Les Laboratoires Servier v Apotex Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Les Laboratoires Servier v Apotex Pty Ltd [2016] FCAFC 27

Appeal from:

Apotex Pty Ltd v Les Laboratoires Servier [2013] FCA 1426

Apotex Pty Ltd v Les Laboratoires Servier (No 2) (2014) 107 IPR 95; [2014] FCA 751

Apotex Pty Ltd v Les Laboratoires Servier (No 4) (2015) 111 IPR 160; [2015] FCA 104

Apotex Pty Ltd v Les Laboratoires Servier (No 5) (2015) 324 ALR 549; [2015] FCA 334
File numbers: NSD 241 of 2015
NSD 247 of 2015
NSD 305 of 2015
NSD 307 of 2015
NSD 346 of 2015
NSD 347 of 2015
Judges: BENNETT, BESANKO AND BEACH JJ
Date of judgment: 8 March 2016
Catchwords:

INTELLECTUAL PROPERTY – PATENTS – best method requirement – construction of Patents Act 1990 (Cth), s 40(2)(a) – whether requirements of s 40(2)(a) met when sufficiency of description satisfied – test in Kimberly-Clark Australia Pty Limited v Arico Trading International Pty Limited (2001) 207 CLR 1 – whether residual requirement to identify best method of performing invention

INTELLECTUAL PROPERTY – PATENTS – best method requirement – where claimed invention is a product – whether best method requirement met by identification of essential integers of product – whether disclosure of method of making product required – whether claimed characteristics of claimed product class required disclosure of method to make a product with those characteristics – relevance of trial and error and choice of parameters

INTELLECTUAL PROPERTY – PATENTS – best method requirement – whether applicant for revocation must prove that alternative method in fact better than that disclosed in the patent

INTELLECTUAL PROPERTY – PATENTS – amendment of patent – whether possible to cure failure to comply with best method requirement by amendment after filing of patent application and grant of patent – whether delay in applying for amendment unreasonable – consideration of matters relevant to exercise of discretion when amendment sought – whether House v The King error established

COSTS – PATENTS – whether leave to appeal from costs orders required – whether House v The King error established in relation to costs orders – whether appropriate to apportion costs according to mixed success on grounds of revocation – whether costs should follow the event – consideration of costs where application to amend a patent
Legislation:

Federal Court of Australia Act 1976 (Cth) ss 24(1A), 43

Patents Act 1903 (Cth) ss 36, 86(1)

Patents Act 1952 (Cth) s 40(1)(a)

Patents Act 1990 (Cth) ss 40(2)(a), 105, 138(3)

Federal Court Rules 2011 (Cth) rr 25.14, 34.41
Cases cited:

Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Limited (1998) 194 CLR 171

AMP Inc v Utilux Pty Ltd (1971) 45 ALJR 123

Apotex Pty Ltd v Les Laboratoires Servier (No 3) [2009] FCA 1069

Badische Anilin und Soda Fabrik v Levinstein (1885) 2 RPC 73

Biogen Inc. v Medeva Plc [1995] RPC 25

British Dynamite Company v Krebs (1896) 13 RPC 190

British United Shoe Machinery Co Ltd v A Fussell & Sons Ltd

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Details
Case
[2016] FCAFC 27
Decision Date

CaseChat Overview and Summary

Les Laboratoires Servier v Apotex Pty Ltd concerned an appeal against a decision of the Federal Court of Australia regarding the validity of a patent for a pharmaceutical compound. The patent in question was for a specific salt form of perindopril, a compound used in the treatment of hypertension and heart failure. Apotex challenged the patent on several grounds, including that it did not disclose the best method of making the compound as required by the Patents Act 1990 (Cth). The legal issues that the court had to decide involved the interpretation of the "best method requirement" under section 40(2)(a) of the Patents Act, whether this requirement was met by the identification of essential integers of the product, and if the applicant for revocation must prove that an alternative method is better than the one disclosed in the patent. Additionally, the court considered whether the patent could be amended post-grant to address any deficiencies in meeting the best method requirement.

The court found that the patent sufficiently disclosed the essential characteristics of the claimed product and that the best method requirement was met by the identification of the essential integers of the product, without necessitating a disclosure of the method to make the product with those characteristics. The court further held that the applicant for revocation does not need to prove that an alternative method is better, but rather that the method disclosed in the patent is not the best. The court also noted that the delay in applying for an amendment to the patent was not unreasonable and that the exercise of discretion in granting such amendments should consider the relevance of trial and error and choice of parameters. Regarding the costs, the court decided that while Apotex was successful in establishing a ground of invalidity, the overall costs of the revocation proceeding were such that Apotex should not bear any costs for the appeal, as it had not succeeded on its alternative grounds of invalidity.

The court dismissed the appeal, maintaining the primary judge's decision that the patent was valid. It ordered that the applicants pay the respondents' and Actavis Pty Ltd's costs of the appeal. This decision underscores the importance of the sufficiency of a patent disclosure and the flexibility in interpreting the best method requirement in the context of pharmaceutical inventions.

Orders

Orders of the court

1. Grant the applicants leave to appeal.

2. The appeal be dismissed.

3. The applicants pay the respondents’ and Actavis Pty Ltd’s costs of the appeal.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Apotex has filed a cross-appeal concerning the form of declaration made by the primary Judge as to revocation. Pursued by way of notice of contention are representations asserted by Apotex to be misrepresentations or false suggestions, which the primary Judge characterised as “the shelf life representation” and “the temperature representation”. Apotex argues that the Patent was obtained by these representations and, accordingly, should be revoked on this basis.THE APPEAL IN RESPECT OF THE BEST METHOD DECISION Servier points out that certain grounds for revocation under the Act were not relied on before the primary Judge or are not pressed on appeal, in particular:·There is no alleged false representation as to the promises of the benefits of the invention.·It is not suggested that the invention as claimed did not fulfil its promises.·There is no allegation of lack of utility.·There is no asserted invalidity for lack of sufficiency, in the sense that it is accepted that there is sufficient description to enable a person of ordinary skill to work the invention as claimed. Thus, this requirement of s 40(2)(a) of the Act is fulfilled.The Patent The claims of the Patent relevant to the appeal from the best method decision are claims 1 and 2, namely:Claim 1:The arginine salt of perindopril and its hydrates.Claim 2:Pharmaceutical composition comprising, as active ingredient, the arginine salt of perindopril and its hydrates, in combination with one or more pharmaceutically acceptable excipients. Claims 8 to 11 are relevant to the amendment decision but the proposed amendment to delete those claims is not opposed. As the specification explains, the claimed invention relates to a new salt of perindopril, a compound known especially for the treatment of arterial hypertension and heart failure. Perindopril was the subject of a previous patent where it was described in a non-salt form. When addition salts with a pharmaceutically acceptable base or acid were mentioned in the previous patent by way of example, the sodium salt or the maleate was given. The specification of the Patent explains the difficulty in finding a pharmaceutically acceptable salt having not only good bioavailability but also adequate stability to be suitable for the preparation and storage of pharmaceutical compositions. The specification then describes difficulties with earlier salt forms in terms of stability. A particular form is said to have exhibited the best stability compared to other forms studied, being the tert-butylamine salt (perindopril erbumine) but, the specification states, even that form was not capable of providing a complete solution to the problems of the product’s lack of sufficient stability to heat and humidity, in particular, instability resulting in a shorter shelf life and the need for additional packaging measures. Reference is made to ‘the intrinsic fragility of perindopril’. The specification states that numerous salts were studied and that the salts customarily used in the pharmaceutical sector proved to be unusable. The claimed invention, the arginine salt of perindopril, was said to have ‘entirely unexpected advantages over all the other salts studied’. The arginine salt of perindopril is said preferentially to be the salt of natural arginine (L-arginine). The specification also states that the pharmaceutical compositions according to the invention will preferably be immediate-release tablets. The specification describes long-term stability studies of perindopril arginine, the results of which are presented in tabular form:

Ratio Decidendi

Legal Principle Established

Servier’s submissions supporting the order for costs can be summarised as follows:·Pursuant to the principles of House v The King at 504 to 505, it is not sufficient if Judges comprising the appellate Court consider that, if they had been in the position of the primary Judge, they would have taken a different course.·The fact that no single Judge of the Court has previously made an order that a successful party in patent proceedings bear a portion of the unsuccessful party’s costs is irrelevant.·There was no error in failing to apply the guideline that costs follow the event.·The power to award costs under s 43 of the Federal Court Act is absolute and unfettered, save that it must be exercised judicially.·The approach taken by the primary Judge is consistent with an approach outlined in Aldous W, Young D, Watson A and Thorley S, Terrell on the Law of Patents (13th ed, Sweet & Maxwell, 1982) at 14.195, citing Badische Anilin und Soda Fabrik v Levinstein (1885) 2 RPC 73 at 118 per Bowen LJ, who observed that if parties in an action raise issues on which they are defeated they ought to do it at their own expense.·Apotex brought the proceedings for its own financial gain.·The demands of the community for greater economy and efficiency in the conduct of the litigation should be reflected in the costs order.·The primary Judge carefully exercised his discretion based on his familiarity with the way in which the trial was conducted.Consideration: The costs of the revocation proceeding The fact remains that Apotex was successful in establishing a ground of invalidity and, accordingly, that the patent was liable to be revoked. In order to deal with the best method issue it was necessary for the Court to construe the patent from the perspective of the skilled addressee. That exercise required the identification of the common general knowledge, in particular:·the evidence and submissions on how salts are made, including on crystallisation parameters;·how those parameters can affect the final form of properties of a compound;·polymorphism and hydration states were relevant to the best method issue as well as to other issues such as obviousness, fair basis, novelty and false suggestion, being issues in which Apotex was unsuccessful. It is not the case that the issues could be segregated as his Honour said at [24]. It is not apparent that any of the issues raised and pursued by Apotex were obviously bad or unreasonably maintained. Apotex abandoned two of the grounds upon which it asserted invalidity after some reflection, which indicates that it chose not to pursue those grounds that it considered to be unlikely to succeed. However, in that regard, Apotex accepted that it did not succeed on its alternative grounds of invalidity and submits that the Court’s discretion would not be misapplied if the Court discounted Apotex’s entitlement to costs in the order of 25%, up to the date of the settlement offers. The primary Judge did not find that any of the grounds of invalidity relied upon by Apotex were trivial, unreasonable or unmeritorious.