FEDERAL COURT OF AUSTRALIA
Alphapharm Pty Ltd v H Lundbeck A/S [2014] FCA 1185
IN THE FEDERAL COURT OF AUSTRALIA | |
| First Appellant APOTEX PTY LTD Second Appellant ASPEN PHARMA PTY LTD Third Appellant SANDOZ PTY LTD Fourth Appellant | |
AND: | Respondent |
DATE OF ORDER: | |
WHERE MADE: |
THE COURT ORDERS THAT:
2. The appellants pay the respondent’s costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
NEW SOUTH WALES DISTRICT REGISTRY | |
GENERAL DIVISION | NSD 706 of 2014 |
BETWEEN: | ALPHAPHARM PTY LIMITED First Appellant APOTEX PTY LTD Second Appellant ASPEN PHARMA PTY LTD Third Appellant SANDOZ PTY LTD Fourth Appellant
|
AND: | H LUNDBECK A/S Respondent
|
JUDGE: | RARES J |
DATE: | 6 NOVEMBER 2014 |
PLACE: | SYDNEY |
REASONS FOR JUDGMENT
1 Alphapharm Pty Ltd, Apotex Pty Ltd, Aspen Pharma Pty Ltd and Sandoz Pty Ltd (the opponents) are manufacturers of generic pharmaceutical products. The opponents have appealed to this Court under s 75(4) of the Patents Act 1990 (Cth) from a decision of a delegate of the Commissioner of Patents made on 25 June 2014: Alphapharm Pty Ltd v H Lundbeck A/S [2014] APO 41. The delegate found that, first, all of the grounds relied on by the opponents in opposing a grant of an extension of the term of H Lundbeck A/S’s Australian patent No 623144 (the patent) had failed and, secondly, the standard 20 year term of the patent should be extended from 13 June 2009 to 9 December 2012.
2 Claim 1 of the patent claimed a molecule, using its chemical name, being the positive enantiomer of citalopram, or, its convenient abbreviation, the (+)-enantiomer, and “non-toxic acid addition salts thereof” in the following terms:
1. (+)-1-(3-dimethylaminopropyl)-1-(4'-fluorophenyl)-1, 3-dihydroisobenzofuran-5-carbonitrile and non-toxic acid addition salts thereof.
That molecule is also known as (+)-citalopram or escitalopram. It is used in the treatment of major depression, as well social anxiety, generalised anxiety and obsessive-compulsive disorders.
3 Enantiomers are pairs of molecules that are comprised of atoms of the same constitution, or structural arrangement, except that each member of the pair is a non-superimposable mirror image of the other. The unchallenged expert evidence of Dr Richard Oppenheim explained that a pair of enantiomers is analogous to a pair of human hands. The properties of the right and left hands are substantively the same. They have the same structural arrangement except that each is a mirror image of the other and so are obviously different in a very limited respect. Dr Oppenheim explained that the substantive differences between the members of a pair of enantiomers are that, first, each rotates plane polarised light in a different direction but otherwise has the same physical properties and, secondly, each has the same chemical properties except with optically active reagents and the products of those reactions.
4 In June 2008, Lindgren J dismissed challenges to the validity of claim 1 by Alphapharm and Arrow Pharmaceuticals Pty Ltd (which was a wholly owned subsidiary of Aspen, then called Sigma Pharmaceuticals (Australia) Pty Ltd). They contended that claim 1 lacked novelty on the basis that the (+)-enantiomer had been disclosed previously in Australian patent No 509445 (the Cipramil patent). Lundbeck was also the patentee of the Cipramil patent that had been sealed on 13 October 1980 and expired on 5 January 1993. The Cipramil patent claimed citalopram, which is a racemic mixture, being one that contains equal parts or amounts of the (+)- and (-)-enantiomers of citalopram. A racemic mixture is also known as a racemate. Lindgren J upheld the contention of Alphapharm and Arrow that there was no basis for an extension of the term of the patent based on the inclusion of LEXAPRO escitalopram (as oxalate) 20mg and 10mg blister packs (Lexapro) on the Australian Register of Therapeutic Goods (ARTG) with a start date of 16 September 2003: Alphapharm Pty Ltd v H Lundbeck A/S (2008) 76 IPR 618.
5 Relevantly, on 12 June 2009, Bennett J and Middleton J, over the dissent of Emmett J, held in the appeal from Lindgren J’s decision that claim 1 of the patent was valid and, properly construed, it was for the pure, isolated or separated (+)-enantiomer: H Lundbeck A/S v Alphapharm Pty Ltd (2009) 177 FCR 151 at 179 [117], 186 [150]-[151], 187 [157]-[160], 203 [244] per Bennett J, 203-204 [250]-[252] per Middleton J agreeing. The Full Court also dismissed Lundbeck’s appeal against Lindgren J’s decision on the extension of the term of the patent. As will appear, the major issues in the appeal before me involve the consequences for the parties that flow from the reasoning of the majority of the Full Court about why Lundbeck was not entitled to an extension of the term of the patent based on the inclusion of Lexapro in the ARTG.
6 The opponents contend, on this appeal, that Lundbeck was not entitled to an extension of time of the patent, and the delegate erred in granting it, because:
(1) the pharmaceutical substance per se disclosed in claim 1 of the patent was the pure, isolated or separated form of the molecule, being the (+)-enantiomer, for the purposes of s 70(2) of the Act, and that that pure form of the molecule was not included in the goods registered as “CIPRAMIL Citalopram hydrobromide 20mg tablet blister pack” on the ARTG with a start date of 9 December 1997 for the purposes of s 70(3). The Cipramil tablets were produced as an exploitation of the properties of the racemate (the per se issue);
(2) the requirement of s 70(4) of the Act, that the term of the patent had not previously been extended, could not be satisfied because the term of the patent in suit had been previously extended to 13 June 2014 by the delegate and that extension had been recorded in the Register of Patents on 17 June 2004, although, subsequently, on 19 June 2008, Lindgren J had ordered under s 192 of the Act that the Register be rectified by removing the extension of time, and the Full Court upheld that decision (the prior extension issue);
(3) the delegate erred because he exceeded his function of deciding the opposition under s 75(2) by also proceeding to grant the challenged extension of time under s 76(1)(b) of the Act, before this appeal had been determined (the erroneous grant issue).
7 The opponents also sought a stay of any implementation of the delegate’s decision to extend the patent pending the reserved decision of the High Court on their challenge to the delegate’s power to extend the time under s 223 of the Act (the s 223 proceeding) for Lundbeck to make its present application for the extension of the term of the patent (the stay issue). Yesterday, the High Court dismissed that appeal: Alphapharm Pty Ltd v H Lundbeck A/S [2014] HCA 42.
8 Lundbeck relied on a notice of contention that raised arguments that the opponents were estopped from relying on their present grounds of opposition. That was because, Lundbeck contended, the opponents’ argument that claim 1 of the patent was not for a pharmaceutical substance per se, but simply for an isolated molecule, being the (+)-enantiomer, had been decided adversely to the opponents in each of the earlier litigation in Lundbeck 177 FCR 151 and the more recent s 223 proceedings in the Full Court in Aspen Pharma Pty Ltd v H Lundberg A/S (2013) 216 FCR 508. Lundbeck argued that each of those decisions gave rise to one or more species of estoppel including an issue estoppel, and in respect of Apotex and Sandoz, which were not parties to any relevant litigation prior to the current extension of time matters, they were approbating and reprobating because of the way in which they had argued in the s 223 proceeding. The opponents countered with an estoppel that they asserted against Lundbeck.
9 I have not dealt with the parties’ convoluted arguments on the various exotic, if not arcane, estoppels that each side asserted against the other. Those arguments involved perusing and analysing a myriad of submissions and arguments one or more of the parties had or could have, but had not, advanced against another. In my opinion, those arguments do not need to be considered because each of the substantive grounds of the opposition fail for the reasons below.
The legislative scheme
10 Part 3 of the Act provided for extension of the term of standard patents relating to pharmaceutical substances. The Dictionary in Sch 1 of the Act defined “pharmaceutical substance” as meaning “a substance (including a mixture or compound of substances) for therapeutic use” with particular applications involving interactions with the human body. It is not in dispute that each of the (+)-enantiomer and the racemate of citalopram is a pharmaceutical substance within the meaning of the Act.
11 The expression “pharmaceutical substance” was a central concept in ss 70 and 71, that provided:
70 Applications for extension of patent
(1) The patentee of a standard patent may apply to the Commissioner for an extension of the term of the patent if the requirements set out in subsections (2), (3) and (4) are satisfied.
(2) Either or both of the following conditions must be satisfied:
(a) one or more pharmaceutical substances per se must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification;
(b) one or more pharmaceutical substances when produced by a process that involves the use of recombinant DNA technology, must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification.
(3) Both of the following conditions must be satisfied in relation to at least one of those pharmaceutical substances:
(a) goods containing, or consisting of, the substance must be included in the Australian Register of Therapeutic Goods;
(b) the period beginning on the date of the patent and ending on the first regulatory approval date for the substance must be at least 5 years.
Note: Section 65 sets out the date of a patent.
(4) The term of the patent must not have been previously extended under this Part.
(5) For the purposes of this section, the first regulatory approval date, in relation to a pharmaceutical substance, is:
(a) if no pre-TGA marketing approval was given in relation to the substance – the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods of goods that contain, or consist of, the substance; or
(b) if pre-TGA marketing approval was given in relation to the substance – the date of the first approval.
(6) For the purposes of this section, pre-TGA marketing approval, in relation to a pharmaceutical substance, is an approval (however described) by a Minister, or a Secretary of a Department, to:
(a) market the substance, or a product containing the substance, in Australia; or
(b) import into Australia, for general marketing, the substance or a product containing the substance.
71 Form and timing of an application
Form of application
(1) An application for an extension of the term of a standard patent must:
(a) be in the approved form; and
(b) be accompanied by such documents (if any) as are ascertained in accordance with the regulations; and
(c) be accompanied by such information (if any) as is ascertained in accordance with the regulations.
For this purpose, document includes a copy of a document.
Timing of application
(2) An application for an extension of the term of a standard patent must be made during the term of the patent and within 6 months after the latest of the following dates:
(a) the date the patent was granted;
(b) the date of commencement of the first inclusion in the Australian Register of Therapeutic Goods of goods that contain, or consist of, any of the pharmaceutical substances referred to in subsection 70(3);
(c) the date of commencement of this section.
12 The Commissioner had to accept an application for an extension to the term of a patent if satisfied, on the balance of probabilities, that the requirements of ss 70 and 71 were met (s 74(1)). The next stages in the process of consideration of an extension of the term of the patent were those in ss 75 and 76. The Minister or any other person could oppose the grant of an extension “on the ground that one or more of the requirements of [ss] 70 and 71 are not satisfied in relation to the extension” and on no other ground (s 75(1)). And, s 75(4) provided that the applicant and any opponent had the right to appeal to this Court against a decision of the Commissioner under s 75. Next, ss 76 and 77(1) provided that:
76 Grant of extension
(1) The Commissioner must grant an extension of the term of a standard patent if:
(a) there is no opposition to the grant; or
(b) in spite of opposition, the Commissioner’s decision, or the decision on appeal, is that the extension should be granted.
(2) If the Commissioner grants an extension, the Commissioner must notify the applicant in writing of the grant and publish a notice of the grant in the Official Journal.
77 Calculation of term of extension
(1) If the Commissioner grants an extension of the term of a standard patent, the term of the extension is equal to:
(a) the period beginning on the date of the patent and ending on the earliest first regulatory approval date (as defined by section 70) in relation to any of the pharmaceutical substances referred to in subsection 70(2);
reduced (but not below zero) by:
(b) 5 years.
13 Where a patent is extended, s 78 limited the exclusive rights that the patentee could assert in an action for infringement. Relevantly, the patentee could not enforce its monopoly if a person was exploiting, either for a purpose other than therapeutic use (as that last expression was defined in the Act) (s 78(a)(i)) or any form of the invention other than, a pharmaceutical substance per se that was in substance disclosed in the complete specification of the patent and in substance fell within the scope of the claim or claims of that specification (s 78(b)(i)).
14 Next, ss 79 and 79A provided:
79 Rights of patentee if extension granted after patent expires
If:
(a) a patentee applies for an extension of the term of a standard patent; and
(b) the term of the patent expires before the application is determined; and
(c) the extension is granted;
the patentee has, after the extension is granted, the same rights to start proceedings in respect of the doing of an act during the period:
(d) commencing on the expiration of the term of the patent; and
(e) ending on the day on which the extension was granted;
as if the extension had been granted at the time when the act was done.
79A Commissioner not to make decision if court proceedings pending
If:
(a) a patentee of a standard patent applies for an extension of the term of the patent; and
(b) relevant proceedings in relation to the patent are pending;
the Commissioner must not make any decision under this Part in relation to the patent without the leave of the court.
Background
15 The Cipramil patent claimed the racemate of citalopram. Thus, it claimed and disclosed both the (+)- and (-)-enantiomers as the constituent elements of the racemic mixture. Critically, however, the means of separating the two enantiomers out of the racemate was not known until the invention claimed in the patent in suit. Thus, until the discovery of the method of isolating the (+)-enantiomer in claim 6 of the patent in suit, the two enantiomers were administered together as the racemate, and the pharmacological properties of each, as opposed to those of the mixture of the two, were not known. The complete specification in the patent taught that the (+)-enantiomer had a greater uptake to the body’s receptor cells than the racemic mixture, while the (-)-enantiomer had a much lower uptake than the positive molecule and the racemate.
16 In other words, by isolating, separating or purifying the (+)-enantiomer from its negative pair, the active pharmaceutical ingredient, being the molecule of the (+)-enantiomer, operated significantly more effectively than each of the racemate and the (-)-enantiomer. In Lundbeck 177 FCR at 194-195 [193], 203 [250], Bennett J, with whom Middleton J agreed, held that the Cipramil patent did not anticipate the patent in suit because the former described only the racemate, being the mixture of the (+) and (-) enantiomers, and did not disclose to the skilled, but non-inventive, addressee how, in the absence of experimentation, to identify which enantiomer in the racemate was which and had any particular pharmaceutical properties. Thus, the disclosure in the Cipramil patent did not point specifically to the independent existence or pharmaceutical properties of each of the two enantiomers.
17 Accordingly, Bennett J found that the Cipramil patent did not disclose an invention that, if performed, would necessarily infringe the patent in suit. Her Honour explained that the Cipramil patent did not negate the novelty of claim 1 of the patent in suit, concluding (177 FCR at 195 [194]):
It is the case that the skilled addressee knew that the racemate could be resolved into the enantiomers but there was nothing to tell him or her to do so. Further, the prior citalopram patent was silent as to the means of obtaining the enantiomers and there were different methods available to try to do so. There were no clear and unmistakable directions to obtain the enantiomers. Some of the available methodology may have been successful, other methods may not.
18 The parties debated in this appeal the construction of Bennett J’s reasons where her Honour dealt with Lundbeck’s previous contention that Lundbeck was entitled to an extension of the patent based on the date of inclusion on the ARTG of Lexapro, being the first pharmaceutical good that utilised the separated (+)-enantiomer of citalopram. The parties debated whether her Honour had found whether the (+)-enantiomer as a molecule, or, in contrast, in an isolated, separated or pure form, was a pharmaceutical substance or a pharmaceutical substance per se for the purpose of s 70(2) of the Act. I will explain more fully this debate on semantics below when making my findings on that matter.
19 The key finding on this issue by the majority of the Full Court was that claim 1 was a claim for the pure, separated or isolated (+)-enantiomer. That was because the inventors had worked for about seven years to discover both the particular therapeutic properties of that molecule, as opposed to those of its companion (-)-enantiomer in the racemate, and a method of how to prepare the (+)-enantiomer separately, being the subject of claim 6 in the patent.
20 Dr Oppenheim explained that the word “substance”, when used in relation to a pharmaceutical substance, referred to a collection of molecules, adding:
A molecule is a single unit of a particular chemical. By definition, a molecule must
be 100% pure and is separated and isolated.
21 He said that the description of the goods that have been marketed as Cipramil stated that “(+)-citalopram is contained, together with (-)-citalopram” in those goods, that they contained citalopram hydrobromide and that:
Because citalopram hydrobromide contains equal amounts of the (+)-enantiomer and the (-)enantiomer of citalopram, the separated or isolated or pure (+)-citalopram is not present in these goods.
The CIPRAMIL goods cannot, in my view, be described as containing the separated, isolated or pure (+)-enantiomer of citalopram. A substance which is “separated”, “isolated” or “pure” means compound that has been obtained through a process of separation, isolation or purification. A racemic mixture certainly is not a separated, isolated or pure form of (+)-citalopram. Similarly, the (+)-enantiomer of citalopram when contained in the racemic mixture is not “separated”, “isolated” or “pure”.
22 For that reason, Dr Oppenheim considered that the goods known as Cipramil did not contain the separated, pure or isolated (+)-enantiomer of citalopram, but rather they contained the racemate present with other substances.
23 Some of the events that led to the proceedings in the Full Court in Lundbeck 177 FCR 151, from which the High Court refused special leave to appeal on 11 December 2009, are still relevant.
24 Initially, on 9 December 2003, Lundbeck sought, and on 27 May 2004 the Commissioner granted, an extension of the patent for five years to 13 June 2014 based on the inclusion of Lexapro in the ARTG on 16 September 2003. That extension was entered in the Register on about 17 June 2004.
25 Alphapharm began proceedings in this Court on 6 July 2005 seeking revocation of the patent and removal of the extension of its term. On 7 July 2005, Alphapharm wrote to the Commissioner, contending that the extension based on the inclusion of Lexapro in ARTG had been wrongly granted. That was because, Alphapharm asserted, Cipramil contained the pharmaceutical substance claimed in the patent and Cipramil had been included in the ARTG earlier.
26 On 13 July 2005, the Commissioner decided that any extension of the term should have been based on the inclusion in the ARTG of Cipramil not Lexapro. For that reason, she proposed to reduce the extension to 9 December 2012 pursuant to reg 10.7(7) of the Patents Regulations 1991 (Cth). Dr Steven Barker, as delegate of the Commissioner, conducted a hearing on the issues of whether the extension of time ought be removed or varied. On 19 May 2006, the delegate decided to vary the extension of the term of the patent under reg 10.7(7) to 9 December 2012 and to correct the earlier entry in the Register: Alphapharm Pty Ltd v H Lundbeck A/S (2006) 69 IPR 629.
27 Both Lundbeck and Alphapharm appealed to this Court from that decision, and those appeals were among all of the proceedings resolved by Lindgren J and, on appeal, by the Full Court. Each of Sandoz (on 13 April 2006) and Arrow (on 17 May 2006) also began separate proceedings in this Court seeking revocation of the patent. In mid-February 2007, Sandoz settled its proceeding with Lundbeck, but Alphapharm and Arrow’s proceedings went to trial before Lindgren J. Apotex was not a party to any of those proceedings, but by early 2007 it had become aware of them.
28 On 19 June 2008, Lindgren J ordered that the Register be rectified pursuant to s 192 of the Act by removing the extension of the term of the patent, but stayed that order, and the order for revocation of the patent, pending the outcome of any appeals. Both Apotex and Sandoz were aware of Lindgren J’s decision when it was given and the appeals brought from it to the Full Court by each of Alphapharm, Arrow and Lundbeck. Each of the 3 appellants put forward arguments on the appeals as to the construction of claim 1 and the validity of the extension of the term based on Lexapro’s inclusion in the ARTG.
29 The Full Court published its reasons on 11 June 2009. The Full Court upheld Lindgren J’s substantive orders. On 12 June 2009 the Full Court substituted its own orders for stays of its orders.
30 Later, on 12 June 2009, Lundbeck applied to the Commissioner for an extension of, first, the time in which to apply for an extension of the term of the patent (that is now the subject of the s 223 proceeding) and, secondly, an extension of the term of the patent to 9 December 2012 based on the inclusion of Cipramil in the ARTG. The standard 20 year term of the patent expired on the next day, 13 June 2009. Within days, each of the opponents launched its own generic product containing the (+)-enantiomer of Citalopram.
31 Each of the opponents opposed the grant of an extension of time to Lundbeck to seek the grant of the extension of the term of the patent to 9 December 2012. On 1 June 2011, Ms Karen Ayers, as a delegate of the Commissioner, dismissed those oppositions and granted that extension of time: Alphapharm Pty Ltd v H Lundbeck A/S (2011) 92 IPR 628. The opponents’ attempts to reverse that decision in the s 223 proceeding failed in the Administrative Appeals Tribunal (Re Aspen Pharma Pty Ltd and Commissioner of Patents (2012) 132 ALD 648) and the Full Court (Aspen 216 FCR 508). As noted above, the High Court heard the opponents’ appeal on 8 August 2014 and dismissed it on 5 November 2014: Alphapharm [2014] HCA 42.
32 In the meantime, on 9 April 2013, Yates J refused the opponents’ application to stay Ms Ayers’ decision (Aspen Pharma Pty Ltd v H Lundbeck A/S [2013] FCA 324). That led to the Commissioner processing Lundbeck’s substantive application for the extension of the term of the patent. After hearing the opponents’ opposition to that application, Dr Barker, as the Commissioner’s delegate, on 25 June 2014, dismissed the oppositions and granted an extension of the patent to 9 December 2012: Alphapharm [2014] APO 41. The opponents have brought this appeal from that decision.
The per se issue
33 Bennett J gave her reasons for dismissing Lundbeck’s appeal from Lindgren J’s order that the Register be rectified by removing the extension of the term of the patent in Lundbeck 177 FCR at 199-203 [223]-[247]. Her Honour had earlier made the finding that claim 1, properly construed, was to the purified or isolated (+)-enantiomer and required the preparation of that enantiomer. She said that one particular, measurable characteristic of the (+)-enantiomer could not be ascertained until the occurrence of the inventive step of obtaining the (+)-enantiomer that underpinned the invention the subject of the patent. That previously unknown characteristic was the ability of the (+)-enantiomer to rotate plane polarised light to the right (177 FCR at 197 [205]-[206]).
34 Lundbeck had argued in those proceedings that Lexapro was the first good included in the ARTG in which the pharmaceutical substance, being the (+)-enantiomer, was contained. And Lundbeck contended that that inclusion marked the first regulatory approval date for the purposes of s 70(3)(b), thus supporting its application for a full five year extension of the patent to 13 June 2014. Accordingly, Lundbeck asserted in the earlier proceedings that the earlier date of the inclusion of Cipramil in the ARTG was not relevant under s 70(3) because the inclusion of Lexapro in the ARTG had occurred after the inclusion of Cipramil, and the (+)-enantiomer was not previously separable or separated from the racemate.
35 Each of Lindgren J and Bennett J held that Cipramil was a good “containing” the pharmaceutical substance, being the molecule that was the (+)-enantiomer (177 FCR at 201-202 [326], citing Lindgren J at 76 IPR at 713 [512], and 203 [244]). That was because the racemate and the (+)-enantiomer were for therapeutic use and, as the invention showed, the latter was the molecule that “worked” in both the mixture and in its isolated form. Her Honour found that the definition of “pharmaceutical substance” focused on the ingredient for therapeutic use that involved the relevant type of interaction and that, in each instance, that ingredient was the molecule, being the (+)-enantiomer. She held that s 70(3), however, was not concerned with the therapeutic effect of the pharmaceutical substance, but was concerned rather with a simple comparison of “ingredients” between, on the one hand, those in, or being, a relevant pharmaceutical substance referred to in s 70(2)(a) and, on the other hand, those in the goods included in the ARTG (177 FCR at 202 [237]-[241]). Her Honour said (at 202 [240], 202-203[242]-[247]):
240 … What is required is an analysis of whether there are goods containing or consisting of (+)-citalopram and, if so, which of those goods had the first regulatory approval date.
…
242 In my view, s 70 recognises that the pharmaceutical substance per se may not equate with the subject matter of the claim of the patent in terms. For example, a chemical compound claimed in a patent may not have the necessary therapeutic use or enable the required physico-chemical interaction unless formulated. It is sufficient if the pharmaceutical substance is in substance disclosed in the specification and in substance falls within the scope of the claim or claims. At that point in the scheme of s 70, the satisfaction of s 70(2), the necessary definition of the pharmaceutical substance by reference to the patent ceases.
243 A patent may be obtained if it discloses and claims, for example, a new method of preparation, or purification that results in greater efficacy, or improvement in the delivery of a known pharmaceutical substance already listed on the ARTG. The scheme of the 1990 Act does not provide for the extension of term of each such patent which relates to the same substance.
244 I have concluded, as a matter of construction, that the subject matter of Claim 1 of the Patent is the separated or purified or isolated (+)-enantiomer, (+)-citalopram. I have also concluded that the claim is not anticipated by the racemate. Lundbeck submits that such a conclusion is inconsistent with a finding that the racemate “contains” the (+)-enantiomer. However, the pharmaceutical substance per se is the molecule, the (+)-enantiomer. The racemic mixture is a solution that contains both (+) and (–) enantiomers in equal proportions. That (+)-enantiomer molecule per se fulfils the requirements of s 70(2). It is the molecule that “works” as a pharmaceutical substance alone, or together with other substances, in goods listed on the ARTG. These other substances may be components of a formulation or may otherwise be described as impurities, such as the (–)-enantiomer.
245 The primary judge considered at [542] whether the conclusion that the racemate contains the (+)-enantiomer is inconsistent with his construction of Claim 1 and did not accept that it was. In considering this aspect of the appeal, his Honour's construction is not relevantly different from the one I have preferred. I agree with his Honour that there is no inconsistency.
246 Having determined that, for the purposes of s 70 and in particular s 70(3), it is unnecessary to evaluate the therapeutic performance of the comparative substances, there is no need to rule on the issue of admissibility of evidence before the primary judge as to the relative pharmacological effect of the racemate and the (+)-enantiomer.
247 It follows that the term of any extension of the Patent is limited by the date of registration of Cipramil, that is, to 9 December 2012. However, as noted by the primary judge at [29], the time for such an application has expired. For that reason, as his Honour concluded at [544], the Register should be rectified by the omission from it of any reference to an extension of term of the Patent.
(bold non-italic emphasis added)
36 The opponents argued that if the pharmaceutical substance per se were the pure, isolated or separated (+)-enantiomer, then the racemate in Cipramil could not have been found to contain it. That is, they contended that Bennett J found in [244] that the molecule, as opposed to the isolated molecule, was the pharmaceutical substance per se, because the molecule was part of the racemic mixture in Cipramil and was not isolated.
37 I reject that argument for the reasons given by her Honour in approving what Lindgren J had said (177 FCR at 202 [241]), namely:
I see no error in his Honour's conclusions. The word “contain” does not import into the administrative process of determining whether an extension of the term of a patent is warranted a comparison of therapeutic effect or efficacy of the pharmaceutical substance. As the primary judge noted at [535] when referring to s 70(5) (which has the same combination of words as s 70(3)):
In s 70(5)(a) it is ‘goods’ that are to contain or are to consist of the pharmaceutical substance in question. In this context, ‘contain’ signifies a physical relationship that is something less than ‘consist of’. If goods A consist of B and C, they may be seen to contain B and to contain C, but not to consist of either alone. B and C will also be goods, although they need not be recognised as continuing to have a separate existence. For example, there is no difficulty in saying that a cake ‘contains’ milk and eggs although they are no longer recognised as having a separate existence in the cake. (emphasis added)
38 The racemate “contains” both enantiomers just as a cake, in Lindgren J’s analogy, “contains” milk and eggs, although they no longer have a separate existence in the mixture or cake. Thus, in [241] and [244], Bennett J found that the pharmaceutical substance per se, for the purposes of s 70(2)(a), was the isolated (+)-enantiomer and that molecule was contained in the racemate even though the (+)-enantiomer was not isolated in the mixture.
39 As Bennett J reasoned, the (+)-enantiomer was a pharmaceutical substance that the racemate in Cipramil contained. Claim 1 of the patent identified, as its subject-matter, the isolated form of that molecule. The isolated (+)-enantiomer was the pharmaceutical substance per se for the purposes of s 70(2)(a). That substance, being the molecule, is contained in both Cipramil and Lexapro.
40 To use another analogy, I understand her Honour to have reasoned as follows. An egg consists of or contains yolk and albumen. If one separates the yolk from the albumen, each has individual properties that, when combined, they do not have. Once separated, the yolk per se is no different from the yolk inside the albumen, yet one can do different things with each and get different culinary and physical results. In the same way, claim 1 in the patent for the separate molecule, being the (+)-enantiomer, identified a pharmaceutical substance per se, for the purposes of s 70(2)(a). As Bennett J noted, the racemic mixture in Cipramil contained that molecule, but s 70(3) did not require that it be contained in any particular form or state or be identifiable separately or that its individual properties be known when it was so contained.
41 The opponents’ argument sought to do what her Honour had held was impermissible, namely to import the qualifying expression “per se” from its singular usage in s 70(2)(a) (and s 78) into the general expression “pharmaceutical substance” used elsewhere in s 70 and Pt 3 (see 177 FCR at 200-201 [227]-[231]).
42 As I explained in Spirit Pharmaceuticals Pty Ltd v Mundipharma Pty Ltd (2013) 216 FCR 344 at 360 [50]-[51], the limitation of “per se” in s 70(2)(a) is connected to the alteration by s 78 of the rights that the patentee can enforce in respect of the extension period. While Dr Oppenheim’s views are entitled to weight, I do not consider that his explanation that the “isolated” or pure (+)-enantiomer is not present in the racemate, as a matter of chemistry, affects the legal construction of the word “contains” in s 70(3)(a) that Bennett J and Middleton J found. Dr Oppenheim’s is a construction based on chemical properties that is inconsistent with the legal construction of the section that the majority of the Full Court arrived at in approving Lindgren J’s analysis, including his analogy referring to ingredients in a cake.
43 For these reasons, I reject the opponents’ argument that the pharmaceutical substance per se, being the pure, separate or isolated molecule the subject of claim 1 in the patent, was not contained in the racemic mixture. The pure (+)-enantiomer was a pharmaceutical substance contained, for the purpose, and within the meaning, of s 70(3)(a), in the goods, being Cipramil, when they were first included on the ARTG. That is why Bennett J concluded (177 FCR at 203 [247]) that it followed from her process of expressed reasons that “the term of any extension of the Patent is limited by the date of registration of Cipramil”. Had her Honour considered that the pure form of the molecule was in any material respect different from the molecule as it existed in the racemate, she could not have found that the registration of Cipramil in the ARTG had any relevance to the extension of the term of the patent.
The prior extension issue
44 I reject the opponents’ argument that there had been a previous extension of the patent. The Register was rectified pursuant to s 192 of the Act to remove the extension of the term of the patent (to 9 December 2012) as a consequence of Lindgren J’s order made on 19 June 2008 (that was not disturbed on the appeal). His Honour found, and the Full Court affirmed, that the original grant of the extension on 27 May 2004 to 13 June 2014, as varied to 9 December 2012 by the delegate on 19 May 2006 and entered in the Register, had been based, incorrectly, on the date of inclusion of Lexapro on the ARTG and should be rectified by the entry being removed. The ground of the decisions of Lindgren J and the Full Court was that that registration, as varied, being based on the inclusion of Lexapro on the ARTG, did not comply for the purposes of s 75(1) with one or more requirements of ss 70 and 71, namely ss 70(3)(a) and 71(2)(b). They all held that the only valid basis on which the patent could be extended was by reference to the date of the inclusion of Cipramil on the ARTG: Alphapharm 76 IPR at 718 [542]-[544]; Lundbeck 177 FCR at 199 [223]-[224], 201 [235], 202 [239], 203 [244]-[247].
45 Critically, s 70(4) requires that the term of the patent for which an application is made to extend its term “must not have been previously extended under this Part”. The words I have just emphasised demonstrate that the opponents’ argument is without substance. The only basis on which the registration of the 2004 extension could have been, and in fact was, removed was that one or more of the requirements in ss 70 or 71 had not been satisfied: i.e. the cancelled registration was not made under Part 3.
46 Lindgren J ordered the rectification of the Register under s 192 of the Act because the delegate had made the extension decision on a basis not authorised by the Act. That was a jurisdictional error. The Full Court upheld that reasoning.
47 An extension of term is not made “under this Part” where the decision involves a failure to exercise jurisdiction or an excess of jurisdiction conferred by the legislation on the administrative decision-maker, here, the Commissioner by her delegate: Plaintiff S157/2002 v The Commonwealth (2013) 211 CLR 476 at 506 [76] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ. Their Honours added that an administrative decision which involves jurisdictional error is “regarded in law, as no decision at all [see Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 at 614-615 [51] per Gaudron and Gummow JJ, at 618 [63] per McHugh J, at 646-647 [152] per Hayne J]”.
48 The opponents’ construction, namely than an extension that was granted by the delegate, but later set aside by the Court because it did not satisfy one or more of the mandatory requirements of ss 70 or 71 for the purposes of s 75(1), was nonetheless made “under this Part”, ignored the fundamental reason why the Court ordered that the grant based on the inclusion of Lexapro on the ARTG be set aside; i.e. because that grant had not been made “under” Pt 3 and so was vitiated by the jurisdictional error involved in its making. The previous grant of an extension of term was “no decision at all”. The consequential rectification of the Register under s 192 brought the Register into conformity with the true legal position, namely that there was no, and had never been any, extension under Pt 3. The invalid earlier extension was not a previous extension “under this Part” for the purpose of s 70(4).
The erroneous grant issue
49 I reject the opponents’ argument that the delegate erred in granting the extension after deciding the opposition. Both ss 79 and 79A deal with issues that might arise from the immediate and delayed grant of an extension of the term of a patent under Pt 3. The Court has a plenary power to correct the Register of Patents under s 192, being a general provision, and express powers under s 160(d) and (e) on an appeal from a decision of the Commissioner such as this, under s 75(4), to affirm, reverse or vary the Commissioner’s decision or “to make any order, that, in all the circumstances, it thinks fit”. The existence of each of those plenary powers enables any possible adverse consequence of an erroneous entry of a grant of an extension of time on the Register of Patents to be corrected.
50 The corrective powers of the Court under ss 160 and 192 of the Act are ample to address any consequence of an erroneous registration of the antecedent, and legally operative, decision (or obligation where there is no opposition) to grant the extension, as the earlier decisions of Lindgren J and the Full Court showed. Moreover, Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ said in Owners of “Shin Kobe Maru” v Empire Shipping Co Inc (1994) 181 CLR 404 at 421 that:
It is quite inappropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words. (footnotes omitted)
51 Indeed, the opponents could not suggest any reason of policy why the Commissioner, or a Court, having come to the conclusion that an extension ought be granted, could not give that decision an immediate effect, as the express words of s 76(1)(b) and (2) require. There is no qualification, by reference to time or appeals, to the mandatory duty of the Commissioner under each provision in s 76 to do what the relevant provision requires. A patentee would be entitled to a constitutional writ of mandamus under s 75(v) of the Constitution if the Commissioner delayed giving effect to its right to the implementation of the grant.
52 The opponents relied on a different construction of a similar provision in s 68(1)(b) of the Trade Marks Act 1995 (Cth) by Sundberg and Bennett JJ, over the dissent of Black CJ, in Woolworths Ltd v BP plc (2006) 150 FCR 134 at 141 [27]-[29]. In my opinion, that decision, first, is not binding on the construction of ss 75 and 76 of the Act since it dealt with a different legislative regime, and secondly, the rights under the Trade Marks Act were new rights that would flow from registration of a mark, not extensions of a present right that the Parliament intended be limited by ss 78, 79 and 79A. Moreover, a person who used a common law mark or engaged in conduct that amounted to passing off or a contravention of a provision such as s 18 of the Australian Consumer Law would be liable in damages to the person whose trade mark was ultimately found to be registrable. Thus, the delay in registration in such a case might not cause irreparable harm. The position of a patentee under the Patents Act is different.
53 There are significant perils for a patentee whose immediate entitlement to enforce an extension of the term of the patent for the exploitation of a pharmaceutical substance per se is delayed by the typically deep-pocketed opponent, being a litigious generic producer of pharmaceuticals who wishes to go to market. As soon as the patent is no longer enforceable, the generic manufacturer can apply to have its product included in the Pharmaceutical Benefits Scheme and, if that occurs, the price for the pharmaceutical substance immediately and irreversibly drops. The patentee can never exploit subsequently its extended, but more limited, monopoly at the earlier higher price.
54 A construction of ss 75 and 76 that prohibited the Commissioner from giving immediate effect to a decision to extend the term of a patent would not serve the legislative purpose of enabling the patentee to exploit its extended monopoly over the pharmaceutical substance per se subject to the newly imposed limitations under s 78A. In addition, an absence of power to give immediate effect to a decision to extend a patent would entail that the unsuccessful opponent would not need to give any undertaking as to damages and the successful patentee could be held out of recouping its reward from the exploitation of the limited extended exclusive rights under s 78 for years awaiting the ultimate outcome of litigation. While s 79 applies to protect the rights of a patentee where the extension is granted after the patent has expired, it is silent as to whether those rights include the value of the amount lost by any reduction in price paid by the Pharmaceutical Benefits Scheme once the original term expired.
55 The legislative policy reflected in s 78 is to enable the patentee to exploit the pharmaceutical substance per se, and only that, for the extended term. That policy would be subverted, not promoted, by construing the phrase “or the decision on appeal” in s 76(1)(b) as a legislative stay on an existing decision to grant. In my opinion, that phrase in the Act refers to a decision of the Court (including the Full Court or High Court) reversing a refusal to grant the extension. Having regard to the plenary corrective powers of the Court under ss 160(d), (e) and 192, there is no need to read down the ample power of the Commissioner, or a Court reversing her decision on appeal, to give immediate effect to a decision rejecting opposition to an application for an extension of the term of a patent under Pt 3.
The stay issue
56 I reject the opponents’ application for a stay as meritless. The opponents could not suggest any prejudice to them from the refusal of a stay. For the reasons I have given on the erroneous grant issue, the balance of convenience is overwhelmingly in favour of maintaining the status quo, namely the immediate operation of the grant of the extension of the term of the patent. Moreover, here the limitation period of six years for infringement proceedings after 13 June 2009, when the original 20 year term of the patent expired, is imminent. If a stay were granted, the appellate process to the Full Court and the High Court may not be completed before that limitation period commences. If my decision is reversed on appeal, the opponents will be protected because any infringement action in respect of the period of the extension would cease to be maintainable. Moreover, the opponents have made no offer to submit to conditions that they would not plead or rely on the benefit of any expired limitation periods. In any event, there may be other persons, not parties to these proceedings, who could be liable for infringing during the extended term but liability for whose acts may become statute barred were the grant of the extension delayed pending the outcome of all litigation over that grant.
57 In granting a stay of his orders, Lindgren J referred to there being a doubt as to the Court’s power to order reinstatement after removal of the particulars of the grant of an extension from the Register of Patents: Alphapharm Pty Ltd v H Lundbeck A/S (No 2) (2008) 78 IPR 338 at 340-341 [11]-[19]. He sourced that doubt to Woolworths 150 FCR at 141-144 [30]-[48]. Each of those cases concerned whether, in the absence of an order staying the implementation of an order requiring an entry to be made in, or removed from, a statutory register, an appellate court could restore the owner of a trade mark or patent, if a trade mark, or a claim for extension of term of a patent, had been ordered to be registered or removed from that statutory register, and the earlier order had been implemented on the register but that order subsequently was reversed on appeal.
58 The opponents have not suggested, far less established, any prejudice that they could suffer by the Commissioner giving immediate effect to the decision to grant the extension. There is no basis to think, and the opponents did not articulate, how the plenary powers of the Court under ss 160(d), (e) and 192 to correct the Register of Patents by removing the grant, if my decision were reversed, and to make any other appropriate order could possibly result in any prejudice in the circumstances of these proceedings.
59 For these reasons, I refuse to order any stay.
Conclusion
60 The appeal from the Commissioner must be dismissed with costs.
I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. |
Associate: Dated: 6 November 2014
