FEDERAL COURT OF AUSTRALIA

Bristol-Myers Squibb Company v Apotex Pty Ltd [2010] FCA 814

THE COURT ORDERS THAT:

1.                  The second applicant inform the Associate to Yates J by no later than 4.00 pm on 11 August 2010 if it wishes to be heard further in relation to whether proposed claims 33 and 34 are allowable under s 102 of the Patents Act 1990 (Cth) or whether it wishes to propose further limitation of those claims.

2.                  The matter be listed for directions on 13 August 2010 at 9.30 am.  

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

INTRODUCTION

1                                             By notice of motion filed on 18 March 2010 the second applicant, Otsuka Pharmaceutical Co. Ltd (Otsuka), seeks orders pursuant to s 105(1) of the Patents Act 1990 (Cth) (the Act) providing for the amendment of Australian Patent No. 2002334413 (the patent).  Otsuka is the patentee.  The patent relates to an improved form of aripiprazole having reduced hygroscopicity, and processes for its preparation.  The amendments sought by Otsuka are in a written statement of proposed amendments annexed to the notice of motion.  The current specification is AU 2002334413 C1.

2                                             Otsuka is a pharmaceutical company that was founded in 1964.  It is engaged in the research and development, and manufacture and sale, of pharmaceutical and consumer products.  It operates primarily from development bases in Japan, the United States of America and Europe.

3                                             In the principal proceeding Otsuka and the first applicant, Bristol-Myers Squibb Company (BMS), said to be the exclusive licensee of the patent, allege that the respondent, Apotex Pty Ltd (Apotex), has infringed the patent.  Apotex denies that it has infringed the patent and has also cross-claimed for revocation of the patent on various grounds.  It has filed particulars of the grounds of invalidity on which it relies. The grounds of invalidity include the alleged non-compliance of the claims with s 40(3) of the Act in identified respects.

4                                             Apotex does not oppose the making of the amendments.  Although non-compliance with s 40(3) is a bar to amendment being allowed, the non-compliance must arise “as a result of the amendment”:  see s 102(2) of the Act, quoted below.  Apotex submits that the aspects of alleged non-compliance on which it relies for the purposes of its cross-claim for revocation are pre-existing defects in the claims and, as such, are not defects that would result from any amendment which Otsuka now seeks.  In Apotex Pty Ltd v Les Laboratoires Servier (No 2) (2009) 83 IPR 42 at [28] Bennett J recognised that there may be deficiencies in an existing complete specification or lack of compliance with s 40 which do not fall for consideration at the time of an application for amendment.  Be that as it may, Otsuka has stated that it accepts that, by not opposing the amendments as sought, Apotex is not and will not be precluded from relying in the principal proceeding on those parts of its currently filed particulars of invalidity that relate to non-compliance with s 40(3) of the Act should the proposed amendments be allowed.

5                                             I will set out more fully the circumstances in which the present application for amendment has been made.  It is sufficient at the present time for me to note that the Commissioner of Patents (the Commissioner) does not oppose the amendments.  Moreover, no other person has come forward to oppose the amendments.

LEGISLATIVE BACKGROUND

6                                             Under s 104 of the Act, a patentee may ask the Commissioner for leave to amend a patent request, complete specification or any other filed document for any purpose, including removing a lawful ground of objection.  Under s 105 of the Act the Court may, on the application of the patentee, make an order directing the Commissioner to make an amendment to a patent, a patent request or complete specification.  Amendment under s 104 is not available “while relevant proceedings in relation to the patent are pending”:  s 112 of the Act.  In relation to a patent, “relevant proceedings” means court proceedings for infringement or revocation of a patent or in which the validity of the patent, or of a claim, is in dispute:  Dictionary, Schedule 1 of the Act.  Given the pendency of the principal proceeding, s 105 provides the only avenue for Otsuka to seek the present amendments. 

7                                             Section 105 provides as follows: 

Amendments directed by court

(1)   In any relevant proceedings in relation to a patent, the court may, on the application of the patentee, by order direct the amendment of the patent, the patent request or the complete specification in the manner specified in the order.

(2)   An order may be made subject to such terms (if any) as to costs, advertisements or otherwise, as the court thinks fit.

(3)   The patentee must give notice of an application for an order to the Commissioner, who is entitled to appear and be heard, and must appear if the court directs.

(4)   A court is not to direct an amendment that is not allowable under section 102.

(5)    The patentee must file a copy of an order within the prescribed period.

(6)   On the filing of a copy of an order, the patent, patent request or complete specification is to be taken to have been amended in the manner specified in the order.

8                                             Section 102 identifies amendments that are not allowable.  Relevantly it provides as follows:  

(1)   An amendment of a complete specification is not allowable if, as a result of the amendment, the specification would claim matter not in substance disclosed in the specification as filed.

…

(2)   An amendment of a complete specification is not allowable after the relevant time if, as a result of the amendment:

 (a)  a claim of the specification would not in substance fall within the scope of the claims of the specification before amendment; or

 (b)  the specification would not comply with subsection 40(2) or (3).

9                                             For present purposes, the “relevant time” referred to in s 102(2) is the date of acceptance of the complete specification:  s 102(2A)(a).  As described in more detail below, the patent was granted on a PCT application.  The description, claims and figures in that application stand as “the specification as filed” for present purposes.

10                                          Section 40(2) provides as follows: 

A complete specification must:

(a)   describe the invention fully, including the best method known to the applicant of performing the invention; and

(b)   where it relates to an application for a standard patent - end with a claim or claims defining the invention; and

(c)   where it relates to an application for an innovation patent - end with at least one and no more than 5 claims defining the invention.

11                                          Section 40(3) provides as follows: 

The claim or claims must be clear and succinct and fairly based on the matter described in the specification.

BACKGROUND TO THE APPLICATION TO AMEND

The claimed invention

12                                          Aripiprazole is an atypical antipsychotic agent that is useful in the treatment of schizophrenia.  The current specification and the specification as filed describe certain methods for making anhydrous crystals of aripiprazole.  A disadvantage of crystals obtained by these methods is that they are significantly hygroscopic.  Thus, when exposed to moisture, the crystals can take on water and convert to a hydrous form of aripiprazole. 

13                                          The current specification and the specification as filed note a number of disadvantages associated with hydrous forms of aripiprazole.  First, hydrous forms of aripiprazole are less bioavailable and less dissoluble than anhydrous forms.  Secondly, batch variations in the relative amounts of hydrous and anhydrous forms of aripiprazole could mean that the specifications set by drug regulatory agencies are not met.  Thirdly, milling may cause the aripiprazole to adhere to manufacturing equipment resulting in processing delays, increased operator involvement, increased cost, increased maintenance and lower production yield.  Fourthly, the potential for absorbance of moisture during storage and handling can adversely affect the shelf-life of the substance. 

14                                          The current specification and the specification as filed declare the desirability of aripiprazole that possesses low hygroscopicity to facilitate pharmaceutical processing and formulation operations required for producing dosage units of an aripiprazole medicinal product having improved shelf-life, suitable dissolubility and suitable bioavailability.

15                                          Anhydrous aripiprazole possessing reduced hygroscopicity can exist in a number of different crystalline forms.  One form of particular significance is described in the current specification as “Anhydrous Aripiprazole Crystals B” and in the specification as filed as “Aripiprazole Anhydride Crystals B”.  I will refer to this particular crystalline form as “Crystals B”.  (I should note that I am satisfied on the evidence that in context, and for present purposes, nothing turns on the use of the word “Anhydrous” in this regard in the current specification compared with the use of the word “Anhydride” in the specification as filed). 

16                                          Crystals B are defined in the body of the current specification and in the specification as filed by reference to six physicochemical properties.  These physicochemical properties relate to:  the ¹H-NMR spectrum; powder x-ray diffraction; infrared absorption bands on the IR (KBr) spectrum; thermogravimetric/differential thermal analysis; differential scanning calorimetry; and hygroscopicity.  These are identified in the current specification and in the specification as filed as properties (6) to (11) respectively.  Reference is also made to a preferred property (12) (namely, mean particle size) when Crystals B are to be used for a particular purpose.  Evidence was given to explain these properties.  Evidence was also given that only properties (7) to (11) are in fact characteristic of the particular crystalline form of Crystals B.  In this connection the property relating to the ¹H-NMR spectrum gives information about the chemical components of aripiprazole but not about the crystalline form in which it might exist.  The evidence shows that measurements of the ¹H-NMR spectrum, as typically performed, involve samples where the crystalline form has been broken down.  Any crystalline form of aripiprazole will have substantially the same ¹H-NMR spectrum.  Indeed, the evidence is that any form of aripiprazole will have substantially the same ¹H-NMR spectrum. 

17                                          For present purposes I am satisfied on the evidence that a person skilled in organic chemistry in 2002 would have understood, on reading the specification as filed, that properties (7) to (11) are the essential physicochemical properties that define the crystalline form of Crystals B.

18                                          The current specification and the specification as filed describe and define five other crystalline forms of anhydrous aripiprazole designated by the letters “C” to “G” respectively (here, Crystals C to G).

The patent and priority documents

19                                          The patent was granted on a PCT application (PCT/JP02/09858) taken as filed on 25 September 2002 and published as WO 03/026659.  The claims of the patent claim priority from three basic applications:  Japanese Patent Application No. 2001-290645 filed on 25 September 2001 (basic application 1); Japanese Patent Application No. 2001-348276 filed on 14 November 2001 (basic application 2) and Canadian Patent Application No. 2379005 filed on 27 March 2002 (basic application 3). 

20                                          Basic application 1 discloses Crystals B and their essential physicochemical properties.  Basic application 2 discloses the other anhydrous crystalline forms (Crystals C to G) and their essential physicochemical properties.

21                                          BMS wished to file a New Drug Submission in Canada for the antipsychotic drug “Abilify” containing anhydrous aripiprazole as its active ingredient in the form of Crystals B.  Before that could be done, it was necessary for a separate patent application to be filed in that country that covered that product.  Accordingly, on 27 March 2002, basic application 3 was filed in Canada.  Basic application 3 did not include any disclosure of, or claims directed to, anhydrous crystalline forms of aripiprazole other than Crystals B.

22                                          The drafting of the PCT application was taken from the drafting of basic application 3 and also incorporated the other anhydrous crystalline forms of aripiprazole disclosed in basic application 2. 

23                                          There were no amendments made to the PCT application between the time of its international filing and the time when it entered the national phase in Australia on 13 January 2003.  As I have noted, the description, claims and figures in the PCT application stand as “the specification as filed” for present purposes. 

24                                          It is necessary to say something about the drafting of the claims in the PCT application.  When Crystals B as such are claimed, they are not claimed by the definition “Aripiprazole Anhydride Crystals B” simpliciter or by a single claim that  contains properties (7) to (11) in combination.  Rather, the draftsman has provided a series of independent claims, each of which claims “Aripiprazole Anhydride Crystals B” with one of properties (7) to (11):  see claim 16 (with respect property (7)), claim 18 (with respect to property (8)), claim 19 (with respect to property (9)), claim 20 (with respect to property (10)) and claim 13 (with respect to property (11)).  There is no explanation why this drafting technique was used.  As a matter of construction one would have thought that, prima facie, use in each case of the expression “Aripiprazole Anhydride Crystals B” in the claim would have operated definitionally to confine each of such claims to aripiprazole crystals having, in combination, properties (7) to (11).  While this approach to construction admits of redundant claiming and of the use of redundant language within claims 13, 16 and 18 to 20 of the PCT application, I am not able to see, as presently advised, how these claims could be otherwise sensibly construed.  No other construction was suggested.  There is no evidence that Otsuka has ever suggested that any of these several independent claims is or was broader in scope than “Aripiprazole Anhydride Crystals B” as so considered.    

25                                          In the course of prosecuting its European patent application (also derived from the PCT application) Otsuka was met with an objection from the European Patent Office in the following terms: 

The present set of claims also comprises 7 independent product-claims (claims 13,16-22, 42-43) which are directed to Anhydride Crystals B characterized by physical properties or desirable properties.  It would appear that all those independent claims are directed to the same product.  This compound should be made object of a single independent claim containing all the essential characteristics for its characterisation (Rule 29(2) EPC).

26                                          Otsuka’s response on that occasion was to submit a new set of claims in which a number of the independent claims directed to Crystals B were consolidated into one claim directed to Crystals B (claim 8) characterised by properties (7) to (11) in combination.  The result was to bring the form of the European patent application claims with respect to Crystals B more into line (although not completely into line) with the form of the corresponding claim in basic application 1 (which was arguably broader in scope).

27                                          The evidence deals with the history of Otsuka’s prosecution of its European patent application which eventually matured into granted patent EP 1330249.  It is not necessary to deal with that history for the purpose of the present application to amend.  For completeness, however, the evidence reveals that the European Patent Office delivered a decision on 7 July 2009 revoking the European patent.  An appeal against that decision is pending.

28                                            After the PCT application entered the national phase in Australia various “clarifying” amendments were made in response to Examiner’s Reports that were issued in the course of examination.  However no objection was taken, as had been taken by the European Patent Office, to the form of the multiple claims directed to Crystals B.  Thus the Australian patent claims directed to Crystals B continued to adopt what might be called the Canadian form of the claims and did not move to what might be called the European form of the claims.  The patent was sealed on 18 February 2005.

Events subsequent to the grant of the patent

29                                          On 1 May 2006 re-examination of the complete specification was sought by a third party acting pursuant to s 97(2) of the Act.  On 10 October 2006 the Commissioner reported adversely on the complete specification with respect to both novelty and inventive step.  Otsuka responded on 23 November 2006.  Its response included filing a first statement of voluntary amendments to the complete specification.  The proposed voluntary amendments continued to adopt the Canadian form of the claims directed to Crystals B.  The amendments were allowed.  The allowance was advertised on 31 May 2007.  On 2 July 2007 a delegate of the Commissioner advised Otsuka that the issues raised in the re-examination report had been overcome and that the re-examination had concluded.

30                                          On 19 September 2008 re-examination of the complete specification was sought by another third party pursuant to s 97(2) of the Act, now known to be attorneys acting for Apotex.  On 28 January 2009 the Commissioner reported adversely on the complete specification with respect to both novelty and inventive step.  Otsuka responded on 26 March 2009.  Its response included the filing of a second statement of voluntary amendments to the complete specification.  These amendments included redrafting the claims directed to Crystals B so as to adopt the European form.  This is exemplified by claim 12 as proposed in the second statement of voluntary amendments.  I note, however, that the change of form was not a requirement of the re-examination report issued on 28 January 2009.  Indeed, Otsuka says that the amendments were not proposed to overcome any lawful ground of objection.  When Otsuka responded to the adverse report it did so in terms that took issue with the adverse conclusions that had been made by the Commissioner with respect to novelty and inventive step. 

31                                          The attorneys for Apotex responded to Otsuka’s request to the Commissioner for amendment by noting that, although the proposed amendments covered certain claims so as to include specific characteristics of Crystals B, similar amendments had not been proposed by Otsuka to other claims relating to uses of, and methods of treatment with, Crystals B. 

32                                          On 4 June 2009, Otsuka proposed further amendments to the complete specification in a third statement of voluntary amendments, dealing in part with the confinement of the use and method of treatment claims to Crystals B as defined in any of claims 12 to 19 as proposed to be amended by the second statement of voluntary amendments filed on 26 March 2009. 

33                                          On 29 June 2009 a delegate of the Commissioner granted leave to amend the complete specification in accordance with the request of 4 June 2009.  Curiously no explicit reference is made to the request of 26 March 2009, although the form of the amendments requested on 4 June 2009 was premised on the amendments requested on 26 March 2009 being allowed.  It is not possible to make sense of the leave granted on 29 June 2009 unless it carried with it leave to amend in accordance with the second statement of voluntary amendments filed on 26 March 2009 as modified by the third statement of voluntary amendments filed on 4 June 2009. 

34                                          On 1 October 2009 Apotex filed a notice of opposition to the allowance of any amendment to the complete specification by Otsuka.  However, no particulars of objection came to be filed.  On 2 October 2009 BMS, as claimed exclusive licensee of the patent, commenced the principal proceeding against Apotex and Otsuka.  The effect of s 112 of the Act in those circumstances was that the Commissioner no longer had power to deal with the amendment application.  On 4 December 2009 Otsuka was removed as a respondent and added as the second applicant in the proceeding. 

35                                          On 23 December 2009 Otsuka gave notice to the Commissioner pursuant to O 58 r 10 of its intention to apply to amend the complete specification in the principal proceeding.  The notice recorded that the amendments sought were identical to those proposed in Otsuka’s second and third statements of voluntary amendments filed, respectively, on 26 March 2009 and 4 June 2009.

36                                          On 9 April 2010 IP Australia advised Otsuka’s solicitors that the notice of intention to amend had been advertised in the Australian Official Journal of Patents Supplement dated 4 February 2010.  IP Australia also advised that the Commissioner had received no notice of opposition to the proceeding for amendment and that the Commissioner considered that the amendments prima facie complied with s 102 of the Act.  On that basis IP Australia further advised that the Commissioner did not intend to appear in the proceeding for amendment. 

37                                          The present notice of motion was filed within the time prescribed by O 58 r 10(4).  The other requirements of O 58 r 10 have been complied with. 

CONSIDERATION

The legal requirement

38                                          Consideration of the prohibition in s 102(1) of the Act requires a comparison between what would be claimed as a result of the proposed amendment and what is disclosed in the specification as filed.  The steps involved in this comparison were described in RGC Mineral Sands Pty Ltd v Wimmera Industrial Minerals Pty Ltd (1998) 89 FCR 458 at 466C-E.  As there emphasised, the key point is that the words “as a result of the amendment” in s 102(1) are not to be confused with the expression “after the amendment”.  The amendment is identified by considering the specification as it stands with how it would stand after the proposed amendment.  It is only by that step that one can determine what matter results from the amendment.  Once that is determined, the next step is to read the specification as a whole (that is, amended in the manner proposed) and to compare it with what is “in substance disclosed” in the specification as filed.  If by reason of the amendment proposed, and for no other reason, the specification would then claim matter not in substance disclosed in the specification as filed, the amendment would not be allowable.

39                                          As to the notion “in substance disclosed”, the Full Court in ICI Chemicals & Polymers Ltd v The Lubrizol Corporation Inc (2000) 106 FCR 214 at [118]  referred to the close relationship between that notion and the test for fair basis, saying that it would be a rare case where a claim which claims matter in substance disclosed in the specification as filed is not, equally, fairly based on the matter described in the specification:  see also Gambro Pty Ltd v Fresenius Medical Care South East Asia Pty Ltd (2000) 49 IPR 321 at [18] where the two requirements were said to be “very similar” .  In Ethyl Corporation’s Patent [1972] RPC 169 at 195, Lord Denning MR said that the requirements were “virtually the same”, although in Lubrizol the Full Court thought it unnecessary to go that far.  It is thus expedient to test whether matter is “in substance disclosed” in the specification as filed by asking whether there is a “real and reasonably clear disclosure” of that matter. 

40                                          Consideration of the prohibition in s 102(2)(a) requires a comparison between the proposed new claims and the claims of the specification immediately before amendment.  Once again the prohibition is conditioned on a state of affairs existing as a result of the amendment, namely that a claim would not in substance fall within the scope of the claims before amendment.  Thus the identification of the amendment is, once again, an important first step.  Moreover, the reference to “within the scope of the claims” before amendment is significant.  The comparison is not between a particular amended claim and that claim before amendment.  The expression “within the scope of the claims” directs attention to all the claims.  For this reason a practical test is to ask whether an amendment makes anything an infringement which would not have been an infringement before the amendment.  If the answer is “yes”, the amendment is proscribed by s 102(2)(a) of the Act:  AMP Incorporated v The Commissioner of Patents (1974) 3 ALR 283 at 289-290; Fina Research SA v Halliburton Energy Services Inc (No 2) (2003) 127 FCR 561 at [29]; W J Voit Rubber Corp’s Application, Re (1965) AOJP 1752 at 1754-1755.

41                                          In the present case the amendments involve cancelling and replacing pages 112 to 141 of the current specification.  The consequence would be to substitute, by the medium of replacement pages, a new claim set for the existing claim set.  This was also the effect of the second and third statements of voluntary amendments to which I have referred.  I have noted that, subject to opposition, the Commissioner granted leave to amend in that form.  Consistently with the granting of that leave, the Commissioner has expressed the view, in the present application, that the amended claims, reflected in the replacement pages, prima facie comply with s 102 of the Act. 

42                                          Although it had filed a notice of opposition to the amendments sought before the Commissioner, Apotex has given no notice of opposition in the present proceeding.  Indeed, it has stated unequivocally that it does not oppose the amendments that are sought, although it has reserved its position with respect to what it alleges to be existing vices in the current specification that would be carried forward by the amendments now sought.

43                                          In support of its application for amendment Otsuka has relied on the expert evidence of Christopher John Easton who is a Professor at the Research School of Chemistry, Institute of Advanced Studies, Australian National University.  Professor Easton has expressed opinions with respect to the disclosures in the complete specification as filed, the scope of the claims in the current specification and the scope of the proposed claims in the new claim set.  This evidence has been of assistance.  However, while that evidence is admissible, it is not determinative of the various questions of construction arising in this application.  Ultimately the construction of the specification as filed, the current specification and the proposed new claims is a matter for the Court, affording such weight, if any, to that evidence as the Court considers appropriate:  EI Dupont de Nemours & Co v Imperial Chemical Industries Plc (2002) 54 IPR 304 at [60].

44                                          The new claim set comprises 130 claims.  The amendments to the existing claim set are extensive.  Those amendments are too numerous to detail in these reasons. The type and nature of the amendments (other than minor grammatical, formatting or simple renumbering amendments) have been conveniently identified in a table exhibited to Professor Easton’s affidavit made on 26 May 2010.  The table was prepared by Otsuka’s solicitors.  A copy of the table is included as a Schedule to these reasons.  The amendments are not confined to claims directed to Crystals B but relate also to claims directed to Crystals C to G, however the form of the amendments differs.

45                                          The most significant amendment relates to claim 12.  Claim 12 as proposed to be amended is as follows:

Anhydrous Aripiprazole Crystals B wherein said crystals

            have low hygroscopicity wherein said low hygroscopicity is a moisture content of 0.40% or less after placing said drug substance for 24 hours in a closed container maintained at a temperature of 60°C and a humidity level of 100%;

            have a powder x-ray diffraction spectrum which is substantially the same as the following powder x-ray diffraction spectrum shown in Figure 5;

            have particular infrared absorption bands at 2945, 2812, 1678, 1627, 1448, 1377, 1173, 960 and 779 cmˉ¹ on the IR (KBr) spectrum;

            exhibit an endothermic peak near about 141.5°C in thermogravimetric/ differential thermal analysis (heating rate 5°C/min); and

            exhibit an endothermic peak near about 140.7°C in differential scanning calorimetry (heating rate 5°C/min).

46                                          This amendment reflects a change from the Canadian form of the claims with respect to the product Crystals B to the European form of the claim with respect to that product, by incorporating each of the essential characteristics of the Crystals B crystalline form as now claimed in separate independent claims (claims 12, 14, 16, 17 and 18) in one claim (proposed claim 12).  Amendment is then made to a number of existing claims (principally claims 13, 15, 19, 20, 21, 46 and 47 which become proposed claims 13 to 19) to create dependency, directly or indirectly, on proposed claim 12.  As a general pattern, other claims relating to Crystals B are then amended to create dependency, directly or indirectly, on proposed claim 12 or on any one of proposed claims 12 to 17 or on any one of proposed claims 12 to 19.  

47                                          Otsuka’s submissions not unnaturally focussed on proposed claim 12 because it is pivotal in considering the proposed amendments.  Otsuka has described the amendments relating to this proposed claim as structural ones.  This is an apt description.  These amendments involve a consolidation of certain seemingly redundant claims into one claim.  In my view this has resulted in proposed claim 12 claiming the product Crystals B in terms which reflect no difference in substance to the product defined and claimed in the specification as filed and in the current specification.  I am satisfied that the amendments reflected in proposed claim 12 are allowable in terms of s 102.  Furthermore, subject to one reservation, I am satisfied that the amendments reflected in the other proposed claims are allowable in terms of s 102. 

48                                          My reservation concerns proposed claims 33 and 34.  These proposed claims claim a particular process for preparing a pharmaceutical solid oral preparation comprising Crystals B and one or more pharmaceutically acceptable carriers.  These claims replace claims 38 to 45 in the current specification.  It is noteworthy, however, that claims 38 to 45 are directed to a process in which Crystals B have a mean particle size of 50 microns or less.  Proposed claims 33 and 34 are directed to a process in which Crystals B as defined in “any one of [proposed] claims 12 to 17” are used (emphasis added).  However, only proposed claims 16 and 17 define Crystals B with a mean particle size of 50 microns or less.  Thus proposed claims 33 and 34 are directed to particular process claims where there is no necessary limitation on the mean particle size of Crystals B used in the process.

49                                          In this connection a comparison can be drawn with proposed claim 46 (amending claim 66) and proposed claim 47 (amending claim 70).  Each of these proposed claims is directed to a process in which Crystals B defined in “any one of [proposed] claims 12 to 19” are used (emphasis added) but, in each case, the draftsman has been careful to include as an additional limiting feature the requirement that the Crystals B used in the process have a mean particle size of 50 microns or less, reflecting an existing limitation in claims 66 and 70. 

50                                          My reservation concerning proposed claims 33 and 34 relates to the prohibitions in both s 102(1) and 102(2).   Were proposed claims 33 and 34 to be limited in the same fashion as proposed claims 46 and 47 then my reservation would be removed.  I will return to this matter.       

The exercise of discretion

51                                          Even where amendments are allowable, it does not follow that they will be allowed.  The Court retains a broad discretion as to whether an allowable amendment should be allowed in all the circumstances of the case.

52                                          In Smith Kline & French Laboratories Ltd v Evans Medical Ltd [1989] 1 FSR 561 Aldous J at 569 summarised the relevant principles concerning the exercise of the discretion as follows:

The discretion as to whether or not to allow amendment is a wide one and the cases illustrate some principles which are applicable to the present case.  First, the onus to establish that amendment should be allowed is upon the patentee and full disclosure must be made of all relevant matters.  If there is a failure to disclose all the relevant matters, amendment will be refused.  Secondly, amendment will be allowed provided the amendments are permitted under the Act and no circumstances arise which would lead the court to refuse the amendment.  Thirdly, it is in the public interest that amendment is sought promptly.  Thus, in cases where a patentee delays for an unreasonable period before seeking amendment, it will not be allowed unless the patentee shows reasonable grounds for his delay.  Such includes cases where a patentee believed that amendment was not necessary and had reasonable grounds for that belief.  Fourthly, a patentee who seeks to obtain an unfair advantage from a patent, which he knows or should have known should be amended, will not be allowed to amend.  Such a case is where a patentee threatens an infringer with his unamended patent after he knows or should have known of the need to amend. Fifthly, the court is concerned with the conduct of the patentee and not with the merit of the invention.

53                                          This passage has been quoted or cited with approval in a number of cases in this Court:  see, for example, Rescare Ltd v Anaesthetic Supplies Pty Ltd [1993] FCA 228; Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd (1997) 40 IPR 110 at 114; Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd (No. 3) (1997) AIPC ¶91-366 at 39,789; Apotex (No 2) at [87].

54                                          In Wimmera (No 3) Sundberg J at 39,790 said: 

The discretion under s 105, like any other discretion, is to be exercised in the light of all relevant factors.  The English cases highlight a number of considerations relevant to amendment applications.  The Smith Kline & French “principles” seem to me, as they did to Gummow J in Rescare, to be appropriate guidelines.  But they are only that.  Since the matter is ultimately one of discretion, the “principles” should not be treated as fixed rules, to be applied inexorably to every case.  They must be accommodated to the facts of the particular case. 

55                                          I am satisfied that there has been full disclosure of all relevant matters.  Otsuka’s evidence has included a substantial account of its prosecution of corresponding patent applications in other countries that were based on the PCT application.  Following the objection raised by the European Patent Office, Otsuka made voluntary amendments to corresponding applications in other countries.  The amendments have not been uniform across patent applications but have included, in a large number of cases, amendments bringing the claims directed to Crystals B into the European form or a similar form.  Sometimes the amendments were made because an objection had been raised by the examining authority with respect to claim format.  In other cases Otsuka simply made the amendment because an opportunity arose to do so.  In some countries no corresponding amendment has been sought.  Significantly, in the United States of America, Otsuka’s application includes claims directed to Crystals B adopting the drafting style of the claims of the PCT application.  On 29 January 2010 a Notice of Allowance of the US patent application with claims in that form was issued by the United States Patent and Trademark Office.  In Malaysia a patent was issued with the original PCT application claims.

56                                          With respect to the position in Australia, Mr Samezawa (the Director of Otsuka’s Intellectual Property Department with responsibility for all intellectual property matters within Otsuka) has given evidence that the reason why Otsuka filed its second statement of voluntary amendments on 26 March 2009 was no more than that it wanted the relevant claims of the patent to be substantially in the same form as the European patent for Crystals B.  He stated that this was the reason for seeking the amendments in the present application.  There is no evidence before me that would provide a proper foundation for suspecting any different reason such as, for example, that the amendments were considered by Otsuka to be necessary or desirable to overcome a lawful ground of objection to the claims in the current specification.  I accept Mr Samezawa’s evidence.

57                                          A question arises why Otsuka has only in recent times sought to make the amendments it seeks.  In large measure this seems to be due to the fact that at no time has the Commissioner raised an objection (such as that raised by the European Patent Office) to the format of the claims directed to Crystals B.  The evidence with respect to the Australian position is consistent with the fact that conformity with the European form of the claims in that regard has been seen as a desirable but neither pressing nor necessary objective. 

58                                          The cases show that delay of itself is not a sufficient reason to disallow an amendment that is otherwise allowable.  Delay generally needs to be coupled with improper conduct or resulting detriment to a particular person or the public more generally, such as where the patentee knows or has reason to suspect on good grounds that the claims are defective in some substantial way but nevertheless seeks, by delay, to take advantage of a wider monopoly than that to which the patentee is truly entitled.  The cases are discussed in Smith Kline & French at 564-569.  See also ICI Chemicals & Polymers Ltd v Lubrizol Corp (1999) AIPC ¶91-521 at [38].  In Apotex (No 2)  Bennett J at [120] summarised the position as follows:

Courts have traditionally refused amendment if it was considered that the patentee’s conduct had been such that, as a matter of discretion, the amendment should be refused.  Following a period of strictness, this rule was relaxed so that it was not applied adversely unless the patentee had deliberately elected to maintain invalid claims which he or she knew or ought to have known required amendment: T H Terrell and S Thorley, Terrell on the Law of Patents, 16^th ed, Sweet & Maxwell, London, 2006, pp 9-37.  Delay likely to be of some detriment to respondents or to the general public was also considered a factor, although mere delay was not: T H Terrell and S Thorley, 2006, pp 9-38.

59                                          In my view delay by Otsuka in the present case is not such that the amendments should not be allowed as a matter of discretion.  There are no other circumstances which lead me to conclude that the amendments, if allowable, should not be allowed.

FURTHER CONSIDERATION

60                                          This brings me back to the reservation I have about whether proposed claims 33 and 34 are allowable amendments in terms of s 102(1) and s 102(2).  I am conscious of the fact that the Commissioner has expressed the view that the amendments are prima facie allowable and that no person, including Apotex, has come forward to oppose the amendments.  However, I have made the position clear in the course of the preparation of this application for hearing that I would need to be satisfied that the legal requirements of s 102 are met.  Section 105(4) of the Act requires no less.

61                                          In these circumstances I am prepared to hear Otsuka further in relation to proposed claims 33 and 34, should it wish to maintain its present application for amendment with those proposed claims in their current form.  If Otsuka wishes to avail itself of that opportunity, I would be assisted by submissions from the Commissioner directed specifically to whether the amendments reflected in proposed claims 33 and 34 are allowable under s 102 of the Act.  On the other hand I am prepared to hear Otsuka on any further amendment to proposed claims 33 and 34 it might be advised to seek.

62                                          The only order I will make at the present time is that Otsuka inform my Associate by no later than 4.00 pm on 11 August 2010 if it wishes to be heard further in relation to whether proposed claims 33 and 34 are allowable under s 102 of the Act or whether it wishes to propose some further limitation of those claims.  In either event, the matter will be listed for directions at 9.30 am on 13 August 2010. 

63                                          Submissions have been made on the question of costs.  I will not make any ruling on that matter until the question with respect to amendment is clear.

Associate:

Dated:         4 August 2010

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