Sanofi-Aventis & Ors v Apotex Pty Ltd; Sanofi-Aventis & Ors v Spirit Pharmaceuticals Pty Ltd

[2010] HCATrans 59

[2010] HCATrans 059

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S295 of 2009

B e t w e e n -

SANOFI‑AVENTIS

First Applicant

SANOFI‑AVENTIS US LLC

Second Applicant

BRISTOL-MYERS SQUIBB INVESTCO LLC

Third Applicant

and

APOTEX PTY LTD ACN 096 916 148

Respondent

Office of the Registry
  Sydney  No S296 of 2009

B e t w e e n -

SANOFI‑AVENTIS

First Applicant

SANOFI‑AVENTIS US LLC

Second Applicant

BRISTOL-MYERS SQUIBB INVESTCO LLC

Third Applicant

and

SPIRIT PHARMACEUTICALS PTY LTD

Respondent

Applications for special leave to appeal

GUMMOW J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 12 MARCH 2010, AT 10.57 AM

Copyright in the High Court of Australia

__________________

MR A.J.L. BANNON, SC:   May it please the Court, I appear with my learned friend, MS C.L. COCHRANE, for Sanofi in each of those matters.  (instructed by Allens Arthur Robinson Lawyers)

MR D.K. CATTERNS, QC:   May it please the Court, I appear with my learned friend, MS J.M. BEAUMONT, for the respondent, Apotex, in the first of the matters.  (instructed by Blake Dawson Lawyers)

MR S.C.G. BURLEY, SC:   May it please the Court, I appear with my learned friend, MR J.S. COOKE, for the respondent, Spirit Pharmaceuticals.  (instructed by Blake Dawson Lawyers)

GUMMOW J:   Now you are allied to Mr Catterns?

MR BURLEY:  Yes, I am, your Honour.

GUMMOW J:   Is there any division of labour between you?

MR BURLEY:   There is some.  I will not say anything to repeat what Mr Catterns has said.

GUMMOW J:   Very well. 

MR BANNON:   Your Honours, the issue which arises in this case is exposed by a consideration firstly of one page of the patent in suit and a couple of paragraphs of the Full Court judgment.  If one turns to application book 187 it is the first substantive page of the patent in suit and the opening words describe:

The present invention relates to the dextro‑rotatory enantiomer –

of a certain compound – I leave aside the words referring to a process -

and pharmaceutical compositions containing it.

There is then a description of the compound and at about line 15 of the patent there is a statement:

The racemic mixture corresponding to this formula was described –

GUMMOW J:   Well, Mr Bannon, you are going too fast again.

MR BANNON:   I am sorry.  Page 187, sorry, after the opening words where it describes the invention as relating to the enantiomer and also it says:

a process for its preparation –

but particularly for this application –

and pharmaceutical compositions containing it.

Then there is a description of the compound by reference to a diagram and the next complete sentence which follows the sentence which surrounds the diagram commences:

The racemic mixture corresponding to this formula was described in the French patent application published under the No. 2 530 247.

That reference to the French patent was the basis on which the Full Court said a compound which one could make by using the formula disclosed in that patent formed part of the basis on which the question of obviousness could be determined, notwithstanding that the patent, although published in Australia, was accepted did not form a part of the common general knowledge, that the compound made in accordance with the patent had never been made in Australia and had never appeared in Australia at a date of the priority date and it was accepted it was not part of the common general knowledge.

GUMMOW J:   Now, we are applying the 1952 Act, are we not?

MR BANNON:   Yes, the terms of which are relevantly the invention so far as claimed and any claim of the patent is obvious.  But the ongoing significance of this case inures because the language under section 18 of the current Act is, again, the invention so far as claimed in any claim of the patent lacks inventive step.  The only difference is the prior art base is widened, but one has to prove the elements to widen that prior art base.

The next point to note is that the claims at 208 of the application book, relevantly for immediate purposes, claims 2, 3 and 4 each identify a compound which consists of a particular salt of the enantiomer.  Each of those claims was found by the trial judge and by the Full Court to be novel.  Claim 3 was accepted to be infringed, so the only reason we have lost it so far is that claims 2, 3 and 4 - in fact, the whole patent was said to be obvious.  The reason it is said to be obvious is in circumstances where - if I could then go to the key parts of the judgment.  If one turns to page 148 of the application book there is a paragraph there which states:

Apotex claims that all of the claims in dispute are obvious but accepts that this depends on the starting point for that assessment.  Apotex contends that the correct starting point is the racemic mixture, PCR 4099 -

which is the compound which was made by reference to the formula referred to in the patent which was published but not part of common general knowledge.  Then the sentence continues:

As neither that compound nor any of the prior art patents were part of common general knowledge in Australia at the priority date, Apotex accepts that if common general knowledge is the starting point, the claims are not obvious.  Sanofi contends that the correct starting point –

unsurprisingly –

is the common general knowledge of the hypothetical non‑inventive worker in the field as at the priority date of the Patent.

Just to make it absolutely clear there was no suggestion that anything said in the patent amounted to an admission that that French patent, or anything contained in it, was part of the common general knowledge.  That appears at page 151 of the application book at paragraph 161.

GUMMOW J:   Just stopping there for a minute, Mr Bannon.  Mr Catterns, just focusing on his submissions, for example, at page 299, paragraph 33 meets this head on. 

MR BANNON:   Yes.  We say the starting point is the statutory test.  It says the invention, so far as claimed in any claim of the patent, is obvious and that is to be tested by reference to common general knowledge.  So whether or not there is an inventive step is whether the movement from common general knowledge to the invention as claimed in a claim of the patent involves invention.  Discussion of how one determines that question and use of judicial tools such as was there a problem being faced are simply tools of that fundamental statutory question, namely the comparison between the prior art base common general knowledge and the invention.

If there is material used by the inventor which was not part of the common general knowledge, then that is material which cannot be taken into account for the purpose of asking whether the hypothetical addressee would have moved from the prior art base to the invention as claimed. 

The Full Court and my learned friends rely on passages from judgments of this Court.  Could I just identify the passages relied on and explain how it is not supported.  If I could refer to the bundle of statutory materials?  Firstly, there is reference to this Court’s decision in Lockwood (No 2) and this appears behind tab 3.  If one turns to page 221 of Lockwood (No 2), behind tab 3 of the Court bundle and, although this is referring to the current Act, the wording is exactly the same, for relevant purposes.  So the first sentence at 148 provides:

It is not to be doubted that ss 7(2), 7(3) and 18(1) read together provide that each claim needs to be examined independently of the other claims when considering whether an alleged invention involves an inventive step . . . 

The exercise, of which s 7(3) is an integral part, is the exercise of determining whether “an invention” (s 7(2)) as disclosed “in any claim” (s 18(1)) “involve[s] an inventive step when compared with the prior art base” (s 7(2)).  The “prior art base” for s 7(2)) is enlarged by s 7(3)) –

One then goes to 153 over on page 223.  Paragraph 153 is a paragraph relied on by our learned friends:

The question of what a person skilled in the relevant art would regard as relevant, when faced with the same problem as the patentee, is to be determined on the evidence.  The starting point is the subject matter of the invention to be considered together with evidence in respect of prior art, common general knowledge, the way in which the invention is an advance in the art –

the art being common general knowledge.  The problem in that particular case, which our learned friends do not allude to and the Full Court did not allude to, was the self‑locking problem in respect of which it was clearly stated on the specification, but as a matter of evidence it was – and this appears from 153 and 154 – part of the “common general knowledge”.

The problem was known.  That is the physical facts of the lock and its features were known and that was proved by evidence or by specific acceptance.  Then paragraph 160 of this judgment at page 224 demonstrates that, as the Court found in this case, one could compare an invention as claimed in one claim against the prior art base and conclude that it was not obvious, which was the conclusion there.  Similarly at 167 to the same effect, that is the “claim 13” claim.  Then lastly in this decision at 226, paragraph 169 the Court adverted to the fact that, although it was not strictly in issue an invention as per the integers of claim 1 was unlikely to be regarded as inventive over the prior art base.

Could I next refer to 3M which is behind tab 7 of the bundle.  3M, we respectfully submit, directly contradicts the outcome in this case.  Indeed, a close reading of 3M demonstrates that one had an example of material which was very close to this present case.  If one turns to 267 of this judgment in the judgment of Justice Aickin agreed in by other members of the Court, the last complete paragraph on the page, which commences, “It appears to me that the essence of this invention” and there are some sentences there and then it continues.  It refers to one of the features being an adhesive and that:

The particular adhesive referred to in claims 8 and 9 –

which were two of the claims in suit –

was known, in the sense that it had been developed by the first appellant and was the subject of an Australian patent (Ulrich’s patent) with a priority date some six months earlier than the patent in suit and was available for inspection -

It was not part of common general knowledge, needless to say.  I appreciate that these are statements well known by the Court.

GUMMOW J:   Mr Bannon, we can read all these cases or we have done so.

MR BANNON:   Yes, but 293, for example, that statement of the test does not involve the question of problem, but involves the comparison of prior art base.  In other words, every case in which there is a reference to problem it has been on the basis that matters the subject of the problem are part of the common general knowledge.  Can I just refer just lastly in this case, 298, just this Ulrich point in the second‑last paragraph of Sir Keith Aickin’s judgment.  He said:

It was no doubt the discovery of the Ulrich adhesive which was the first step towards a suitable non‑irritating adhesive but the Ulrich patent, even assuming it to be common general knowledge in Australia at the relevant time, did not reveal anything –

et cetera.  In other words even the Ulrich patent, which falls squarely within the French patent category here, ie available only to the inventor, was only relevant to be considered on obviousness if one made an assumption contrary to the facts in that case that it was part of common general knowledge.  In other words, this case foursquare, not only in principle, but in the detail, is contrary to what the Full Court has said.

Could I just then lastly or penultimately refer to a couple of passages in VR Laboratories, which is in the extra material - there should be a separate additional bundle - and the statement, if I can invite your Honours to turn to page 270 in the last paragraph commencing on that page, commencing with the words “It is as well to bear in mind” that statement of principle, in particular the reference:

without regard to documents in existence but not part of such common general knowledge -

Would preclude the respondents’ success in this case.  Again, at page 280 there is a sentence about five lines from the bottom of the page which, of course, as your Honours know, deals generally with the question of the relevance of inventors’ steps, but as the sentence:

Evidence of what was in the patentee’s mind may be admissible as evidence of the state of the art –

referring to common general knowledge –

but could seldom be otherwise admissible. 

It was not suggested in our case that the inventor’s knowledge reflected common general knowledge.  Then page 284 at the first complete paragraph after the quotation.  What appears there and over the top of the next page simply confirms that one has to prove the common general knowledge in Australia.  At 286 there is a sentence which commences at the point on the page where Aickin J appears in the margin:

It is still correct to say that a valid patent may be obtained for something stumbled upon by accident . . . What is important is that the patent itself should involve an inventive step, whether or not it was consciously taken by the patentee and whether or not it appeared obvious to the patentee himself.

It may well be that it appeared obvious to the patentee himself if the patentee had something that the common general knowledge hypothetical addressee did not have, but this Court has said and correctly so in accordance with the statutory test, that does not matter.

GUMMOW J:   The patentee may not have known there was a problem.

MR BANNON:   Absolutely.  Indeed, there is a bigger issue to this case.  This drug is an anti‑platelet drug, in other words, blood thinning for people who have pacemakers, clots, findings where they have achieved high success.  Although there was no evidence directed to this issue, but there is plainly demand for such a drug.  So when the cases talk about a problem or an “unfelt want”, as appears on page 287 on the next page – and that is the last reference in VR Laboratories I was going to take your Honours to ‑ ‑ ‑

GUMMOW J:   Now, you had an earlier patent, did you not?

MR BANNON:   We did and there was no argument that that anticipated claims 2, 3 and 4.  There was an argument and we lost that that it anticipated claim 1, because claim 1 was limited to the enantiomer, not the salt.  So we won on the anticipation argument.

GUMMOW J:   What is the answer to the Full Court’s statement at page 151, paragraph 160?

MR BANNON:   In circumstances where there is no admission that that problem was part of the common general knowledge or that any of the facts underlying it was part of the common general knowledge, even assuming that that is correct we debate as to whether there is such a statement of the problem.  But let us assume it correct for the purposes of argument.  As her Honour indicated the patentee may completely misunderstand the position.  The patentee may fail to understand that what has happened is an invention and that is why the objective test is, what one says is – perhaps I should just say two things. 

Considering fair basing as the Court did in Lockwood (No 1) and other cases, one looks at the body of the specification to see what is the invention described and then ask whether the claims are wider or otherwise.  That is the occasion when one looks at the invention as described, but for terms of obviousness one looks at the invention as claimed in this case it is a compound.

So the only question for the Court under the statutory test is to say not do I look in the patent to see what the patentee thinks he has done, or she has done – not do I look to see what they think is the problem they were facing, because that may be a foreign patent, they may have an incompetent patent attorney, they may have no idea what they are doing, as inconceivable as that may be.  They have no idea of the law, but the court gives the benefit of the grant because it is the accretion to the public knowledge of something which examined in the terms of the claim, represents an inventive step. 

That is part of the contract, in effect, that one has with I guess the monopoly for providing something as per the claim, which is an advance in the art and paragraph 160 subverts that test.  May it please the Court.

MR CATTERNS:   May it please the Court.  Your Honours, the phase “common general knowledge” has been first used in the present Act, the 1990 Act.  It was not in the 1952 Act and, as your Honours remember before that in the 1903 Act that phrase was not used, but referred to the old writ.  Your Honours, our submission is that it is a different concept from prior art base, which is the phrase our friends use in their propounded question.  What it means, your Honours, as the Court has explained several times, it is part of the mental equipment of those in the art. 

We see that in the Lockwood v Doric Case, paragraph 55.  Sir Keith Aickin uses the phrase “equipped with the common general knowledge” in 3M.  It is the background knowledge and experience available to all in the trade.  That is what Sir Keith Aickin also says.  Your Honours, it is information generally accepted and assimilated.  That is what the majority says in Aktiebolaget Hässle v Alphapharm Pty Ltd Case.

So, your Honours, common general knowledge is the tool or the equipment that the inventive step is to be assessed against.  So it is background knowledge that you have in your mind as your intellectual capital as you engage on the hypothetical – or the skilled addressee – engages on the hypothetical inventive journey.

Now, your Honours, that is a completely different concept from prior art base.  Prior art base does not appear in the 1952 Act but, your Honours, the prior art base is now in the new Act, a statutory starting point, which is why this case only has significance with respect to the old Act.  Your Honours, our friend’s bundle has the Act.  It does not have section 18 in it.  That is in our bundle.  But perhaps to save time if I could just remind your Honours that section 18 deals with patentable inventions.  It says:

Patentable inventions for the purposes of a standard patent

(1)Subject to subsection (2), an invention is a patentable invention for the purposes of a standard patent if the invention, so far as claimed in any claim . . . 

(b)when compared with the prior art base as it existed before the priority date . . . 

(ii)involves an inventive step –

Your Honours, our friends then put in the dictionary behind their tab 2 in the materials and, your Honours, at page 166 of the print our friends have copied, in the schedule alphabetically under “prior art base”, in the middle of page 166 your Honours see there is now a statutory definition of “prior art base”, namely:

in relation to deciding whether an invention does or does not involve an inventive step:

(i)information in a document that is publicly available, whether in or out of the patent area; and ‑

This is one of the changes in the new Act that your Honours have noticed.  Your Honours, then we know, of course, there is the section 7(2) and section 7(3), which was the additional document that can be relied on as discussed in Lockwood v Doric. 

But, your Honours, the prior art base is plainly there not common general knowledge, it is a different concept.  It is a single document or, indeed, a single Act.  It is now a single Act anywhere in the world.  When the Act was originally enacted ‑ ‑ ‑

GUMMOW J:   Assuming you are right about all of that and just returning to the 1952 Act, what do you say?

MR CATTERNS:   Well, your Honour, what Sir Keith Aickin was – it says ‑ ‑ ‑

GUMMOW J:   But as to this starting point?

MR CATTERNS:   Well, your Honour, the starting point is not in the words “having regard to what is known or used”.  Those words, your Honour, are parallel to the words in section 7(2) “in the light of the common general knowledge”.  Your Honour, there is no doubt that Sir Keith Aickin explained that “having regard to what was known or used” meant that you assess the invention “having regard to” or “in the light of”, which is a new phrase, “the common general knowledge”.  So, your Honour, that Act did not specify a starting point.  Your Honour, in the 3M Case it is clear that the ‑ ‑ ‑

GUMMOW J:   Where does this notion of starting point come from?

MR CATTERNS:   From the word “step”, your Honour.  Your Honour, that is where we submit that the idea is in the 1952 Act informed by Sir Keith Aickin in the 3M Case by the common law, of course.  But now, your Honour, it is codified, in effect, by the provision I took your Honours to.  But in that case what his Honour’s judgment is considering is whether or not you can make a mosaic – your Honour remembers that, of course – out of all the things you can find littering the patent registries in Australia, because we are only talking about Australian documents, or other pieces of prior art that were not common general knowledge in assessing the inventive step.

So, your Honours, the famous passage in his Honour’s reasons which I do not need to take your Honours to, after disapproving or distinguishing really the HPM Case where his Honour Justice Williams had used the phrase “mosaic” in the context of obviousness and it arose in argument – your Honours remember Sir Keith was junior counsel in that case – what his Honour’s famous passage deals with is what you can have in mind, what the skilled addressee can have in mind, as equipment when they solve the problem. 

Then his Honour goes on and makes a finding on the evidence in that case – your Honours remember Sister Stahl who was a matron of a hospital and so on and she gave evidence about the problems with existing bandages – he holds that the problem in that particular case was common general knowledge.  But, your Honours, then two years later in the Full Court in the VR v Wellcome Case in the passage that just follows - the passage our friends took your Honours to at page 286 we get the phrase that refers to the problem.

Your Honours, I readily accept not all patent cases are apt to be dealt with under a problem solution analysis, as the High Court pointed out in Lockwood v Doric (No 2).  But, your Honours, in VR v Wellcome which was in our smaller bundle ‑ ‑ ‑

GUMMOW J:   Page?

MR CATTERNS:   Page 286.  Your Honours, our friends took your Honours to the passage towards the end of that top paragraph, but your Honours, the famous phrase that is:

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.

So, your Honours, “faced with the same problem”.  Now, your Honours, that precise passage is set out again in Lockwood and set out again by the Full Court – the majority judgment in Alphapharm v Astra.  Your Honours, that is precisely the task that the Court set itself and followed in the Alphapharm v Astra Case, reminding your Honours that the problem in Alphapharm was plainly not common general knowledge. 

The problem in Alphapharm was that omeprazole was acid labile and had solubility problems and so on.  The Court, in deciding that case, we submit, as ratio proceeded on the basis of the problem, in effect, as a given.  Now, your Honours, in paragraph 105 of the Lockwood v Doric (No 2), the Court is discussing admissions and our friends fairly note that we never put this as a matter of admissions.  But your Honours go on there to say it is commonplace in patents to say what the problem is, if it is a problem and solution type of case.  This could be something you have remembered from a dream and that would not be apposite.  Not this case.

But, your Honours, if you do postulate a problem then we submit, as in the case before the Court now, as in Alphapharm and, indeed, as in Lockwood, where I accept it was common general knowledge, you start with that problem.  So, your Honours, may I go to the specification which is at page 187.  Your Honours, these are consistory clauses as in the Alphapharm Case, and your Honours, what we see is the first consistory clause says:

The present invention relates to the dextro‑rotatory enantiomer –

That corresponds with claim 1 –

and pharmaceutical compositions containing it.

That is claims 10 and 11.  Your Honours, then there is the reference to the racemic mixture but, your Honours, we do not have to go the French patent to find what the problem is because we are told it here at line 25.  This is an assertion of inventive step done, your Honour – we do not rely it by way of admission, but that is why it is commonplace to recite this because that is how you get you patent.  You overcome prior art in this way.  Then, your Honours, at 29 it says ‑ ‑ ‑

HEYDON J:   The problem is at line 25, is it - “In an unexpected manner”?

MR CATTERNS:   Yes, your Honour, it is either that or a perception of - I am using “problem” as a shorthand.  Your Honours remember from the modified question that was referred to in the High Court in Alphapharm, paragraph 51.  “Problem” as a shorthand could be perception of an advantage or merely a useful alternative, but in short, your Honours, it is a problem or a perception of an advantage that you can get a better efficacy and tolerance.  Then it says in another consistory clause:

The invention also relates to the addition salts -

That is the second half of claim 1.  Your Honours, at page 188, line 15, it relates more particularly to the specified salts.  That is claims 2 to 5.  Then there is the method set out at line 21 and then the last four lines relate to the method of claims 7, 8 and 9.

Now, your Honours, this specification states a problem or states an advance and it proceeds on the basis that you have the racemic mix.  Indeed, claims 6 and 7 assume that.  Just quickly, your Honours, page 197, the last three lines, compares the particular enantiomer with the racemic mix.  At 199, last two lines, we have a conclusion about the isomer compared to the racemate.  Then, your Honours, the tables at pages 200, 202, 204, and 205 all compare efficacy and toxicity with the racemate.

Your Honours, the claims are at 208.  Our friends took your Honours to claim 1.  We did have a novelty case on claims 2 to 5, in particular claim 3.  We would raise that by way of notice of contention if leave were granted.  Claim 6 assumes you have the racemic mix process for the preparation of the compound comprising the formation of a salt of - that is the racemic compound.  They are narrowed in claims 7 to 9. 

So, your Honours, we respectfully submit that whereas here and whereas in Alphapharm, to use a phrase used in argument in Alphapharm, where the patentee recites that this is what I am doing, it is not a question of admission but that is an appropriate starting point under the old Act.  As I submit, it is not a question of admission.

May I ask your Honours to go briefly to the Astra v Alphapharm Case behind tab 5.  In paragraph 3 the Court, with respect, paraphrased Justice Lehane’s finding in paragraph 9 of his judgment as to the problem.  There was a problem in the administration of a drug.  I reiterate that this was not common general knowledge.  Then at paragraph 24 the Court took account of the “complex of difficulties” in fact encountered by Astra in solving the problem.  Crucially, at 41 – and I respectfully submit this applies precisely to our case:

In any event, the consistory clause in the Patent states that the invention claimed therein is designed to obtain a pharmaceutical dosage form of omeprazole which answers the problems referred to earlier in the body ‑

That is the paragraph I took your Honours to.  Your Honours, at 45, there is reference to 3M and your Honours can see that the majority there break up the concept of common general knowledge, the idea of searching in the Patents Office and so on, on the one hand, and then your Honours say:

On the other hand, Aickin J did have regard to evidence relating to the use of surgical tapes in hospitals and in medical practice as indicative both of what products were the common general knowledge and of the problem awaiting solution.

Your Honours, at 50, the Court cites the passage from Wellcome Foundation that I have cited.  Your Honours, in 52, in the middle of the paragraph here:

Secondly, the invention claimed in the Patent –

That is the patent in suit in Alphapharm –

lay not in perceiving “the true nature of the problem” to which “straightforward experiments” then would provide the solution; the

invention was in the interaction between the integers of the compound, to answer the known problem.

That is known, your Honour, but not common general knowledge.  Finally, your Honours, at 72, again in the middle of the paragraph, the majority says:

Paragraph (e) of s 100(1) of the 1952 Act, applied to the present case, asks whether the combination claimed in claim 1 was obvious.  The paragraph does not fix upon the direction to be taken –

Their Honours are referring to the “worthwhile to try” topic –

in making efforts or attempts to reach –

Then I emphasise, your Honours –

that particular solution to the problem identified in the Patent.

Your Honours, in our respectful submission, the judgments below were correct.  Your Honours, I accept readily that there are still patents alive under the 1952 Act.  It was repealed 19 years ago, however, but the transitional provisions continue to invoke it, so to speak.  But it is relevant to a diminishing number of patents.  The new Act now prescribes a starting point, and it is inappropriate, we submit, for the Court to revisit – forgive the tautology – yet again the construction of that section of the 1952 Act.  May it please the Court.

MR BURLEY:   Your Honours, some brief points.  Firstly, our learned friends for the applicant contended that the Patents Act requires – this is the 1952 Act – that attention be given only to the claim. If one turns to the wording of section 100(1)(e), which is behind tab 1 of the additional bundle that our friends handed up, one can see that the statutory wording is a little more complex than that ‑ ‑ ‑

GUMMOW J: Section 100(1)(e), is it not?

MR BURLEY:   Yes, your Honour, thank you.  That is, that in considering the ground:

that the invention, so far as claimed in any claim of the complete specification or in the claim of the petty patent specification, as the case may be, was obvious and did not involve an inventive step having regard to what was known or used in Australia -

The words “so far as claimed in any claim” and “did not involve an inventive step” make it plain, in our submission, that the inventive step may be a part of a claim, but need not be coterminous with its breadth.  That is a significant starting point, and one which has been acknowledged by this Court in its approach to the construction of claims.

So it was in the Lockwood v Doric (No 1) decision – which appears behind tab 4 of our friends’ bundle.  There is a reference at paragraph 10 at page 282 to the “inventive step”, and there your Honours will see that the reference is to:

The specification then described the inventive step as follows:

“According to the present invention, a latch assembly of the foregoing kind [ie using integers (i)-(v)] is characterised in that it includes a lock release means which is responsive to operation of the second actuator –

and so forth.  The passage that follows identifies that from this consistory clause the patentee was identifying the inventive step by reference within the context of the claim to an aspect of the claim that conferred it.  Although that case was concerning there the question of fair basis, this Court observed at paragraphs 28 to 32 in the decision that the consequence of the broad consistory clause was that the patentee had to deal with matters under section 40 – this is paragraph 31 – and also as far as obviousness was concerned, paragraph 32, that:

so broad a statement of an invention that was said to achieve a new result prima facie made the Patent vulnerable to attack on the ground that it was obvious in that it did not involve an inventive step –

That is a recognition, in our respectful submission.  The Court had by virtue of the consistory clause identified an aspect of the claim, not coterminous with its full breadth, although of course the test was that the claim needed to involve the inventive step.

The second aspect of the statutory construction point is that – if I can return your Honours to tab 1 and section 100(1)(e) of the 1952 Act – the question of involving an inventive step draws attention to the inventive step. As my learned friend, Mr Catterns, said, Sir Keith Aickin’s reference to the hypothetical skilled addressee’s approach faced with the same problem is the problem of the inventive step, not with something which was anterior to the inventive step in circumstances where that was made plain within the context of the patent.

In our submission, the passage to which our learned friend, Mr Bannon, referred in the Lockwood v Doric Case, paragraph 152, made specific reference to the need to have regard to the invention.  Perhaps if I can invite your Honours to turn to tab 3 of our friend’s bundle at paragraph 153?  There, this Court said – repeated “the same problem” – words which appear in Sir Keith Aickin’s passage – and then in the second sentence say:

The starting point is the subject matter of the invention –

That is the invention as disclosed in the specification and claim, your Honours.  Then that is:

to be considered together with evidence in respect of prior art, common general knowledge –

and so forth.  So, in our respectful submission, that is consistent with the approach that has been adopted by the Full Court in the present case.

The Full Court considered the approach to this patent in the context of the policy and purposes of the Act, the need to achieve a balance between encouraging innovation but not stifling development, and one of the aspects of that was, of course, the fact that within the body of the specification in suit there had been a reference and acknowledgment that the PCR 4099 had been previously discovered and the subject of a patent. 

Justice Gyles observed in his judgment that indeed if that had not been recognised there would have been exposure to a false suggestion in the patent because that was indeed not the starting point.  Our friend’s submissions have the paradoxical effect that if by including that as part of the background of the invention they could nonetheless avoid the consequence that the invention had previously been disclosed and claimed elsewhere, and that ‑ ‑ ‑

GUMMOW J:   This is your paragraph 38 on page 330, I think.  You say they are counterintuitive?

MR BURLEY:   Yes, your Honour.  Your Honours, I think my learned friend, Mr Catterns, covered all the other points.  We have noted also that there would be a contention in relation to claim 1, the second half of which refers to these pharmaceutically acceptable salts of the compound, and that would concern a novelty.  If it please the Court.

MR BANNON:   The issue which we say arises in this case is exposed by a comparison of our learned friend’s arguments with what we put forward in this sense.  Once they accept, as they must, that the statement of the problem is not determinative and was not so determinative in the sense of an admission, if – your Honours may have noticed on passing through the patent actually the words “problem” and “solution” do not appear anywhere in the body of specification, but let us assume that the Full Court’s assertion that the statement of the problem is correct – if we said nothing about a problem or solution, or words which may have given rise to that, and we were not obliged to, but simply set out the best method of performing, and the statement of invention being a compound, we would have won.  We would have won because it is accepted that the compound was not obvious having regard to the common general knowledge.

When my learned friend, Mr Catterns, says, the invention is to be assessed in the sense of the problem solved, we say that is statutorily incorrect, it is the invention as claimed.  One looks at the claimed invention, whether it is a combination product, and one asks at the end of the day whether it would be a Lockwood combination, and says, how does that stack up against the common general knowledge?  In that case there was a known problem. 

In this case how does the particular compound stack up against the known common general knowledge?  For the hypothetical skilled addressee to be given that compound with its therapeutic benefits was something they could not have predicted and they say because we said something about what the inventor did, for some reason or other the statutory reward to the Australian community and similar communities worldwide of this advance in the is deprived.  We say that is wrong.  Every time you see the word “problem” in the earlier cases it is in the context – including VR – of a well‑known problem, that is something which is in the evidence.

Lockwood itself, the passage referred to most recently by my learned friend, at 153 – this is number 2, in paragraph 153 behind tab 3 – had this sentence:

It should be mentioned that the starting point is not necessarily the inventive step as claimed, or even agreed between parties, because the evidence, particularly in respect of a combination of integers, may support a different inventive step.

Their test involves this proposition.  If you have a genius who takes three steps to get to an invention, A, B and C – A to B there is no problem at all, but he struggles from B to C – or she – but the ordinary person from A to B is a disaster, cannot do it.  If the inventor states in his specification, “I went from A to B in a breeze, from B to C I found terrible problem”, they say the invention is to be tested by that inventor’s difficulty from going from B to C.  That is wrong, and a fundamental, we daresay, heresy.

Two things lastly.  The counterintuitive point involves this proposition.  They say because someone could have found this patent in a library somewhere, and if they had read it, done some tests, and got somewhere, that is unfair that should be a patent.  The law is what it is.  It takes as the base the common general knowledge.  In that regard, in Alphapharm there are two statements which are apposite.  Firstly, the warning of Judge Learned Hand referred to in paragraph 18, referring the:

“unexpressed and unacknowledged [judicial] misgiving” about the facility with which patents appear to have been granted –

This is at page 422 behind tab 5.  Courts do not give sway to that, ought not.  The second point in Alphapharm at page 419 at paragraph 6, the second sentence of that paragraph:

Thus, for example, in the present case, it is not to the point that of the three integers it may be said that omeprazole was known as an acid labile compound and that it was known that enteric coatings were resistant to acids.

This High Court, and particularly those members of that Court, would not have used that expression “known” in a context of obviousness in any sense other than known in the field.  The assertions made that as a matter of fact in that case that was not part of the common general knowledge may or may not be correct.  The case plainly proceeded on the basis that it was so known, and if that was the result of a concession by counsel in that case, so be it.  We all know that…..often a concession which even today still cannot be explained.  If it please the Court.

GUMMOW J:   We are not satisfied that there are sufficient prospects of success in overturning the result in the Full Court of the Federal Court respecting the operation of section 100(1)(e) of the Patents Act 1952 (Cth) to warrant a grant of special leave in these applications. Special leave is refused with costs in each application.

We will adjourn to reconstitute.

AT 11.45 AM THE MATTERS WERE CONCLUDED