Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth - [2011] FCAFC 132

FEDERAL COURT OF AUSTRALIA
Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2011] FCAFC 132

Citation: Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2011] FCAFC 132

Appeal from: Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2010] FCA 1211

Parties:
SIGMA PHARMACEUTICALS (AUSTRALIA) PTY LIMITED ACN 004 118 594 v WYETH AND WYETH AUSTRALIA PTY LIMITED ACN 000 296 211

ALPHAPHARM PTY LIMITED ACN 002 359 739
v WYETH AND WYETH AUSTRALIA PTY LIMITED ACN 000 296 211

GENERIC HEALTH PTY LTD ACN 110 617 859
v WYETH AND WYETH AUSTRALIA PTY LIMITED ACN 000 296 211

File numbers: NSD 1533 of 2010
NSD 1603 of 2010
NSD 1644 of 2010

Judges: BENNETT, NICHOLAS AND YATES JJ

Date of judgment: 28 October 2011

Catchwords:
PATENTS – characterisation of invention in priority document – whether method disclosed in priority document is confined to particular encapsulated formulation – relevance of claims of priority document to characterisation of invention

PATENTS – characterisation of invention in patent – whether invention involves discovery of new method with any formulation

PATENTS – validity – external fair basis – priority date –
whether amended claim is “in substance disclosed” in priority document

PATENTS – validity – internal fair basis – relevance of consistory clause mirroring claim of patent – whether claims encompassing a formulation using hydrogel technology lack fair basis where specification states that attempts to produce a formulation using hydrogel technology were fruitless and such a formulation is impossible to achieve – whether claims unconfined to treatment of depression lack fair basis where specification refers only to depression

PATENTS – validity – sufficiency – relevance of statements made in specification that attempts to produce formulation using hydrogel technology were fruitless and such a formulation is impossible to achieve – relevance of failure to provide description to enable performance of claimed methods using hydrogel tablet technology

PATENTS – validity – false suggestion – relevance of expert evidence concerning statement made in specification that production of formulation using hydrogel technology is impossible to achieve – whether statement was a false suggestion material to grant of patent – whether statement that attempts to produce formulation using hydrogel technology were fruitless was a false suggestion material to grant of patent – relevance of absence of evidence from Commissioner

PATENTS – validity – false suggestion– relevance of failure to nominate all inventors correctly

PATENTS – validity – clarity – definition of therapeutic blood plasma concentration – where further steps required to ascertain whether a particular formulation infringes patent

PATENTS – validity – obviousness – expert evidence – whether knowledge of existence of patent and of successful formulation taints experts’ conclusions with hindsight

PATENTS – validity – entitlement – relevance of failure to nominate all inventors correctly – evidentiary onus

PATENTS – infringement – whether claims of patent should be construed to exclude hydrogel technology

Legislation:
Foreign Corporations (Application of Laws) Act 1989 (Cth) s 7(3)(a)

Patents Act 1990 (Cth) ss 7(2), 7(3), 15(1), 18(1)(b)(ii), 40(2)(a), 40(3), 114, 138(3)(b), 138(3)(d), 138(3)(e), 138(3)(f)
Patent Regulations 1991 (Cth) regs 3.12, 3.14(b)

Cases cited: Apotex Pty Ltd v Sanofi-Aventis (2009) 82 IPR 416 cited
Atlantis Corporation Pty Ltd v Schindler (1997) 39 IPR 29 cited
Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd (2008) 78 IPR 463 cited
Fresenius Medical Care Australia Pty Ltd v Gambro Pty Ltd (2005) 224 ALR 168 followed
ICI Chemicals & Polymers Ltd v The Lubrizol Corporation Inc (2000) 106 FCR 214 cited
Inverness Medical Switzerland GmbH v MDS Diagnostics Pty Ltd (2010) 85 IPR 525 applied
Kimberly-ClarkAustralia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 cited
LockwoodSecurity Products Pty Ltd v Doric Products Pty Ltd (2004) 217 CLR 274 applied
No-Fume Ltd v Frank Pitchford & Co Ltd (1935) 52 RPC 231 applied
Ranbaxy Australia Pty Ltd v Warner-Lambert Co LLC (2008) 77 IPR 449 applied
Shavev HV McKay-Massey Harris Pty Ltd (1935) 52 CLR 701 cited
Stauffer Chemical Co’s Application [1977] RPC 33 cited
W M Wrigley Jr Company v Cadbury Schweppes Pty Ltd (2005) 66 IPR 298 cited

Date of hearing: 14-17 February 2011

Date of last submissions: 24 February 2011

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 296

Counsel for the First Appellant: Mr D Shavin QC with Ms H Rofe

Solicitor for the First Appellant: Griffith Hack

Counsel for the Second Appellant: Mr S Burley SC with Mr P Flynn

Solicitor for the Second Appellant: Mallesons Stephen Jaques

Counsel for the Third Appellant: Ms A Bowne SC with Mr A Fox

Solicitor for the Third Appellant: Middletons

Counsel for the Respondents: Mr J Ireland QC with Mr C Dimitriadis

Solicitor for the Respondents: Jones Day

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1533 of 2010

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA

BETWEEN:
SIGMA PHARMACEUTICALS (AUSTRALIA) PTY LTD ACN 004 118 594
Appellant

AND:
WYETH
First Respondent

WYETH AUSTRALIA PTY LIMITED ACN 000 296 211
Second Respondent

JUDGES:

BENNETT, NICHOLAS AND YATES JJ

DATE OF ORDER:

28 OCTOBER 2011

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.The parties are to submit proposed agreed orders or, if there is no agreement, each party should submit proposed orders, accompanied if desired by submissions of no more than 3 pages, within 7 days.

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

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1603 of 2010

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA

BETWEEN:
ALPHAPHARM PTY LIMITED ACN 002 359 739
Appellant

AND:
WYETH
First Respondent

WYETH AUSTRALIA PTY LIMITED ACN 000 296 211
Second Respondent

JUDGES:

BENNETT, NICHOLAS AND YATES JJ

DATE OF ORDER:

28 OCTOBER 2011

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.The parties are to submit proposed agreed orders or, if there is no agreement, each party should submit proposed orders, accompanied if desired by submissions of no more than 3 pages, within 7 days.

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

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1644 of 2010

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA

BETWEEN:
GENERIC HEALTH PTY LTD ACN 110 617 859
Appellant

AND:
WYETH
First Respondent

WYETH AUSTRALIA PTY LIMITED ACN 000 296 211
Second Respondent

JUDGES:

BENNETT, NICHOLAS AND YATES JJ

DATE OF ORDER:

28 OCTOBER 2011

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.The parties are to submit proposed agreed orders or, if there is no agreement, each party should submit proposed orders, accompanied if desired by submissions of no more than 3 pages, within 7 days.

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

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1533 of 2010

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA

BETWEEN:
SIGMA PHARMACEUTICALS (AUSTRALIA) PTY LTD ACN 004 118 594
Appellant

AND:
WYETH
First Respondent

WYETH AUSTRALIA PTY LIMITED ACN 000 296 211
Second Respondent

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1603 of 2010

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA

BETWEEN:
ALPHAPHARM PTY LIMITED ACN 002 359 739
Appellant

AND:
WYETH
First Respondent

WYETH AUSTRALIA PTY LIMITED ACN 000 296 211
Second Respondent

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1644 of 2010

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA

BETWEEN:
GENERIC HEALTH PTY LTD ACN 110 617 859
Appellant

AND:
WYETH
First Respondent

WYETH AUSTRALIA PTY LIMITED ACN 000 296 211
Second Respondent

JUDGES:

BENNETT, NICHOLAS AND YATES JJ

DATE:

28 OCTOBER 2011

PLACE:

SYDNEY

REASONS FOR JUDGMENT
BENNETT J

The patent the subject of this appeal is Australian Patent No AU 2003259586 and is entitled ‘Extended Release Formulation’ (the Patent). It was filed on 30 October 2003, amended on 20 December 2006 and granted to the respondents (together Wyeth) on 11 May 2007. The Patent contains 28 method claims relating to the administration of the compound venlafaxine hydrochloride, which is used in the treatment of depression. An earlier patent for the compound venlafaxine hydrochloride expired on 6 December 2008.
Wyeth claims that the earliest priority date for the Patent is 25 March 1996, based on United States Patent Application No 60/014,006 (the Priority Document). The Patent is a divisional of Australian Patent Application No 65442/00 which was filed on 10 October 2000 (the Parent Application), which itself is a divisional of Australian Patent Application No 16400/97 filed on 20 March 1997 (the Grandparent Application). The Grandparent Application claims priority from the Priority Document.
Amendments were made to the Patent on 20 December 2006 (the 2006 Amendments). I will refer to the contents of the Patent prior to the 2006 Amendments as the Original Patent and following the 2006 Amendments as the Amended Patent.
The appellants, Sigma Pharmaceuticals (Australia) Pty Ltd (Sigma), Alphapharm Pty Limited (Alphapharm) and Generic Health Pty Ltd (General Health) are generic pharmaceutical companies which have obtained registration of extended release (ER) formulations of venlafaxine hydrochloride on the Australian Register of Therapeutic Goods for products known as Evelexa XR, Enlafax-XR and “generichealth XR” respectively.
The primary judge found that the appellants had not established any ground under
s 138(3) of the Patents Act 1990 (Cth) (the Act) to justify revocation of the Patent. Her Honour concluded that the appellants had threatened to infringe claims 1, 4, 5, 8, 9, 10, 15, 16 and 27 of the Amended Patent (at [632]).
A number of issues were raised in the appeal. In summary, they are:
·whether the Priority Document affords fair basis for claims 1 to 17 and 27 of the Amended Patent (external fair basis). If not, Wyeth is not entitled to claim an earlier priority date based on the Priority Document, which, as the parties agree, would result in the relevant claims of the Amended Patent being revoked for lack of novelty; and
·whether certain claims of the Amended Patent are fairly based on the specification of the Amended Patent pursuant to s 40(3) of the Act (internal fair basis);
·whether the specification of the Amended Patent sufficiently describes the invention pursuant to s 40(2)(a) of the Act;
·whether certain claims of the Amended Patent lack clarity pursuant to s 40(3) of the Act;
·whether the invention of the Amended Patent was obvious pursuant to ss 7(2) and (3) of the Act;
·whether certain statements made by Wyeth make the Amended Patent liable to be revoked for false suggestion or misrepresentation pursuant to s 138(3)(d) of the Act;
·whether Wyeth is entitled to the invention pursuant to s 15(1) of the Act; and
·whether Alphapharm has infringed the Amended Patent.
Each of the appellants addressed their notices of appeal and their submissions to different of these grounds. Rather than specify which submission was advanced by or adopted by each of the appellants, I shall refer to Sigma, Alphapharm and Generic Health as the appellants.
It is instructive to turn first to a characterisation of the inventions disclosed in the Priority Document and in the Amended Patent.
THE PRIORITY DOCUMENT
It is necessary to summarise the content of the Priority Document. The title of the invention as set out in the Priority Document is “[ER] Formulation”. The abstract of the invention, again entitled “[ER] Formulation”, relates to a 24 hour ER dosage formulation which provides better control of blood plasma levels than conventional tablet formulations and further provides a lower incidence of nausea and vomiting than conventional tablets.
Under the heading “Background of the invention”, it is stated that:
·ER drug formulations are conventionally produced as compressed tablets by hydrogel tablet technology. When the production of tablets is not feasible, it is conventional in the drug industry to prepare encapsulated drug formulations which provide extended or sustained release properties. Dosage forms are formulated and transformed into spheroids using standard spheronisation equipment. The spheroids, after drying, may then be film-coated to retard dissolution.
·Gelatin capsules are filled with the film-coated spheroids in the quantity needed to obtain the desired therapeutic effect.
·A cited US patent discloses a sustained release pharmaceutical composition of a hard gelatin capsule filled with film-coated spheroids where the film coating is composed of ethyl cellulose optionally with hydroxypropyl methylcellulose (HPMC).
·Venlafaxine is a drug used in the treatment of depression. Venlafaxine hydrochloride is administered in compressed tablet form in doses ranging from 75 to 350 mg per day, in divided doses two or three times a day. In therapeutic dosing with tablets, rapid dissolution results in a rapid increase in blood plasma levels followed by a decrease in blood plasma levels over several hours as the active compound is eliminated or metabolised, until sub-therapeutic plasma levels are approached about 12 hours following administration. This requires additional dosing with the drug, which has the side effects of nausea and vomiting.
Under the heading “Brief description of the Invention”, the invention is described in summary as follows (emphasis added):
·An ER encapsulated formulation containing venlafaxine as the active drug component provides in a single dose a therapeutic blood serum level over a 24 hour period.
·Through administration of the venlafaxine formulation of this invention, there is provided a method for obtaining a flattened drug plasma concentration to time profile, affording a tighter plasma therapeutic range control than can be obtained with multiple daily dosing.
·In other words, this invention provides a method for eliminating the sharp peaks and troughs (hills and valleys) in blood plasma drug levels induced by multiple daily dosing with conventional immediate release (IR) tablets.
·The plasma levels of venlafaxine hydrochloride rise after administration of the ER formulations of the invention for between five to about eight hours (optimally about six hours) and then begin to fall for the remainder of the 24 hour period, maintaining at least a threshold therapeutic level of the drug during the entire 24 hour period.
·In contrast, the conventional IR venlafaxine hydrochloride tablets give peak blood plasma levels in two to four hours.
·Hence, in accordance with the use aspect of this invention, there is provided a method for moderating plural blood plasma peaks and valleys of multiple daily tablet dosing with administration of a one-a-day ER formulation of venlafaxine hydrochloride.
·The use of the one-a-day formulations of this invention reduces the level of nausea and incidence of emesis that attend the administration of multiple day dosing.
·In clinical trials of the ER formulation, the probability of developing nausea in the course of the trials was greatly reduced after the first week. Venlafaxine’s ER formulation showed a statistically significant improvement over conventional tablets.
·Thus, in accordance with this use aspect of the invention, there is provided a method for reducing the level of nausea and incidence of emesis which comprises dosing a patient in need of treatment with venlafaxine hydrochloride with an ER formulation once a day in a therapeutically effective amount.
This brief description describes the invention as an ER encapsulated formulation containing venlafaxine hydrochloride. The use of that formulation, unlike conventional formulations, provides a therapeutic blood serum level of venlafaxine hydrochloride over a 24 hour period enabling a one-a-day dose and reduced side effects. The use of that formulation provides a method of treatment once a day with reduced side effects.
The “Detailed Description of the Invention” as set out in the specification can be summarised as follows (emphasis added):
·Polymorphic forms of velafaxine hydrochloride may be used in the formulations of the invention. The ER formulations comprise venlafaxine hydrochloride, microcrystalline cellulose and HPMC.
·The level of coating can be changed as desired. Other equivalents of ethyl cellulose and HPMC, having the same chemical and physical characteristics as the named proprietary products, may be substituted without changing the inventive concept.
·
It was completely unexpected that an ER formulation could be obtained. Numerous attempts to produce ER tablets by hydrogel technology proved to be fruitless, which is attributable to the extreme water solubility of the hydrochloride of venlafaxine. Typically, tablets prepared as hydrogel sustained release formulations gave 40–50% dissolution at two hours, 60–70% dissolution at four hours and

85–100% dissolution at eight hours.
·Unsuccessful attempts at spheroid formulations are described.
·Examples are said to illustrate the solution to the problem of preparation of the ER drug containing formulations of this invention.
·The examples are of different levels of coating. Additional film coating gives the desired dissolution profile.
·
The capsules of the invention are filled to provide an amount of venlafaxine hydrochloride equivalent to that presently used in tablet form and also up to about

150 mg venlafaxine hydrochloride.
·Table 2 shows the plasma level of venlafaxine hydrochloride versus time for an IR tablet administered every 12 hours; two ER capsules administered simultaneously every 24 hours; and one 150 mg ER capsule administered once every 24 hours in human male subjects who were already receiving venlafaxine according to the dosage protocol. The table reports that the plasma levels of the two 75 mg ER capsules and the one 150 mg ER capsule provided similar blood levels and that the plasma level after 24 hours for either ER regimen is very similar to that provided by two IR 75 mg tablets administered at 12 hour intervals. Further, the plasma levels with the ER formulation do not increase to the peak levels obtained with the conventional IR tablets given at 12 hour intervals.
·Table 3 reports plasma blood levels for males having no prior venlafaxine blood level. The peak blood plasma concentration with the ER capsules was seen at about six hours; whereas the 50 mg IR tablet had a peak blood plasma concentration at four hours.
·The tables are not presented as examples of a broader method unlimited by formulation.
·Thus the desired dissolution rate of sustained release dosage form of venlafaxine hydrochloride, impossible to achieve with hydrogel tablet technology, has been achieved with the film coated spheroid compositions of this invention.
The claims

All of the claims refer to an encapsulated ER formulation of venlafaxine hydrochloride. In summary:
·Claim 1 is:
An encapsulated, [ER] formulation of venlafaxine hydrochloride comprising a hard gelatin capsule containing a therapeutically effective amount of spheroids comprised of venlafaxine hydrochloride, microcrystalline cellulose and [HPMC] coated with ethyl cellulose and [HPMC].
[emphasis added]
·Claims 2 to 5 are dependent on claim 1.
·Claim 6 is to a film coating which is composed of, relevantly, ethyl cellulose and HPMC.
·Claim 7 is to an ER formulation for once daily administration comprising spheroids containing, relevantly, venlafaxine hydrochloride, microcrystalline cellulose and HPMC and a coating of ethyl cellulose and HPMC sufficient to give those coated spheroids a dissolution profile which gives the desired release rate over a 24 hour period.
·Claim 8 is dependent on claim 7.
·Claim 9 is to:
A method for providing a therapeutic blood concentration of venlafaxine over a twenty four hour period with diminished incidences of nausea and emesis which comprises administering orally to a patient in need thereof, an encapsulated, [ER] formulation that provides a peak blood plasma level of venlafaxine in from about four to eight hours, said formulation containing venlafaxine hydrochloride as the active ingredient.
[emphasis added]
·Claim 10 is to:
A method for eliminating the troughs and peaks of drug concentration in a patients [sic] blood plasma attending the therapeutic metabolism of plural daily doses of which comprises administering orally to a patient in need thereof, an encapsulated, [ER] formulation that provides a peak blood plasma level of venlafaxine in from about four to about eight hours, said formulation containing venlafaxine hydrochloride as the active ingredient.
The invention as described and claimed in the Priority Document
The primary judgment
The primary judge concluded at [165] that:
(a)The Priority Document disclosed two inventions, ‘an encapsulated formulation’ and ‘a method for obtaining a certain drug to plasma relationship over time yielding a “tighter plasma therapeutic control” than multiple daily dosing’, eliminating the sharp peaks and troughs in blood plasma level induced by multiple daily dosing and thereby reducing the level of nausea and the incidence of emesis that attended multiple daily dosing.
(b)When the Priority Document is read as a whole, the method disclosed is not confined to the particular encapsulated formulations which are disclosed in the Priority Document.
The appellants challenge these findings and submit that the only invention described in the Priority Document is the encapsulated formulation.
Consideration
The essential integers of claims 1 to 5 include:
·an encapsulated ER formulation of venlafaxine hydrochloride;
·a hard gelatin capsule containing a therapeutically effective amount of spheroids comprised of venlafaxine hydrochloride, microcrystalline cellulose and HPMC, with the spheroids being coated with a composition of ethyl cellulose and HPMC.
Claim 6 is to a particular film coating composition which includes, as an essential integer, HPMC.
Claims 7 and 8 are each to an ER formulation of venlafaxine hydrochloride for once daily administration. The essential integers include spheroids containing, inter alia, HPMC and a coating containing, inter alia, HPMC.
Claims 9 and 10 are method claims. The essential integers of claim 9 are:
·a method for providing a therapeutic blood plasma concentration of venlafaxine over a 24 hour period with diminished incidences of nausea and emesis;
·administering orally to a patient an encapsulated ER formulation;
·the formulation provides a peak blood plasma level of venlafaxine in from about four to about eight hours.
The essential integers of claim 10 are:
·a method for eliminating the troughs and peaks of drug concentration in a patient’s blood plasma;
·attending a therapeutic metabolism of plural daily doses;
·the administration of an encapsulated ER formulation;
·that provides a peak blood plasma level of venlafaxine in from about four to about eight hours.
While claims 9 and 10 do not expressly specify the nature of the formulation, in each case the formulation is in an encapsulated ER form.
An issue before the Court in considering the invention of the Priority Document is whether the Priority Document, in particular claims 9 and 10, includes a method for using any ER formulation, including hydrogel tablets.
The Priority Document describes the conventional approaches to ER drug formulations. They are conventionally produced as compressed tablets by hydrogel tablet technology and, when the production of tablets is not feasible, it is conventional to prepare encapsulated drug formulations which provide extended or sustained released properties. Venlafaxine and venlafaxine hydrochloride were both known. However, the hydrochloride of venlafaxine was extremely water soluble. IR dose formulations were known but produced side effects and could not be utilised because the compressed tablets produced by that technology were either physically unstable or dissolved too rapidly in solution studies.
The body of the specification of the Priority Document is explicit. It states that it was completely unexpected that an ER formulation containing venlafaxine hydrochloride could be obtained because of its extreme water solubility. The specification states that numerous attempts to produce ER tablets by known hydrogel technology proved to be “fruitless”. That is, conventional hydrogel tablet technology could not be utilised. This created a need for a different ER formulation of venlafaxine hydrochloride.
The invention was the preparation of spheroid formulations to provide an ER drug containing venlafaxine hydrochloride. The starting point for the invention, that is, the background against which the invention and inventive step were presented in the Priority Document, was a known compound with known characteristics, known therapeutic effect, known side effects, an inability to use existing known hydrogel tablet technology and a desire to develop a formulation that overcame the side effects. A formulation was obtained using a different methodology. There was no suggestion in the specification or in the claims of the Priority Document that the patentee overcame the problem with the use of hydrogel tablet technology. That technology formed no part of the invention. The solution to an ER formulation was to use a different style of formulation altogether; a spheroid formulation.
Read as a whole, it is clear that the Priority Document does not describe an invention or inventive step that includes hydrogel tablet technology. Indeed, the basis proffered for the invention is the stated impossibility of obtaining a formulation by such conventional technology. The invention is a successful formulation, overcoming the lack of utility of previous unsuccessful formulations, including those of hydrogel tablet technology. The statements of the patentee circumscribing the invention cannot be ignored in understanding what the invention is. The description of the invention in the specification and the description of how to achieve it are the consideration for and basis of the claimed monopoly.
The problem prior to the invention of the Priority Document was that IR formulations of venlafaxine in multiple daily doses gave unwanted side effects. Wyeth’s case is that the solution that it invented was the appreciation that the answer to the problem was a formulation that provided a therapeutic level of venlafaxine over a 24 hour period and an ER formulation with the prescribed plasma profile.
The continuous release of venlafaxine in lesser but still therapeutic levels did not cause the side effects of an IR formulation. That approach was conventional and was not asserted as part of the invention. Further, if that was the idea, it had to be put into effect and it was formulation dependent. Not all formulations would achieve the required delivery and the Priority Document does not assert otherwise.
Wyeth points to the claims of the Priority Document. Eight of those claims relate to the particular formulation. Independent claims 9 and 10 are, standing alone, to a method unrestricted to formulation, other than a requirement that it be an encapsulated ER formulation containing venlafaxine hydrochloride as the active ingredient. The consistory clause or parts of the specification of the Priority Document said by Wyeth to provide the basis for these claims refer to a method using ‘an [ER] formulation of venlafaxine hydrochloride once a day in a therapeutically effective amount’. However this is the continuation of a sentence that commences ‘in accordance with this use aspect of the invention’; that is, the method of claims 9 and 10 is linked to the use of the invention, the invention being the formulation described. In context, the formulation is not unlimited.
It simply cannot be said that, properly construed, claims 9 and 10 of the Priority Document encompass a hydrogel tablet formulation. The claims are read as part of the specification as a whole; if there were any ambiguity or uncertainty on the part of the skilled reader as to the scope of ‘an encapsulated [ER] formulation’, a reading of the specification would make it clear that it did not extend to hydrogel tablet formulations. A construction of these claims to encompass any formulation of venlafaxine hydrochloride would result in these claims not being fairly based on the specification of the Priority Document.
However, the fact that it could be said that the unlimited claims 9 and 10 are not fairly based on the body of the specification of the Priority Document does not necessarily answer Wyeth’s contention that the unrestricted claim is present and therefore disclosed sufficiently to provide external fair basis for the equivalent unrestricted claim in the Amended Patent and, accordingly, provide the basis for the earlier claimed priority date, to which I will turn below. The question for present purposes is what the disclosure of those claims was. If, in context, they are read, or would have been read, as restricted to the formulation described in the Priority Document and claimed in claims 1 to 8, the disclosure of those claims is of the use of the formulation of the invention.
In my view, the latter is the case. A skilled reader reading the whole of the Priority Document would be left in no doubt that the methods of claims 9 and 10 refer to the use of an encapsulated, ER formulation. In order to know how to work the method of those claims, the reader would have to turn to the body of the specification which provides that formulation. Otherwise, claims 9 and 10 would be to a goal and not to a patentable invention that is a manner of manufacture and useful and where sufficient instruction is given to enable the skilled worker to work the claimed method.
On reading the whole of the document, the skilled reader would understand the formulation of those claims to be the formulation of the invention and not unrestricted except for the requirement that it be encapsulated and an ER formulation. Both the specification of the Priority Document and the description of the methods subsequently claimed in claims 9 and 10 make it clear that the method is ‘through administration of the venlafaxine formulation of this invention’. In the words of the specification, the method is ‘the use aspect of this invention’, the invention being the formulation. The formulation achieved is central to the invention and it is the administration of the formulation that achieves the results as set out in the method. The method is dependent on the formulation. It is not a separate and independent invention. This is supported by the information in the specification which provides the blood plasma levels of the new formulation and discloses a direct relationship between the particular formulation disclosed and the particular blood plasma levels achieved. That is, the disclosure of the specific formulation yielding the specific plasma profile (the first invention of the Priority Document found by the primary judge) is not a disclosure of a general method where the administration of any ER oral dosage form would have the same therapeutic effect and plasma profile (the second invention of the Priority Document found by the primary judge).
When the Priority Document is read as a whole, not only are the methods of claims 9 and 10 limited to the administration of the encapsulated ER formulation, but they are also limited to the encapsulated ER formulation of claims 1 to 8. What was new and inventive was not a method for eliminating troughs and peaks of drug concentration with an ER formulation but of providing the ER formulation of venlafaxine hydrochloride, a drug which was, according to the inventors, difficult to formulate by conventional hydrogel tablet technology.
THE AMENDED PATENT
The Original Patent is, as relevant to the appeal, the same as the Priority Document, save for:
·the abstract of the Original Patent describes the invention as ‘an encapsulated, [ER] formulation of venlafaxine hydrochloride comprising a hard gelatin capsule containing a therapeutically effective amount of spheroids comprised of venlafaxine hydrochloride, microcrystallised cellulose and [HPMC], the spheroids being coated with ethyl cellulose and [HPMC]’; and
·the application of the Original Patent says that it is a divisional of the Parent Application which is in turn a divisional of the Grandparent Application and that ‘the entire disclosure of both these early applications is incorporated herein by reference’.
These changes to the Original Patent have been retained in the Amended Patent.
The background of the invention in the Amended Patent has not been changed from the Priority Document and the Original Patent save for:
·a statement to the effect that the discussion of the background of the invention is included to explain the context of the invention; and
·a statement that it is not to be taken as an admission that any of the material referred to was published, known, or part of common general knowledge in Australia as at the priority date of any of the claims.
The 2006 Amendments
Deletions
The following subject matter in the Priority Document/Original Patent was deleted:
·The statement that what is provided, in accordance with the invention, is an ER encapsulated formulation.
·The statement that, through administration of the venlafaxine formulation of the invention there is provided a method of obtaining a flattened drug plasma concentration to time profile, thereby affording a tighter plasma therapeutic range control than can be obtained with multiple daily dosing.
·A reference to the fact that the use of the one-a-day formulation of the invention reduces by adaptation the level of nausea and incidence of emesis that attended the administration of multiple daily dosing and that in accordance with this use aspect of the invention there is a method of reducing the level of nausea and incidence of emesis attending the administration of venlafaxine hydrochloride.
·The statement that the ER formulations of the invention are comprised of venlafaxine hydrochloride in admixture with microcrystalline cellulose and HPMC.
·The unequivocal statement that preferably the spheroid formulations of the invention contain stated percentages of venlafaxine hydrochloride, microcrystalline cellulose and HPMC.
·The statement that it was completely unexpected that an ER formulation containing venlafaxine hydrochloride could be obtained because it proved to be extremely water soluble.
There has been substantial alteration to the “brief description of the invention”. The reference to an ER encapsulated formulation that provides a therapeutic blood serum level over a 24 hour period has been deleted. The references to the flattened drug plasma concentration time profile and the moderation of the plural blood plasma peaks and valleys have been deleted. Also deleted is the statement that the use of the ‘one-a-day venlafaxine hydrochloride formulations of the invention’ reduces the level of nausea and incidence of emesis that attend the administration of multiple daily dosing.
Additions
The changes to the body of the specification include the addition of statements that the invention is no longer simply the formulation described, which is now only one example of a broader invention. For example, a number of references to the formulation of the invention have been deleted and replaced by broad consistory statements, for new claims, each to a method.
The brief description of the invention now commences with the statement that, in accordance with the invention, there is provided the claimed method. Further embodiments are described:
·A method for moderating the plural blood plasma peaks and valleys attending the pharmacokinetic utilisation of multiple daily dosing of venlafaxine hydrochloride, which comprises the claimed method.
·A method of reducing the level of nausea and emesis in a patient in need of venlafaxine by the claimed method.
·A method for treating depression – including by the claimed method.
·A method for providing a therapeutic blood plasma concentration of venlafaxine hydrochloride over a 24 hour period with a stated peak blood plasma concentration of no more than 150 ng/ml.
·A method of moderating the plural blood plasma peaks and valleys by administering venlafaxine hydrochloride over a 24 hour period with a peak blood plasma level of no more than 150 ng/ml.
·A method of reducing the level of nausea in a patient in need of venlafaxine by the administration of venlafaxine hydrochloride over a 24 hour period with a peak blood plasma level of no more than 150 ng/ml.
·A method for treating depression at the dosage level (defined above).
·A method for providing a therapeutic blood plasma concentration of venlafaxine over a 24 hour period by administering orally a single daily dosing formulation with a specified dissolution profile.
·A method for moderating the plural blood plasma peaks and valleys attending the pharmacokinetic utilisation of multiple daily dosing of venlafaxine hydrochloride which comprises administering orally a single daily dosing formulation having the stated dissolution profile. Added by a further amendment on 11 January 2007 is a further feature that the daily dosing formulation provides a therapeutic blood plasma concentration of venlafaxine over a 24 hour period.
·Similarly, a method of reducing the level of nausea and the incidence of emesis with the specified profile.
·A method for treating depression by the stated profile.
The formulations of venlafaxine hydrochloride are, after the 2006 Amendments, only examples and embodiments of examples. One example is an ER formulation that is administered as a single daily dosing formulation. One embodiment of the invention is the use of that example in the claimed method or minor variations of the claimed method. ER formulations previously described as beads or spheroids are described in the Amended Patent as “coated beads”. Where in the Priority Document and the Original Patent the statement was made that the drug containing the formulation is coated with a mixture of ethylcellulose and HPMC to provide the desired level of coating, that wording is now described merely as one embodiment. A further change has been to specify that, instead of the ER spheroid formulations of the invention “comprising” stated percentages of venlafaxine hydrochloride, microcrystalline cellulose and HPMC, the coated spheroid core of the ER formulation “preferably comprise” those percentages.

The statement in the Priority Document that:
It was completely unexpected that an [ER] formulation containing venlafaxine hydrochloride could be obtained because the hydrochloride of venlafaxine proved to be extremely water soluble. Numerous attempts to produce [ER] tablets by hydrogel technology proved to be fruitless because the compressed tablets were either physically unstable (poor compressibility or capping problems) or dissolved too rapidly in dissolution studies.
has been replaced in the Amended Patent with:
It was completely unexpected that a single daily dosing formulation containing venlafaxine hydrochloride for use in the methods of the invention could be obtained because the hydrochloride of venlafaxine proved to be extremely water soluble. Numerous attempts to produce single daily dosing, [ER] or tablets by hydrogel technology proved to be fruitless because the compressed tablets were either physically unstable (poor compressibility or capping problems) or dissolved too rapidly in dissolution studies.
[emphasis added]
The claims
There has been substantial alteration to the claims of the Original Patent by the 2006 Amendments and some further minor alteration by amendments made in 2007 (the 2007 Amendments). Claims 1 to 8 of the Original Patent have been deleted. Claim 1 of the Amended Patent is now a method of treatment claim, untrammelled by reference to any specific kind of formulation of venlafaxine. Claim 1 of the Amended Patent is the previous claim 9 of the Original Patent and the Priority Document amended to remove references to diminished incidences of nausea and emesis and substituting ‘a single daily dosing formulation of venlafaxine hydrochloride’ for ‘an encapsulated [ER] formulation’. Claim 1 of the Amended Patent is to:
A method for providing a therapeutic blood plasma concentration of venlafaxine over a 24 hour period which comprises administering orally to a patient in need of venlafaxine a single daily dosing formulation of venlafaxine hydrochloride that provides a peak blood plasma level of venlafaxine in from about 4 to 8 hours after administration.
The remaining claims of the Amended Patent reflect the amended consistory clauses added by the 2006 Amendments. All references to “encapsulated” ER formulations in claims 9 and 10 of the Original Patent (which were the same as claims 9 and 10 of the Priority Document) have been removed in the claims of the Amended Patent. None of the added claims refer to an encapsulated ER formulation. They refer to ‘a single daily dosing formulation of venlafaxine hydrochloride’ that provides a therapeutic blood plasma concentration of venlafaxine over a 24 hour period with a specified peak blood plasma level.
The reference to a spheroid core first appears in claim 18, which has been modified from claim 1 of the Priority Document and the Original Patent to be a claim not to a formulation but to a method according to one of the preceding claims wherein the formulation contains a therapeutically effective amount of spheroid core, the spheroid core being coated with a coating comprising ethyl cellulose and HPMC.
Claim 27, the final claim, is to:
A method according to any one of the preceding claims wherein the formulation is an encapsulated formulation.
This is the only claim that limits the formulation to an encapsulated formulation.
The 2007 Amendments insert into various of the claims the requirement that the single daily dosage formulation of venlafaxine hydrochloride provides a therapeutic blood plasma concentration of venlafaxine over a 24 hour period.
The invention of the Amended Patent
It is necessary to turn to the Amended Patent to understand the invention there described. To ascertain the invention of the Amended Patent, I am assisted by the way in which the patentee describes:
- the invention;
- what is said about the problem faced by the patentee; and
- the advance over matters previously known.
The invention of the Amended Patent is said to be a method. What was in the forefront of the description of the invention in the Priority Document, that is, a formulation for treating depression and the elimination of the side effects of nausea and emesis, is now relegated to the role of further embodiments.
The appellants submit that the formulation is central to the operation of the method and that the “method” is a description of the result of administering a single daily dosing of venlafaxine.
Wyeth says that it has developed a new method of treatment which depends on the parameters of the blood plasma profile achieved. Wyeth characterises the invention of the Amended Patent as ‘a method for providing a therapeutic blood plasma concentration of venlafaxine over a 24 hour period which comprises administering orally to a patient in need of venlafaxine a single daily dosing formulation of venlafaxine hydrochloride, characterised by certain parameters’. Those parameters include a Tmax and a Cmax.
Wyeth submits that the claimed method represents a new result or thing, obtained by a new application of principle as in Shavev HV McKay-Massey Harris Pty Ltd (1935) 52 CLR 701 at 709 and LockwoodSecurity Products Pty Ltd v Doric Products Pty Ltd (2004) 217 CLR 274 (Lockwood (No 1)) at [59]. Accordingly, Wyeth submits, the inventor may claim all the alternative means by which the thing or result may be achieved. Wyeth emphasises that the Amended Patent does not disclaim that the method achieved is one of “general application”.
Wyeth cites part of the brief description of the invention as supporting the claimed general ER formulation:
In accordance with this invention, there is provided a method for providing a therapeutic blood plasma concentration of venlafaxine over a 24 hour period which comprises administering orally to a patient in need of venlafaxine a single daily dosing formulation of venlafaxine hydrochloride that provides a peak blood plasma level of venlafaxine in from about 4 to 8 hours after administration.
However, that passage must be read in the context of the Amended Patent as a whole.
The first sentence of the “Background of the Invention” in the Amended Patent says:
[ER] drug formulations are conventionally produced as compressed tablets by hydrogel tablet technology.
There follows an explanation of the conventional preparation of sustained or ER forms. It is stated that it is conventional to prepare encapsulated drug formulations which provide extended or sustained release properties where the production of tablets is, as here, not feasible. One way is to form spheroids using standard techniques, which may be coated to retard dissolution. Gelatin capsules are filled with the film-coated spheroids ‘in the quantity needed to obtain the desired therapeutic effect’. This can include a means of releasing the drug at different rates. The Amended Patent discusses the unwanted side effects with two or three doses a day of venlafaxine tablets accompanied by a rapid increase in blood plasma levels of the drug after administration followed by a decrease in blood plasma to sub-therapeutic levels. It is in this context that the Amended Patent turns to a brief description of the invention, saying that what is provided is an ER formulation which provides, in a single dose, a therapeutic blood serum level over a 24 hour period. It is this invention that is said ‘to provide a method for eliminating’ the uneven blood plasma drug levels of multiple dosing. Again, as in the Priority Document and the Original Patent, the Amended Patent states that ‘in accordance with the use aspects of the invention’ a method is provided for moderating the plural blood plasma levels of multiple dosing.
The specification includes a description of the invention as a method. It states that the method of the invention is that of claim 1, the broadest claim.
The invention does not, however, disclose a new “principle” or a new application of principle. The principle of the invention is to achieve an ER formulation which was, as the Amended Patent states, a conventional means of formulation of a compound that was difficult to formulate. A plasma profile that provides a therapeutic level of a drug over a 24 hour period was not a new principle. There is no explanation in the Amended Patent of how the side effects were diminished but that result followed the elimination of the troughs and peaks as a result of the plasma profile achieved with the specific formulation described.
The invention is not the discovery of a new method with any formulation. The method disclosed is the use of the invention, the ER formulation. There is no asserted invention in the measurement of blood plasma levels after administration of the drug. There is no asserted invention in the idea of a sustained release formulation delivering a therapeutic plasma level of the drug over 24 hours. They are the parameters by which the success of the formulation is measured. They are the parameters of the method which is the goal: a therapeutic dosage, measured by the plasma level of the drug, delivered over 24 hours. The goal is not the patentable invention. The invention is the means of achieving the goal.
Wyeth submits that the utility of the method turns on the parameters of the profile achieved, but that confuses the measurements or parameters by which a successful ER formulation may be assessed with the disclosure of the formulation which can achieve those outcomes. It is equivalent to saying ‘I claim all methods of transporting man to the moon that will overcome the earth’s gravitational pull, travel at X km/h and achieve an orbit around the moon’ with the disclosure of one particular rocket that does so. It confuses the goal with the means of achieving the goal.
The plasma profile, exemplified for the specific formulation described in the Amended Patent, is, in its application to any ER formulation, a “wish list”. It tells the reader that the desired invention is a formulation of venlafaxine that is formulated to achieve an ER of a therapeutic dosage. However, it does not tell the reader how to do so, or what the formulations are other than the specified formulation. The Amended Patent says that it is providing the method, which achieves the desired outcome ‘through administration of the venlafaxine formulation of this invention’, not through some sort of recognition of the parameters that can be measured when the formulation is used. The method may be characterised by the outcome of the blood plasma profile but that is in the context of the desirable blood plasma profile of a successful formulation. It is the use of the disclosed formulation that achieves the method, with an outcome of the desirable therapeutic amounts of venlafaxine over a 24 hour period without undesirable side effects. The method is at all times linked to the nature of the formulation. That is the description of the invention, read as a whole.
Evidence from Professor Charman, Wyeth’s expert witness at the trial, that, in his view, a formulation using hydrogel technology was not in fact impossible and that a formulation that achieved the plasma profile of the invented formulation would be useful in the method of the Amended Patent is not relevant to the description of the invention.
FAIR BASIS
General
A patent, conventionally drafted, records the background to the invention, generally describing a problem in the art, realised or unrealised by others. It explains how the inventor solved the problem and what he, she or they found. It then sets out the extent of the monopoly claimed for the invention described. It is necessary to read the whole of the patent to understand what the invention is. In order to gain the monopoly sought, the patent must satisfy the statutory tests in the Act. Some tests are directed to the way in which the patent is drafted, others to the right of the patentee to the claimed monopoly. A patent that satisfies the drafting requirements, for example where claims are fairly based on the description in the body of the specification, may still be liable for revocation, for example for want of novelty, lack of utility, the absence of an inventive step in “the journey” to the invention as outlined in the patent, or lack of sufficient description of the invention.
Section 40(3) of the Act provides that the claims of a patent must be fairly based on the matter described in the specification. The test for determining whether a claim is fairly based is determined by the application of the principles set out in Lockwood (No 1) at [69]. Section 40(3) requires a ‘real and reasonably clear disclosure’ of what is claimed. The invention must be broadly described in the body of the specification and not travel beyond the matter disclosed. As the High Court emphasised in Lockwood (No 1), s 40(3) does not involve an analysis of the inventor’s rights to the invention but whether, as a matter of drafting, the claims can be said to reflect what is disclosed or stated in the body of the specification.
The same principles apply to a determination of external fair basis (Inverness Medical Switzerland GmbH v MDS Diagnostics Pty Ltd (2010) 85 IPR 525 at [142]); the claims must be fairly based on matter disclosed in a parent patent or a priority document. If the patentee asserts an earlier priority date than the filing date of the patent, by reason of the filing of an earlier patent or document in Australia or overseas, the claims of the patent must be supported by the description of the invention in the earlier patent or document. If the patentee changes the claims, the priority date of the claims may be deferred to the date that those changes were made.
In essence, even if an amended patent itself complies with the drafting rules, for example by amendments to add information to the specification to provide support for amended claims, a patentee cannot set forth one basis for and description of the invention to obtain an early priority date and then change the basis and the characterisation and description of the invention while keeping the same earlier priority date.
External fair basis
Section 114(1) of the Act provides:
Where a claim of a complete specification claims matter that was in substance disclosed as a result of amending the specification, the priority date of the claim must be determined under the regulations.
Regulation 3.14 of the Patent Regulations 1991 (Cth) (the Regulations) relevantly provides:
If subsection 114(1) of the Act applies to a claim of a specification, the priority date of the claim is:
…
(b)in any other case – the date of filing of the statement of proposed amendments that resulted in the disclosure referred to in subsection 114 (1) of the Act.
If, as contended by the appellants, claims 1 to 17 and 27 of the Amended Patent claim matter that was ‘in substance disclosed’ as a result of the 2006 Amendments, the priority date of each claim of the Amended Patent is determined under s 114 of the Act and reg 3.14(b) of the Regulations. The priority date of the claim would then be the date of filing of the statement of amendments, 20 December 2006.
The principles to be applied are not in dispute in the appeal. The primary judge held at [154] that the test for ‘in substance disclosed’ for the purposes of s 114 is essentially the same as that for fair basis under s 40(3). Therefore, as the primary judge stated, the issue for determination for the purpose of the priority date of the Amended Patent is whether the claims of the Amended Patent are in substance disclosed in the Priority Document.
The key issue is the description and characterisation of the invention disclosed in the Priority Document, which I have already discussed above.
The primary judgment
Her Honour found at [165] that the relevant claims of the Amended Patent were disclosed in the Priority Document. This was based on her Honour’s conclusion that the Priority Document disclosed the two inventions of:
·an encapsulated formulation; and
·a method for obtaining a certain drug to plasma relationship over time.
Her Honour said that when the Priority Document is read as a whole, the method there disclosed was not confined to the particular encapsulated formulations, embodiments or examples disclosed. In coming to that conclusion, her Honour discounted the references to the inventor’s failed efforts to prepare a hydrogel tablet formulation and to the fact that claims 9 and 10 of the Priority Document, which claimed a method, were themselves restricted to a method comprising the administering of ‘an encapsulated, [ER] formulation’.
Consideration
Based on my consideration of the invention of the Priority Document above, if Wyeth relies on the whole of the Priority Document for external fair basis, the claims of the Amended Patent are wider than the invention there disclosed which, as I found above and as is claimed in claims 1 to 8 of the Priority Document, is limited to the ER formulation described in the body of that specification. The claimed methods of the Amended Patent are not so limited. The subject matter of each of claims 1 to 17 and 27 of the Amended Patent is not fairly based on the matter disclosed in the Priority Document and those claims claim matter in substance disclosed as a result of the 2006 Amendments.
If the claims of the Amended Patent are to a method that includes the administration of a formulation utilising hydrogel technology, they travel beyond the disclosure of the Priority Document and are not fairly based. The description of the invention in the Priority Document is of the specific formulation as claimed in claims 1 to 8 of that document. As I found above, the invention of the Priority Document does not include a formulation based on hydrogel tablet technology. The claims of the Amended Patent, which include such formulations, are thereby not fairly based.
Wyeth relies on claims 9 and 10 of the Priority Document, standing alone, to provide fair basis for claims 1 to 17 and 27 of the Amended Patent. Claims 1 to 17 of the Amended Patent are each to any ‘single daily dosing formulation of venlafaxine hydrochloride’ whether encapsulated or not. Claim 27 is to a method according to any of the preceding claims ‘wherein the formulation is an encapsulated formulation’.
Claims 9 and 10 cannot be read in isolation to provide fair basis for these claims. The invention described in the specification of the Priority Document also circumscribes a proper construction of claims 9 and 10. As described earlier in these reasons, that is not any formulation or any encapsulated formulation but the formulation or encapsulated formulation of the invention of the Priority Document.
There is no dispute that regard must be had to the whole of the Priority Document, including the claims. This involves an assessment of statements in the Priority Document in context. There is no dispute that the comparison must be conducted as a matter of substance. However, Wyeth submits that, by analogy with the fair basing of a complete patent specification on a provisional specification, ‘a development along the same line of thought which constitutes or underlies the invention described in the earlier document’ may be regarded as fairly based on matter disclosed in the earlier document (Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd (2008) 78 IPR 463 at [20] per Gyles J, citing Stauffer Chemical Co’s Application [1977] RPC 33 at 54). Those observations cannot, however, derogate from the requirement that the earlier document must in substance disclose the claimed invention. Even if that invention were further developed in the later document, it must be the same invention. Additionally, a disclaimer of the scope of the invention described in the earlier document cannot be disregarded in assessing the external fair basis of the subsequent claim on that earlier document.
The necessity of putting stray phrases, parts of sentences or parts of paragraphs into the context of the whole of the Priority Document answers many of Wyeth’s submissions on external fair basis. It is correct that, as Wyeth submits, there is a reference in the specification of the Priority Document to the provision of an ER encapsulated formulation containing venlafaxine hydrochloride, unlimited by reference in that sentence to the particular spheroid formulation the subject of the later examples. However, the beginning of that sentence is ‘in accordance with this invention’ an ER formulation is provided. The next sentence commences with ‘through administration of the venlafaxine formulation of this invention, there is provided a method’. The Priority Document does not assert that it provides a method unrestricted to the formulation described. To the contrary, it asserts that some formulations, such as a hydrogel formulation, have not worked.

Claims 1 to 17 and 27 of the Amended Patent are not fairly based on the Priority Document. They claim matter that was in substance disclosed as a result of the 2006 Amendments. Accordingly, the priority date of the Amended Patent is deferred to 20 December 2006.
As agreed, as at that date, the relevant claims of the Amended Patent lacked novelty and are liable to be revoked.
The alternative basis advanced for the determination of the priority date is through the application of reg 3.12 of the Regulations which also deals with the priority date of a claim. Regulation 3.12 relevantly provides:
(1) Subject to regulations 3.13 and 3.14 and subregulation (2), the priority date of a claim of a specification is the earliest of the following dates:
(a) the date of filing of the specification;
(b)if the claim is fairly based on matter disclosed in 1 or more priority documents, the date of filing the priority document in which the matter was first disclosed;
(c)if the specification is a complete specification filed in respect of a divisional application under Section 79B of the Act and the claim is fairly based on matter disclosed in the specification referred to in paragraph 79B(1)(a) of the Act – the date mentioned in subregulation (2C); …
(2C)The date for a specification to which paragraph 3.12 (1) (c) applies is the date that would have been the priority date of the claim if it had been included in the specification referred to in paragraph 79B (1) (a) of the Act.
Accordingly, the Amended Patent would take the date of filing of the Original Patent unless the claims are fairly based such that:
·a claim of the Original Patent is fairly based on matter disclosed in the specification of the Grandparent Application (see regs 3.12(1)(c) and 3.12(2C) of the Regulations); and
·a claim of the Grandparent Application is fairly based on matter disclosed in the Priority Document (see reg 3.12(1)(b) of the Regulations);
then, the priority date of the amended claim would be the date of filing of the Original Patent, that is, 30 October 2003.
However, reg 3.12 is subject to reg 3.14 of the Regulations. It follows that the claims of the Amended Patent as filed in the statement of proposed amendments only take the date of the Original Patent and thereby of the Priority Document if they are in substance disclosed in the Original Patent and, it follows, in the Priority Document. In this case, the result is the same as that obtained by a direct application of reg 3.14. The priority date is, again, the date of filing of the statement of amendments, 20 December 2006.
I agree with Yates J that it is unnecessary to consider further the interaction between s 114 of the Act and regs 3.14(b), 3.12(1)(a) and 3.12(1)(b) for the purposes of this appeal.
It follows that the appellants have been successful in their appeal and it is not necessary to consider the remaining grounds. I will, however, consider some further aspects and indicate, shortly, my conclusions.
Internal fair basis
The primary judge’s characterisation of the invention of the Amended Patent, as a method of treatment by administration of any formulation of venlafaxine hydrochloride that achieved the required profile, led to the conclusion that claims 1 to 17 and 27 of the Amended Patent were fairly based on the description of the invention in the specification of the Amended Patent.
If the assessment of internal fair basis were a mere comparison of the claims and specification of the Amended Patent as a matter of drafting, it can be said that there is a disclosure by the consistory clause inserted into the specification to mirror and support the claims as a matter of drafting of words. To that extent, there is internal fair basis. That, in essence, was the approach of the primary judge, accepting Wyeth’s submissions on the principles in Lockwood (No 1).
However, Lockwood (No 1) does not set down a superficial test based solely on the presence or absence of words. The High Court emphasised that s 40(3) does not concern the question of the merits of or entitlement to the claimed invention; it concerns the question of drafting and a single comparison of the claims with the disclosures of the specification. However, the High Court also stated at [99]:
[T]he correct position is that a claim based on what has been cast in the form of a consistory clause is not fairly based if other parts of the matter in the specification show that the invention is narrower than that consistory clause. The inquiry is into what the body of the specification read as a whole discloses as the invention. An assertion by the inventor in a consistory clause of that of which the invention consists does not compel the conclusion by the court that the claims are fairly based nor is the assertion determinative of the identity of the invention. The consistory clause is to be considered by the court with the rest of the specification.
That is, it is not simply a matter of matching a consistory clause or other stray phrases with a claim. It is a question of comparing the invention claimed with the invention disclosed. Frequently, indeed most often, there is no real difference; sometimes there is.
Fair basis requires a ‘real and reasonably clear disclosure’ in the body of the specification of what is claimed (Lockwood (No 1) at [69]). If the consistory clause is not consistent with the description of the invention in the body of the specification considered as a whole, or is wider than that invention, the mere insertion of a statement mirroring the claim does not, of itself, provide fair basis for the claim. If the consistory clause must be understood in a particular way to be consistent with the rest of the specification, and if so understood it does not describe the invention claimed, there is no fair basis (Lockwood (No 1) at [99]).
The specification states that the priority documents are incorporated by reference, in their totality, which includes the description of the invention that I have already discussed. This should not be ignored in a determination of the invention of the specification as a whole. I agree generally with the consequences of this as set out in the reasons of Yates J.
Further, the characterisation of the invention of the Amended Patent as a method of treatment by result led her Honour to conclude at [209] that the claims were fairly based despite the method including the administration of a formulation utilising hydrogel technology. The primary judge concluded that the method as claimed in the Amended Patent is not limited to a particular formulation, nor limited to exclude the use of hydrogel tablet technology. Her Honour seemed to rely on the fact that there was no stated limitation in the specification of the formulation of the claims to exclude a formulation using hydrogel tablet technology (at [209]). The primary judge said that once she characterised the invention as the method, the appellants’ contended lack of internal fair basis for a formulation utilising hydrogel technology failed.
The specification of the Amended Patent repeatedly states that the invention is a method and also states that the formulation is for use in the method of the invention. Although there remain references to the solution to the problem of preparation of an ER formulation being the ‘formulations of this invention’, for the purposes of internal fair basis, it can be said that there is fair basis for claims to a method, generally as set out. However, the specification still contains the statement that ‘attempts to produce single daily dosing, [ER] or tablets by hydrogel technology proved to be fruitless’ and that the success of an ER formulation, which was at least part of the inventive step and of the invention, was in the context that an ER dosage form of venlafaxine hydrochloride was ‘impossible to achieve with hydrogel tablet technology’.
It follows that claims 1 to 17 and claim 27 (to the extent that it is dependent on claims 1 to 17), which encompass a formulation of venlafaxine hydrochloride which includes a formulation achieved using hydrogel tablet technology, travel beyond and are not fairly based on the disclosures of the specification.
The spheroid core formulation
The appellants further contend that the specification of the Amended Patent is limited to an invention comprising a particular spheroid composition and that, therefore, the claims of the Amended Patent, which claim more than that particular formulation, are not fairly based.
Her Honour rejected the argument that the claims lack fair basis because they extend beyond the use of the particular spheroid formulation disclosed and/or the particular blood plasma profile appearing in Tables 2 and 3 of the specification. Her Honour held at [195] that those tables provided mere descriptions of the shape of the plasma concentration curve resulting from the administration of the particular formulation and concluded that it cannot be said that the specification does not disclose that other formulations may also be used to achieve the therapeutic blood plasma concentration in the claims. The primary judge held at [197] that neither the particular formulation described, the particular embodiments described, the failed attempts using hydrogel tablet technology described, nor the solution found to enable the preparation of the spheroids, confined the general method claimed.
Wyeth accepts that the Amended Patent describes the preparation of a particular formulation, the spheroid formulation. However, it says that while the preparation of a single daily dosing formulation was a necessary step in the development of the claimed method and provides an example of one type of single daily dosing formulation that may be used in the claimed method, the utility does not depend on the nature of the particular formulation used but on the parameters of the blood plasma profile achieved. Further, it contends, the Tmax and Cmax are not confined to those exemplified. That, Wyeth says, entitles it to claim the method by reference to those parameters, unlimited to the particular formulation.
That is directly contradicted by the statements in the specification that formulations produced by hydrogel tablet technology were impossible to achieve. The appellants also point to the following evidence of Professor Charman, that the blood plasma profile from one dose form cannot be predicted across to another dose form, which was quoted by the primary judge at [194]:
To accept different plasma profiles from different types of formulations is a whole another [sic] situation because it requires different releases, where it is released, what is the rate of release, so it is a lot more complicated… In terms of predictability of different dose forms, I am not comfortable as to how one would make those predictions…
Wyeth has not established fair basis by reason of the description of a new principle, or a principle, of general application.
Depression
The appellants further contend that to the extent that the word “therapeutic” as used in the claims means ‘therapeutic in therapies other than depression’ the relevant claims travel beyond, and are not fairly based upon, the specification of the Amended Patent.
Her Honour’s characterisation of the invention of the Amended Patent formed the basis for the conclusion at [226] that the treatment of depression was only one embodiment of the invention, which meant that the general claim, unrestricted by clinical action, was fairly based. This was despite her Honour’s earlier finding at [187]-[188] that the phrase “therapeutic blood plasma concentration” meant:
The blood plasma concentration-time profile of venlafaxine arising from the administration of a single daily dosing formulation of venlafaxine hydrochloride that has been shown to be therapeutically effective when studied in a population of depressed patients.
[emphasis added]
There are difficulties with Wyeth’s submission that there is no limitation to the use of the formulation to the treatment of depression. It is difficult to see how the skilled reader is given information as to the therapeutic level of venlafaxine for unnamed disorders, or how he or she is to assess ‘a person in need of venlafaxine’. The only condition to which reference is made in the Amended Patent is depression.
Apart from claims 4, 8 and 14, the claims of the Amended Patent are not limited to the treatment of depression and there is no specific restriction or limitation in the specification to depression. The fact that the drug is used in the treatment of depression is part of the background to the invention but this is not in itself a reason why, in the claim for a formulation of venlafaxine to deliver a therapeutic dose to a patient in need of it, the claim should be read down for lack of fair basis in the absence of evidence from a person of skill in the art that the results with the described formulation are not relevant to the use of venlafaxine for another disorder. However, there is also no basis by which to link the described plasma levels, reflecting the therapeutic dosage for the treatment of depression, with any other disorder. Nor is there any basis for extending the treatment of one disorder to any other disorder, even another form of social anxiety disorder.
The primary judge accepted that “therapeutically effective” was linked to the medical condition for which it was required to achieve therapeutic effectiveness. References to venlafaxine are only as a treatment for depression. The only reference to a therapeutic blood concentration is a therapeutic dosage for a patient with depression. To the extent that the claims are not limited to therapeutic effectiveness in patients suffering from depression, they are not fairly based.
The claims of the Amended Patent are not fairly based on the specification as required by s 40(3) of the Act.
SUFFICIENCY OF DESCRIPTION
Section 40(2)(a) of the Act states: ‘A complete specification must describe the invention fully, including the best method known to the applicant of performing the invention.’ A failure to comply with s 40(2)(a) makes a patent liable to be revoked pursuant to s 138(3)(f) of the Act. The test for sufficiency has been formulated by the High Court in Kimberly-ClarkAustralia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 at [25] as follows:
The question is, will the disclosure enable the addressee of the specification to produce something within each claim without new inventions or additions or prolonged study of matters presenting initial difficulty?
This was endorsed in Lockwood (No 1) at [60], in which the High Court also held that for the purposes of s 40(2)(a) it is not necessary for the inventor to disclose all of the alternative means of performing the invention.
I agree with Yates J, generally for the reasons he gave, that the primary judge did not err in rejecting the appellants’ contention that the specification does not comply with s 40(2)(a) of the Act.
FALSE SUGGESTION
Pursuant to s 138(3)(d) of the Act, the Court may revoke a patent that was obtained by a false suggestion or misrepresentation. Alphapharm points to the statement in the specification that declared that ‘the desired dissolution rate of a sustained release dosage form of venlafaxine [was] impossible to achieve with hydrogel tablet technology’ (the “impossibility” statement) and the statement that the stated basis for the ‘completely unexpected’ outcome of obtaining a single daily dosing formulation of venlafaxine hydrochloride for use in the methods of the invention set up a problem that was overcome by the development of the spheroid formulations described in the specification (the “completely unexpected” statement). Alphapharm submits that this problem did not exist because, as a matter of fact, it was not impossible to achieve an ER formulation of venlafaxine hydrochloride using hydrogel tablet technology. Alphapharm contends that the Amended Patent is liable to be revoked because the “impossibility” statement and the “completely unexpected” statement were material to the grant of the Patent.
The primary judge found that the skilled addressee would have understood the “impossibility” statement and the “completely unexpected” statement to reflect the position of the inventor only and that these statements were not to be taken as an objective statement of impossibility (at [531]). The effect of her Honour’s finding was that these statements were not material to the grant of the Patent, as the person skilled in the art would have known that hydrogel tablet technology was not impossible. Her Honour relied on Professor Charman’s evidence as support for that interpretation of the “completely unexpected” statement (at [532]). Wyeth relies on the evidence of Professor Charman to the effect that he did not read the Patent specification as meaning that it was impossible to obtain a formulation using hydrogel technology.
A patent may state that the experimental method for isolating a compound is X when the skilled reader knows that there is a better method. That does not affect the statement made that X was used. Such evidence, that a skilled reader does not accept a statement in the Priority Document of impossibility of a formulation, does not affect the disclosure of the specification. “Impossible” is not a term of art (Ranbaxy Australia Pty Ltd v Warner-Lambert Co LLC (2008) 77 IPR 449 at [96]). The specification stated clearly that hydrogel formulation was impossible.
Nevertheless, a statement in a patent that a step was impossible does not amount to a false suggestion simply because it can later be demonstrated that it was not impossible. A statement that a course of inquiry or experimentation was fruitless does not amount to a false suggestion just because it can later be shown that the course of inquiry or experimentation would bear fruit. If the specification stated that it was impossible to formulate venlafaxine hydrochloride using hydrogel technology, the fact that it was later shown to be possible does not demonstrate false suggestion. There is no suggestion that the statement was false to the knowledge of the inventors or of Wyeth prior to grant.
There was no evidence from the Commissioner or any of his delegates. That is relevant to questions of materiality but certainly not decisive. There have been a number of recent cases in this Court where a claim for revocation based upon a false suggestion or misrepresentation has succeeded even though the Commissioner did not take up any such position: see, in particular, W M Wrigley Jr Company v Cadbury Schweppes Pty Ltd (2005) 66 IPR 298 and Ranbaxy. However, there is no basis for concluding that the statements relied upon, even if they amounted to a false suggestion within the meaning of s 138(3)(d) of the Act, were material to the grant of the Patent.
The appellants have not demonstrated a false suggestion that was material to the grant of the Patent.
CLARITY
Another issue before the Court is whether, as the appellants contend, the relevant claims of the Amended Patent are lacking in clarity pursuant to s 40(3) of the Act on the basis of the term ‘therapeutic blood plasma concentration’. Her Honour rejected the submission that the term should be construed as meaning a specific level of venlafaxine in the blood, accepting that the unanimous expert evidence indicated that the skilled addressee at the priority date would have known that there is no point-to-point relationship between levels of venlafaxine in the blood (at [240]).
That conclusion has not been shown to be in error.
OBVIOUSNESS/INVENTIVE STEP
The test for whether an invention is obvious is set out in ss 7(2) and (3) of the Act.
Despite stating that the problem-solution approach was inapposite in the circumstances, the primary judge found at [488] that it was far from obvious that the solution to the “problem” of the IR formulation was a method of treatment involving the single daily dosing formulation claimed in the Amended Patent. Her Honour accepted Wyeth’s submission that the appellants ‘did not ask the appropriate hypothetical question... [which was] whether a method of treating depression by oral administration of a single daily dosing of venlafaxine hydrochloride which provides a therapeutic blood plasma concentration of venlafaxine over 24 hours with a peak plasma concentration in from about 4 to 8 hours is obvious’ (at [489]).

Accordingly, the specification does not provide, by description, a basis for claiming any one of the methods performed by use of a single daily dosing formulation of venlafaxine hydrochloride produced by using hydrogel tablet technology.
I agree with Bennett J that, by seeking to claim methods which include such a formulation, Wyeth has travelled beyond the matter described in the specification. For that reason alone, claims 1 to 17 are not fairly based for the purposes of s 40(3) of the Act. The same result ensues for claim 27 (when dependent on claims 1 to 17). An encapsulated formulation is one that can comprise tablets contained within the capsule. Alphapharm’s ENLAFAX – XR product is of that kind: see Reasons [628]. Claim 27 would include a method involving the use of an encapsulated formulation where the capsule contents are produced by hydrogel tablet technology.
For completeness, I also agree with Bennett J, substantially for the reasons given by her Honour, that, additionally, the relevant claims are not fairly based on the matter described in the specification of the Amended Patent to the extent that they are not limited to methods involving the treatment of depression: cf. claims 4, 8 and 14 where, for example, that limitation is provided.
Sufficiency
The primary judge rejected the appellants’ contention that the specification does not describe the invention fully, including the best method known to Wyeth of performing the invention: s 40(2)(a).
In my view, the primary judge did not err in her conclusion.
The main plank of the appellants’ challenge was that, given the apparent width of the relevant claims to include methods using a single daily dosing formulation of venlafaxine hydrochloride produced by hydrogel tablet technology, there is no description in the specification that would enable the performance of the claimed methods using such a formulation.
That proposition may be accepted. However, in my view, that acceptance does not lead to the conclusion that the Amended Patent is invalid for want of compliance with s 40(2)(a) of the Act.
The specification of the Amended Patent fully describes the invention that can be validly claimed. In so doing, the specification lays bare the fruitlessness and impossibility of Wyeth’s endeavours in seeking to achieve an ER formulation using hydrogel tablet technology. The specification, by the provision of examples, enables the claimed methods to be performed. Wyeth was not required by s 40(2)(a) of the Act to describe every formulation that might be used in the performance of those methods; nor was it required to describe a formulation that was found to be “fruitless” or “impossible to achieve”.
In my view the problem with the specification, for s 40 purposes, is not one of insufficiency of description, but one of impermissible claim width.
Clarity
The primary judge rejected the appellants’ contention that the relevant claims of the Amended Patent do not define the claimed invention clearly: see s 40(3). The appellants’ contention was directed to the phrase “therapeutic blood plasma concentration” where used in those claims.
Based on the argument developed on appeal, there seems to be no error suggested in the primary judge’s acceptance that the phrase should be given its ordinary English meaning as referring to a single daily dosing of a formulation of venlafaxine hydrochloride that achieves a blood plasma concentration of venlafaxine that is therapeutically effective. The import of the appellants’ submissions is that, so understood, the phrase is unclear: it does not provide a workable standard because there is no way of predicting in advance what the therapeutic concentration for a particular formulation will be, thereby enabling the person skilled in the art to avoid the possibility of infringement. In advancing these submissions the appellants did not suggest that the determination of the therapeutic efficacy of a given formulation of venlafaxine hydrochloride itself presents a challenge to the person skilled in the art.
In my view the appellants’ contention raises, in a conventional way, a criticism that can be made of many claims limited by result. As a general rule, however, such claims do not fail for lack of clarity simply because further steps must be taken by the person skilled in the art, in the nature of trial and error or routine testing not involving invention, in order to understand when the result will be achieved: No-Fume Ltd v Frank Pitchford & Co Ltd (1935) 52 RPC 231 at 238, 245-246 and 247-249. The necessity for, or extent of, the work required in that regard may point to the possibility of insufficient description, but no challenge to validity of that kind has been raised in this respect.
Like Bennett J, I am not persuaded that the appellants have shown that the primary judge erred in her conclusion.
False suggestion
The primary judge rejected the appellants’ contention that the statements in the Amended Patent that it was completely unexpected that an ER formulation could be achieved because of the fruitless attempts to obtain such a formulation by hydrogel tablet technology, and that it was impossible to achieve with hydrogel tablet technology a dosage form that achieved the desired dissolution rate, constituted a false suggestion or misrepresentation on which the Patent was obtained: see s 138(3)(e).
I agree with Bennett J, substantially for the reasons advanced by her Honour, that the appellants have not demonstrated a false suggestion that was material to the grant of the Patent.
Lack of inventive step
The primary judge rejected the appellants’ contention that the invention as claimed is not a patentable invention because it lacks an inventive step: see ss 18(1)(b)(ii) and 138(3)(b).
In coming to that conclusion the primary judge gave detailed consideration to a significant body of factual and scientific evidence, including opinion evidence, which had been adduced by the parties on that question. In undertaking that task the primary judge identified a significant number of complex factual issues that were necessary to be decided in the present case in order for her to reach a finding on the ultimate question of inventive step: see Reasons [264].
The primary judge’s reasons stand as ample testimony of the magnitude of that task and of the methodical way in which her Honour considered those issues: see Reasons [265]-[514]. A significant part of the argument on appeal was devoted to challenging the primary judge’s factual findings and conclusions that were made along the way to reaching her conclusion on that ultimate question, in an endeavour to identify appealable error.
The framework for considering whether an inventive step is involved in an invention is provided by s 18(1)(b)(ii) of the Act, assisted by ss 7(2) and (3) and the definitions of “prior art base” and “prior art information”. A question of comparison is involved. Section 18(1)(b)(ii) makes clear that the invention is the invention “so far as claimed in any claim”. It also makes clear that the invention, as claimed, must be compared with the “prior art base as it existed before the priority date of that claim”.
The primary judge’s consideration of the question of inventive step was undertaken by making a comparison of the invention, as claimed in each of the relevant claims, with the prior art base as it existed at 25 March 1996, based on her conclusion that Wyeth was entitled to rely on the date of filing of the Priority Document as the priority date for those claims. This included a consideration of what information comprised the prior art base at that time, including what knowledge was part of common general knowledge. This consideration also took place in a context where the primary judge had rejected the appellants’ contention that the relevant claims were not fairly based for the purposes of s 40(3) of the Act.
It is clear that the determination of the correct priority date is pivotal to the comparison required by s 18(1)(b)(ii) of the Act. If the correct priority date is not 25 March 1996, but the deferred priority date of 20 December 2006 (as, in my opinion, it is) or even 30 October 2003, it can be appreciated that the prior art base may be radically different from that considered by her Honour, especially where, as here, Wyeth’s own embodiment of the invention had been on the market for a number of years before the relevant priority date and would have been prior art information.
In my view there is no utility in the Full Court now proceeding to deal with this part of the case by reference to the incorrect priority date of 25 March 1996. To do so would not only be to ignore critical findings made in this appeal about the relevant priority date but also to engage in an essentially barren exercise given that, regardless of the priority date chosen, the relevant claims are not valid, for want of fair basis under s 40(3) of the Act.
Entitlement and false suggestion
The primary judge rejected the appellants’ contention that Wyeth’s failure to correctly nominate all inventors in its application for the Patent constituted a false suggestion or misrepresentation on which the Patent was obtained: see s 138(3)(e).
The primary judge also rejected the appellants’ contention that Wyeth was not entitled to the Patent: see s 138(3)(a).
It is convenient to deal with these two challenges to validity together.
As to the question of false suggestion or misrepresentation, there is no debate about the fact that Ms Sherman was shown, incorrectly, to be the only inventor on Wyeth’s application for the Patent. The primary judge found that Messrs Clark, Lamer and White were co-inventors with Ms Sherman. Her Honour also found that all these inventors were employees of Wyeth at all material times. In its patent application, Wyeth claimed to be the person entitled to the invention based on the assignment to it of the rights in and to the invention. The primary judge reasoned that the representation that Ms Sherman was the sole inventor could not have been material to the grant of the Patent because the only material representation was Wyeth’s entitlement as assignee of the invention, a question which the primary judge subsequently resolved in Wyeth’s favour: see Reasons [552] and [554].
In my view, no error has been demonstrated in the primary judge’s approach to determining this aspect of the appellants’ case on false suggestion and misrepresentation. I agree with the primary judge that the determination of this issue depends on whether the appellants could demonstrate that Wyeth was not entitled to the Patent in reliance on s 15(1) of the Act.
As to the question of entitlement, the evidence before the primary judge revealed that the inventors had each entered into a standard form invention and disclosure agreement with a subsidiary company, Ayerst Laboratories Inc (Ayerst), of American Home Products Corporation (American Home Products). Between 1996 and 2001 the inventors also executed a series of specific assignments of patent and other rights in the invention to American Home Products.
On 11 March 2002, American Home Products merged with one of its subsidiary companies, to become Wyeth.
Moreover, through a series of corporate reorganisations, Ayerst was merged with another company, the surviving corporation being a company ultimately named, as at 21 March 2002, Wyeth Pharmaceuticals Inc (Wyeth Pharmaceuticals). In December 2002, Wyeth Pharmaceuticals was merged into another Wyeth subsidiary company, with all the “estate, rights, privileges, immunities, powers and franchises of Wyeth Pharmaceuticals being vested in and held and enjoyed by” the Wyeth subsidiary company, the name of which was then changed to Wyeth Pharmaceuticals Inc. I include that company in the description “Wyeth Pharmaceuticals”.
Annual Reports lodged under United States securities legislation for the years 2001 to 2008 showed Wyeth Pharmaceuticals to be a wholly-owned subsidiary of Wyeth.
Part of the appellants’ case before the primary judge was that Wyeth had an evidentiary onus to establish its entitlement. The primary judge rejected that contention, correctly in my view. It was for the appellants to establish a lack of entitlement, not for Wyeth to prove its entitlement. That is not to say, however, that the appellants could not discharge that onus by reference to material that Wyeth itself had tendered on this issue.
In this connection the appellants did not seek to adduce their own evidence. Their initial challenge to Wyeth’s entitlement was based solely on the alleged false suggestion or misrepresentation arising from the fact that only Ms Sherman was shown on Wyeth’s original application for the Patent, not on the history or the effect of corporate reorganisations revealed by Wyeth’s evidence. However, in light of the evidence adduced by Wyeth, the appellants’ approach was to raise arguments directed to the sufficiency of that evidence or to what that evidence might otherwise show.
The highest that the appellants’ case rose on this issue at trial was that “the person most likely to be entitled to the invention claimed in the Patent is a company the corporate status of which is unclear, or in any event has not come forward in these proceedings”: see Reasons [572]. Why this should be so is not clear because the evidence before the primary judge either showed or supported the conclusion that American Home Products had been merged into the one surviving corporation that was Wyeth, and Ayerst, through a succession of mergers, had been merged in the surviving corporation that was Wyeth Pharmaceuticals. Furthermore, Wyeth Pharmaceuticals was a wholly-owned subsidiary of Wyeth.
The primary judge concluded that the appellants had not discharged their onus of establishing lack of entitlement in the face of the evidence of assignment of all rights in connection with the invention to Wyeth: see Reasons [588]. The evidence of assignment was constituted by the specific assignments by the inventors to Wyeth.
The primary judge went further and held that, in any event, the terms of the standard form invention and disclosure agreements were themselves sufficient to establish Wyeth’s entitlements to the invention. The primary judge held that clauses 4, 5 and 8 of those agreements provided “a workable scheme for the identification and vesting of all rights as identified in Wyeth’s subsidiary … in circumstances where Wyeth was the sole shareholder”: see Reasons [589].
Those clauses were as follows:
4.(a)AYERST and EMPLOYEE agree that all Confidential Information, including its uses and the ideas related to its advertisement and promotion, is AYERST’s sole property. Further, all the Confidential Information developed, improved, discovered, invented or conceived by EMPLOYEE, solely or in concert with others, during the term of his (or her) employment with AYERST, shall become AYERST’s sole property.
5.EMPLOYEE will immediately disclose and assign to AYERST his (or her) entire right and interest in and to (1) developments, improvements, discoveries and inventions related to Confidential Information; (2) any applications for patents that may be filed relating to Confidential Information, and (3) any letters patent that may issue relating to such Confidential Information. He (or she) will also promptly give all assistance possible, including signing of necessary documents, for the preparation and prosecution of any application for new, revised or reissued patents on the above, or divisional or corresponding foreign patent applications thereon, as may be requested by AYERST.
8.EMPLOYEE agrees that every part of this agreement applies to, inures to the benefit of, and is enforceable by any of the subsidiary, affiliate, associate, or successor companies of AYERST or its parent company, American Home Products Corporation. In addition, this Agreement shall insure [sic] to the benefit of and be binding upon EMPLOYEE, EMPLOYEE’S heirs, executors, and administrators.
Her Honour then concluded, in accordance with a submission advanced by Wyeth, that, by accepting the specific assignments made to it, and in applying for the Patent in its own name, Wyeth had signified its assent to that transaction on its own behalf and on behalf of its wholly-owned subsidiary Wyeth Pharmaceuticals. That assent was consistent with clause 8 of the standard form invention and disclosure agreement.
The substance of the appellants’ contentions on appeal, reflected in submissions made by Alphapharm, was that the primary judge had concluded (correctly, according to the appellants’ submissions) that the invention had been assigned to Ayerst by the standard form invention and disclosure agreements, but that her Honour erred by finding that: (a) those rights vested in the company called Wyeth Pharmaceuticals, following the merger in December 2002; and (b) Wyeth had established that there had been an assignment, disposition or alienation of those rights to it, based on the fact that it was the sole shareholder of Wyeth Pharmaceuticals. The appellants maintained the position that it was not sufficient for Wyeth to rely on the documents it had tendered; it had to go further and prove the legal effect of the documents it had tendered including, where relevant, the content of foreign law.
In my view the primary judge did not err in rejecting the appellants’ contention that Wyeth was not entitled to the Patent. It was not incumbent on Wyeth to positively prove its chain of title. It was entitled to apply for the Patent on an assertion as to its entitlement. That assertion of its entitlement was based on its status as “the assignee of the actual inventor”: see the Request for a Standard Patent and Notice of Entitlement lodged by Wyeth on

30 October 2003 and Reasons [541]. That claimed entitlement derives from s 15(1)(c) of the Act which, for its own purposes, treats an “invention” as a species of property. The position revealed on the face of the documents was consistent with Wyeth’s assertion as to its entitlement.
First, there were specific assignments to Wyeth of the rights in and to the invention by the inventors. Wyeth is entitled to rely on those documents for what they show on their face.
Secondly, in my view, clauses 4(a) and 5 of the standard form invention and disclosure agreement did not operate to immediately assign all rights in and to the invention to Ayerst. Rather, those clauses constituted a contractual obligation on the part of the inventor to give over inventions to Ayerst and to provide other assistance to Ayerst in applying for patents in respect of inventions. It follows that the standard form invention and disclosure agreements did not stand in the way of the specific assignments taking effect in favour of Wyeth, according to their terms. There is no evidence to suggest that Wyeth Pharmaceuticals or any other surviving Wyeth subsidiary company has asserted a superior right to Wyeth’s or could realistically do so over Wyeth’s objection.
In this connection, I am not satisfied that the primary judge did find (as the appellants contend) that the invention was assigned by the standard form invention and disclosure agreements. The primary judge found no more than that the standard form invention and disclosure agreements provided a “workable scheme” for the identification and vesting of rights, which her Honour then considered in the context of Wyeth itself taking direct assignments from the inventors in circumstances where, absent any evidence to the contrary, Wyeth Pharmaceuticals, as the successor of Ayerst and as Wyeth’s wholly-owned subsidiary, was subject to Wyeth’s corporate will and could be taken to have assented to such transfers to its parent company.
If the appellants wished to contend, contrary to what was shown on the face of the documents in evidence, that Wyeth Pharmaceuticals was not the successor of Ayerst or that Wyeth Pharmaceuticals was not a wholly-owned subsidiary of Wyeth (and, therefore, not subject to Wyeth’s corporate will), or that, say, Wyeth Pharmaceuticals had asserted and maintained a valid prior claim to ownership of the invention, or that, realistically, it could and would make such a claim, then it was for them to adduce evidence of the relevant facts, including proof of relevant foreign law if necessary: see s 7(3)(a) of the Foreign Corporations (Application of Laws) Act 1989 (Cth). That position was not achieved by the appellants contending that Wyeth had failed to discharge an onus which it did not bear or by pointing, argumentatively, to the possibility of other legal outcomes.
Infringement

The primary judge rejected Alphapharm’s contention that the use of its ENLAFAX XR formulation in the methods of the relevant claims would not infringe those claims because ENLAFAX XR “is hydrogel tablet technology within the meaning of the specification, and therefore does not infringe the claims”.
Acceptance of Alphapharm’s contention required acceptance of the related contention that the words “a single daily dosing formulation of venlafaxine hydrochloride” should be construed as meaning “a single daily dosing formulation of venlafaxine hydrochloride (not utilising hydrogel tablet technology)”.
For the reasons given above in relation to the issue of internal fair basing, the relevant claims do not bear the construction for which Alphapharm contends.
It follows, in my view, that the primary judge did not err in her conclusion. However, as I have also found, the impermissible breadth of the relevant claims stands as an independent reason why those claims are invalid.
DISPOSITION
The appeals should be allowed. I agree with the orders proposed by Bennett J.

I certify that the preceding one hundred and fifteen (115) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates.
Associate:
Dated: 28 October 2011

Citation:		Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2011] FCAFC 132
Appeal from:		Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2010] FCA 1211
Parties:		SIGMA PHARMACEUTICALS (AUSTRALIA) PTY LIMITED ACN 004 118 594 v WYETH AND WYETH AUSTRALIA PTY LIMITED ACN 000 296 211
ALPHAPHARM PTY LIMITED ACN 002 359 739 v WYETH AND WYETH AUSTRALIA PTY LIMITED ACN 000 296 211
GENERIC HEALTH PTY LTD ACN 110 617 859 v WYETH AND WYETH AUSTRALIA PTY LIMITED ACN 000 296 211
File numbers:		NSD 1533 of 2010 NSD 1603 of 2010 NSD 1644 of 2010
Judges:		BENNETT, NICHOLAS AND YATES JJ
Date of judgment:		28 October 2011
Catchwords:		PATENTS – characterisation of invention in priority document – whether method disclosed in priority document is confined to particular encapsulated formulation – relevance of claims of priority document to characterisation of invention PATENTS – characterisation of invention in patent – whether invention involves discovery of new method with any formulation PATENTS – validity – external fair basis – priority date – whether amended claim is “in substance disclosed” in priority document PATENTS – validity – internal fair basis – relevance of consistory clause mirroring claim of patent – whether claims encompassing a formulation using hydrogel technology lack fair basis where specification states that attempts to produce a formulation using hydrogel technology were fruitless and such a formulation is impossible to achieve – whether claims unconfined to treatment of depression lack fair basis where specification refers only to depression PATENTS – validity – sufficiency – relevance of statements made in specification that attempts to produce formulation using hydrogel technology were fruitless and such a formulation is impossible to achieve – relevance of failure to provide description to enable performance of claimed methods using hydrogel tablet technology PATENTS – validity – false suggestion – relevance of expert evidence concerning statement made in specification that production of formulation using hydrogel technology is impossible to achieve – whether statement was a false suggestion material to grant of patent – whether statement that attempts to produce formulation using hydrogel technology were fruitless was a false suggestion material to grant of patent – relevance of absence of evidence from Commissioner PATENTS – validity – false suggestion– relevance of failure to nominate all inventors correctly PATENTS – validity – clarity – definition of therapeutic blood plasma concentration – where further steps required to ascertain whether a particular formulation infringes patent PATENTS – validity – obviousness – expert evidence – whether knowledge of existence of patent and of successful formulation taints experts’ conclusions with hindsight PATENTS – validity – entitlement – relevance of failure to nominate all inventors correctly – evidentiary onus PATENTS – infringement – whether claims of patent should be construed to exclude hydrogel technology
Legislation:		Foreign Corporations (Application of Laws) Act 1989 (Cth) s 7(3)(a) Patents Act 1990 (Cth) ss 7(2), 7(3), 15(1), 18(1)(b)(ii), 40(2)(a), 40(3), 114, 138(3)(b), 138(3)(d), 138(3)(e), 138(3)(f) Patent Regulations 1991 (Cth) regs 3.12, 3.14(b)
Cases cited:		Apotex Pty Ltd v Sanofi-Aventis (2009) 82 IPR 416 cited Atlantis Corporation Pty Ltd v Schindler (1997) 39 IPR 29 cited Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd (2008) 78 IPR 463 cited Fresenius Medical Care Australia Pty Ltd v Gambro Pty Ltd (2005) 224 ALR 168 followed ICI Chemicals & Polymers Ltd v The Lubrizol Corporation Inc (2000) 106 FCR 214 cited Inverness Medical Switzerland GmbH v MDS Diagnostics Pty Ltd (2010) 85 IPR 525 applied Kimberly-ClarkAustralia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 cited LockwoodSecurity Products Pty Ltd v Doric Products Pty Ltd (2004) 217 CLR 274 applied No-Fume Ltd v Frank Pitchford & Co Ltd (1935) 52 RPC 231 applied Ranbaxy Australia Pty Ltd v Warner-Lambert Co LLC (2008) 77 IPR 449 applied Shavev HV McKay-Massey Harris Pty Ltd (1935) 52 CLR 701 cited Stauffer Chemical Co’s Application [1977] RPC 33 cited W M Wrigley Jr Company v Cadbury Schweppes Pty Ltd (2005) 66 IPR 298 cited
Date of hearing:	14-17 February 2011
Date of last submissions:	24 February 2011
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	296
Counsel for the First Appellant:	Mr D Shavin QC with Ms H Rofe
Solicitor for the First Appellant:	Griffith Hack
Counsel for the Second Appellant:	Mr S Burley SC with Mr P Flynn
Solicitor for the Second Appellant:	Mallesons Stephen Jaques
Counsel for the Third Appellant:	Ms A Bowne SC with Mr A Fox
Solicitor for the Third Appellant:	Middletons
Counsel for the Respondents:	Mr J Ireland QC with Mr C Dimitriadis
Solicitor for the Respondents:	Jones Day

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1533 of 2010

JUDGES:	BENNETT, NICHOLAS AND YATES JJ
DATE OF ORDER:	28 OCTOBER 2011
WHERE MADE:	SYDNEY

JUDGES:	BENNETT, NICHOLAS AND YATES JJ
DATE:	28 OCTOBER 2011
PLACE:	SYDNEY