Merck & Co Inc v Arrow Pharmaceuticals Ltd - [2003] FCA 1344

FEDERAL COURT OF AUSTRALIA
Merck & Co Inc v Arrow Pharmaceuticals Ltd [2003] FCA 1344
PATENTS – Appeal from decision of a delegate of the Commissioner of Patents - Application for extension of term of patent – Patent for metabolite of prodrug – Prodrug had previously been the subject of a patent, now expired – Whether the applicant is entitled to an extension of its patent over the metabolite on the basis that the prodrug is listed on the Australian Register of Therapeutic Goods (‘ARTG’) and production of the metabolite is the only known therapeutic use of that prodrug – Alternatively, whether the applicant is entitled to an extension of term on the basis that small quantities of the metabolite are contained in its manufactured product, being a product listed on the ARTG.
Patents Act 1990 (Cth) s 70
MERCK & CO INC v ARROW PHARMACEUTICALS LIMITED
N 406 of 2002
WILCOX J
25 NOVEMBER 2003
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 406 of 2002

BETWEEN:

MERCK & CO INC
APPLICANT

AND:

ARROW PHARMACEUTICALS LIMITED
RESPONDENT

JUDGE:

WILCOX J

DATE OF ORDER:

25 NOVEMBER 2003

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1. The appeal be allowed.
2.The decision of the delegate of the Commissioner of Patents to refuse an application for extension of the term of Australian Patent 535944 be set aside and, in lieu thereof, it be ordered that:
(a)the opposition to that extension be dismissed; and
(b)the said application be allowed.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 406 of 2002

BETWEEN:

MERCK & CO INC
APPLICANT

AND:

ARROW PHARMACEUTICALS LIMITED
RESPONDENT

JUDGE:

WILCOX J

DATE:

25 NOVEMBER 2003

PLACE:

SYDNEY

REASONS FOR JUDGMENT
WILCOX J:

This is an appeal against a decision made by a delegate of the Commissioner of Patents (‘the Commissioner’), refusing a request by the applicant, Merck & Co Inc (‘Merck’), for extension of Australian patent no 535944 (‘the patent’).
The application for extension was made pursuant to s 70 of the Patents Act 1990 (Cth) (‘the Act’). It was opposed, before the delegate, by Arrow Pharmaceuticals Limited (‘Arrow’). When it filed its notice of appeal in this Court, Merck named Arrow as the respondent to the appeal. However, at an early directions hearing, Arrow submitted to the order of the Court and obtained leave to withdraw from the proceeding. As the Commissioner took no part in the proceeding, this meant the appeal was undefended. There were no submissions put to the Court in answer to those advanced by counsel for Merck, Dr J Emmerson QC and Ms K Howard.
The statutory provisions
Section 70 of the Act relevantly provides:
‘(1)The patentee of a standard patent may apply to the Commissioner for an extension of the term of the patent if the requirements set out in subsections (2), (3) and (4) are satisfied.

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2003] FCA 1344
Decision Date: 25 NOVEMBER 2003

CaseChat Overview and Summary

Merck & Co Inc brought a case against Arrow Pharmaceuticals Ltd regarding the extension of the term of a patent under section 70 of the relevant Act. The central dispute was over whether the patent term for a pharmaceutical substance, Lovastatin, could be extended. The matter was heard in the Federal Court of Australia.

The legal issues at hand primarily revolved around the interpretation of section 70 of the Act, particularly focusing on the requirements for extending the patent term of a pharmaceutical substance. Specifically, the court had to determine whether the pharmaceutical substance in question, Lovastatin, and its ß-hydroxy metabolite, met the criteria for a patent term extension. Merck argued on two fronts: that Lovastatin itself was eligible for extension, and alternatively, that the ß-hydroxy metabolite of Lovastatin was eligible. The court needed to assess whether these substances fell within the scope of the patent claims and whether they satisfied the specific conditions laid out in the Act.

The court, in its reasoning, noted that while Lovastatin is a pro-drug that converts into its ß-hydroxy metabolite upon administration, this transformation does not inherently make Lovastatin itself fall within the scope of the patent claims for the metabolite. The court highlighted that the actual infringement occurs due to the use of Lovastatin, leading to the formation of the metabolite, rather than Lovastatin itself being the infringed entity. The court concluded that Merck's argument, relying on Beecham Group Ltd v Bristol Laboratories Ltd, did not sufficiently establish that Lovastatin in substance fell within the claims to the metabolite. Consequently, the court found that the application for extension could not be upheld based on the arguments presented.

The court allowed the appeal, set aside the delegate's decision to refuse the patent term extension, and ordered that the opposition to the extension be dismissed. Additionally, the application for the patent term extension was granted.

Orders

Orders of the court

1. The appeal be allowed.

2. The decision of the delegate of the Commissioner of Patents to refuse an application for extension of the term of Australian Patent 535944 be set aside and, in lieu thereof, it be ordered that:

(a) the opposition to that extension be dismissed; and

(b) the said application be allowed.

Background

Background to the litigation

Section 70 of the Act relevantly provides:‘(1)The patentee of a standard patent may apply to the Commissioner for an extension of the term of the patent if the requirements set out in subsections (2), (3) and (4) are satisfied. (2)Either or both of the following conditions must be satisfied: (a)one or more pharmaceutical substances per se must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification;(b)one or more pharmaceutical substances when produced by a process that involves the use of recombinant DNA technology, must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification. (3) Both of the following conditions must be satisfied in relation to at least one of those pharmaceutical substances: (a)goods containing, or consisting of, the substance must be included in the Australian Register of Therapeutic Goods [(ARTG)]; (b)the period beginning on the date of the patent and ending on the first regulatory approval date for the substance must be at least 5 years. (4) The term of the patent must not have been previously extended under this Division.’ The facts The delegate set out the background to the extension application in her reasons for decision, at paras 1 - 5, as follows:‘The matter concerns a substance called Lovastatin, and its ß-hydroxy metabolite. Lovastatin is entered on the Australian Register of Therapeutic Goods (ARTG) and is used for the control of cholesterol levels. Lovastatin is a pro-drug which, when administered, is metabolised into the ß-hydroxy form that is the substance that directly interacts with the physiological system to produce the therapeutic effect. There is no dispute that such a pro-drug falls within the definition of a pharmaceutical substance.Normally the considerations under s.70 would not involve the consideration of any other application. However the facts of this case require a limited understanding of patent 532626 in the name of Sankyo Company Pty Ltd.The Sankyo patent (532626) was applied for on 19 Feb 1980, with a priority date of 20 Feb 1979. The term of that patent expired on 19 Feb 2000. The patent claims a compound of a particular formula that Sankyo called Monacolin K – but which is now more generally referred to as Lovastatin. The patent describes obtaining the substance from micro-organisms of the genus Monascus. It does not disclose the ß-hydroxy metabolite of Lovastatin. No extension of term has been sought for this patent.The current patent was applied for on 3 June 1980, with priority dates of 15 June 1979, 21 Sept 1979, and 23 Jan 1980. It describes substances of several formulae identified as compounds I to IV, which were obtained from the genus Aspergillus. [Both parties agreed that no issue arose from whether the compounds were obtained from Aspergillus or Monascus.] Compound I corresponds to Lovastatin; compound III is the ß-hydroxy metabolite of Lovastatin. The patent indicates that compounds I and III are generated at the same time by the micro-organism, and are separated. There is no teaching that the compounds should be kept together. The specification as filed included 2 broad claims to substances. The first (claim 8) specified compounds I & II. Claim 9 specified compounds III & IV. It is noteworthy that compound I was identical to the compound claimed in the Sankyo patent (i.e. to Lovastatin.) The issues concerning the request for the extension of term revolve around compounds I and III.In the first examination report of the Merck patent, the examiner objected that claim 8 (and 16) was prior claimed by claim 1 of the Sankyo patent. [The objection extended also to claims 20 and 28, which define a pharmaceutical composition based on the relevant compounds.] No other objection was taken. In response to the examination report, compound I was deleted from claim 8. Claim 16 (which was specific to compound I) was deleted. Similar amendments were made with respect to claims 20 and 28. The patent was subsequently granted on this basis – that is, with the chemical entity Lovastatin having been specifically excised from the claims of the Merck patent.’

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

WILCOX J

Dr Brenner referred to a stability study on Mevacor. He said LHA was detected in all of the 86 batches included in the study, the range being from about 0.1% to 0.6%. There is a tendency for the proportion to increase over the two year shelf life.The delegate’s decision Merck argued its extension application on two alternative bases: first, that the relevant pharmaceutical substance was lovastatin and, second, that it was LHA. Merck faced the difficulty, in relation to its lovastatin argument, that compound I (lovastatin) had been excluded from the claims of the patent. It will be recalled that an amendment to that effect was made in response to an objection made by the examiner arising out of the existence of the Sankyo patent. Consequently, in its extension application, Merck could not rely on the fact that compound I was included in the specification. However, Merck pointed out that compound III (LHA) was claimed in the specification. The delegate summarised Merck’s argument in this way at para 12:‘Merck’s primary argument in support of their extension is that a good containing the substance Lovastatin is clearly entered on the ARTG, and that Lovastatin falls within the scope of the claims to the ß-hydroxy metabolite of Lovastatin. There is no suggestion that ß-hydroxy metabolite of Lovastatin is Lovastatin. Rather, Merck argues that the only reasonable use of Lovastatin is for a pharmaceutical use; that upon use Lovastatin is metabolised into the ß-hydroxy form; that such use constitutes infringement of claims to the metabolite; and therefore Lovastatin must fall within the scope of claims to the metabolite. They particularly rely on Beecham Group Ltd v Bristol Laboratories Ltd [1978] RPC 153 to support the proposition that the use of Lovastatin would be an infringement of the claims to the metabolite.’ (Original emphasis) The delegate said she was prepared to assume, for the purpose of the decision, ‘that human pharmaceutical use of Lovastatin generates the ß-hydroxy metabolite, and that such use would constitute an infringement of claims to the ß-hydroxy metabolite in the Merck patent’. However, she thought it was a separate question ‘whether this infringement necessarily means that Lovastatin in substance falls within the scope of those claims’. After referring to provisions of the Act concerning infringement, she said at para 16:‘The difficulty for Merck is that the infringement they rely upon comes about by the use (or intended use) of Lovastatin, not Lovastatin per se. The chemical entity Lovastatin is not embraced by the chemical formula in the claims – including allowing for routine variation of substituents that a person skilled in the art might have made. Infringement only comes about as a result of the use of Lovastatin – which use results in the formation of the ß-hydroxy metabolite that is the subject of the claims. While Merck have argued that the only reasonable use of Lovastatin is a human pharmaceutical use, the fact remains that use of Lovastatin in any other manner, or possession for a purpose other than such use, would not constitute an infringement of the claims to the metabolite.’ (Original emphasis)

Ratio Decidendi

Legal Principle Established

Established by: WILCOX J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 406 of 2002

BETWEEN:	MERCK & CO INC APPLICANT
AND:	ARROW PHARMACEUTICALS LIMITED RESPONDENT
JUDGE:	WILCOX J
DATE OF ORDER:	25 NOVEMBER 2003
WHERE MADE:	SYDNEY

JUDGE:	WILCOX J
DATE:	25 NOVEMBER 2003
PLACE:	SYDNEY