the person entitled to the invention.  Then, paragraph 7 confirms that Shionogi’s agreement was without prejudice to AstraZeneca’s contention that it – i.e. AstraZeneca was the owner of the invention.  The wording of the assignment is paragraph (a) that the assignment is “any and all right [it] may have”.

So the starting point is that there was no concession in that assignment that Shionogi was the true inventor.  Her Honour – and we have referred to this in our submissions ‑ that the primary judge recognised and accepted that Shionogi had never made a claim to the invention.  So, at all material times, there was an issue at trial, and would have been at trial no matter when the assignment had been taken, that Shionogi was not the inventor from our point of view.  From their point of view, Shionogi was the inventor.  That was a live issue at all material times.

Then if I could take your Honours to the effect of the Full Court judgment, firstly, at application book 330, at paragraph 147, it records that the assignment was made and took place after the – sorry, that section 22A took effect after the date on which the primary judge gave reasons.  So if it had executed an assignment, it could not have done anything as a matter of law.

Then if one turns to – if I may invite your Honours to go to paragraph 154 of the judgment where one sees the terms – that is 331 of the application book – one sees the terms of 22A:

A patent is not invalid merely because:

(a)        . . . [it] was granted to a person who was not entitled to it –

And at paragraph 156 on that same page, that that section applied to patents granted before and after the coming into force of the section.  If I can invite your Honours to jump to page 338 of the application book, and at paragraph 187 after a considerable debate in and out as to section 138(4), the Full Court found that 138(4) was:

not obliged to take into account –

for the purposes of the appeal.  The significance of that statement is this.  There was an argument before the Full Court as to whether or not 22A was necessarily tied to 138(4).  The potential for the argument being that if it was tied and 138(4) did not apply that, perhaps, 22A did not apply.  But, as we read their Honours’ reasons, their Honours say they are, in effect, not tied, 138(4) does not apply, so that then 22A applies in its full force.

However, at 188 their Honours emphasise that 22A says by reason only of lack of entitlement because they found against us on 7(2) – accommodation 7(3) – that was the determinative reason why they rejected our entitlement to rely on it.  We accept that they then proceeded in 189 to deal with some discretionary reasons.  We also accept that in 190 they said if they were:

wrong as to the utility . . . 

i.e. because of the other reason ‑

we would be minded to refuse them on discretionary grounds.

But if I can draw some of those threads together.  Firstly, we say 22A in its terms apply to this patent.  We were not, according to their Honours’ reasons which we say are right, afflicted by whether or not 138(4) had to apply.  As we read our learned friends’ Apotex’s submissions, they accept that there is no issue of moment in relation to 22A.  They accept that on the appeal, 22A did apply to this patent and, therefore, if the assignment had got in then it would overcome the problem.  Those references in their submissions are at 582, 583 and 589 of the application book, paragraphs 5, 11, 31 to 34.  I do not think there is any issue in relation to that.

Our learned friends fairly accept that the determinative reason why we could not rely on the assignment was because of the futility argument, namely, the other issue.  But again, they also say they would invite this Court, by way of notice of contention, to pray in aid the discretionary reasons as to why it should not be admitted.  We say two things in relation to that.  Firstly, if we are otherwise right, the futility argument goes away, this Court could re‑exercise the discretion or the Court could send it back.  In terms of whether there is an overall prospect of ‑ ‑ ‑

HAYNE J:   That would be – if the chain of argument you have described is right is that not the consequence, namely, retrial?

MR BANNON:   Only on the discretion.

HAYNE J:   No.  Is it not said that the issues agitated at trial would have differed if 22A had been, in some sense, in the ring recognising the time sequence?

MR BANNON:   Yes.

HAYNE J:   Is not the consequence that it would be retrial of action that would be the ultimate outcome?  That is a very large outcome to grapple with, is it not?

MR BANNON:   Yes.  The steps are – assume we have had a grant of special leave, assume we succeed on our 7(2), 7(3) point, that would knock out the reason why we were not – the affirmative reason why we were not allowed to rely on the assignment, and assuming there is no dispute that the assignment would be effective, one then comes, is there is a discretionary reason why we should not be allowed to rely on the assignment.  That is a debate which has not been determined.  We say the discretionary reasons are fallacious.  So, there are two options which would be available.  One is the Court itself would consider that discretion.  I accept, your Honour, if the outcome was a retrial then, yes, the discretionary answer would be we would lose.  But we would say the exercise of discretion, if it were to be exercised by the High Court in the punitive circumstances, would not be to refuse it.

HAYNE J:   Is retrial of an action a meaningless spectre that I should put aside from consideration?  If it is, why is it such a spectre?

MR BANNON:   It is meaningless because if that is the outcome of a reconsideration of the discretion, I do not think I can say that there should be a retrial of the whole action.

FRENCH CJ:   If you succeed on the inventive step argument, does that feed into the discretion then in any way?

MR BANNON:   We say it does.  Obviously, the reasons read as they do, but if you have something which is valuable, which is an invention, section 22A cures the only reason we otherwise would not get it.  It must be a very powerful discretionary reason why we would fail in those circumstances because, as I say, there was an issue of inventorship.  The reasons put forward – the Full Court says the issues would be different.  They would not be any different.  They would be exactly the same.  With the assignment – in the same terms as were there before – we would still be viciously, ferociously, defending the point that Shionogi was not the owner.  We were the owner because there were still issues about construction of 22A and 138(4).  So, that would not have changed.

One of the points our learned friends say in their material, as I say, they would have sought to join Shionogi as a party.  With respect, that is fallacious.  They were not claiming anything.  They had no interest.  They were a predecessor in title at best.  They say they would have got documents from Shionogi.  Well, they could not have got them by joining them.  If they wanted documents from Shionogi on the inventorship issue, that was a live issue at trial – would be a live issue if there was an assignment – if there was a process by which they could have sought documents it was available to them, in any event.

A closer analysis of the reasons put briefly by the Full Court of discretion, we say, would be exposed as entirely fallacious.  As I say, the stepping stones along the way would be, as I say, if we get to the point, we would invite the Court to exercise the discretion in our favour because there is no further evidence required ‑ it was all before the Full Court – and either, it would be in our favour and we win, on the punitive assumptions.  If it was exercised against us, then we would go back to the position of not being able to get it in but the Court would have determined the important point in relation to 7(2), 7(3).  Another option would be for this Court simply to send it back to the Full Court to re‑exercise that discretion in the light of the reasons of the Full Court, which would be that futility is not a relevant reason.

FRENCH CJ:   Yes, all right, thank you.  We might hear from Mr Catterns next.

MR CATTERNS:   May it please the Court.  As our friends accept, this is a knock‑out point if they cannot persuade the Court to exercise its discretion to allow them to amend to rely on the assignment.  Your Honours, the passage our friends took your Honours to at page 338, we respectfully submit, show how the Court would decide the discretionary question.  At 189, their Honours say – we, both sides – our friend, Mr Ryan and us:

. . . a very persuasive case for refusing leave to amend on discretionary grounds ‑

Our friends ‑

must be taken to have been well aware of the provisions of the Raising the Bar Act –

It had received royal assent six months before the trial, your Honours –

at least from the time of its passing but almost certainly from an earlier point –

It –

could not have litigated . . . the arguments which it now wishes to bring forward –

because 22A had not taken effect –

it could have flagged its intention to raise these arguments at the earliest opportunity –

I will submit in a minute, your Honours, that we had pleaded that persons, other than Shionogi – doctors – had come up with this invention.  The invention is a very simple one.  It is the choice of five and 10 milligram doses.  We had suggested – we had pleaded and identified doctors, the deputy head of the cardiovascular centre of Japan, but we did not need to go there because a win on Shionogi…..Shionogi clinical trial and we did not need to go beyond that, but may I continue, your Honours?  Our friends could have raised the argument earlier:

or, alternatively, a delay in the delivery of judgment –

They got the assignment the day her Honour Justice Jagot made the last orders, including costs, in the matter – a couple of revocation orders ‑ her Honour made the other orders earlier –

AstraZeneca could have taken the assignment which it later took on 11 June 2013 –

that is the date of the last orders.  Our friends could have –

argued that Stack –

which was the vice that section 22A overcame –

and Conor Medsystems, Inc had been wrongly decided ‑

Justice Bennett had dissented in Conor –

It did not do so.  Had any of these steps been taken, the nature of the issues concerning entitlement at trial would have changed markedly.  There is considerable force in the submissions . . . that they would have conducted [different] investigations. 

Your Honours, Mr Sands’ affidavit is in volume 2 at page 599, the relevant passages – pardon me, your Honours – tab 25.  At 599, he refers to our “Particulars of Invalidity” at the bottom paragraph, 26.  Your Honours can see the particulars at page 600 and we said they were not the inventors – that is, AstraZeneca were not the inventors, contrary to their assertion.  Then, your Honours, we pleaded (a) to (f), Japanese people, who were Shionogi employees who had published the Watanabe article.  Then a number of other people – (j) Dr Akira Yamamoto was the deputy head of the national cardiovascular centre, and Ken Katagiri who was head of the centre where the clinical trials went forward.  As I said in our paragraph 43.4 that those individuals made a sufficiently substantial contribution and there was no entitlement derived from them.

So, your Honours, we respectfully submit that in the end, of course, at trial we ran the case that Shionogi were the inventors.  That was good enough for us and our friends vehemently said – as they said today – that they were not.  Our friends submitted that they had not come up with the five and ten milligram idea.  Your Honours, we have not got a clue who came with the five and ten milligram idea.  Our friends lost their substantive entitlement argument which was based on the submission that you have got to carry it through to clinical trials.  They lost that before Justice Jagot and before the Full Court.  So, therefore, they needed to rely on 22A, about which there is no legal dispute, and the assignment getting in.  We respectfully submit, it was – as your Honours can see, the court did not hold

that that was the additional ground of refusing it.  But, we respectfully submit, their Honours went close enough and this Court would be in the same position.

One does not lightly play – a joke between ourselves – the forensic disadvantage card, but it is true, your Honours.  It would be completely different.  Shionogi would have been able to be joined as a party.  We would not have taken at face value, under Federal Court rule 9 – we would not have taken at face value our friends’ assertion that they derived entitlement from Shionogi.  They would have had to call evidence about that.  We would have been entitled to go behind that, and while we are there, your Honours, Shionogi – in addition to the question of entitlement, evidence and discovery from Shionogi, or relating to Shionogi, would have been relevant to the question of obviousness.

As your Honours know, we very routinely get discovery of inventor’s notebooks – to coin a phrase – and also it might have been relevant even as to proof of common general knowledge which was a near run thing.  The knowledge of rosuvastatin we just lost.  Her Honour held there was a buzz about it but we were not able to prove the drug was common general knowledge before the priority date. 

So, your Honours, we do respectfully submit that the forensic landscape would have been completely different.  Our friends, assuming they win on the obviousness point – we agree that takes away the paragraph about futility ‑ but then our friends have to persuade the High Court to grant, in its discretion, leave to rely on the assignment and, we respectfully submit, it should be refused.  May it please the Court?

FRENCH CJ:   Thank you.  Yes, Mr Ryan.

MR RYAN:   Your Honours, I have got nothing to add on the entitlement point.

FRENCH CJ:   Yes.  Yes, Mr Bannon.

MR BANNON:   The discretionary issue is a curious one.  At the time of the trial, we did not have an assignment, so there was no assignment which could have been brought forward.  What the respondents say is that in circumstances where they were positively asserting that Shionogi was the inventor by its employees, we should have engaged in a commercial transaction, the utility of which we denied because (a) we thought we were the inventors, and (b) it would not have done us any good in law, and they say that is a relevant discretionary matter as to how the trial would have been won, namely, that we ought to have engaged in a commercial transaction at a point in time earlier than we did.  They say that would have

secured them an alleged forensic advantage.  Just pausing there, we say as a matter of law that is not a relevant prejudice.  But the forensic advantages to further entrench, it would appear, that their case that Shionogi was the inventor.  Well, they won that case anyway.

All the other points about inventive step were at large.  Shionogi was an entity.  If any evidence about what Shionogi did or did not do was available and in issue, and the only point they seem to say is that Shionogi could have been joined at a party.  We reiterate it was not, in those circumstances, an interested party.  It was a predecessor on the punitive circumstances.  It was not suing for infringement.  It was not a party which would be relevant if the patent was rendered invalid.  It had no interest.  We say, analysed, that the nature of the alleged prejudice is fallacious.  It is not something that has ever been recognised, namely, somebody should have engaged in a commercial transaction which they had not done and then taken a step which would have been futile anyway in accordance with the then law.

There is a suggestion we should have asked for a reconsideration of Full Federal Court cases on entitlement at that point of time.  No‑one suggested they were wrong.  We say that none of those matters will succeed if the High Court deems it appropriate for it to exercise that discretion.  But the Court certainly, we respectfully submit, could not conclude on this discussion that it is an inevitable outcome that that discretion would be exercised adversely to us.

FRENCH CJ:   Thank you.  Mr Catterns, is there anything further you want to say in relation to the first point – the obviousness point?

MR CATTERNS:   Yes, your Honour.

FRENCH CJ:   Yes.

HAYNE J:   I thought there might be.

MR CATTERNS:   Yes, your Honour.  Our learned friends’ first question, question 1(a), is based on a wrong factual premise.  We respectfully submit that the conditions of section 7(3) were met by the experts when they ascertained Watanabe and the 471 patent.  His Honour Justice Hayne was a member of the Bench in the Lockwood (No 2) Case, ascertained ‑ which said ascertain means discovered or found out.

Your Honours, our friends Mr Ryan and Mr Horak will deal with their witness.  We agreed to split it up, if that is convenient, and be brief.  Dr Reece, our Dr Reece, selected three articles as being relevant – Aoki, Watanabe and Thompson.  He ascertained them by conventional searches.  There is no doubt that in Justice Jessup’s reasons his Honour took the documents one at a time, combined with common general knowledge.  Indeed, our learned friends’ question, 1(b), criticises that.  He says it should have taken Aoki into account as well.

But our friends’ complaint is that in regarding Watanabe as relevant, Dr Reece used one of the other articles he got – he got three, Aoki, Watanabe and Thompson – to reinforce the relevance of Watanabe.  But, your Honours, that oversimplifies it, with great respect.  If your Honours would not mind going to page 442 in volume 1?  In discussing his evidence, in paragraph 528 at the bottom of page 442, he has located Watanabe and his Honour says:

The Watanabe article contained a report on . . . rosuvastatin, which Dr Reece recognised as “a very potent inhibitor of cholesterol biosynthesis”, and as “definitely a candidate for further development”.

Your Honours, he actually said “definitely a candidate for further development” in Phase II trials.  Your Honours, it was clear from the very earliest stage of Dr Reece’s process that Watanabe was of relevance.  Our friends’ argument is he needed Thompson to tell him that it was relevant.  They just do not make that factual point good, with respect.  He had said in his paragraph – we have brought it but I will not trouble the Court with it – that as soon as he saw the abstracts – he found 19 abstracts, coloured them yellow, which he exhibited, but Watanabe he coloured blue because, as he said, one of the abstracts contains blue highlighting to signify that the reported results of potency in that abstract stood out from all the other abstracts.

So, your Honours, he was not challenged on that part of his evidence, or the evidence I have just referred your Honours to.  He did agree that when he read Thompson, it told him that Watanabe was in Phase II trials.  The wrong premise end of our friends’ argument is that needing to know that it is in Phase II trials is the deal breaker.  We respectfully submit it was not so, therefore, this point just simply cannot have affected the outcome.  Your Honour, there is just one more paragraph in relation to that, which is 541 on page 447, where his Honour says – there is a little bit of double negatives because it had to be at least as good as atorvastatin:

In Dr Reece’s affidavit, he said that the new statin . . . would have to be neither less potent nor less safe than atorvastatin.  One of the conclusions which he drew from the Watanabe article –

as we have seen, was that rosuvastatin ‑

was “a very potent agent . . . Our attention was drawn to no passage in his cross‑examination in which he was tested on the extent to which he could have inferred that S‑4522 would likely be at least as efficacious as atorvastatin in this regard.

So, your Honours, we respectfully submit, that the process that was undertaken under section 7(3) was a correct one of filtering judgment – sorry, documents – for relevance, working your way down, ascertaining as the Court described it in Lockwood v Doric.  Although he said that when he read Thompson he told him that 4522, rosuvastatin, was in clinical trials, that made no practical difference to the result.  We submit that the correct question and approach to section 7(3) is that you can filter.

Then, our learned friends’ second question which is, in effect, the converse, section 7(2) requires the Court only to have regard to a single piece of information except in the limited case where they can be combined.  You cannot take – you are not supposed to take into account both Watanabe and Aoki so that Aoki persuades you against Watanabe.  So, we respectfully submit, that neither of our learned friends’ special leave questions has sufficient prospects of success.  May it please the Court?

FRENCH CJ:   Yes, Mr Ryan.

MR RYAN:   Your Honours, on the first point our learned friends at AstraZeneca proceed upon a wrong construction of section 7(3).  It requires, or it allows, the notional skilled addressee to conduct a search to identify a document because you have got to show that the document was one that could be ascertained, understood and regarded as relevant to work in the area.  Your Honours, in this area, plainly the way you do that is by a search such as through Medline or some other search engine.  That throws up, of course, multitudes of documents and you have got to engage in some kind of comparison in order to ascertain the one document you are going to take forward and decide its relevance.

So, at that stage of the analysis, when you are purely concerned with finding a document that fits the criteria of section 7(3), there is no prohibition on degree of comparison or filtering.  Justice Jessup so construed the section at paragraph 530.  We would, frankly, submit that there is no sensible contrary construction.  He, therefore, then concluded at 531 that a degree of comparison in those circumstances, at that stage of the inquiry, was appropriate.  We support that reasoning and that finding of the trial judge which was upheld on appeal.

Your Honours, the second stage of AstraZeneca’s contention involves the proposition that when you come to look at the question of whether the invention claimed is obvious – the question posed by section 7(2) – they say that you have got to ask that question against the background of the common general knowledge, plus the one document that you are entitled to use that you found under section 7(3) but they add in then another one, the Aoki article, because in the course of your comparison operation to find Watanabe, under section 7(3) you stumble across Aoki.   Justice Jessup said in the second part of 530, the concluding two sentences, your Honour, that that is not a proper construction of section 7(2) and we support that reasoning.

Section 7(2) very carefully tells you that you judge the obviousness question against the common general knowledge and either of the kinds of information mentioned in subsection (3).  We are concerned here with subsection (3)(a) and that says:

prior art information . . . made publicly available in a single document –

So there is no call under the statute to ask the question – which our friends would urge – was the invention obvious in the light of common general knowledge and Watanabe and Aoki?  Aoki is just not part of the analysis.  You only get one under section 7(3)(a) and that, in our case, was Watanabe.  Your Honours, even if that construction is wrong, which we say it is obviously not, our friends would never get there on the facts because Professor O’Brien, in his searching operation, had to make a choice between Aoki and Watanabe and it was a plain, obvious choice.  So, even given our friends’ construction which is wrong, he would never get to the final point of success because O’Brien had no trouble choosing Watanabe over Aoki.  If your Honours would not mind going to the evidence on this point which was given by Professor O’Brien?  It starts at tab 27 with his affidavit material, volume 2.

HAYNE J:   Page?

MR RYAN:   It is paragraph 13.32, your Honour, at page 651.  Your Honours, at 13.31 he has just taken us through Aoki and told us what it says.  Then at 13.32:

The remaining article is the Watanabe Article which discloses a novel HMG‑CoA reductase inhibitor which is referred to as “S‑4522” and is even more interesting than the previous article –

namely, Aoki ‑

This statin has been tested in rats, dogs and monkeys and appears to be more effective than pravastatin, fluvastatin and lovastatin ‑

they are the ones on the market ‑

At page 440 column 2 first paragraph it is stated that this is a promising candidate for development and has progressed to clinical trials.  This indicates to me that it therefore had sufficient and promise to proceed to the next phase of development (which requires it to be given to humans).  There is also discussion of high potency with reduced side effects in clinical use.  From the statements in the Aoki Article and the Watanabe Article, it appears that S‑4522 is further along the line of development than NK‑104.  I therefore consider that in answering the First Problem I would regard S‑4522 as the most relevant compound identified although NK‑104 may also solve the problem.  I now know that 4522 was AstraZeneca’s internal designation for rosuvastatin.

Our friends rely upon a passage in his oral evidence to suggest that he had some difficulty in making that choice between rosuvastatin and NK‑104.  Your Honours, that does not bear analysis either.  If your Honours would not mind looking at tab 23A in that same volume?

FRENCH CJ:   This is at 497 it starts?

MR RYAN:   The passage I was going to take your Honours to begins at the bottom of 498.  At line 45 we see the basis for our friends’ criticism of the comparison which he says one cannot do when one finds a document, or ascertains a document, under section 7(3).  The limited comparison is set out here.  Our friends said to him, at line 45:

You saw that this morning.  And then we come to Watanabe, and it’s correct, isn’t it, as the selection – as solution on this hypothetical exercise is based on a comparison of the best candidates of the individual pieces of information you got, correct?

And Professor O’Brien says, “Yes”.  Well, of course, it must be.  You have got to have some filtering process to take you forward.  Then, O’Brien mentions at the top of the next page ‑

Watanabe mentioned specifically that it had progressed to human trials –

Then he goes down at line 19.  My friend says to him in the question ‑

I should add there’s nothing in NK‑104 to say it wasn’t ready to go to clinical trials, or?‑‑‑No, there isn’t, although ‑ ‑ ‑

It just doesn’t say it?‑ ‑ ‑No, correct.  Correct.

That is the point, you did not get that information from the Aoki Article ‑

I understand that point?‑‑‑That’s right, yes.  And as I say in the affidavit, it –

he means NK‑104 ‑

was certainly a perfectly worthy potential candidate.

And, I mean, did you understand the exercise to be on the basis that there was some rush to market it, it was a hurried exercise, or did you want to get the best candidate?‑‑‑It was to find the ‑ the exercise was to find statins that would be useful for treatment in humans, so if I was looking at something that might be closest to treating my patient, something that had progressed into clinical trial already would be potentially advantageous ‑

Then, at 34 ‑

That was the reason for my choice.

Then, crucially, here at 36:

Well, I mean, the thing is that if it’s not progressed to humans trials, there may be an issue with toxicity that – there may be a reason for that.  So, you know, we just don’t know why one had and one hadn’t, but clearly if you’ve got two agents, one is being tested in humans, one hasn’t got that far, the one that’s being tested in humans is the preferable candidate.

So, you indicate both show great promise?‑ ‑ ‑Yes.

And sitting back here 12 years later, you say you think you would have gone for one rather than the other?‑‑‑Yes.

So, he made the choice.  He was cross‑examined about it.  He had no hesitation in indicating that he would choose rosuvastatin over NK‑104 on the basis of Watanabe over what he got from Aoki.  So, even on our friends’ wrong construction, he would never get to the point he wants to because the choice between rosuvastatin and NK‑104 was stark.  My friend likes the passage over the next page.  The first paragraph there, the question:

But you reasonably expect others might have gone for the NK‑104 in a similar position?‑‑‑Possibly, yes.

Just hard to say which?‑‑‑Exactly, yes.  I mean, I wouldn’t be critical of somebody that went for the other.

That is a polite way of saying other people might do different things.  But the one witness called – sorry.  He was clear in his process of making the choice.  He was not shaken about it.  Our friends called no‑one to say they would have made a different choice.  There was no contrary evidence on this point.  So, your Honours, for those reasons, we would say that their prospects are not sufficiently high to grant special leave on this point because the construction below is correct.  But, in any event, on our friends’ construction, he could not succeed. 

FRENCH CJ:   Thank you.

MR RYAN:   May it please the Court?

FRENCH CJ:   Yes, Mr Bannon.

MR BANNON:   Your Honours, we say the effect of section 7(2) and (3) is to add a publication to the common general knowledge.  The effect of the section is not to dictate a particular path as the only path available to the hypothetical skilled addressee in solving the particular problem.  As your Honours have heard – and there is no debate about it – but the primary judge in the Full Court found that at least the Watanabe and 471 Articles – which had the relevant compound in it – were discovered in accordance with evidence by the hypothetical skilled addressee they relied on, which was this evidence, namely, if faced with a problem, they would have undertaken a search and they would have done search terms and they would have come up with, yes, the ones they rely on but also Aoki NK‑104. 

If you had gone down the NK‑104 path you fail – a relative fail.  If you had gone down the other one, you win.  The evidence of Professor O’Brien was ‑ others can reasonably make one choice or another.  Dr Reece did not even venture on the issue as to which one he would go down.  The Full Court’s approach was to say, you do not get to ask that question.  Paragraph 536, last line of the decision at page 446 of the application book, Justice Jessup and two of the other members agreed:

In this wholly notional exercise, the skilled person would never be faced with a choice of the kind which is implicit in this submission on behalf of the appellants.

You see, what has happened here is a subversion of the purpose of 7(2) and (3).  There is no dispute that the two experts, relevantly, said faced with the problem they would have undertaken a search.  They would have looked for alternative statins.  They would have looked at the product and they would have made a choice.  That is the evidence the Full Court relied on, and the primary judge, to get the two publications into the ring on 7(3).  Having got that evidence, they ignored that evidence in asking what is the obviousness question?  The obviousness question, relevantly, everyone agreed, was what would the hypothetical skilled addressee have done in the circumstances?  We know the hypothetical skilled addressee would have undertaken a search.

If you give him or her an additional publication, there is no evidence to suggest that they still would not have undertaken the search.  Giving them a publication would simply have meant they had a relevant publication but they did not know that it was the relevant, and that is the key.  If the construction of 7(2) or (3) is right, the effect is, as happened here, the revoker has two articles.  They do searches.  There are a number of others but the two are convenient.  We say, on the evidence, one of them was an equally viable route.  The revoker gets the choice of putting before the expert and the Court to say – faced with only that choice, what would you have done?

If that is the outcome, there is a very important part of the Full Court judgment which overturns Sanofi v Apotex which said the starting point of inventive step is whatever the inventor started with if he refers to it in the specification.  They overturned that and that was, we say, plainly right.  But they have introduced a new version of starting point to say under 7(2), 7(3), the revoker can go all searching – and it applies to the current Act as well now – anything they can find, they put it before the inventor and they say the only thing you look at is this.

But that is not the intent of 7(2) or 7(3).  It is simply to add something.  It is not to add the solution.  It is to add a piece of material, and if the evidence, as here was, that the hypothetical skilled addressee would have undertaken a search and made a choice, to give them one article does not mean they would not have made a search.  There is no evidence to say if they had been given an article they would not have made a search.  All this to say, well, that is an option.  They said, well, that is very interesting but, I – as I have told you – want to make a search and then I will make a choice.

They do not even answer that question.  Our learned friend, Mr Ryan, says if they had answered that question they would have come to this result.  They did not even pose that question.  We say, on the evidence that he took your Honours to, you could not have come to that choice.  It was one or the other.  You could not say it was obvious to go one route or another.  One adds to that Dr Reece’s evidence where he did not even venture on the issue.

There is another way to get to the same outcome, to say that if evidence of relevance as to the reason why this was relevant was that it was on a comparison process – that is, a comparison with other articles – surely that evidence as to why it is relevant should be before the Court under 7(2).  In that circumstance, the Court would say he knows it is relevant – that is, the skilled addressee – because it is (a) an article, but the skilled addressee says I cannot move on this.  I need to know more.  I need to be able to make a choice.  If you are telling me this is my only choice, of course I will go down that route.  There is nothing else I have got.

That is the issue of principle which arises and it is a significant issue which informs both the current Act and would inform the future Act – the continuing Act.  The continuing Act simply removes the need for an ascertainment.  So you do not have to ascertain, you just – as I say, we can get an example of ten examples, nine failed routes, ten under this approach, and just put the good one forward.  We say, that is the incorrect approach to the Act, but if it is the correct approach, it is certainly a matter which is worthy of this Court’s consideration and affirmation, contrary to our argument, that is the correct approach.

FRENCH CJ:   Thank you, Mr Bannon.  All right, there will be a grant of special leave.  What would your estimate be, Mr Bannon, one to one and a half?

MR BANNON:   One and a half.

MR CATTERNS:   I think it might be two days, your Honour, with our contention that we propose to do on the starting point issue.

FRENCH CJ:   Yes, all right.  And you have a timetable which will be made available to you.

The Court will adjourn now to reconstitute.

AT 11.42 AM THE MATTER WAS CONCLUDED