Sandoz AG v Bayer Intellectual Property GmbH

In Sandoz AG v Bayer Intellectual Property GmbH, the Federal Court of Australia considered an appeal by Sandoz AG and Sandoz Pty Ltd against the decision of the primary judge in the Federal Court, which upheld the validity of two patents held by Bayer Intellectual Property GmbH and licensed to Bayer Australia Limited. Bayer Intellectual Property GmbH holds two Australian patents, No. 2004305226 (the 226 Patent) and No. 2006208613 (the 613 Patent), related to methods for producing a solid, orally applicable pharmaceutical composition and for the prevention and treatment of thromboembolic disorders, respectively. Sandoz sought to revoke these patents, arguing they were obvious in light of prior art, specifically International Patent Publication No. WO 01/47919 (WO 919) and certain abstracts published in the journal Blood.

The primary judge ruled in favour of Bayer, finding the patents valid and not obvious. The judge concluded that the skilled person could not reasonably be expected to have ascertained WO 919, and thus it could not be considered prior art under s 7(3) of the Patents Act 1990 (Cth). Additionally, the judge found that the inventions claimed in the patents involved an inventive step in light of the common general knowledge and the cited prior art. Sandoz appealed, arguing that the primary judge erred in both the ascertainment of prior art and the assessment of inventive step.

The court found that the primary judge erred in concluding that the skilled person could not reasonably be expected to have ascertained WO 919. The court clarified that the standard for ascertainment under s 7(3) requires a reasonable expectation on the balance of probabilities, not a certainty. The court held that the evidence established that the skilled person would have searched the patent database using relevant terms, and that WO 919 would have been included in the search results. The court also found that the primary judge applied an incorrect legal test when assessing the inventive step of the claimed inventions. The court held that the primary judge should have considered whether the skilled person would have had a requisite expectation of success in arriving at the claimed inventions, rather than whether they would have been directly led to the claimed compounds.

The court allowed the appeal, finding that the primary judge erred in both the ascertainment of prior art and the assessment of inventive step. The court set aside the primary judge’s decision and remitted the matter to the primary judge for reconsideration in light of the court’s findings. The parties were ordered to confer and supply draft short minutes of order to give effect to the court’s reasons within 10 days. If the parties could not agree, the areas of disagreement were to be set out in mark-up.