Novartis AG v Arrow Pharmaceuticals Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Novartis AG v Arrow Pharmaceuticals Pty Ltd [2020] FCA 139

File number: NSD 859 of 2019
Judge: JAGOT J
Date of judgment: 14 February 2020
Catchwords: PATENTS – application to amend under s 105(1A) of the Patents Act 1990 (Cth) – method of treating or preventing multiple sclerosis and protecting against neurodegenerative brain inflammation – where amendments narrow the scope of the claims by defining the method and use of claims only – application to amend granted – costs
Legislation:

Patents Act 1990 (Cth) ss 40(2), 40(3), 102(1), 102(2), 102(2A), 105(3), 105(4),105(1A)

Federal Court Rules 2011 (Cth) r 34.41(a)
Cases cited:

Cytec Industries Inc v Nalco Company [2019] FCA 1800

Eli Lilly and Company v Pfizer Research and Development Company NV/SA [2003] FCA 988; (2003) 59 IPR 234

Meat & Livestock Australia Limited v Cargill, Inc (No 2) [2019] FCA 33

Re Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622

Date of hearing: Heard on the papers
Date of last submissions: 20 December 2019 (Applicant)
17 January 2020 (Respondent)
Registry: New South Wales
Division: General Division
National Practice Area: Intellectual Property
Sub-area: Patents and associated Statutes
Category: Catchwords
Number of paragraphs: 20
Counsel for the Applicant: Mr C Dimitriadis SC with Mr C Burgess
Solicitor for the Applicant: Clayton Utz
Counsel for the Respondent: Mr JS Cooke
Solicitor for the Respondent: Maddocks Lawyers

ORDERS

NSD 859 of 2019
BETWEEN:

NOVARTIS AG

Applicant
AND:

ARROW PHARMACEUTICALS PTY LTD ACN 605 909 911

Respondent

JUDGE:

JAGOT J

DATE OF ORDER:

14 FEBRUARY 2020

THE COURT ORDERS THAT:

1.The parties confer and file agreed short minutes of order reflecting these reasons for judgment within 7 days including directions for the future conduct of the matter.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT

JAGOT J:

The application

  1. The appellant has applied to amend the claims of Australian Patent Application No 2013204752 (the 752 application) pursuant to s 105(1A) of the Patents Act 1990 (Cth) by inserting new claims 1 to 20. The respondent does not oppose the amendment application but seeks an order that the appellant pay the respondent’s costs of the amendment application and any costs thrown away if the amendment application is successful.

  2. The appellant contends that the amendments should be made because:

    (1)appropriate notice of the amendments has been given;

    (2)neither the respondent nor the Commissioner of Patents nor any third party opposes the amendments;

    (3)the amendments comply with the requirements of s 102 of the Patents Act; and

    (4)it is appropriate in the exercise of the Court’s discretion to make the amendments.

    Background

  3. The appellant is the applicant for the 752 application.  The 752 application relates to pharmaceutical compositions that comprise an S1P modulator, including methods of treating or preventing multiple sclerosis and methods of protecting against neurodegenerative brain inflammation, that involve administering such compositions.  The…

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Details
Case
[2020] FCA 139
Decision Date

CaseChat Overview and Summary

The appeal in Novartis AG v Arrow Pharmaceuticals Pty Ltd concerns an application to amend patent claims under section 105(1A) of the Patents Act 1990 (Cth). The appellant, Novartis AG, sought to amend its patent application 752, which relates to pharmaceutical compositions for treating or preventing multiple sclerosis and protecting against neurodegenerative brain inflammation. The Commissioner of Patents had previously upheld the respondent's opposition to the 752 application on the ground of lack of inventive step. The appellant’s application to amend was made under section 105(1A) of the Patents Act, which allows for amendments if certain conditions are met, including compliance with section 102 of the Act. The court was required to determine whether the proposed amendments met these conditions and whether it was appropriate to exercise its discretion to allow the amendments.

The court examined whether the statutory pre-conditions for amendment under section 102 of the Patents Act were satisfied. The court found that the proposed amendments did not result in the specification claiming matter not disclosed in substance in the specification as filed, nor did they result in claims that would not fall within the scope of the claims before amendment. The court also noted that there was no opposition to the amendments from the respondent or any third party, and the Commissioner of Patents was satisfied that the amendments complied with the Act. The court considered these factors in exercising its discretion, finding that the amendments were narrowly scoped and would confine the dispute to the method and use claims only. The court concluded that the statutory pre-conditions were met and that there were no discretionary considerations that weighed against allowing the amendments.

The court granted the appellant’s application to amend the patent claims. The court ordered that the parties confer and file agreed short minutes of order within 7 days, including directions for the future conduct of the matter. The court also addressed the issue of costs, noting that while it was common for the patentee to be ordered to pay the respondent’s costs in patent amendment applications, the decision on costs was within the court’s discretion. The court ordered that each party bear its own costs, limiting the respondent’s costs to those reasonably and properly incurred in relation to the interlocutory application.

Orders

Orders of the court

1. The parties confer and file agreed short minutes of order reflecting these reasons for judgment within 7 days including directions for the future conduct of the matter.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

The appellant contends that the amendments should be made because:(1)appropriate notice of the amendments has been given;(2)neither the respondent nor the Commissioner of Patents nor any third party opposes the amendments;(3)the amendments comply with the requirements of s 102 of the Patents Act; and(4)it is appropriate in the exercise of the Court’s discretion to make the amendments.Background The appellant is the applicant for the 752 application. The 752 application relates to pharmaceutical compositions that comprise an S1P modulator, including methods of treating or preventing multiple sclerosis and methods of protecting against neurodegenerative brain inflammation, that involve administering such compositions. The Commissioner of Patents upheld the respondent’s opposition to the 752 application on the ground of lack of inventive step. This proceeding is the appellant’s appeal from that decision. The proceeding has not yet been fixed for hearing. Nor has any timetable for the filing of evidence been fixed. The application to amend the 752 application is made under s 105(1A) of the Patents Act. An amendment may only be permitted if allowable under s 102: s 105(4). To be allowable the amendments must not result in the specification claiming matter not disclosed in substance in the specification as filed (s 102(1)) and, after the relevant time, must not result in a claim of the specification that would not in substance fall within the scope of the claims of the specification before amendment (s 102(2)). The “relevant time” means after the specification has been accepted: s 102(2A). The proposed amendments are confined to the claims and either restrict the scope of the claims or remove some of the claims. The respondent withdrew its opposition to the proposed amendments after the appellant abandoned some of the amendments. Notice requirements The notice requirements are satisfied. Notice was given to the Commissioner of Patents on 3 July 2019 as required by s 105(3) of the Patents Act. The Commissioner advertised the amendments on 25 July 2019 by advertisement in the Official Journal stating the matters identified in r 34.41(a) of the Federal Court Rules 2011 (Cth). The advertisement required any third party intending to oppose the amendments to notify the parties and the Commissioner of Patents of its intention by 22 August 2019. No notice was given by a third party. The Commissioner of Patents is prima facie satisfied that the amendments do not contravene s 102 of the Patents Act and does not wish to appear in the proceeding. In Cytec Industries Inc v Nalco Company [2019] FCA 1800 at [43] Burley J said “…the absence of opposition and consent of the Commissioner tends strongly in favour of the grant of the leave sought…”.Compliance with s 102 Section 102(2)(a): an amendment is not allowable if, as a result, a claim of the specification would not in substance fall within the scope of the claims of the specification before amendment.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

As a matter of discretion the appellant submitted that the amendments are appropriate to be allowed. In particular:(1)the amendments merely restrict the subject-matter already claimed in the 752 application to the existing method and use claims (proposed claims 1 to 16) and re-write claim 15 to adopt a corresponding form (proposed claims 17 to 20);(2)the amendments will reduce the scope of the rights that would be conferred upon grant by removing the composition of matter claims, and a claim directed to a process for producing a pharmaceutical composition;(3)the proposed amendments will narrow the scope of the issues in the appeal by confining the dispute to the method and use claims only; (4)there is no opposition to the amendment application; and(5)the appellant has acted expeditiously and without undue delay in bringing its application for amendment.Conclusions In the circumstances set out above, the amendments which the appellant has sought should be permitted. The statutory pre-conditions are satisfied and there is no discretionary consideration which weighs against allowing the amendments. Costs The appellant accepted that it is common in patent amendment applications for the patentee to be ordered to pay the respondent’s costs irrespective of the outcome, but this is not a rule as costs are always in the Court’s discretion: Eli Lilly and Company v Pfizer Research and Development Company NV/SA [2003] FCA 988; (2003) 59 IPR 234 at [25]. The appellant submitted that having regard to the restrictive and limited nature of the amendments to claims 1 to 20, it was unreasonable for the respondent to incur any costs formulating grounds of opposition against those amendments. As to amended claims 21 to 24 the appellant did not press for those claims and there has been no hearing on the merits so that the appropriate order is for each party to pay its own costs: Re Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 at 624-625. Alternatively, any order to pay the respondent’s costs should be limited to those reasonably and properly incurred in relation to the interlocutory application. The respondent submitted that the appellant should pay the respondent’s reasonable costs of and incidental to the amendment application and any costs thrown away if the amendment application is successful. The respondent pointed out that the proceeding was commenced by the filing of a notice of appeal on 30 May 2019 against the decision of the Commissioner of Patents that each of claims 1 to 15 lacked an inventive step. On 21 June 2019 the respondent filed a notice of contention in which it contended that the decision of the Commissioner of Patents was correct for the reasons given and for additional reasons. On 28 June 2019 the appellant filed an interlocutory application to amend the 752 application by proposing new claims 1 to 24. On 5 September 2019 the respondent filed a statement of grounds and particulars of opposition to the proposed amendments. Ground 1 opposed certain of the proposed claims on the basis of non-compliance with s 102(2) of the Patents Act. Ground 2 opposed the amendments for discretionary reasons, including the paucity of disclosure in the accompanying affidavit about the reasons for the proposed amendments. The appellant then filed further affidavit material providing additional reasons for and background to the proposed amendments. This further material also indicated that the appellant would not press for the amendments to introduce claims 21 to 24. On 28 November 2019 the respondent indicated that it did not intend to file any evidence. On 6 December 2019 the respondent indicated it no longer opposed the proposed amendments, but would seek an order that the appellant pay its costs of and incidental to the application.

Ratio Decidendi

Legal Principle Established

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