Hassle and Anor v Alphapharm Pty Limited S268/2000

[2001] HCATrans 616

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S268 of 2000

B e t w e e n -

AKTIEBOLAGET HÄSSLE

First Applicant

ASTRA PHARMACEUTICALS PTY LIMITED

Second Applicant

and

ALPHAPHARM PTY LIMITED

Respondent

Application for special leave to appeal

McHUGH J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 23 NOVEMBER 2001, AT 9.49 AM

Copyright in the High Court of Australia

MR J.McL. EMMERSON, QC:   If the Court pleases, I appear with my learned friends, MR D.M. YATES, SC, MS K.J. HOWARD and MR M. DARKE, for the applicants.  (instructed by Minter Ellison)

MRS A.C. BENNETT, SC:   If the Court please, I appear with my learned friend, MR S.C.G. BURLEY, for the respondent.  (instructed by Mallesons Stephen Jacques)

McHUGH J:   Dr Bennett, this is certainly a very interesting case and, prima facie, a very important case.  I think we might hear from you first.

MRS BENNETT:   If the Court pleases.  Your Honours, this case can be dealt with on two very basic principles.  This is a question of whether or not there was an inventive step.  As your Honours would well know, the question of inventive step has to be considered in the light of the hypothetical skilled worker in the art, taking into account the nature of the art, because the alternative question, as was stated by Justice Gummow in Werner v Bailey, which this Court has recently approved in the Grain Pool Case, is that the consideration for the monopoly would fail were the patentee to disclose nothing but what any member of the community acquainted with the industry in question would certainly be able to do for himself.  The test has been classically set out in the Wellcome v VR Case by Sir Keith Aickin.  There the test was formulated very clearly and it is that test that was applied in this case.

McHUGH J:   Well, did Justice Aickin approve what Lord Justice Buckley had said in the Beecham Group Case?

MRS BENNETT:   He did not specifically deal with that case but what his Honour did in the VR v Wellcome Case was to go through the history of the development of the question of inventive step and make it clear that the question – if your Honours have the decision there.  I think we sent a copy up to your Honours.

McHUGH J:   Yes.

MRS BENNETT:   If your Honours go to page 286.  After having dealt with the prospect – I should add in passing, that one does look at the question of what would be tried, so if your Honour Justice McHugh is referring to the question of the obvious “to try” test ‑ ‑ ‑

McHUGH J:   Yes.

MRS BENNETT:   That concept has been long upheld in Australian law.  Sir Keith Aickin at page 281, if I can take your Honours to that, deals with the fact that:

it might show that experiments were of a routine character which the uninventive worker in the field would try as a matter of course.

It is of interest that in the Hills Hoist Case, which we have not referred to specifically, but I can tell your Honours that Justice Windeyer in that case specifically said that:

I think I must hold that it probably would come to the mind of such a person; that is to say, that what was done was obvious within the meaning of the provision of s 100(1), that it did not involve an inventive step.  It might not be the first means a person devoting his mind to the problem would think of.  But that is not decisive –

because there are two different sorts of so‑called inventions one can have.  One is an idea, which can come from scratch, as was said in VR v Wellcome, invented from a dream, but the second can be the sort of concept which one gets to only by experiment.  As was said in the VR v Wellcome Case, chemistry, by definition, does not involve pre‑vision.  Now, what we have here is a ‑ ‑ ‑

McHUGH J:   But there was more to it than experiment in this case, was there not?  It was a question of taking into account some of the earlier documents and they then provided an insight for an idea which the experimenter started with as the basis for the experiments.

MRS BENNETT:   With respect, no, your Honour.  Certainly Justice Lehane looked at the documents, but he also found as a fact – and it is referred to at the application book at pages 30 to 31 – that the persons of ordinary skill would have learnt the characteristics, if not from the documents, then by standard laboratory testing, and he is referring there to the evidence of Dr Rowe.

The Full Court specifically referred to the same facts where, at the application book at page 162, they pointed out that if the person of ordinary skill did not have any of the documents but only had the compound itself, that the evidence was clear that all the information would have been readily obtained by a series of routine tests on a quantity of omeprazole, that is the hypothetical skilled worker faced with the problem of formulating omeprazole would, by standard pre‑formulation tests, have come up with all of the information in the articles.

So, what actually happened was, on the facts of this case – and if your Honours will recall, there was only one set of facts – that the applicant was not able to find any formulator in Australia to come along and say that this was anything other than a routine formulation and what happened was ‑ ‑ ‑

KIRBY J:   Yes, but it was a routine formulation that took a little time, was it not?

MRS BENNETT:   What happened is interesting, your Honour.  As was found as a fact and as was shown even by the inventors, in proceeding to the formulation the first two aspects, that is the enteric coat and the alkali destabiliser and acid labile compound in the core, were a given.  They were put on immediately.  That worked all the way through the early trials.  The problem, so‑called, only arose on long‑term storage.  So, it is not the totality of the formulation time that is important. 

It was only towards the end of 1981 when they were doing long‑term studies for storage purposes, which were found as a fact to be standard studies that any formulator would have had to do to get the thing to market, that they perceived the discolouration and the evidence was clear and accepted that when you have an alkali core and an acid coat that the ordinary skilled worker would immediately have thought of interaction between the two and separated them.  So, the time factor was because it was only on the long‑term storage studies that the “problem” arose.

KIRBY J:   Yes, but we have the time and the investment and the fact that they hit on it.  I realise what you say, but it seems an interesting case, and we do not do very much of this nowadays and maybe it is nice to do it every now and again.

McHUGH J:   Your expert did not solve the problem anyway, did he?  Is that my understanding, that ‑ ‑ ‑

MRS BENNETT:   Yes, he did, your Honour.  We say he did.  There were two lots of evidence that we called, all corroborated, we say, as one can do ‑ ‑ ‑

McHUGH J:   You gave a few hints along the way.

MRS BENNETT:   No.  With respect, there was held as a finding of fact that those were not hints.  What he was told along the way was to assume that if he had done experiments, because he was doing it on paper, and these things are experimental things, that he would have got the results that were obtained and it was a finding of fact that it would be irrational to assume that he would have got a different result if he had done an experiment than actually occurred.

So, we have two lots of evidence.  We have the classic hypothetical skilled workers of Drs Rowe and Story, who gave evidence that was undisputed and accepted that they would have come to that formulation and they gave their reasons.  Then you have the witness who was so‑called cocooned, who was just told, “Here is omeprazole.  What would you do?”.  He immediately said, “I would put in the core and the coat”.  Then it was said, “What if you had a problem?”.  He said, “I would separate them with a subcoat”.  So, if I may just go back for a moment and answer your Honour Justice Kirby ‑ ‑ ‑

KIRBY J:   I am thinking of what Mr Ryan says in his affidavit, which I have carefully read, at 25 where he says that the approach taken by the Full Court here:

sets a higher threshold for patentability, which, to my knowledge, is inconsistent with the similar requirement in other major patent areas, including Europe and the United States –

Now, I have read Dr Pickering’s affidavit as well and he rather contests that, but the fact that two such very experienced patent attorneys and experts are in difference about that seems to present an issue that we should look at.

MRS BENNETT:   With great respect, one has to take Mr Ryan’s affidavit in perspective and look at what Dr Pickering says and what has happened.

McHUGH J:   Well, I am by no means certain we should be looking at either of the affidavits.  After all, it is for us to say whether there has been a departure from the test.  I do not think that people can be putting on affidavits about these matters.

KIRBY J:   Yes, but I do not know what the law is in Europe, and I do not know what the law is in the United States, and these are experts who can assist the Court with that.

MRS BENNETT:   If I may answer your Honour Justice Kirby, there are two answers to that.  The first is, Mr Ryan, on his own statement, is a mechanical person.  Dr Pickering is a chemical person.  Dr Pickering has dealt with it, but he has done something more.  He has annexed the decision in Germany, which found lack of inventive step almost on the same basis.

KIRBY J:   That is with this very product, is it not?

MRS BENNETT:   With this very patent, the equivalent of this very patent.  They found it lacked inventive step in almost the same terminology, as did the Full Court and Justice Lehane.

KIRBY J:   Yes, I think that is a strong argument in your favour.

MRS BENNETT:   So, in our respectful submission, if it were to go the other way, we would be out of step with Europe.  America has a different test but ours is the same as Europe and the same as England, and we would be out of step if the decision of the Full Court were overturned, with great respect.

McHUGH J:   But what evidence was there before the German court?  Does it say that?  I have not read either affidavits, and I deliberately did not read either affidavit because to my mind there are very serious questions as to their admissibility on a special leave question.  The moment I skimmed them and saw what was in them I stopped.

KIRBY J:   I deliberately read them.

MRS BENNETT:   Well, the German court said much the same as did the Full Court.  They formed the view that, in effect, a hypothetical skilled worker would, as a matter of routine, have come to this formulation and, therefore, it lacked inventive step.

McHUGH J:   Yes, but it depends on the evidence before them.

MRS BENNETT:   They run their cases a little differently so far as evidence is concerned, but they accepted the same sort of formulator’s evidence and here, of course, that evidence was absolutely one‑sided and if I can just go back to one matter, if I may, the Full Court made it absolutely clear that it was the evidence of the formulators at page 189 that led to the finding of lack of inventive step, because, in this particular art, bearing in mind that one has to look at the art in order to assess an inventive step and the fact that one does a series of experiments in that art does not mean that there is an inventive step.

Indeed, in a recent case in the United Kingdom in the Genentech Case, which we have referred to in our submissions, there it was held that there was a lack of inventive step in the area of molecular biology and what the court pointed out is you have to look at the nature of what the ordinary skilled worker does to ascertain whether or not there is truly consideration for a monopoly.

KIRBY J:   Yes, but in a sense, is not that what makes it an important point, because with the Internet, modes of searching nowadays that will make a very simple step possible would not have been available in earlier times, and that is an important question.

MRS BENNETT:   That is not a fact in this case.

McHUGH J:   Well, it is.  Is it not in one sense, because, once upon a time anyway, common general knowledge was normally proved by reference to commonly used books or by the evidence of expert witness and it was not enough that information was in documents widely circulated.

KIRBY J:   Now you have search engines.

MRS BENNETT:   But in this case, your Honour, it is a classic ‑ ‑ ‑

McHUGH J:   And whatever happened to Cripps’ question in patent cases?  It does not seem to get a run any more, does it?

MRS BENNETT:   Your Honour, with respect, in this case, that question does not arise, because the evidence that formed the basis for the Full Court’s decision was that it was ignoring the documents completely, ignoring the documents.  They found that on the basis of the basic, classic evidence of the hypothetical skilled worker as to what they would have done based upon their own common general knowledge, not taking any of those documents into account ‑ ‑ ‑

McHUGH J:   What, not taking the salts patent or the Pilbrant and Cederberg article into account?

MRS BENNETT:   That is right.  No account was taken at all of the salts patent or the article.  The evidence was that they would have got all of that information on basic pre‑formulation test, because all that they told the person of ordinary skill was, for example, that it was acid labile and matters such as that, and those were matters which they must have had if they had just started off with just formulating omeprazole, so that the issue in this case simply does not arise.

Although Justice Lehane did take those documents into account, the Full Court pointed out – or first, Justice Lehane also noted that all of that information would have been available to the person of ordinary skill conducting what were accepted as basic pre‑formulation experiments and then again the Full Court specifically stated that it would have all been available by a series of routine tests on a quantity of omeprazole.     So, in this particular case, in this particular art, that question simply does not arise.

So, if I may go back to the very classic point, the test is as was set out in VR v Wellcome, that you have to take the question of the art.  The art here involves no pre‑vision, which by definition means a series of experiments, and that is part of the ordinary nature of the art in this particular case, formulation more than any other, as was pointed out by Sir Keith Aickin citing the IG Farben Case.  There is no pre‑vision in chemistry.  So the nature of this art is that you do an experiment.  If you want to choose between it dissolves in oil or water, you put it into oil and see if it does.  You put it into water and see if it does.  It is the same sort of concept as classically going to a textbook.  In this art the hypothetical worker does something.  The hypothetical worker here, who has been held to be a person who may have a doctorate – so that again brings in the concept of what is your hypothetical worker and what do they do?

The fact that they do a series of tests can be very ordinary to that person and, as Lord Justice Mustill pointed out in the Genentech Case, while one has to be careful not to see lack of invention where there is one, with respect, for a judge making the decision, one has to be equally careful not to see invention where there is not one, because what we are talking about is whether or not there was an inventive step sufficient to justify a monopoly.

McHUGH J:   How long did it take the patentee to find this?

MRS BENNETT:   To put in the subcoat?

McHUGH J:   Yes.

MRS BENNETT:   My recollection is, your Honour, that they started in December 1981 when the problem first arose and they had a session and decided it pretty well there and then and then just had to go through and test it.  It is set out in the judgments the fact that the undisputed – but, of course, the evidence of the inventor is not the relevant evidence.  It can only be supportive.  We say it supports what the hypothetical skilled workers say, because they say – start again.  The inventors say they had some hypothesis of what the problem was.

As all the courts below pointed out, the hypothesis did not matter because the formulators in Australia, who were unusual in that we have generic formulators – that is what we do in this country.  We do not have the large pharmaceutical companies.  The expertise in Australia are generic formulators used to taking a compound and formulating it.

One of the witnesses pointed out that he could not understand why Astra had the problems they had, because what the evidence here was – it started off they used a funny granulation process – but the evidence here was absolutely unequivocal that as soon as a generic formulator in Australia, who is the person against whom the test is judged, as soon as that person saw alkali core, acid coat, apparent discolouration and a problem, put something between them.

One of our witnesses, who is referred to in Justice Lehane’s judgment, said he would expect an undergraduate chemistry student to understand that if you are having a potential interaction, you separate it and then there was evidence given as to why you would choose the kind of subcoat in question.  It is interesting that the cocooned witness himself, who was unusual ‑ ‑ ‑

McHUGH J:   Who was that?  Was that Dr Marshall?

MRS BENNETT:   Dr Marshall, who was unusual, because that is evidence – you do not normally need to go that high, if I can put it that way, because the normal evidence, as your Honour Justice McHugh has pointed out, is that of the hypothetical skilled worker who is given the information and said, “What would you do?”, and everyone has been very careful here to account for hindsight and all matters such as that.

Their evidence was accepted unequivocally, but in addition, we had Dr Marshall, who straightaway, in the first formulation he proposed, said, “I’d put the alkali and the enteric coat”.  When he was told, “What would you do if there was a problem?”, he said, “I’d separate it with a subcoat” and then he went through and got to the point – because it was a very rushed case, in terms of getting the case on – of saying, “One of the subcoats I’d look at is a water soluble subcoat”.  So, he got there quickly and in theory, without even being able to do the experiments.

So, in our respectful submission, there are three things.  This case is not attended by any doubt whatsoever.  It is a classic application of a classic principle that has been recently approved as the principle for the test of obviousness by this Court in the Speedy Gantry special leave matter and, because of two reasons – and, of course, it is an old Act case, but also, because of the circumstances of this case and this art and the fact that the experiments themselves and the classic tests only were applied and the only classic evidence was taken into account, it would not be an appropriate case for the broader questions of obviousness that your Honours have raised, because the evidence does not enable your Honours to get to those questions that may ultimately arise.

McHUGH J:   Well, it may enable you to get to it, I mean, if the Court took a different view from what the Full Court took about the evidence.

MRS BENNETT:   But the evidence, with great respect, is a jury question.  The jury question – it has been classically described, as referred to in VR v Wellcome, as a jury question, and that was that the hypothetical workers themselves would have got the information that was otherwise referred to in the Pilbrant and Cederberg ‑ ‑ ‑

McHUGH J:   But was there not a conflict on that fact?

MRS BENNETT:   No conflict at all.

McHUGH J:   None?

MRS BENNETT:   No conflict.  There was no evidence called at all by Astra from any hypothetical skilled worker in Australia who was a formulator, not one piece of evidence.  They called two overseas professors and a professor from Sydney who had never formulated and, as a finding of fact, they were not held to be the relevant persons.  I see the lights are on, your Honours.  I am happy to continue because ‑ ‑ ‑

McHUGH J:   Well, continue.

KIRBY J:   It is only the yellow light.

MRS BENNETT:   Here, your Honours, the other factors are that so far as – so even otherwise, even had those other documents been taken into account, the only documents that the Full Court allowed to be taken into any account at all ‑ ‑ ‑

McHUGH J:   Well, now, where is the passage in the Full Court’s judgment that you rely on from this point?

MRS BENNETT:   Well, there are a number of different passages because they have set it out in a number of different ways, but if your Honours go to page – I am sorry, if your Honours wish me to go to the actual finding of fact as to the ‑ ‑ ‑

McHUGH J:   Yes, that is what I want.

MRS BENNETT:   Justice Lehane accepted Dr Rowe that he would have learnt the characteristics “by standard laboratory testing” at application book pages 30 to 31.  At line 15:

Dr Rowe’s evidence was that he would have learnt from Pilbrant and Cederberg (or by standard laboratory testing) that omeprazole degrades rapidly in acidic solutions –

and that is all he really needed at that stage.  Then the Full Court at page 162 at the top of the page:

Dr Rowe gave evidence that, if information about the basic characteristics of omeprazole was not already available to a formulator, the formulator could, and would, readily obtain it by carrying out a series of routine tests –

and then they go on and say at line 15:

it may make little difference to the result whether or not the Salts Patent and the Pilbrant Cederberg Article are assumed to have been available to the hypothetical formulator as a routine step or whether the hypothetical formulator would, as a matter of routine, ascertain the characteristics of omeprazole by his or her own tests.

We do not consider that it is permissible to have regard to documents that would have been read merely for “general ideas” . . . Our ultimate conclusion of lack of an inventive step does not depend on the contents of manufacturers’ literature; rather, the conclusion is based on expert evidence regarding fundamental concepts known to pharmaceutical formulators prior to the priority date –

and that is reiterated at page 189 of the application book where they say it is:

the undisputed assertions of those witnesses established Alphapharm’s case on obviousness.

They say, back on page 162:

that the hypothetical formulator should be assumed not to have had access to the manufacturer’s literature –

even though, of course, in other cases, that sort of literature has been relied upon, such as in the Grace v Asahi Case.

McHUGH J:   Yes, thank you.  Yes, Dr Emmerson.

MRS BENNETT:   If the Court pleases.

MR EMMERSON:   If the Court pleases, it is our submission that this case raises absolutely fundamental issues which arise in an area of law which has not been considered intensively by this Court since the Minnesota Mining Case back in 1980.  There are issues about what you assume that the hypothetical worker in the field does when faced with the problem in order to see whether the matter is obvious.

Now, we say that, as a matter of law, you ask the hypothetical skilled worker, “Here is the problem.  What answer do you give to it?”.  The approach taken by the Full Court was quite different.  It was saying, “Here is the problem”, not “What answer do you give to it?”, but, “Could you solve that problem?”.

McHUGH J:   Yes.  The question depends upon a researcher faced with the patentee’s problem, is it not?

MR EMMERSON:   The issue is, “Was it obvious?”, and so, “Was it obvious to a person skilled in the art faced with the question?”.  Your Honour uses the expression “the patentee’s problem”.

McHUGH J:   Yes.

MR EMMERSON:   If by that one means that the problem right at the start ‑ ‑ ‑

McHUGH J:   Yes.

MR EMMERSON:   My learned friend moved the time forward by a couple of years by discounting the first series of experiments done by the patentee.  So, the question is, “Faced with that problem, is the solution obvious?”.  Now, we say that the approach taken, both at first instance and in the Full Court, to that is wrong, because what they asked in each case was, “Could the skilled addressee solve the problem?”.  That works great unfairness in present circumstances where one is giving the skilled addressee access to search engines, where choosing as the skilled addressee someone who is highly sophisticated, as the learned trial judge held, ordinarily with a doctorate. 

Now, the protection for a patentee is that the question is, “Was it obvious to that skilled addressee?”, not, “Could that skilled addressee, drawing on the various facilities that he would have, eventually solve the problem?”.

KIRBY J:   But the drawing on is merely the way courts have endeavoured to explain this elusive concept of obviousness, and what would have been not obvious in earlier times may well become obvious today with the benefit of search engines.  I mean, that is the world we live in.  That is the world in which every graduate of every university, undergraduates, live in.

MR EMMERSON:   But the law as stated in Minnesota Mining is that the skilled addressee cannot draw on anything which is not shown to be part of common general knowledge.

KIRBY J:   Yes, but that was a long while back.  Maybe that is the point.

MR EMMERSON:   Your Honour, if that point is ‑ ‑ ‑

KIRBY J:   You say that that, itself, is an important point.

MR EMMERSON:   It would be an exceedingly important point.

KIRBY J:   But what is your answer, first of all, to the contention that you did not call any evidence to counteract that which was called by the respondent on this point?  You did not call some so‑called theoretical addressee, the person who could come along and say, “Well, I didn’t see this” or “I wouldn’t have seen this”.

MR EMMERSON:   Well, we called people who were skilled in the art and who were capable of giving evidence about what the skilled addressee would do.  The evidence relied upon by our learned friend was evidence, in one case, from someone who had various patents to his credit.  Another case was in charge of a research department.  I mean, these were research people.  So, in each case, evidence was being given as to what the skilled researcher would do.

KIRBY J:   But is not that the real world in which companies like yours operate, that they have their research department and skilled people and they have computers, they have search engines?

MR EMMERSON:   Yes, but your Honour will appreciate, if the effect of the real world is that anything discovered by a research department is held ipso facto to be obvious ‑ ‑ ‑

KIRBY J:   The Act self destructs.

MR EMMERSON:   ‑ ‑ ‑ then the Act self destructs.  The underlying rationale of the Act is to encourage setting up research.

KIRBY J:   I understand that.  Does not that then mean that in every case it really is a question of fact and the assessment of fact along the path as between, on the one hand, that which goes over the border of obviousness into a genuine step, an inventive step, and that which is really just the logical consequence of doing a bit of research?  It is a difficult line to draw and how one articulates it I am not sure.

MR EMMERSON:   Well, we would say you draw the line by asking at the outset whether the invention is obvious, and that is the line which we say has been the law of this country since Minnesota Mining.

KIRBY J:   Yes, well I understand that.  The second question I had related to the German case.

MR EMMERSON:   Yes.

KIRBY J:   I mean, you would be asking us to reach a different conclusion in this Court than the Federal Court and the German tribunal did.

MR EMMERSON:   Your Honour, can I say something about this German case.  We put it in an affidavit by Mr Ryan to deal with international implications, but not, as it were, to debate the likely outcome of the present case under different jurisdictions.  We took the view that that would not be admissible.

KIRBY J:   It is not unusual.  We had a case recently about the Philips’ shaver, where we had affidavits of this kind.

MR EMMERSON:   Yes, right. 

KIRBY J:   Let us not get into that question.  I have read it.

MR EMMERSON:   Well, let me inform the Court, though, that while in Germany the patent was, at first instance, held invalid, it is subject to appeal.  In Israel the patent has been held valid, both at first and second instance, and that is a final decision.  In Norway ‑ ‑ ‑

KIRBY J:   Did that go to the Supreme Court of Israel, which is a fine court?

MR EMMERSON:   I do not think I can go, I am afraid, your Honour, beyond what I have said.  It is first and second instance and that decision is final, but whether it is final because it was not appealed or because leave was not given to appeal, I am not able to tell your Honour. 

In Norway, the patent was held valid at first instance, though the time for appeal has not yet expired.  In Denmark an interlocutory injunction was granted on behalf of my clients, but that is subject to appeal.  Now, there are, as well as that, a very large number of other pieces of litigation in other countries in the world.

KIRBY J:   The European Patent Office is in Munich.

MR EMMERSON:   Yes.

KIRBY J:   The German decision would be pretty influential, I would think.

MR EMMERSON:   Now, we say that the comparison, in any event, is not a comparison with outcomes, because outcomes are going to depend on evidence.

KIRBY J:   And on the law of the particular place.

MR EMMERSON:   And on the law of a particular place.

KIRBY J:   Dr Bennett says there is no difference between the German law and our law relevantly.  Do you agree with that?

MR EMMERSON:   No.

KIRBY J:   I must admit to you that in the Philips’ Case the pattern of decisions was relevant to my decision as to whether we should grant special leave.

MR EMMERSON:   Yes.  Well, the point that we would seek to make is that in foreign jurisdictions, in three out of four cases  ‑ ‑ ‑

KIRBY J:   You are in front.

MR EMMERSON:   ‑ ‑ ‑ my clients have been successful, albeit possibility of appeal in two of those three.  In one we have been unsuccessful, albeit that there is an appeal on our part.

KIRBY J:   Yes.

MR EMMERSON:   Now, it does depend on matters of what prior art is led and matters of that sort.  You see, on our case, there are certain pieces of prior art which, under Minnesota Mining, are simply not admissible.

KIRBY J:   Can I ask you a question which is in my mind and, therefore, I ought to expose?

MR EMMERSON:   Yes.

KIRBY J:   If there is a choice here in what the law is in Australia, is it not better to go the way the Federal Court went, in the sense that if you make obviousness too difficult to prove, then in matters of genomic developments, you are going to have a lot more patents, as it were, covering the field of the science and that that is not really what the Act was intended to do, especially given the search engines and the other capacities nowadays.  It is a big question, but I am thinking about it, so I ought to give you a chance to get it out of my mind if it is not relevant.

MR EMMERSON:   We would say, with great respect, your Honour, it is a big question.  If it is to be aired in this Court, it should be on a final hearing, not on an application for special leave. 

McHUGH J:   One of the problems on the special leave application is we do not have the evidence before us.

MR EMMERSON:   Yes.

McHUGH J:   And it is never easy to understand findings of fact without having all the evidence before you.

MR EMMERSON:   No, though our submission is that, in order to raise the points that we seek to raise in an appeal, these do not depend on findings of fact, that is to say, we say the points arise, even assuming the disputed facts against us.

KIRBY J:   I know you say that, but there is inevitably going to be a spectrum here between the facts that will merge into obviousness.

MR EMMERSON:   Yes.

KIRBY J:   And it is going to be a question of drawing the line and expressing how one draws that line in some phrase other than “obviousness”.

MR EMMERSON:   Well, your Honour, part of our submission is that a good deal of the trouble occurs because people do try to use some phrase other than “obvious”, and you therefore end up, in the present case, with what seems to us to be an entirely paradoxical result, something which took ‑ ‑ ‑

KIRBY J:   But the problem is “obviousness” depends upon obvious to whom, obvious to what material, obvious after what time, obvious after how much experimentation, how much searching.

MR EMMERSON:   Precisely.

KIRBY J:   I mean, you cannot get away from those questions, Dr Emmerson.

MR EMMERSON:   Those are questions which we say are properly raised in this case and which provide a ground for the grant of special leave.  Our case is that “obvious”, however, means just what it says.

McHUGH J:   How long did it take your company to solve this problem from the moment ‑ ‑ ‑

MR EMMERSON:   They were working from early 1980 to 1983, your Honour.

KIRBY J:   That is not the picture Dr Bennett painted.

MR EMMERSON:   It is not the picture, but then ‑ ‑ ‑

KIRBY J:   What is the difference between you in ‑ ‑ ‑

MR EMMERSON:   I will tell you, your Honour.  What the difference between us is that my learned friend took as her starting point the results of a number of tests which were done over a long period of time, over the course of a year or so, by my clients.  So there was a very large amount of data and my learned friend, as it were, treats that, nevertheless, as the starting point.

KIRBY J:   You say you tried and tried and tried again and ultimately you succeeded.

MR EMMERSON:   Yes, absolutely.

McHUGH J:   That is why I said it is a question of looking at it from the point of view of the patentee’s problem at the beginning, I would have thought.

MR EMMERSON:   Yes, but you have to go back to a bedrock of common general knowledge or, under the 1990 Act, common general knowledge plus anything which comes in under the special provisions of that Act.  You do not just go from a part of the research project that the patentee undertook and say, “From then on was it plain sailing?”, because there must always come a point when it was plain sailing.  The question is whether it would have been obvious to a notional skilled addressee faced with the patentee’s problem before the priority date that this was the answer.

McHUGH J:   On your argument, is the reference to Dr Story’s evidence at page 159 line 25 irrelevant to the critical issue?  There is the concept of using a “subcoat to physically separate”.  What do you say about that?

MR EMMERSON:   Well, we say that that is something which was dealt with by the learned trial judge.  It is greatly overstated.  If your Honour could look at page 49, for instance, in the application book, a similar comment by a witness called on my learned friend’s part, Dr Thiel, saying this is something anyone could do.  Then one goes to paragraph 107 in Justice Lehane’s judgment in which he sets out a number of reasons why it just simply was not obvious.  Now, we are entitled to rely on that. 

So far as statements by individual witnesses are concerned, it is important, in our respectful submission, to look to see whether they really do take you inside what is claimed.  For instance, in many cases what is referred to is a subcoat but not a water soluble subcoat and that turns out to be a crucial difference.

McHUGH J:   Yes.

MR EMMERSON:   In the case of Dr Marshall, our learned friends said, and we dispute, that he actually got there.  What he got after six tries with extra information being fed each time was a possible leaky subcoat, not shown to be the same thing.  Now, the test ought to have been that he ought to have started with what was properly admissible by way of common general knowledge and so on, and then asked to solve the problem rather than being fed results of tests, which is, itself, going down the wrong track because it is attempting to cover what a hypothetical person might have done.

McHUGH J:   Yes.  Now, what do you say about the passage at 162 line 35:

rather, the conclusion is based on expert evidence regarding fundamental concepts known to pharmaceutical formulators prior to the priority date.

MR EMMERSON:   That conclusion as to fundamental concepts cannot be a conclusion that any of the witnesses said, faced with this problem, knowing the fundamental consequences, “I would have got the result”, because none of them did say that.  What Dr Story and the other people said was, “Well, I would conduct elaborate searches, and then I would do preliminary tests, and then I would do so and so, so and so.  Then I would get to the answer.”  But that is entirely different from saying – given a foundation which, on our case, is the one available to them as a matter of law – “the answer would be obvious”, because not one immediately suggested, even as one of a range of possibilities, anything within the scope of the claims. 

KIRBY J:   When you know that there is an answer, it all falls into a certain logic. 

MR EMMERSON:   Exactly, yes, your Honour, as has, indeed, been held that it is difficult to resist the temptation, once you know that there is an answer, to think, well ‑ ‑ ‑

KIRBY J:   How easy ‑ ‑ ‑

MR EMMERSON:   How easy ‑ ‑ ‑

KIRBY J:    ‑ ‑ ‑ how simple that all was. 

MR EMMERSON:   Exactly. 

KIRBY J:   And most great ideas are easy. 

MR EMMERSON:   Yes, once you know the answer.  We would say that if the decision below is correct or upheld, it would lead to a very large number of patents being invalid, because a lot of research work, understandably enough, is done by skilled people armed with information that they can obtain.  We say it is proper that this Court should look at these propositions of law to determine whether or not they should form part of our law.  If the Court pleases.

McHUGH J:   Yes, thank you very much.  Yes, Dr Bennett? 

MRS BENNETT:   Your Honours, I can deal with this very simply, again, with about five short points.  I have not counted them, but it is probably about five.  The first is my learned friend has invited your Honours to go back into all the facts.  The facts were found unequivocally and they were right.  There has been no suggestion, with great ‑ ‑ ‑

McHUGH J:   They do not depend on credibility. 

MRS BENNETT:   They do not depend on credibility.  No, I withdraw that.  The only attack upon the witnesses for Alphapharm was on credit, and that was rejected.  There was no attack in cross-examination, as noted by the Full Court, on any of the underlying propositions that were put.  They were undisputed, unchallenged and found as findings as fact, although our learned friends are seeking to have your Honours go behind that detailed analysis that was done by both the Full Court and the trial judge.  There is no suggestion, with great respect, that there has been any misapplication of principle.  My learned friend refers to the 3 ‑ ‑ ‑

McHUGH J:   Well, that is for Dr Emmerson to say. 

MRS BENNETT:   My learned friend referred to the 3M Case.  The 3M Case is not the test for a case such as this.  The 3M Case is dealing with the sort of concept where all you have is common general knowledge and then you have an idea.  If I can just read to your Honours – I am sorry to do this ‑ very shortly, what is the test in a case such as this, where, as it was noted, it is a chemical case where there is no pre-vision? 

What is important is that the patent itself should involve an inventive step, whether or not it was consciously taken by the patentee –

making the patentee’s evidence of marginal weight, although it supports our case –

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. 

That was the evidence in this case.  That was applied.  It was not a case of people knowing the answer.  The primary finding was based upon the evidence of Drs Rowe and Story; however, Dr Marshall did not know the answer.  Dr Marshall was totally cocooned and did not know what the result was.  And yet, as shown on page 35 of the appeal book, he immediately, in his first suggested formulation, came up with two of the three integers, and then, when he was told that there was an interaction ‑ which would only happen when the inventors did it, as well, in their routine steps – doing exactly the same sort of steps that the evidence went to – if there were an interaction, he would separate it. 

KIRBY J:   Dr Emmerson says these steps took three years. 

MRS BENNETT:   I am coming to that, with great respect.  It is interesting that the inventors themselves did not, as my learned friend would have it, stand with the prior art and say, “Here is the formulation.  I have the three integers immediately”, because it is not the nature of this sort of matter and that is where the hypothetical evidence goes. 

McHUGH J:   But he was asked to assume three successive scenarios, was he not? 

MRS BENNETT:   He was told what would happen if he had done the next test, the test that was a routine test.  He was told, “All right, you have put them together and you get this interaction.  What would you then do?”  Or you get a bioavailability problem.  It was exactly what would have happened in the ordinary course.  The time frame, with respect, bearing in mind that Dr Marshall immediately put the two integers in – that worked.  That worked for bioavailability.  The only reason it took the length of time, your Honour, was because until you did the testing for long-term stability ‑ which in the overall formulation is a normal thing that happens down the track – this problem did not arise. 

So the time factor is not relevant in this case, because it is part of the ordinary formulation and you did not get to the need for the subcoat until you did the long-term storage studies that gave rise to that problem.  Dr Marshall, totally cocooned, came up with the other formulation immediately.  Then, as soon as he was told that there was a problem, which would, in the ordinary course, have happened only at the stage going into the Phase III clinical trials – when you are starting to do long-term storage studies, that were held to be the sort of thing that any formulator would do to get something to market – it always would be at that stage of the process that that would arise.  It is not unusual that it took that length of time. 

McHUGH J:   But all this seems to me to raise a real question as to whether an ordinary English word, “obvious”, has not been so construed by the specialists in this field that it has now lost its ordinary meaning. 

MRS BENNETT:   With great respect, your Honour, just ‑ ‑ ‑

McHUGH J:   Look at page 37 of the book: 

Dr Marshall suggested that the evaluation of other sealants should not be excluded. 

He lists four of them; then he makes certain recommendations.  This does not seem very obvious.  You may well be right that in this class of case one has to go through all this testing, and if you come to the correct solution and it is not obvious – but it seems to me an arguable case, or at least something this Court ought to have a look at. 

KIRBY J:   The test is not obvious to judges. 

MRS BENNETT:   Your Honour, with respect, as was pointed out in Werner v Bailey by Justice Gummow, and by Sir Keith Aickin, the test for obviousness is looking to see whether there is an inventive step.  That test is the test that has been applied on facts that are not in dispute.  Those facts inevitably lead to the conclusion that there is no inventive step, and it is that test that is the test for obviousness. 

KIRBY J:   But is that not an argument for special leave, that you have, you say, facts that are not in dispute, findings of fact, tendering an issue, and in a context where what is available to a researcher has exploded ‑ ‑ ‑

MRS BENNETT:   The only matter that has been raised by our learned friends is to go back into the facts, because the facts that have been found inevitably lead ‑ ‑ ‑

KIRBY J:   The solution to all problems, Dr Bennett, lies in facts. 

MRS BENNETT:   But, with respect, your Honour, first, the question of the other documentation does not arise, because it was not relevant to the decision in this case.  So that may be an interesting question for another day, but not here.  Secondly, it is not a convenient vehicle to deal with that sort of matter, because the facts here are undisputed, and the application of principle then inevitably led to the conclusion ‑ ‑ ‑

McHUGH J:   Well, your time is up, but before you sit down, what do you say about Dr Emmerson’s point that you have taken the time frame forward? 

MRS BENNETT:   I thought I had dealt with that, your Honour, in pointing out that, in the ordinary, routine step of this, the only question mark in the formulation arose at the stage of stability studies.  Prior to that, as Dr Marshall pointed out in that passage, you have an acid labile compound, you put an alkaline core in, you put an enteric coat on.  So the time frame should only really start – otherwise it is a perfectly ordinary formulation ‑ only started when they got that problem.  If I can just add one other thing, because I did not deal with it earlier, and that is that the law of obvious to try has long been the law in Australia, it has long been the law in the United Kingdom, and it is presently – and we sent up to your Honours an extract from the Patent Agents Guide – it is still the law in Europe.  That was a part of it that Mr Ryan did not deal with.  The law of obvious to try is part of the law of inventive step, in all relevant ‑ ‑ ‑

KIRBY J:   It sounds like l-o-r-e, to me. 

MRS BENNETT:   Obvious to try with reasonable prospects of success has been a ‑ ‑ ‑

KIRBY J:   Some judge late in an afternoon wrote that down and now it has become part of the l-o-r-e. 

MRS BENNETT:   It is a classic test that has been set out originally in Johns‑Manville.  It has been applied in every stage and it is a way of dealing with the question of obviousness, but it has certainly been applied by this Court, by judges of this Court, routinely, and again and again. 

McHUGH J:   Yes, well, your time is up.  There will be a grant of special leave in this matter.  How long do you expect the matter to take, Dr Emmerson? 

MR EMMERSON:   Perhaps a day to a day and a half. 

McHUGH J:   What do you say, Dr Bennett? 

MRS BENNETT:    Your Honours will have seen that the whole of the appeal was set down for four days, including the notice of contention, and this question of obviousness took four days before the Full Court.  We would have thought that it would not finish in a day. 

McHUGH J:   Thank you. 

AT 10.40 AM THE MATTER WAS CONCLUDED