The ending point for 'starting point'

In brief

The Full Federal Court has published its much-anticipated judgment in the AstraZeneca v Apotex appeal. A bench of five judges heard the appeal (in contrast to the usual three judges) in order to be able to clarify, or overrule if appropriate, an earlier Full Court decision relating to the correct test for assessing 'inventive step' – known as the 'starting point' issue. This ruling restores the tighter test for obviousness and should be welcomed by patentees. As Managing Associate Clare Young and Senior Associate Suzy Muller report, the court also provided other useful guidance on infringement of method of medical treatment claims, and on the issue of whether injunctions are always the right remedy for patent infringement.

Background

AstraZeneca AB and AstraZeneca Pty Limited (AZ) were the patentee and exclusive licensee respectively of three Australian patents relating to rosuvastatin, a cholesterol-lowering drug known by the brand name CRESTOR. None of the patents-in-suit claimed the compound rosuvastatin itself. The appeal concerned only two of the three patents:

• the '051 patent' or the 'low dose patent', which claimed the use of rosuvastatin at particular doses for the treatment of high cholesterol; and
• the '842 patent' or the 'cation patent', which claimed pharmaceutical compositions that include rosuvastatin as the active ingredient.

Watson, Ascent and Apotex (all suppliers of generic pharmaceutical products) each wished to supply generic versions of AZ’s rosuvastatin products in 5mg, 10mg, 20mg and 40mg doses.

On 19 March 2013, Justice Jagot at first instance ordered the revocation of all three claims of the 051 patent and some claims of the 842 patent, and AZ’s claims for infringement of each patent were dismissed: Apotex Pty Ltd v AstraZeneca AB (No 4) [2013] FCA 162. On 11 June 2013, Justice Jagot ordered that the balance of the claims of the 842 patent be revoked: Apotex Pty Ltd v AstraZeneca AB (No 5) [2013] FCA 560.

AZ appealed the first of these two decisions. The Full Court had to deal with a wide range of grounds of invalidity, including entitlement, novelty, inventive step, manner of manufacture and fair basis, as well as infringement under section 117 of the Patents Act. 

The end result was that the appeal failed and AZ's patents will be revoked (subject to an appeal to the High Court). However that result does not tell the whole story: AZ was successful on 'starting point' and novelty in relation to the 051 patent, and had the 051 patent been held to be valid, would have been successful on infringement under sections 117(2)(b) and 117(2)(c) of the Patents Act.

We focus on what we consider to be the key issues in the appeal decision below.

Inventive step – the 'starting point' issue

In a nutshell, the 'starting point' issue is whether a valid patent may be obtained for an invention that comprises a solution to a problem in the relevant art where the solution is obvious, but where the problem is neither common general knowledge nor information to which regard may be had under s7(3) of the Patents Act. Put another way, if the inventor has knowledge of a compound, which is not within the common general knowledge of those skilled in the art or could not have reasonably been found and thought relevant by those skilled persons, is the 'starting point' for the assessment of obviousness allowed to include that compound?

In short, Justice Jagot at first instance thought that it should. Her Honour followed the reasoning of the Full Court in Apotex Pty Ltd v Sanofi-Aventis (2009) 82 IPR 416 that characterisation of the invention depends on the terms of the claims construed in the context of the specification as a whole. Her Honour held that the specification of the 051 patent 'identifies the invention in a manner that pre-supposes the existence of rosuvastatin'. On that basis, Her Honour decided that the skilled person is entitled to assume knowledge of that compound too.   

The Full Court disagreed with that reasoning. A key reason given in the joint judgment of Justices Besanko, Foster, Nicholas and Yates is that the 'notion that the question of inventive step can be answered by reference to information which has not been made publicly available is antithetical to patent law'.

The Full Court stopped short of overruling the Apotex v Sanofi-Aventis decision. In a statement which employs an unhelpful double-negative¹, it appears that the reasoning in Apotex v Sanofi-Aventis is confined to patents to be determined under the 'old' act, being the Patents Act 1952. Justice Jessup went a step further and said that 'their Honours' test would misdirect the focus of the relevant inquiry away from the claim and this cannot stand alongside' another Full Court decision.

The current Patents Act 1990 has undergone two major revisions since the version that applied in this case. Under the current version of the Act, which incorporates the Raising the Bar amendments that started on 15 April 2013, the body of knowledge against which an invention is assessed for obviousness includes any publicly available document whether or not the person skilled in the art would have found it or thought that it was relevant.

Novelty (051 patent)

The Full Court found that the primary judge had impermissibly supplemented the disclosures of a prior publication (known as 'Watanabe') by reference to information that was part of the common general knowledge but not part of the disclosure that Watanabe itself made. The court found that, although common general knowledge can be used to construe a prior art document, such use is limited and 's7(1) does not permit it to be used as a resource that can be deployed complementarily to arrive at a disclosure which the document alone, properly construed, does not make'.

Entitlement (051 patent)

At first instance, the primary judge found that the 051 patent was invalid because AZ was not entitled to it, on the basis that the invention in that patent was invented by employees of another company, Shionogi, none of whom was named as inventor. AZ sought to amend its Notice of Appeal to appeal Justice Jagot's finding on entitlement on the basis of an amendment to the Patents Act that came into effect after the date on which the primary judge delivered judgment and made orders with respect to the 051 patent. The amendment to the Act came into effect on 15 April 2013 and introduced new s22A, and new s138(4) which relevantly provide:

22A: Validity not affected by who patent is granted to
A patent is not invalid merely because:
(a)  the patent, or a share in the patent, was granted to a person who was not entitled to it; or
(b)  the patent, or a share in the patent, was not granted to a person who was entitled to it.
138: Revocation of patents in other circumstances
(4)  A court must not make an order under subsection (3) on the ground that the patentee is not entitled to the patent unless the court is satisfied that, in all the circumstances, it is just and equitable to do so.

The key issue was how the transitional provisions relating to those new sections were to operate, in the circumstances of an appeal from a first instance determination of an application for a revocation order that was determined before 15 April 2013.

As the revocation orders had already been made by Justice Jagot, the Full Court was not being called upon to make a revocation order under s138(3)(a) and therefore s138(4) did not apply. The only circumstance in which the Full Court would allow the appeal would be if none of the grounds of revocation could be sustained and, as the Full Court upheld Justice Jagot's decision on lack of  inventive step (despite reversing Justice Jagot's decision on 'starting point'), that was not the case.

Infringement (051 patent)

At first instance the primary judge held that, if the 051 patent was valid, AZ would have proved threatened infringement in respect of the proposed supply of the generic 5mg and 10mg products, but not the 20mg and 40mg products.

The reason for the distinction between the 5mg and 10mg products on the one hand, and the 20 and 40mg products on the other, was that the 051 patent claimed 5mg and 10mg doses only. There was evidence filed by AZ to the effect that consumers and pharmacies would engage in 'tablet splitting' whereby the 20mg and 40mg products would be split into halves or quarters and therefore used in an infringing manner.

AZ appealed this finding under s117(2)(b) (that the generic companies had the requisite 'reason to believe' that their products would be put to infringing use) and s117(2)(c) (that the generic companies would supply the product with instructions to put the product to infringing use) of the Act in relation to the supply of the 20mg product (but not the 40mg product).

In relation to the Watson generic product, the Full Court found that, given the Watson product information document included a statement that '[t]he 10, 20 and 40 mg tablets can be divided into equal halves', this amounted to 'a clear inducement to consumers of its 20mg dosage product to engage in tablet splitting'. Accordingly the Full Court found that, had they been of the opinion that the claims of the 051 patent were valid, they would have found Watson liable for infringement under s117(2)(c).

After reaching the same conclusion as the primary judge that rosuvastatin is not a staple commercial product, the Full Court then found, contrary to the primary judge, that the evidence did establish that the generic parties had the requisite reason to believe under s 117(2)(b) that some consumers would put the generic parties’ 20mg products to an infringing use. That is, those consumers who would split the tablets into 5mg or 10mg doses. Interestingly, their Honours went on to comment on the blanket nature of the relief sought by AZ, stating that 'the application of s117(1) when read with s117(2)(b) may be particularly challenging for a patentee both in establishing an actual or threatened supply to which s117(1) can apply and in fashioning appropriate injunctive relief in circumstances where there are many users of the product only some of whom are likely to put the product to an infringing use' and that in certain circumstances 'some consideration of proportionality as between the extent of the infringing use that is forecast and the scope of any injunctive relief is warranted'. Unfortunately, the decision provides no guidance as to what the 'appropriate injunctive relief' would be in these circumstances as, given that the appeals were dismissed, the Full Court did not need to do so.